Oblicon Case Book

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SAINT LOUIS UNIVERSITY

Obligations and Contracts

Case Book

Cabson, Claire Ignacio, Regine Kiwang, Chesty Joy

Pocais, Laurice Poserio, Chrissan Mae

Abad, Kendal Paraan, Brian Jonathan Vehemente, Joseph Harvey

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CORPORATION ... 846 DOMINGO CARABEO vs. SPOUSES NORBERTO and SUSAN DINGCO ... 848 PIO SIAN MELLIZA vs. CITY OF ILOILO, UNIVERSITY OF THE PHILIPPINES and THE COURT APPEALS ... 849 MANUEL CATINDIG, represented by his legal representative EMILIANO CATINDIG-RODRIGO vs. AURORA IRENE VDA. DE MENESES ... 851 ANTHONY ORDUÑA, DENNIS ORDUÑA, and ANTONITA ORDUÑA vs. EDUARDO J. FUENTEBELLA, MARCOS S. CID, BENJAMIN F. CID, BERNARD G. BANTA, and ARMANDO GABRIEL, JR. ... 852 CARMELA BROBIO MANGAHAS vs. EUFROCINA A. BROBIO ... 853 GOLDEN APPLE REALTY AND DEVELOPMENT CORPORATION and ROSVIBON REALTY CORPORATION vs. SIERRA GRANDE REALTY CORPORATION, MANPHIL INVESTMENT CORPORATION, RENAN V. SANTOS and PATRICIO MAMARIL ... 855 ASKAY vs. FERNANDO A. COSALAN ... 857 HEIRS OF THE LATE SPOUSES AURELIO AND ESPERANZA BALITE; Namely, ANTONIO T. BALITE, FLOR T. BALITE-ZAMAR, VISITACION T. BALITE-DIFUNTORUM, PEDRO T. BALITE, PABLO T. BALITE, GASPAR T. BALITE, CRISTETA T. BALITE and AURELIO T. BALITE JR., All Represented by GASPAR T. BALITE vs.

RODRIGO N. LIM ... 858 RAFAEL G. SUNTAY, substituted by his heirs, namely: ROSARIO, RAFAEL, JR., APOLINARIO, RAYMUND, MARIA VICTORIA, MARIA ROSARIO and MARIA LOURDES, all surnamed SUNTAY vs. THE HON. COURT OF APPEALS and FEDERICO C. SUNTAY ... 860 WILLIAM UY and RODEL ROXAS vs. COURT OF APPEALS, HON. ROBERT BALAO and NATIONAL HOUSING AUTHORITY ... 862 PENTACAPITAL INVESTMENT CORPORATION vs. MAKILITO B. MAHINAY... 864 HEIRS OF RAMON C. GAITE, CYNTHIA GOROSTIZA GAITE and RHOGEN BUILDERS vs. THE PLAZA, INC. and FGU INSURANCE CORPORATION ... 866 HICOBLINO M. CATLY (Deceased), Substituted by his wife, LOURDES A. CATLY vs. WILLIAM NAVARRO, ISAGANI NAVARRO, BELEN DOLLETON, FLORENTINO ARCIAGA, BARTOLOME PATUGA, DIONISIO

IGNACIO, BERNARDINO ARGANA, AND ERLINDA ARGANA-DELA CRUZ, and AYALA LAND, INC. ... 868 CONCHITA LIGUEZ vs. THE HONORABLE COURT OF APPEALS, MARIA NGO VDA. DE LOPEZ, ET AL. ... 870 PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y CANON FAUSTINO, deceased vs. LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng, deceased ... 872 SONIA F. LONDRES, ARMANDO V. FUENTES, CHI-CHITA FUENTES QUINTIA, ROBERTO V. FUENTES,

LEOPOLDO V. FUENTES, OSCAR V. FUENTES and MARILOU FUENTES ESPLANA vs. THE COURT OF APPEALS, THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, THE DEPARTMENT OF

TRANSPORTATION AND COMMUNICATIONS, ELENA ALOVERA SANTOS and CONSOLACION ALIVIO ALOVERA ... 874

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SPS. ANTONIO & LETICIA VEGA vs. SOCIAL SECURITY SYSTEM (SSS) & PILAR DEVELOPMENT

CORPORATION ... 876

CLARA M. BALATBAT vs. COURT OF APPEALS and Spouses JOSE REPUYAN and AURORA REPUYAN ... 878

