Obligations and Contracts A2010 page 1
Prof. Labitag
BARREDO V GARCIA
;
8, 1942
BOCOBO July
NATUREPetition for review on certiorari
FACTS
- from CA, holding Fausto Barredo liable for damages for death pf Faustino Garcia caused by negligence of Pedro Fontanilla, a taxi driver employed by Fausto Barredo - May 3, 1936 – in road between Malabon and Navotas, head-on collision between taxi of Malate Taxicab and carretela guided by Pedro Dimapilis thereby causing overturning of the carretela and the eventual death of Garcia, 16-yo boy and one of the passengers
- Fontanilla convicted in CFI and affirmed by CA and separate civil action is reserved - Parents of Garcia filed action against Barredo as sole proprietor of Malate Taxicab as employer of Fontanilla
- CFI and CA awarded damages bec Fontanilla’s negligence apparent as he was driving on the wrong side of the road and at a high speed
> no proof he exercised diligence of a good father of the family as Barredo is careless in employing (selection and supervision) Fontanilla who had been caught several times for violation of Automobile Law and speeding
> CA applied A1903CC that makes inapplicable civil liability arising from crime bec this is under obligations arising from wrongful act or negligent acts or omissions punishable by law
- Barredo’s defense is that his liability rests on RPC TF liability only subsidiary and bec no civil action against Fontanilla TF he too cannot be held responsible
ISSUE
WON parents of Garcia may bring separate civil action against Barredo making him primarily liable and directly responsible under A1903CC as employer of Fontanilla
HELD
Yes. There are two actions available for parents of Garcia. One is under the
A100RPC wherein the employer is only subsidiarily liable for the damages arising from the crime thereby first exhausting the properties of Fontanilla. The other action is under A1903CC (quasi-delict or culpa aquiliana) wherein as the negligent employer of Fontanilla, Barredo is held primarily liable subject to proving that he exercising diligence of a good father of the family. The parents simply took the action under the Civil Code as it is more practical to get damages from the employer bec he has more money to give than Fontanilla who is yet to serve his sentence.
Obiter
Difference bet Crime and Quasi-delict
1) crimes – public interest; quasi-delict – only private interest
2) Penal code punishes or corrects criminal acts; Civil Code by means of indemnification merely repairs the damage
3) delicts are not as broad as quasi-delicts; crimes are only punished if there is a penal law; quasi-delicts include any kind of fault or negligence intervenes
NOTE: not all violations of penal law produce civil responsibility
e.g. contravention of ordinances, violation of game laws, infraction of rules of traffic when nobody is hurt
4) crime – guilt beyond reasonable doubt; civil – mere preponderance of evidence - Presumptions:
1) injury is caused by servant or employee, there instantly arises presumption of negligence of master or employer in selection, in supervision or both
2) presumption is juris tantum not juris et de jure TF may be rebutted by proving exercise of diligence of a good father of the family
- basis of civil law liability: not respondent superior bu the relationship of pater familias
- motor accidents – need of stressing and accentuating the responsibility of owners of motor vehicles
MENDOZA V ARRIETA
-
;
29, 1979
MELENCIO HERRERA June
NATURE
Petition for review on Certiorari of the Orders of CFI Manila dismissing petitioner’s Complaint for Damages based on quasi-delict
FACTS
- Three-way vehicular accident occurred along Mac-Arthur Highway, Marilao, Bulacan involving (1) Mercedes Benz, owned and driven by petitioner MENDOZA; (2) private jeep owned and driven by respondent SALAZAR; (3) gravel and sand truck owned by respondent TIBOL and driven by MONTOYA.
- Mendoza’s and Montoya’s version: After jeep driver overtook the truck, it swerved to the left going towards Marilao, and hit car which was bound for Manila. Before impact, Salazar jumped from the jeep, Mendoza unaware that jeep was bumped from behind by truck
- Salazar’s version: After overtaking truck, he flashed a signal indicating his intention to turn left towards Marilao but was stopped at intersection by a policeman directing traffic. While at stop position, his jeep was bumped at rear by truck causing him to be thrown out of jeep. Jeep then swerved to left and hit the car.
- Oct. 22, 1969. In CFI Bulacan, two separate informations for Reckless Imprudence Causing Damage to Proprety were filed against SALAZAR (damage to Mendoza) and MONTOYA (damage to Salazar)
- Salazar was acquitted; Motoya found guilty beyond reasonable doubt
- Aug. 22, 1970. In CFI Manila, Mendoza filed a civil case against Salazar and Timbol either in alternative or in solidum.
- Timbol filed Motion to Dismiss on grounds that complaint is barred by prior judgement; CFI Manila dismissed Complaint against Timbol
- Salazar filed Motion to Dismiss; CFI Mla also dismissed Complaint against him on grounds that New Rules of Court rewuires an express reservation of civil action to be made in the criminal action
ISSUES
1. WON Mendoza can file an independent civil case against Timbol a) Is the civil suit barred by prior judgment in the criminal case?
b) Is the civil suit barred by failure to make a reservation in the criminal action of right to file an independent civil action (as required in Sec.2 of Rule 111)?
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Prof. Labitag
2. WON Mendoza can file an independent civil case against Salazar
HELD
1. Yes.
a) No, not all requisites of Res Judicata are present.
Ratio There is no identity of cause of action between the dismissed criminal case
and the new civil case.
Reasoning In the criminal case, cause of action was enforcement of civil liability
arising from criminal negligence. In the civil case, it was quasi-delict. The two factors a cause of action must consist of are: (1) plaintiff’s primary right – Mendoza as owner of the car; (2) defendant’s delict or wrongful act or omission which violated the primary right – negligence or lack of skill, either of Salazar or of Montoya.
b) No, right to file an independent civil action need not be reserved.
Ratio Sec. 2 of Rule 111, Rules of Court is inoperative because it is an
unauthorized amendment of substantive law, and it cannot stand because of its inconsistency with Art.2177.
Reasoning Art.2176 and 2177 of Civil Code create a civil liability distinct and
different from the civil action arising from the offense of negligence under the RPC. 2. No.
Ratio Civil action had extinguished because “the fact from which civil liability
might arise did not exist.” (Sec 3c, Rule 111, Rules of Court) Under the facts of the case, Salazar cannot be held liable.
Reasoning The offended party has an option between action for enforcement of
civil liability based on culpa CRIMINAL (RPC, Art.100) or action for recovery of damages based on culpa AQUILIANA (CC, Art.2177). First option was deemed simultaneously instituted with the criminal action unless expressly waived or reserved of separate application. It can be concluded that Mendoza opted to base his cause of action on culpa criminal, as evidenced by his active participation in the prosecution of criminal suit against Salazar.