UNIVERSAL ROBINA SUGAR MILLING CORPORATION vs. HEIRS OF ANGEL TEVES... 879

RITA SARMING, et.al. vs. CRESENCIO DY, et.al. ... 881

CEBU CONTRACTORS CONSORTIUM CO. vs. COURT OF APPEALS and MAKATI LEASING & FINANCE CORPORATION ... 883

ADR SHIPPING SERVICES, INC. vs. MARCELINO GALLARDO and THE HONORABLE COURT OF APPEALS . 885 VALENTIN MOVIDO, substituted by MARGINITO MOVIDO vs. LUIS REYES PASTOR ... 887

TSPIC CORPORATION vs. TSPIC EMPLOYEES UNION (FFW), representing MARIA FE FLORES, et.al. ... 889

SPS. RAFAEL P. ESTANISLAO AND ZENAIDA ESTANISLAO vs. EAST WEST BANKING ... 891

AGRIFINA AQUINTEY vs. SPOUSES FELICIDAD AND RICO TIBONG ... 893

ADORACION E. CRUZ, THELMA DEBBIE E. CRUZ, GERRY E. CRUZ and NERISSA CRUZ-TAMAYO vs. THE HONORABLE COURT OF APPEALS, SUMMIT FINANCING CORP., VICTOR S. STA. ANA, MAXIMO C. CONTRERAS, RAMON G. MANALASTAS, and VICENTE TORRES ... 895

NAPOLEON H. GONZALES vs. HONORABLE COURT OF APPEALS AND SPOUSES GABRIEL AND LUZVIMINDA CABALLERO ... 897

JUANA ALMIRA, RENATO GARCIA, ROGELIO GARCIA, RODOLFO GARCIA, ROSITA GARCIA, RHODORA GARCIA, ROSALINDA GARCIA, ROLANDO GARCIA and RAFAEL GARCIA Represented in this suit by EDGARDO ALVAREZ vs. COURT OF APPEALS AND FEDERICO BRIONES ... 899

PHILIPPINE BANK OF COMMUNICATIONS vs. ELENA LIM, RAMON CALDERON, and TRI-ORO INTERNATIONAL TRADING & MANUFACTURING CORPORATION ... 901

SPOUSES EFREN N. RIGOR and ZOSIMA D. RIGOR, for themselves and as owners of CHIARA CONSTRUCTION vs. CONSOLIDATED ORIX LEASING and FINANCE CORPORATION ... 902