Disposition
Order dismissing Civil Case against Timbol is set aside and trial court to proceed with hearing on merits; orders dismissing complaint in Civil Case against Salazar are upheld.
PSBA V COURT OF APPEALS
;
4, 1992
PADILLA February
NATURE
Petition to review the decision of Court of Appeals.
FACTS
- A stabbing incident on August 30, 1985 which caused the death of Carlitos Bautista on the premises of the Philippine School of Business Administration (PSBA) prompted the parents of the deceased to file suit in the Manila RTC. It was established that his assailants were not members of the school’s academic community but were outsiders.
- The suit impleaded PSBA, its President, VP, Treasure, Chief of Security and Assistant Chief of Security. It sought to adjudge them liable for the victim’s death due to their alleged negligence, recklessness and lack of security precautions.
- Defendants (now petitioners) sought to have the suit dismissed alleging that since they are presumably sued under Art. 2180 of the Civil Code, the complaint states no cause of action against them since academic institutions, like PSBA, are beyond the ambit of that rule.
- Respondent Trial court denied the motion to dismiss. And the MFR was similarly dealt with. Petitioners the assailed the trial court’s dispositions before the respondent appellate court which affirmed the trial court’s ruling.
ISSUES
WON respondent court is correct in denying dismissal of the case.
HELD
Ratio Although a school may not be liable under Art. 2180 on quasi-delicts, it may
still be liable under the law on contracts.
Reasoning The case should be tried on its merits. But respondent court’s premise
is incorrect. It is expressly mentioned in Art. 2180 that the liability arises from acts done by pupils or students of the institution. In this sense, PSBA is not liable. But when an academic institution accepts students for enrollment, the school makes itself responsible in providing their students with an atmosphere that is conducive for learning. Certainly, no student can absorb the intricacies of physics or explore the realm of arts when bullets are flying or where there looms around the school premises a constant threat to life and limb.
Disposition WHEREFORE, the foregoing premises considered, the petition is
DENIED. The Court of origin is hereby ordered to continue proceedings consistent wit this ruling of the Court. Costs against the petitioners.
Voting Melencio-Herrera (Chairman), Paras, Regalado and Nocon, JJ., concur.
AMADORA V CA
;
15, 1988
CRUZ April
NATURE
Petition for certiorari to review the decision of Court of Appeals.
FACTS
- A few days before high school graduation, while in the auditorium of his school (Colegio de San Jose-Recoletos), a classmate, Pablito Daffon, fired a gun that mortally hit and killed Alfredo Amadora.
- The victim’s parents filed a civil action for damages under Article 2180 of the Civil Code against the Colegio de San Jose-Recoletos, its rector, the high school principal, the dean of boys, and the physics teacher (the victim was in school to finish his physics experiment –a prerequisite to graduation), together with Daffon and two other students, through their respective parents.
- The pertinent provision reads:
“Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices so long as they remain in their custody.”
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Prof. Labitag
WON respondents are liable under Art. 2180
HELD
Ratio Those liable under the related provision of Art. 2180 shall be taken to mean
as teacher(s)-in-charge for academic institutions and heads for schools of arts and trades.
Reasoning The difference between academic and arts and trades institutions lie in
history. Back in the times of artisan guilds, heads of academic institutions were already focused on administrative work and it is only the teachers who interact closely with students. Heads of schools of arts and trades, on the other hand, because of the technical nature of their craft, interact directly with the appentices. Although the same may not be said for schools of arts and trades at present, it is what is written. And only a re-writing of the law can abolish the intended difference. In the case at bar, none of the respondents were liable. The school is not liable under Art. 2180; the rector, the principal and the dean of boys only exercised general authority; the mere fact that Amadora was in school to finish his physics experiment did not make the physics teacher charge; and even if he were in-charge, there was no showing that it was his negligence in disciplining Daffon that made Daffon shoot Amadora; and the other respondents didn’t have custody of the offender.
Disposition WHEREFORE, the petition is DENIED, without any pronouncements as
to costs.
Voting Yap, Narvasa, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and
Grino-Aquino, JJ., concur.
Teehankee, C.J., did not participate in deliberations.
Fernan and Padilla, JJ., no part, formerly counsel for Colegio de San Jose-Recoletos. Gutierrez, Jr., J., concur but please see additional statement.
Herrera, J., with separate concurring and dissenting opinion.
&
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SONG FO
CO V HAWAIIAN PHILIPPINE CO
;
16, 1925
MALCOLM September
NATURE
Appeal from a judgment of the Court of First Instance of Iloilo
FACTS
Plaintiff presented a complaint with two causes of action for breach of contract against the defendant in which judgment was asked for P70,369.50, with legal interest and cost. In an amended answer and cross-complaint, the defendant set up the special defense that since the plaintiff had defaulted in the payment for molasses delivered to it by the defendant under the contract between the parties, the latter was compelled to cancel and rescind the contract. The case was submitted for decision on a stipulation of facts and exhibits. The judgment of the trial court condemned the defendant to pay to the plaintiff a total of P35,317.93 with legal interest from the date of the presentation of the complaint, and with costs.
HELD
- The written contract between the parties provided for the delivery by the
Hawaiian-Philippine Co. to Song Fo & Co. of 300,000 gallons of molasses. The
language used in another exhibit with reference to the additional 100,000 gallons was not a definite promise. Still less did it constitute an obligation.
- The terms of contract fixed by the parties are controlling. The time of payment stipulated for in the contract should be treated as of the essence of the contract. Hawaiian-Philippine Co. had no legal right to rescind the contract of sale because of the failure of Song Fo & Co. to pay for the molasses within the time agreed upon by the parties. The general rule is that the rescission will not be permitted for a slight or casual breach of the contract, but only for such breaches are as so substantial and fundamental as to defeat the object of the parties in making the agreement. A delay in payment for a small quantity of molasses for some 20 days is not such a violation of an essential condition of the contracts as warrants rescission for nonperformance.
- The measure of damages for breach of contract in this case is as follows: Song Fo & Co. is allowed P3,000 on account of the greater expense to which it was put in being compelled to secure molasses in the open market. It is allowed nothing for lost profits on account of the breach of the contract, because of failure of proof.
VELARDE V COURT OF APPEALS
;
11, 2001
PANGANIBAN July
FACTS
- David Raymundo (private respondent) is the absolute and registered owner of a parcel of land, together with the house and other improvements.
- Gorge Raymundo, David’s father, negotiated with Avelina and Mariano Velarde (plaintiffs) for the sale of David’s property, which was under lease.
- Aug 8, 1986, a Deed of Sale with Assumption of Mortgage was executed by David Raymundo in favor of Avelina Velarde. It states that David Raymundo sells, cedes, transfers conveys and delivers the property to Avelina Velarde for P800,000 and that Avelina Velarde assumes to pay the mortgage obligations on the property in the amount of P1,800,000 in favor of BPI.
- On the same date, Avelina, with the consent of husband Mariano, executed an Undertaking, parts of which as follows:
1. that Avelina Velarde paid David Raymundo P800,000, and assumes the mortgage obligations on the property with BPI in the amount of P1.8M. 2. while Avelina’s application for the assumption of the mortgage obligations on
the property is not yet approved by BPI, Avelina agreed to pay the mortgage obligations on the property, including interest and charges for late payment. 3. Avelina binds and obligates herself to strictly and faithfully comply with the ff
terms and conditions:
a. until such time that assumption of mortgage obligations on the property is approved by BPI, Avelina shall continue to pay said loan in accordance with its terms and conditions.
b. In the event Avelina violates any of the terms and conditions, her downpayment of P800,000 plus all payments made with BPI on the mortgage loan shall be forfeited in favor of David Raymundo, and that David shall resume total and complete possession and ownership of the property, and the Deed of Sale with Assumption of Mortgage shall be deemed automatically cancelled.
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Prof. Labitag
- As per agreement, the Velardes paid BPI the monthly interest on the loan for 3 months, (Sept 19, 1986 at P27,225; Oct 20, 1986 at 23,000; Nov 19, 1986 at 23, 925)
- Dec. 15, 1986, plaintiffs were advised that their Application for Assumption of Mortgage with BPI was not approved. This prompted the Velardes not to make any further payment.
- Jan. 5, 1987, the Raymundos, thru counsel, wrote plaintiffs informing them that their nonpayment to BPI constituted nonperformance of their obligation.
- On January 7, 1987, the Velardes responded thru counsel and advised that they are willing to pay the balance in cash not later that Jan 21 1987 provided that: a) respondents deliver actual possession of the property not later that Jan 15, 1987; b) respondents cause the release of title and mortgage from BPI and make the title available and free from any liens and encumbrances; and c) respondents execute an absolute deed of sale in favor of Avelina Velarde not later than Jan 21, 1987. - Jan 8, 1987, defendants sent the Velardes a notarial notice of cancellation/rescission of the intended sale of the property, allegedly due to the plaintiffs’ failure to comply with the terms and conditions of the Deed of Sale with Assumption of Mortgage and the Undertaking.
- Feb 9, 1987, the Velardes filed a complaint against respondents for specific performance, nullity of cancellation, writ of possession, and damages.
- RTC instructed the parties to proceed with the sale, directing the Velardes to pay the balance of P1.8M and ordered the Raymundos to execute a deed of absolute sale and to surrender possession of property to the Velardes.
- CA reversed the ruling and dismissed the Velardes’ Complaint.
ISSUES
1. WON there is a breach of contract
2. WON the rescission by the Raymundos of the contract valid
3. WON the finding of the CA that the Velardes’ Jan 7, 1987 letter gave three “new conditions” constituted an attempt to novate, thus necessitating a new agreement between the parties
HELD
1. Yes. In a contract of sale, the seller obligates itself to transfer the ownership of and deliver a determinate thing, and the buyer to pay therefore a price certain in money or its equivalent.
- Private respondents already performed their obligation through the execution of the Deed of Sale, which effectively transferred ownership of property to Velarde through consecutive delivery. Prior physical delivery or possession is not legally required, and the execution of the Deed of Sale is deemed equivalent to delivery. - Petitioners did not perform their correlative obligation of paying the contract price in the manner agreed upon. They wanted private respondents to perform obligations beyond those stipulated in the contract before fulfilling their own obligation to pay the full purchase price.
2. Yes. Private respondents’ right to rescind the contract finds basis in Article 1191 of the Civil Code, which provides:
“Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek
rescission even after he has chosen fulfillment, of the latter should become impossible.”
- The right of rescission of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of faith by the other party who violates the reciprocity between them. The breach contemplated in said provision is the obligor’s failure to comply with an existing obligation. When the obligor cannot comply with what is incumbent upon it, the oblige may seek rescission and, in the absence of any just cause for the court to determine the period of compliance, the court shall decree the rescission.
- Private respondents validly exercised their right to rescind the contract, because of the failure of petitioners to comply with their obligation to pay the balance of the purchase price. The Velardes violated the very essence of reciprocity in the contract of sale, a violation that consequently gave rise to private respondents’ right to rescind the same in accordance with law.
- Mutual restitution required in rescission.
- the breach committed by petitioners was a nonperformance of a reciprocal obligation, not a violation of the terms and conditions of the mortgage contract. Thus, the automatic rescission and forfeiture of payment clauses do not apply. Civil Code provisions shall govern.
- Since breach herein is under A1191, mutual restitution is required to bring back the parties their original situation prior to the inception of the contract.
- Rescission creates an obligation to return the object of the contract. It can be carried out only when the one who demands rescission can return whatever he may be obliged to restore.
- To rescind is t declare a contract void at its inception and to put an end to it as though it never was.
3. SC did not find it necessary to discuss third issue but said that the three conditions were not part of the original contract, and that petitioners had no right to demand preconditions to the fulfillment of their obligation, which had become due.
Disposition CA decision affirmed with modification that private respondents are
ordered to return to petitioners P874,150 with legal interest.
WOODHOUSE V HALILI
;
31, 1953
LABRADOR July
FACTS
- November 29, 1947- plaintiff entered into a written agreement with defendant: 1. that they shall organize a partnership for the bottling and distribution of Mission soft drinks, plaintiff to act as industrial partner or manager, and the defendant as a capitalist, furnishing the capital necessary therefore
2. that the defendant was to decide matters of general policy regarding the business, while the plaintiff was to attend to the operation and development of the bottling plant
3. that plaintiff was to secure the Mission Soft Drinks franchise for and in behalf of the proposed partnership
4. that the plaintiff was to receive 30 per cent of the net profits of the business - Prior to entering into this agreement, plaintiff had informed the Mission Dry Corporation of Los Angeles, California, U. S. A., manufacturers of the bases and ingredients of the beverages bearing its name, that he had interested a prominent
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Prof. Labitag
financier (defendant herein) in the business, who was willing to invest half a million dollars in the bottling and distribution of the said beverages, and requested, in order that he may close the deal with him, that the right to bottle and distribute be granted him for a limited time under the condition that it will finally be transferred to the corporation
- Pursuant to this request, plaintiff was given "a thirty days' option on exclusive bottling and distribution rights for the Philippines"
- The contract was finally signed by plaintiff on December 3, 1947.