RODOLFO P. VELASQUEZ vs. COURT OF APPEALS, and PHILIPPINE COMMERCIAL INTERNATIONAL BANK, INC. ... 904

HEIRS OF SOFIA QUIRONG, Represented by ROMEO P. QUIRONG vs. DEVELOPMENT BANK OF THE PHILIPPINES ... 906

SAMUEL U. LEE and PAULINE LEE and ASIATRUST DEVELOPMENT BANK, INC. vs. BANGKOK BANK PUBLIC COMPANY, LIMITED ... 908

EQUATORIAL REALTY DEVELOPMENT, Inc. vs. MAYFAIR THEATER, Inc. ... 911

MARIA ANTONIA SIGUAN vs. ROSA LIM, LINDE LIM, INGRID LIM and NEIL LIM ... 913

KHE HONG v. COURT OF APPEALS ... 915

SUNTAY v. COURT OF APPEALS ... 917

MANGAHAS v. BROBIO ... 919

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FUENTES v ROCA ... 923

ASSOCIATED BANK v. MONTANO ET.AL... 925

WILLIAM ALAIN MIAILHE v. COURT OF APPEALS ... 927

FIRST PHILIPPINE HOLDINGS CORPORATION v. TRANS MIDDLE EAST EQUITIES INC. ... 928

SANCHEZ v. MAPALAD ... 930

OESMER v. PARAISO DEVELOPMENT CORPORATION ... 932

PERPETUA VDA. DE APE v. COURT OF APPEALS... 934

JULIAN FRANCISCO v. PASTOR HERRERA ... 936

ROSARIO L. DE BRAGANZA v. FERNANDO F. DE VILLA ABRILLE ... 938

MIGUEL KATIPUNAN v. BRAULIO KATIPUNAN, JR. ... 939

NILO R. JUMALON v.COURT OF APPEALS ... 941

CABALES, ET. AL vs COURT OF APPEALS ... 942

ANUNCIACION VDA. DE OUANO v. REPUBLIC OF THE PHILIPPINES ... 943

SHOEMAKER v. LA TONDENA ... 945

PNB v. PHILIPPINE VEGETABLE OIL COMPANY ... 946

ANUNCIACION VDA. DE OUANO v. REPUBLIC OF THE PHILIPPINES ... 948

MUNICIPALITY OF HAGONOY v. DUMDUM ... 950

TAN v. VILLAPAZ ... 952

SPOUSES DAVID v. TIONGSON ... 954

GENARO CORDIAL v. DAVID MIRANDA ... 955

VILLANUEVA-MIJARES v. THE COURT OF APPEALS ... 956

ROSENCOR v. INQUING ... 957

FIRME v.BUKAL ... 959

HEIRS OF M. DORONIO v. HEIR OF F. DORONIO ... 960

GURREA v SUPLICO ... 961

FRENZEL v. CATITO ... 963

LA BUGA’AL-BLAAN v. RAMOS ... 965

AGAN v. PIATCO ... 967

COMMISSION ON ELECTIONS v. JUDGE MA. LUISA QUIJANO-PADILLA ... 969

SENATOR ROBERT S. JAWORSKI v. PAGCOR ... 971

OESMER v . PARAISO DEVELOPMENT CORPORATION ... 972

HEIRS OF BALITE v. RODRIGO N. LIM ... 974

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CRUZ vs. BANCOM FINANCE CORPORATION ... 978

CUATON v. REBECCA SALUD ... 980

INFOTECH v. COMELEC ... 982

PABUGAIS v. SAHIJWANI ... 984

LIGUEZ v. COURT OF APPEALS ... 987

PHILIPPINE BANKING CORPORATION v. LUI SHE ... 989

VIGILAR v. AQUINO ... 990

EPG CONSTRUCTION v. VIGILAR ... 992

GO CHAN v YOUNG ... 994

FRANCISCO v. HERRERA ... 996

MENDEZONA v. OZAMIZ ... 998

MANZANILLA v. CA ... 1000

RURAL BANK OF PARAÑÀQUE v. REMOLADO... 1002

COJUANGCO v. REPUBLIC ... 1004

RINGOR v. RINGOR ... 1006

SALVADOR v. CA ... 1008

SPOUSES RICARDO AND MILAGROS HUANG v. COURT OF APPEALS ... 1009

VDA. DE ESCONDE v. COURT OF APPEALS ... 1011

TALA REALTY SERVICES CORPORATION vs. BANCO FILIPINO SAVINGS AND MORTGAGE BANK ... 1012

HEIRS OF MEDINA v. COURT OF APPEALS ... 1016

FILIPINAS PORT SERVICES vs. GO ... 1020

MENDIZABEL v. APAO ... 1023

VDA. DE GUALBERTO v. GO... 1026

HEIRS OF YAP v. Court of Appeals ... 1028

HEIRS OF KIONOSALA v. DACUT ... 1030

RAMOS v. RAMOS ... 1032

THE INTESTATE ESTATE OF TY vs. COURT OF APPEALS ... 1034

VDA. DE RETUERTO v. BARZ ... 1036

CHIA LIONG TAN v. COURT OF APPEALS ... 1038

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MARIANO UN OCAMPO III v PEOPLE OF THE PHILIPPINES

G.R Nos. 156547-51. February 4, 2008

FACTS:

 The Department of Budget and Management (DBM) released National Aid for Local Government Units (NALGU) funds in the total amount of P100 million to the Province of Tarlac. The NALGU is a fund set aside in the General Appropriations Act to assist local governments in their various projects and services.

 Petitioner Ocampo, provincial governor of Tarlac from February 22, 1988 up to June 30, 1992, loaned out P56.6 million of the P100 million to the Lingkod Tarlac Foundation, Inc. (LTFI) for the implementation of various livelihood projects. The loan was made

pursuant to a Memorandum of Agreement (MOA) entered into by the Province of Tarlac, represented by petitioner Ocampo, and LTFI, represented by petitioner Flores, on August 8, 1988.

 How the P56.6 million released to LTFI was utilized became the subject matter of 25 criminal cases.

 Petitioner Ocampo, as governor of Tarlac, neglected to set up safeguards for the proper handling of the NALGU funds in the hands of LTFI which resulted in the disappearance of P1,132,739 and P58,000 of the said funds.