- When the bottling plant was already in operation, plaintiff demanded of defendant that the partnership papers be executed.
- Defendant gave excuses and would not execute said agreement, thus the complaint by the plaintiff.
- Plaintiff:
1. execution of the contract of partnership 2. and accounting of profits
3. share thereof of 30 per cent
4. damages in the amount of P200,000 - Defendant:
1. the defendant’s consent to the agreement, was secured by the representation of plaintiff that he was the owner, or was about to become owner of an exclusive bottling franchise, which representation was false, and that plaintiff did not secure the franchise but was given to defendant himself 2. that defendant did not fail to carry out his undertakings, but that it was plaintiff who failed
3. that plaintiff agreed to contribute to the exclusive franchise to the partnership, but plaintiff failed to do so
4. counterclaim for P200,00 as damages - CFI ruling:
1. accounting of profits and to pay plaintiff 15 % of the profits 2. execution of contract cannot be enforced upon parties 3. fraud wasn’t proved
ISSUES
1. WON plaintiff falsely represented that he had an exclusive franchise to bottle Mission beverages
2. WON false representation, if it existed, annuls the agreement to form the partnership
HELD
1. Yes. Plaintiff did make false representations and this can be seen through his letters to Mission Dry Corporation asking for the latter to grant him temporary franchise so that he could settle the agreement with defendant. The trial court reasoned, and the plaintiff on this appeal argues, that plaintiff only undertook in the agreement "to secure the Mission Dry franchise for and in behalf of the proposed partnership." The existence of this provision in the final agreement does not militate against plaintiff having represented that he had the exclusive franchise; it rather strengthens belief that he did actually make the representation. defendant believed, or was made to believe, that plaintiff was the grantee of an exclusive franchise. Thus it is that it was also agreed upon that the franchise was to be transferred to the name of the partnership, and that, upon its dissolution or termination, the same shall be reassigned to the plaintiff.
- Again, the immediate reaction of defendant, when in California he learned that plaintiff did not have the exclusive franchise, was to reduce, as he himself testified, plaintiff's participation in the net profits to one half of that agreed upon. He could not have had such a feeling had not plaintiff actually made him believe that he (plaintiff) was the exclusive grantee of the franchise.
2. No. In consequence, article 1270 of the Spanish Civil Code distinguishes two kinds of (civil) fraud, the causal fraud, which may be ground for the annulment of a contract, and the incidental deceit, which only renders the party who employs it liable for damages. This Court has held that in order that fraud may vitiate consent, it must be the causal (dolo causante), not merely the incidental (dolo incidente) inducement to the making of the contract. The record abounds with circumstances indicative of the fact that the principal consideration, the main cause that induced defendant to enter into the partnership agreement with plaintiff, was the ability of plaintiff to get the exclusive franchise to bottle and distribute for the defendant or for the partnership. The original draft prepared by defendant's counsel was to the effect that plaintiff obligated himself to secure a franchise for the defendant. - But if plaintiff was guilty of a false representation, this was not the causal consideration, or the principal inducement, that led plaintiff to enter into the partnership agreement. On the other hand, this supposed ownership of an exclusive franchise was actually the consideration or price plaintiff gave in exchange for the share of 30 per cent granted him in the net profits of the partnership business. Defendant agreed to give plaintiff 30 per cent share in the net profits because he was transferring his exclusive franchise to the partnership. - May the agreement be carried out or executed? We find no merit in the claim of plaintiff that the partnership was already a fait accompli from the time of the operation of the plant, as it is evident from the very language of the agreement that the parties intended that the execution of the agreement to form a partnership was to be carried out at a later date. , The defendant may not be compelled against his will to carry out the agreement nor execute the partnership papers. The law recognizes the individual's freedom or liberty to do an act he has promised to do, or not to do it, as he pleases.
GERALDEZ V CA
;
23, 1994
REGALADO February
NATURE
- Petition for review on Certiorari
- This is an action for damages by reason of contractual breach filed by Lydia
Geraldez against Kenstar Travel Corporation.
FACTS
- Lydia came to know about the respondent through advertisements about tours in Europe and eventually availed of one of the packages they offered.
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Prof. Labitag
- The package was “VOLARE 3” which covered 22-day tour of Europe for 190,000 Php which she paid for herself and her sister.
- Her disappointments (because it was contrary to what was in the brochure) during the trip were:
• There was no European tour manager for their group of tourists
• The hotels which she and the group were billeted were not first- class
• The UGC Leather Factory, which was a highlight of the tour, was not visited
• The Filipino lady tour guide was performing said job for the first time.
- RTC: granted a writ of preliminary attachment against private respondent on the ground respondent committed fraud in contracting an obligation (as per petitioner’s motion) but said writ was also lifted upon filing a counterbond of Php 990k
- Lydia also filed other complaints at the Department of Tourism and the Securities and Exchange Commission which fined the respondent Php 5k and Php 10k respectively.
- RTC awarded moral damages, nominal damages, exemplary damages, and for attorney’s fees to Lydia Geraldez worth Php 500k, Php 200k, Php 300k and Php 50k respectively. Respondent also had to pay for the costs of the suit.
- CA modified the RTC’s decision since they found no malice could be imputed against Kenstar Travel Corporation.
ISSUE
WON private respondent acted in bad faith or with gross negligence in discharging its obligations under the contract.
HELD
Yes, Kenstar Travel Corporation did commit fraudulent misrepresentations amounting to bad faith to the prejudice of Lydia Geraldez and the members of the tour group.
Reasoning
- On respondent’s choice of tour guide
By providing the Volare 3 tourist group with an inexperienced and a first timer tour escort, KTC manifested its indifference to the convenience, satisfaction and peace of mind of its clients during the trip. Respondent
should have selected an experienced European tour guide, or it could have allowed Zapanta (the lady guide) to go as an understudy under the guidance, control, and supervision of an experienced and competent European or Filipino tour guide who could’ve given her training.
- The inability of the group to visit the leather factory is likewise reflective of the neglect and ineptness of Zapanta in attentively following the itinerary for the day.
This incompetence must necessarily be traced to the lack of due diligence on the part of KTC in the selection of its employees. The UGC leather factory
was one of the highlights of the tour and it was incumbent upon the organizers of the tour to take special efforts to ensure the same.
- Clearly, KTC’s choice of Zapanta as tour guide is a manifest disregard of its specific assurances to the tour group, resulting in agitation and anxiety on their part, and which is contrary to the elementary rules of good faith and fair play. - On the European Tour Manager
KTC: the euro tour manager refers to an organization and not to an individual;
Geraldez didn’t attend the pre-departure briefing, wherein we explained the concept of the euro tour manager
SC: the advertisement reveals that the contemplated tour manager contemplated is
a natural person not a juridical one as KTC asserts. Furthermore, the obligation to provide not only a European tour manager, but with local European tour guides were likewise never made available. Zapanta couldn’t even remember the name of the European guide with her supposedly.
From the advertisement, it is beyond cavil that the import of the “he” is a natural and not a juridical person (in reference to the euro tour guide). There is no need for further interpretation when the wordings are clear. The meaning that will
determine the legal effect of a contract is that which is arrived at by objective standards; One is bound not by what he subjectively intends, but by what he leads others reasonably to think he intends.
KTC relies in the delimitation of its responsibility printed on the face of its brochure. (see page 330)
SC:
* CONTRACT OF ADHESION: contracts drafted by only one party (i.e.
corporations); the only participation of the other party is the affixing of his signature or his “adhesion” thereto. Such a contract must be strictly construed against the one who drafted the same, especially where there are stipulations that are printed in fine letters and are hardly legible. SC: Private respondents cannot rely on its defense of “substantial compliance” with
the contract.
- On the First Class Hotels
The respondents likewise committed a grave misrepresentation when it assured in its Volare 3 tour package that the hotels it had chosen would provide the tourists complete amenities and were conveniently located along the way for the daily itineraries. It turned out that some of the hotels were not sufficiently equipped with even the basic facilities and were at a distance from the cities covered by the projected tour.
- Even assuming arguendo that there is indeed a difference in classifications , it cannot be denied that a first-class hotel could at the very least provide basic necessities and sanitary accommodations.
- if it could not provide the tour participants with first-class lodgings on the basis of the amount that they paid, it could and should have instead increased the price to enable it to arrange for the promised first-class accommodations.
- Damages
Moral damages may be awarded in breaches of contract where the obligor acted
fraudulently or in bad faith.
- The fraud or dolo which is present or employed at the time of birth or
perfection of a contract may either be dolo causante or dolo incidente. - Dolo Causante – causal fraud , referred to in Art. 1338,
- are those deceptions or misrepresentations of a serious character employed by one party
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Prof. Labitag
- without which the other party would NOT have entered into the contract - essential cause of the consent
- effects: nullity of the contract and indemnification of damages
- Dolo Incidente – incidental fraud, referred to in Art. 1334,
- are those which are not serious in character
-without which the other party would still have entered into the contract - some particular or accident of the obligation
- effects: damages
- SC: KTC is responsible for damages whether it has committed either dolo causante or incidente.
- Lydia joined the tour with the belief of a euro tour guide accompanying them; she suffered serious anxiety and distress when the group was unable to visit the leather factory and when she didn’t receive first-class accommodations in their lodgings. These entitle her to moral damages.
- Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. According to the Code Commission, exemplary damages are required by public policy, for wanton acts must be suppressed.
- Under the present state of law, extraordinary diligence is not required in travel or tour contracts, such as that in the case at bar, the travel agency acting as tour operator must nevertheless be held to strict accounting for contracted services, considering the public interest in tourism, whether in the local or in the international scene.
Disposition MORAL DAMAGES –Php 100k, EXEMPLARY DAMAGES – Php 50k,
ATTY’S FEES –Php 20k and costs against the respondent KTC. Award for nominal damages is deleted.
Note Nominal damages are awarded when there the complainant suffered actual
or substantial damage from the breach of contract.
GUTERREZ V GUTIERREZ
;
23, 1931
MALCOLM September
NATURE
Appeal from the judgment of the CFI of Manila
FACTS
- On Feb 2, 1930, a passenger truck and a private automobile collided while attempting to pass each other on the Talon bridge on the Manila South Rd in Las Pinas. The truck was driven by the chauffer Abelardo Velasco (AV) and was owned by Saturnino Cortez (SCor). The auto was being operated by Bonifacio Gutierrez (BG), 18 y/o, and was owned by his parents Mr./Mrs. Manuel Gutierrez (MG).
- At the time of the collision, BG was with his mother and several other members of the family. MG was not in the car.
- A passenger of the autobus, Narciso Gutierrez (NG) was en route from San Pablo to Manila. The collision resulted in NG suffering a fractured right leg requiring him medical assistance.
- The collision was caused by negligence. While the plaintiff blames both sets of defendants, the owner of the passenger truck blames the automobile and vice versa.
ISSUE
What are the liabilities of the owners and drivers of the vehicles involved in the collision
HELD
- BG was an incompetent chauffer as he was driving in an excessive speed. The guarantee the father gave at the time the son was granted a license to operate motor vehicles gave the father responsible for the acts of his son.
- SCor and AV’s liability is based on the contract. The position of the truck on the bridge and the speed in operating the machine and the lack of care employed reached such conclusion. The fact that 2 drivers were approaching a narrow bridge, neither willing to slow up and give right of way inevitably resulted to the collision and the accident.
- The contention that there was contributory negligence as the plaintiff kept his foot outside the truck was not pleaded and was dismissed as speculative.
Ratio
In the US it is uniformly held that the head of the house, the owner of the vehicle, who maintains it for the general use of his family is liable for its negligent operation by one of his children, whom he designates or permits to run it, where the car is occupied and being used for the pleasure of the other members of the family, other than the child driving it.
VAZQUEZ V DE BORJA
;
23, 1944
OZAETA February
NATURE
PETITION to review on certiorari a decision of te Court of Appeals
FACTS
- de Borja entered into a contract with Natividad-Vazquez Sabani Development to purchased 4,000 sack of palay at P2.10 per sack for a total consideration of P 8,400 which was paid by de Borja. Vazquez and Busuego represented the Company in the transaction as acting manager and treasurer, respectively. In addition, de Borja delivered to the defendants a total of 4,000 empty sacks which presumealy were to be used in the delivery of the palay.
- Defendants only deliverd to de Borja a total of 2,488 cavans of palay with a value of P5,224.80 and have since refused to deliver the balance.
- Action was commenced by Francisco de Borja in the Court of First Instance of Manila against Antonio Vazquez and Fernando Busuego to recover from them jointly and severally the total amount of P4,702.70 arising out of the non delivery of 1,512 cavans of rice and 1,510 empty sacks.
- Vazquez denied entering into the contract in his individual and personal capacity. The contract was between plaintiff and Natividad-Vazquez Sabani Development Co., Inc., a corporation which the defendant Vazquez represented as its acting manager. Vazquez filed a counterclaim for P1,000 as damages.