 Petitioners presented five documents to show that LTFI’s obligations to the Province of Tarlac, in the amount of P56.6 million, have been extinguished: the Tripartite

Memorandum of Agreement (TMOA) executed by the Province of Tarlac, LTFI and the Barangay Unity for Industrial and Leadership Development (BUILD) Foundation whereby the liability of LTFI in favor of the Province of Tarlac was transferred and assumed by BUILD in the total amount of P40 million; Deed of Assignment between Tarlac and LTFI whereby the latter assigned its loan portfolios (including interests and certificates of time deposit), the Juki embroidery machines and other assignable documents to the Province of Tarlac in the total amount of P16,618,403.

ISSUE: Whether the amount loaned was private in nature. Held: Yes.

The MOA shows that LTFI is “allowed to borrow funds directly from the Provincial Government to fund Lingkod Tarlac Foundation projects provided the projects are livelihood projects under the Rural Industrialization Can Happen Program.” Moreover, the agreement stipulates under the “Conditions for Release of Funds” that the Province of Tarlac “shall release in lump sum the appropriate funds for the approved projects covered by individual loan documents upon signing of the respective loan agreement…”

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Art. 1953 of the Civil Code provides that “[a] person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.”

Hence, petitioner Ocampo correctly argued that the NALGU funds shed their public character when they were lent to LTFI as it acquired ownership of the funds with an obligation to repay the Province of Tarlac the amount borrowed. The relationship between the Province of Tarlac and the LTFI is that of a creditor and debtor. Failure to pay the indebtedness would give rise to a collection suit.

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LEUNG BEN v P. J. O'BRIEN

G.R. No. L-13602 April 6, 1918

Facts:

 PJ O’ Brien instituted an action for recovery of the money in the amount of 15,000 which he won from Leung Ben in a series of gambling, banking and percentage games conducted ruing the two or three months prior to the institution of the suit.

 In his verified complaint the O’Brien asked for an attachment, under section 424, and 412 (1) of the Code of Civil Procedure, against the property of Leung Ben, on the ground that the latter was about to depart from the Philippine islands with intent to defraud his creditors. This attachment was issued; and acting under the authority thereof, the sheriff attached the sum of P15,000 which had been deposited by the herein plaintiff with the International Banking Corporation

 The contention of the petitioner is that the statutory action to recover money lost at gaming is that the statutory action to recover money lost at gaming is no such an action as is contemplated in this provision, and he therefore insists that the original complaint shows on its face that the remedy of attachment is not available in aid thereof; that the Court of First Instance acted in excess of its jurisdiction in granting the writ of

attachment

Issue: Whether or not the statutory obligation to restore money won at gaming

an obligation arising from "contract, express or implied.

Held:

Upon general principles, recognize both the civil and common law, money lost in gaming and voluntarily paid by the loser to the winner cannot in the absence of statute, be recovered in a civil action. But Act No. 1757 of the Philippine Commission, which defines and penalizes several forms of gambling, contains numerous provisions recognizing the right to recover money lost in gambling or in the playing of certain games (secs. 6, 7, 8, 9, 11). The original complaint in the action in the Court of First Instance is not clear as to the particular section of Act No. 1757 under which the action is brought, but it is alleged that the money was lost at gambling, banking, and percentage game in which the

defendant was banker. It must therefore be assumed that the action is based upon the right of recovery given in Section 7 of said Act, which declares that an action may be

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brought against the banker by any person losing money at a banking or percentage game.

In the case now under consideration the duty of the defendant to refund the money which he won from the plaintiff at gaming is a duty imposed by statute. It therefore arises ex lege. Furthermore, it is a duty to return a certain sum which had passed from the plaintiff to the defendant. By all the criteria which the common law supplies, this a duty in the nature of debt and is properly classified as an implied contract. It is well- settled by the English authorities that money lost in gambling or by lottery, if

recoverable at all, can be recovered by the loser in an action of indebitatus assumpsit for money had and received. This means that in the common law the duty to return money won in this way is an implied contract, or quasi-contract.