- Trial court found in favor of the plaintiff and ordered Vazquez to pay the total sum of P3,552.70. It also absolved Busuego from the complaint.
- Vazquez appealed to the CA and it modified the judgement by reducing the amount to P 3,314.78 plus interest and costs. On motion for reconsideration, the CA
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Prof. Labitag
set aside its judgment and ordered the case remanded to the court of origin for further proceedings.
- Hence the two petitions from both plaintiff and defendant to the Supreme court for certiorari.
ISSUES
1.WON de Borja entered into the contract with Vazquez in his personal capacity or as manager of the Natividad-Vazquez Sabani Development
2. WON Vazquez is entitled to counter damages arising out of the erroneous suit
HELD
Ratio
- The Action being on a contract, and it appearing from the preponderance of the evidence that the party liable is Natividad-Vazquez, which is not a party to the suit, the complaint should have been dismissed.
- No award is given to Vazquez as the SC believes that he was morally responsible to the party with whom he contracted to see to it that the corporation represented by him fulfilled the contract by delivering that palay it had sold particularly since the same had already been made.
Reasoning
- Corporations are artificial beings invested by law with a personality of is own,
separate and distinct from that of the shareholders and from that of its officers who manage and run its affairs. The mere fact that its personality is owing to a legal fiction and that it necessarily has to act thru its agents does not make such agents personally liable on a contract duly entered into by them for and in behalf of said corporation. This legal fiction may however be disregarded only when an attempt is made to use its as a cloak to hide an unlawful or fraudulent purpose. As there seems to be no showing that Vazquez personally benefited from the transaction, he is within his rights to invoke the legal fiction to avoid personal liability.
- The trial court in finding Vazquez guilty of negligence in the performance of the contract and in holding him personally liable manifestly failed to distinguish a contractual from an extra-contractual obligation, or an obligation arising from contract from an obligation arising from culpa aquiliana. In the contractual obligation, it is the obligor to fulfill said contract and not its agents. Hence, the obligor is the party guilty of negligence in the fulfillment of said contract. On the other hand, if independently from the contract, Vazquez by his fault or negligence cased damage to the plaintiff, then he would be personally liable for such damage. But since the suit is based on the contract, then the court has no jurisdiction over the issue and could not adjudicate upon it.
Disposition The judgment of the CA is reversed and the complaint is dismissed,
without finding as to cost.
SEPARATE OPINION
[
]
PARAS dissent
-From the facts, it appears that Vasquez prior to entering into contract with de Borja knew that his company was already insolvent. Knowing full well that the contract could not be fulfilled, he nonetheless consummated the transaction and
received the full payment. Hence the CFI and Ca are both correct in holding the failure to deliver was the result of Vazquez’s fault or negligence.
- While it is true that the contract is between de Borja and the company, it was proven during the trial that it was Vazquez who prevented the performance of the contract and also of negligence bordering on fraud which caused damage to de Borja. Hence the technicality of a procedural error should not be hindrance to the rendition.
- The suit be considered as based on fault and negligence of Vazquez and to sentence defendant accordingly.
,
&
DE GUIA V MANILA ELECTRIC RAILROAD
LIGHT CO
;
STREET
January
28, 1920
NATURE
APPEAL from a judgment of the Court of First Instance of Manila.
FACTS
-The plaintiff is a physician residing in Caloocan City.
-Sept 4, 1915, at about 8pm, the defendant boarded a car at the end of the line with the intention of coming to Caloocan.
-At about 30 meters from the starting point the car entered a switch, the plaintiff remaining on the back platform holding the handle of the right-hand door. Upon coming out of the switch, the small wheels of the rear truck left the track ran for a short distance and hit a concrete post.
-the post was shattered: at the time the car struck against the concrete post, the plaintiff was allegedly standing on the rear platform, grasping the handle of the right-hand door. The shock of the impact threw him forward, and the left part of his chest struck against the door causing him to fall. In the falling, the plaintiff alleged that his head struck one of the seats and he became unconscious.
-the plaintiff was taken to his home which was a short distance away from the site of the incident. A physician of the defendant company visited the plaintiff and noted that the plaintiff was walking about and apparently suffering somewhat from bruises on his chest. The plaintiff said nothing about his head being injured and refused to go to a hospital.
-The plaintiff consulted other physicians about his condition, and all these physicians testified for the plaintiff in the trial court.
-the plaintiff was awarded with P6,100, with interest and costs, as damages incurred by him in consequence of physical injuries sustained. The plaintiff and the defendant company appealed.
ISSUES
1. WON the defendant has disproved the existence of negligence 2. What is the nature of the relation between the parties? 3. WON the defendant is liable for the damages
4. If liable for damages, WON the defendant could avail of the last paragraph of Art 1903 on culpa aquiliana (Art 2180)
5. What is the extent of the defendant’s liability?
5.1 Did the trial judge err in the awarding of the damages for loss of professional earnings (P900)?
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5.2 Did the trial judge err in the awarding of the damages for inability to accept a position as a district health officer?
5.3 Did the trial judge err in not awarding damages for the plaintiff’s supposed incapacitation for future professional practice (P30,000)?
5.4 Is the plaintiff reasonable in demanding P10,000 for the cost of medical treatment and other expenses incident to his cure?
6. WON the trial judge erred in treating written statements of the physicians who testified as primary evidence?
HELD
1. NO, the existence of negligence in the operation of the car must be sustained, as not being clearly contrary to the evidence.
Ratio An experienced and attentive motorman should have discovered that
something was wrong and would have stopped before he had driven the car over the entire distance from the point where the wheels left the track to the place where the post was struck.
Reasoning The motorman alleged that he reduced his speed to the point that the
car barely entered the switch under its own momentum, and this operation was repeated as he passed out. Upon getting again on the straight track he put the control successively at points one, two, three and lastly at point four. At the moment when the control was placed at point four he perceived that the rear wheels were derailed and applied the brake; but at the same instant the car struck the post, some 40 meters distant from the exit of the switch. However, testimonial evidence alleged that the rate of a car propelled by electricity with the control at point "four" should be about five or 6 miles per hour (around 8 kph) and other evidence showed that the car was behind schedule time and that it was being driven, after leaving the switch, at a higher rate than would ordinarily be indicated by the control at point four. The car was practically empty (so it’s possible that it could run faster???). The court granted that there is negligence as shown by the distance which the car was allowed to run with the front wheels of the rear truck derailed, aside from the fact that the car was running in an excessive speed.
2. The relation between the parties was of a contractual nature.
Ratio The company was bound to convey and deliver the plaintiff safely and
securely with reference to the degree of care which, under the circumstances, is required by law and custom applicable to the case.
Reasoning The plaintiff had boarded the car as a passenger for the city of Manila
and the company undertook to convey him for hire.
3. YES, the defendant is liable for the damages
Ratio/ Reasoning Upon failure to comply with that obligation arising from the
contract, the company incurred the liability defined in articles 1103-1107 of the Civil Code.
4. No, the defendant could not avail of the last paragraph of Art 1903 Ratio/ Reasoning The last paragraph of article 1903 of the civil code refers to
liability incurred by negligence in the absence of contractual relation, that is, to the culpa aquiliana of the civil law and not to liability incurred by breach of contract; therefore, it is irrelevant to prove that the defendant company had exercised due care in the selection and instruction of the motorman who was in charge of its car and that he was in experienced and reliable servant.
5. The defendant is liable for the damages ordinary recoverable for the breach of contractual obligation, against a person who has acted in good faith, which could be reasonably foreseen at the time the obligation is contracted.
Ratio The extent of the liability for the breach of a contract must be determined in
the light of the situation in existence at the time the contract is made; and the damages ordinarily recoverable are in all events limited to such as might be reasonably foreseen in the light of the facts then known to the contracting parties.
Reasoning The court has the power to moderate liability according to the
circumstances of the case, i.e. when the defendant must answer for the consequences of the negligence of its employees. Also, an employer who has displayed due diligence in choosing and instructing his servants is entitled to be considered a debtor in good faith (w/n meaning of article 1107, old CC)
5.1. NO, the trial judge was liberal enough to the plaintiff.
Reasoning As a result of the incident, the plaintiff was unable to properly attend
his professional labors for 3 months and suspend his practice for that period. By testimonial evidence, his customary income, as a physician, was about P300/month. So the trial judge accordingly allowed P900 as damages for loss of earnings.
5.2 YES. The trial judge erred in awarding such damages.
Ratio Damage of this character could not, at the time of the accident, have been
foreseen by the delinquent party as a probable consequence of the injury inflicted.
Reasoning The representative from Negros Occidental has supposedly asked Dr.
Montinola to nominate the plaintiff as district health officer of Negros Occidental for two years, with a salary of P1,600 per annum and a possible outside practice worth of P350. However, even if true, the damages were too speculative to be the basis of recovery in a civil action.
5.3 NO. the trial court was fully justified in rejecting the exaggerated estimate of damages allegedly created.
Ratio/ Reasoning The plaintiff alleged, even showing testimonial evidences from
numerous medical experts, that he developed infarct of the liver and traumatic neurosis, accompanied by nervousness, vertigo, and other disturbing symptoms of a serious and permanent character, and these manifestations of disorder rendered him liable to a host of other dangerous diseases, and that restoration to health could only be accomplished after long years of complete repose.
-The medical experts introduced by the defendant testified however that the plaintiff’s injuries, considered in their physical effects, were trivial and that the attendant nervous derangement, with its complicated train of ailments, was merely simulated.
-According to the court, the evidence showed that immediately after the incident the plaintiff, sensing in the situation a possibility of profit, devoted himself with great assiduity to the promotion of this litigation; and with the aid of his own professional knowledge, supplemented by suggestions obtained from his professional friends and associates, he enveloped himself more or less unconsciously in an atmosphere of delusion which rendered him incapable of appreciating at their true value the symptoms of disorder which he developed.
5.4 No. He is only justified with P200, or the amount actually paid to Dr. Montes (the doctor who treated the plaintiff) which is the obligation supposedly incurred with respect to treatment for said injuries.
Ratio In order to constitute a proper element of recovery in an action of this
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Prof. Labitag
be such as to have created a legal obligation upon the plaintiff but such as was reasonably necessary in view of his actual condition.
Reasoning Dr. Montes, in his testimony, speaks in the most general terms with
respect to the times and extent of the services rendered; and it is not clear that those services which were rendered many months, or year, after the incident had in fact any necessary or legitimate relation to the injuries received by the plaintiff. -On the obligation supposedly incurred by the plaintiff to three other physicians: (1) it does not appear that said physicians have in fact made charges for those services with the intention of imposing obligations on the plaintiff to pay them; (2) in employing so many physicians the plaintiff must have had in view the successful promotion of the issue of this lawsuit rather than the bona fide purpose of effecting the cure of his injuries.
6. YES, certificates or the written statements of the physicians which were referred to in the trial cannot be admitted as primary evidence since it is fundamentally of a hearsay nature
Ratio The only legitimate use of certificates could be put, as evidence for plaintiff,
was to allow the physician who issued it to refer thereto, to refresh his memory upon details which he might have forgotten
Disposition Judgment from the trial court modified by reducing the amount of the
recovery to P1,100, with legal interest from Nov. 8, 1916 (all judges – 6 (ponente counted) – concurred)
.
SARMIENTO V SPS CABRIDO
;
9, 1003
CORONA April
NATUREPetition for review on certiorari of a decision of the Court of Appeals
FACTS
Tomasa Sarmiento’s friend, Dra. Virginia Lao, requested her to find someone to reset a pair of diamond earrings into two gold rings. Sarmiento sent Tita Payag with the earrings to Dingding’s Jewelry Shop, owned and managed by spouses Luis and Rose Cabrido, which accepted the job order for P400. Petitioner provided 12 grams of gold to be used in crafting the pair of ring settings. After 3 days, Payag delivered to the jewelry shop one of the diamond earrings which was earlier appraised as worth .33 carat and almost perfect in cut and clarity. Respondent Marilou Sun went on to dismount the diamond from original settings. Unsuccessful, she asked their goldsmith, Zenon Santos, to do it. He removed the diamond by twisting the setting with a pair of pliers, breaking the gem in the process. Petitioner required the respondents to replace the diamond with the same size and quality. When they refused, the petitioner was forced to buy a replacement in the amount of P30,000. Rose Cabrido, manager, denied having any transaction with Payag whom she met only after the latter came to seek compensation for the broken piece of jewelry. Marilou, on the other hand, admitted knowing Payag to avail their services and recalled that when Santos broke the jewelry, Payag turned to her for
reimbursement thinking she was the owner. Santos also recalled that Payag requested him to dismount what appeared to him as sapphire and that the stone accidentally broke. He denied being an employee of the Jewelry shop. The MTCC of Tagbilaran City rendered a decision in favor of the petitioner. On appeal, Respondents conceded to the existence of an agreement for crafting a pair of gold rings mounted with diamonds but denied they had obligation to dismount the diamonds from the original setting. Petitioner claims that dismounting the diamonds from the original setting was part of the obligation assumed by respondents under the contract of service. The RTC ruled in favor of the respondents. CA affirmed the judgment of the RTC.