It is no argument to say in reply to this that the obligation here recognized is called an implied contract merely because the remedy commonly used in suing upon ordinary contract can be here used, or that the law adopted the fiction of promise in order to bring the obligation within the scope of the action of assumpsit. Such statements fail to express the true import of the phenomenon. Before the remedy was the idea; and the use of the remedy could not have been approved if it had not been for historical antecedents which made the recognition of this remedy at one logical and proper. Furthermore, it should not be forgotten that the question is not how this duty but what sort of obligation did the author of the Code of Civil Procedure intend to describe when he sued the term implied contract in section 412.

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ARTURO PELAYO v MARCELO LAURON ET AL.

G.R. No. L-4089 January 12, 1909

FACTS:

 On the 23rd of November, 1906, Arturo Pelayo, a physician residing in Cebu, filed a complaint against Marcelo Lauron and Juana Abella setting forth that on or about the 13th of October of said year, at night, the plaintiff was called to the house of the defendants, situated in San Nicolas, he was requested by them to render medical assistance to their daughter-in-law who was about to give birth to a child; after consultation with the attending physician, Dr. Escaño, it was found necessary, on account of the difficult birth, to remove the fetus by means of forceps which operation was performed by the plaintiff, who also had to remove the afterbirth.

 The just and equitable value of the services rendered by him was P500, which the defendants refuse to pay without alleging any good reason therefor;

 In answer to the complaint counsel for the defendants denied all of the allegation therein contained and alleged as a special defense, that their daughter-in-law had died in consequence of the said childbirth, and that when she was alive she lived with her husband independently and in a separate house without any relation whatever with them, and that, if on the day when she gave birth she was in the house of the defendants, her stay there was accidental and due to fortuitous circumstances ISSUE: Whether or not the defendants are liable to pay the professional fee.

HELD:

Obligations arising from law are not presumed. Those expressly determined in the code or in special laws, etc., are the only demandable ones. Obligations arising from contracts have legal force between the contracting parties and must be fulfilled in accordance with their stipulations. (Arts. 1090 and 1091.)

The rendering of medical assistance in case of illness is comprised among the mutual obligations to which the spouses are bound by way of mutual support. (Arts. 142 and 143.)

If every obligation consists in giving, doing or not doing something (art. 1088), and spouses are mutually bound to support each other, there can be no question but that, when either of them by reason of illness should be in need of medical assistance, the other is under the unavoidable obligation to furnish the necessary services of a physician in order that health may be restored, and he or she may be freed from the sickness by which life is jeopardized; the party bound to furnish such support is therefore liable for all expenses, including the fees of the medical expert for his professional services. This liability originates from the above-cited mutual obligation which the law has expressly established between the married couple.

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In the face of the above legal precepts it is unquestionable that the person bound to pay the fees due to the plaintiff for the professional services that he rendered to the

daughter-in-law of the defendants during her childbirth, is the husband of the patient and not her father and mother- in-law, the defendants herein. The fact that it was not the husband who called the plaintiff and requested his assistance for his wife is no bar to the fulfillment of the said obligation, as the defendants, in view of the imminent danger, to which the life of the patient was at that moment exposed, considered that medical assistance was urgently needed, and the obligation of the husband to furnish his wife in the indispensable services of a physician at such critical moments is specially established by the law, as has been seen, and compliance therewith is unavoidable; therefore, the plaintiff, who believes that he is entitled to recover his fees, must direct his action against the husband who is under obligation to furnish medical assistance to his lawful wife in such an emergency.

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ASJ CORPORATION AND ANTONIO SAN JUAN v SPS.

EFREN & MAURA EVANGELISTA

G.R. NO. 158086 February 14, 2008

FACTS:

 Respondents, under the name and style of R.M. Sy Chicks, are engaged in the large-scale business of buying broiler eggs, hatching them, and selling their hatchlings (chicks) and egg by-products in Bulacan and Nueva Ecija. For the incubation and hatching of these eggs, respondents availed of the hatchery services of ASJ Corp., a corporation duly registered in the name of San Juan and his family.

 On February 3, 1993, respondent Efren went to the hatchery to pick up the chicks and by-products covered by Setting Report No. 108, but San Juan refused to release the same due to respondents’ failure to settle accrued service fees on several setting reports starting from Setting Report No. 90. Nevertheless, San Juan accepted from Efren 10,245 eggs covered by Setting Report No. 113 and P15,000.00 in cash as partial payment for the accrued service fees.