ISSUES
1. WON dismounting of the diamond from its original setting was part of the obligation
2. WON respondents are liable for damages 3. WON respondents are liable for moral damages
HELD
1. YES
Ratio The contemporaneous and subsequent acts of the parties reveal the scope
of obligation assumed by the jewelry shop to reset the pair of earrings.
Reasoning Marilou expressed no reservation regarding the dismounting of the
diamonds. She could have instructed Payag to have the diamonds dismounted first, but instead, she readily accepted the job order and charged P400. After the new settings were completed, she called petitioner to bring the diamond earrings to be reset. She examined one of them and went on to dismount the diamond from the original setting. After failing to do the same, she delegated it to the goldsmith. Having acted the way she did, she cannot deny that the dismounting was part of the shop’s obligation to reset the pair of earrings.
2. YES
Ratio Those who, in the performance of their obligations are guilty of fraud,
negligence or delay and those who in any manner contravene the tenor thereof, are liable for damages. The fault or negligence of the obligor consists in the ‘omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place.’
Reasoning Santos acted negligently in dismounting the diamond from its original
setting. Instead of using a miniature wire, which is the practice of the trade, he used a pair of pliers. Marilou examined the diamond before dismounting and found the same to be in order. The subsequent breakage could only have been caused by Santos’ negligence in using the wrong equipment. Res ipsa loquitur. Facts show that Marilou, who has transacted with Payag on at least 10 occasions, and Santos, who has been accepting job referrals through respondents for 6 mos. now, are employed at the jewelry shop. The jewelry shop failed to perform its obligation with the ordinary diligence required by the circumstances.
3. YES
Ratio Moral damages may be awarded in a breach of contract when there is proof
that defendant acted in bad faith, or was guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligation.
Reasoning Santos was a goldsmith for more than 40 years. He should have known
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gross negligence of their employee makes the respondents liable of moral damages.
Disposition Petition was granted and CA decision was reversed. Respondents were
ordered to pay P30,000 as actual damages and P10,000 as moral damages.
CRISOSTOMO V CA
-
;
25, 2003
YNARES SANTIAGO August
NATURE
Petition for review on certiorari of a decision of the Court of Appeals
FACTS
- Atty. Crisostomo contracted the services of Caravan Travel and Tours Int’l to arrange and facilitate her booking, ticketing, and accommodation in a tour dubbed Jewels of Europe at a total cost of P74k; Crisostomo was given discount for her niece, Menor was the company’s ticketing manager
- Pursuant to the contract, Menor went to her aunt’s house on June 12, 1991 (Wednesday) to deliver the travel documents and plane tickets. Crisostomo gave Menor the full payment. Menor told her to be at the airport on Saturday two hours before her flight
- Without checking her travel documents, Crisostomo went to NAIA on Saturday. She discovered that the flight she was supposed to take had already departed the previous day.
- Crisostomo called up Menor to complain. Menor prevailed upon her aunt to take another tour – the British Pageant. She was asked anew to pay P21k as partial payment and commenced the trip in July
- Upon Crisostomo’s return, she demanded the difference between the sum she paid for Jewels of Europe and the amount she owed respondent for British Pageant - Caravan Travel refused to reimburse her saying it was non-refundable
- Trial Court held that the Caravan Travel was negligent in erroneously advising Crisostomo of her departure date through it employee, Menor who was not presented as a witness. However, Crisostomo was guilty of contributory negligence for not verifying the exact date of her departure. Accordingly, 10% of the amount was deducted from the amount being claimed as refund
- Court of Appeals also found both parties at fault but held that Crisostomo is more negligent because as a lawyer and a well-traveled person, she should have known better. She was ordered to pay the Caravan Travel the balance of British Pageant plus interest
ISSUE
WON a travel agency is bound under the law to observe extraordinary diligence in the performance of its obligation
HELD
NO. For reasons of public policy, a common carrier in a contract of carriage is bound by law to carry passengers as far as human care and foresight can provide using the utmost diligence of a very cautious person and with due regard for all circumstances.
- However, a travel agency is not a carrier that it is not an entity engaged in the business of transporting either passengers or goods. Respondent’s services as a
travel agency include procuring tickets and facilitating travel permits or visas and booking customers for tours. It is thus not bound under the law to observe extraordinary diligence in the performance of its obligation
,
.
CETUS DEVELOPMENT INC V CA
;
7, 1989
MEDIALDEA August
NATURE
Petition for review on certiorari of the decision of the CA
FACTS
- Respondents Ong, Teng, Liwanag, Canlas, Sudario, Nagbuya, were lessees of premises in Quiapo, Manila, originally owned by the Susana Realty. They were individual, verbal leases, on a month-to-month basis. Rental payments were made to a collector of the Susana Realty who went to the premises monthly.
- Premises were sold to petitioner, Cetus Development, in 1984. The private respondents continued to pay monthly rentals to a collector sent by the petitioner from April to June, 1984. In August and September, they failed to pay because no collector came.
- In October, petitioner sent letters demanding they vacate the premises and pay back rentals. Immediately upon receipt of the demand letters, private respondents paid arrearages, which were accepted subject to the condition that the acceptance was without prejudice to the filing of an ejectment suit. Subsequent monthly rental payments were accepted under the same condition.
- For failure of the private respondents to vacate the premises as demanded in the letter, petitioner filed with the Metropolitan Trial court complaints for ejectment. - Trial court dismissed the case, and subsequently the Regional Trial Court did so, as did the CA.
ISSUES
WON there exists a cause of action, when the complaints for unlawful detainer were filed considering the fact that upon demand by petitioner for payment of back rentals, respondents immediately tendered payment, which was accepted.
HELD
-Section 2, RoC, "Landlord to proceed against tenant only after demand." states that the right to bring an action of ejectment or unlawful detainer must be counted from the time the defendants failed to pay rent after the demand therefor. The demand required partakes of an extrajudicial remedy that must be pursued before resorting to judicial action so much so that when there is full compliance with the demand, there is no need for court action.
-for purposes of bringing an ejectment suit, 2 requisites: 1) must be failure to pay rent/comply with conditions of lease, and 2) must be DEMAND to both pay or to comply and vacate.
- in this case, no cause of action for ejectment has accrued. NO FAILURE YET on the part of private respondents, because upon demand, they paid.
**exceptions where demand is not required: (a) when obligation or law so declares; (b) when from the nature and circumstances of obligation it can be inferred that time is of the essence of the contract, (c) when demand would be useless.