 On February 10, 1993, Efren returned to the hatchery to pick up the chicks and by-products, but San Juan again refused to release the same unless respondents fully settle their accounts. In the afternoon of the same day, respondent Maura, with her son Anselmo, tendered P15,000.00 to San Juan, and tried to claim the chicks and by-products. She explained that she was unable to pay their balance because she was hospitalized for an undisclosed ailment. San Juan accepted the P15,000.00, but insisted on the full settlement of respondents’ accounts before releasing the chicks and by-products.

 Believing firmly that the total value of the eggs delivered was more than sufficient to cover the outstanding balance, Maura promised to settle their accounts only upon proper accounting by San Juan. San Juan disliked the idea and threatened to impound their vehicle and detain them at the hatchery compound if they should come back unprepared to fully settle their accounts with him.

ISSUE: Whether or not petitioners’ retention of the chicks and by-products on account of respondents’ failure to pay the corresponding service fees unjustified.

HELD:

Under Article 1248 of the Civil Code, the creditor cannot be compelled to accept partial payments from the debtor, unless there is an express stipulation to that effect. More so,

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respondents cannot substitute or apply as their payment the value of the chicks and by-products they expect to derive because it is necessary that all the debts be for the same kind, generally of a monetary character. Needless to say, there was no valid application of payment in this case.

Furthermore, it was respondents who violated the very essence of reciprocity in contracts, consequently giving rise to petitioners’ right of retention. This case is clearly one among the species of non-performance of a reciprocal obligation. Reciprocal obligations are those which arise from the same cause, wherein each party is a debtor and a creditor of the other, such that the performance of one is conditioned upon the simultaneous fulfillment of the other. From the moment one of the parties fulfills his obligation, delay by the other party begins.

Nonetheless, San Juan’s subsequent acts of threatening respondents should not remain among those treated with impunity. Under Article 19 of the Civil Code, an act constitutes an abuse of right if the following elements are present: (a) the existence of a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another. Here, while petitioners had the right to withhold delivery, the high-handed and oppressive acts of

petitioners, as aptly found by the two courts below, had no legal leg to stand on. We need not weigh the corresponding pieces of evidence all over again because factual findings of the trial court, when adopted and confirmed by the appellate court, are binding and conclusive and will not be disturbed on appeal

Since it was established that respondents suffered some pecuniary loss anchored on petitioners’ abuse of rights, although the exact amount of actual damages cannot be ascertained, temperate damages are recoverable.

[b X (d X e) + c X (d X f)] = Temperate Damages

b and c - representing the average rates of conversion of broiler eggs into hatched chicks and egg by-products as tabulated by the trial court based on available statistical data which was unrebutted by petitioners (41% and 17%).d- 68,784 eggs, or the total number of broiler eggs under Setting Report Nos. 109 to 113; and e and f- P14.00 and P1.20, or the then unit market price of the chicks and by-products, respectively.

41% X (68,784 eggs X P14) = P394,820.16 17% X (68,784 eggs X P1.20) = P 14,031.94 [P394,820.16 + P14,031.94] = P408,852.10

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ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS,

INC., v. ERNESTO QUIAMCO

G.R. No. 146322 December 6, 2006

FACTS:

 In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan, Josefino Gabutero and Raul Generoso to amicably settle the civil aspect of a criminal case for robbery filed by Quiamco against them. They surrendered to him a red Honda XL-100 motorcycle and a photocopy of its certificate of registration. Respondent asked for the original certificate of registration but the three accused never came to see him again.

 It turned out that, in October 1981, the motorcycle had been sold on installment basis to Gabutero by petitioner Ramas Uypitching Sons, Inc., a family-owned corporation managed by petitioner Atty. Ernesto Ramas Uypitching. To secure its payment, the motorcycle was mortgaged to petitioner-corporation.

 When Gabutero could no longer pay the installments, Davalan assumed the obligation and continued the payments. In September 1982, however, Davalan stopped paying the remaining installments and told petitioner corporation’s collector, Wilfredo Veraño, that the motorcycle had allegedly been “taken by respondent’s men.”

 Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by policemen, went to Avesco-AVNE Enterprises to recover the motorcycle. Uypitching uttered that Quiamco is a thief and he took the motorcycle and left.

 On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theft and/or violation of the Anti-Fencing Law against respondent in the Office of the City Prosecutor of Dumaguete City. Respondent moved for dismissal because the complaint did not charge an offense as he had neither stolen nor bought the motorcycle. The Office of the City Prosecutor dismissed the complaint and denied petitioner Uypitching’s subsequent motion for reconsideration.

 Respondent filed an action for damages against petitioners in the RTC of Dumaguete City, Negros Oriental, Branch 37. He sought to hold the petitioners liable for the following: (1) unlawful taking of the motorcycle; (2) utterance of a defamatory remark (that respondent was a thief) and (3) precipitate filing of a baseless and malicious complaint. These acts humiliated and embarrassed the respondent and injured his reputation and integrity.

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 RTC Ruling: Petitioner Uypitching was motivated with malice and ill will when he called respondent a thief, took the motorcycle in an abusive manner and filed a baseless complaint for qualified theft and/or violation of the Anti-Fencing Law. Petitioners’ acts were found to be contrary to Articles 19 and 20 of the Civil Code. Hence, the trial court held petitioners liable to respondent for P500,000 moral damages, P200,000 exemplary damages and P50,000 attorney’s fees plus costs.

 CA Ruling: Affirmed the trial court’s decision with modification, reducing the award of moral and exemplary damages to P300,000 and P100,000, respectively. Petitioners sought reconsideration but it was denied

ISSUE: Whether or not petitioner abused the right of respondent HELD:

Petitioner corporation failed to bring the proper civil action necessary to acquire legal possession of the motorcycle. Instead, petitioner Uypitching descended on respondent’s establishment with his policemen and ordered the seizure of the motorcycle without a search warrant or court order. Worse, in the course of the illegal seizure of the motorcycle, petitioner Uypitching even mouthed a slanderous statement.

No doubt, petitioner corporation, acting through its co-petitioner Uypitching, blatantly disregarded the lawful procedure for the enforcement of its right, to the prejudice of

respondent. Petitioners’ acts violated the law as well as public morals, and transgressed the proper norms of human relations.

The basic principle of human relations, embodied in Article 19 of the Civil Code, provides:

Art. 19. Every person must in the exercise of his rights and in the performance of his duties, act with justice, give every one his due, and observe honesty and good faith. Article 19, also known as the “principle of abuse of right,” prescribes that a person should not use his right unjustly or contrary to honesty and good faith, otherwise he opens himself to liability. It seeks to preclude the use of, or the tendency to use, a legal right (or duty) as a means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or injure another. The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or unduly harsh; there must be no intention to harm another.

Otherwise, liability for damages to the injured party will attach.

In this case, the manner by which the motorcycle was taken at petitioners’ instance was not only attended by bad faith but also contrary to the procedure laid down by law. Considered in conjunction with the defamatory statement, petitioners’ exercise of the right to recover the mortgaged vehicle was utterly prejudicial and injurious to respondent. On the other hand, the precipitate act of filing an unfounded complaint could not in any way be

considered to be in accordance with the purpose for which the right to prosecute a crime was established. Thus, the totality of petitioners’ actions showed a calculated design to embarrass, humiliate and publicly ridicule respondent. Petitioners acted in an excessively

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harsh fashion to the prejudice of respondent. Contrary to law, petitioners willfully caused damage to respondent. Hence, they should indemnify him.

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NIKKO HOTEL MANILA GARDEN and RUBY LIM vs ROBERTO

REYES, a.k.a. “AMAY BISAYA,”

[G.R. No. 154259. February 28, 2005] 452 S 352

FACTS:

 Roberto Reyes alleged that he was humiliated by Ruby Lim during the party of the hotel manager Mr. Masakazu Tsuruoka. In a loud voice and within the presence and hearing of the other guests who were making a queue at the buffet table, Ruby Lim told him to leave the party (“huwag ka nang kumain, hindi ka imbitado, bumaba ka na lang”).

 Mr. Reyes tried to explain that he was invited by Dr. Filart. Dr. Filart, who was within hearing distance, however, completely ignored him thus adding to his shame and humiliation. Not long after, while he was still recovering from the traumatic experience, a Makati policeman approached and asked him to step out of the hotel. Like a common criminal, he was escorted out of the party by the policeman. Claiming damages, Mr. Reyes asked for One Million Pesos actual damages, One Million Pesos moral and/or exemplary damages and Two Hundred Thousand Pesos attorney’s fees.

 Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under the ignominious circumstance painted by the latter. Ms. Lim narrated that she was the Hotel’s Executive Secretary for the past twenty (20) years. One of her functions included organizing the birthday party of the hotel’s former General Manager, Mr. Tsuruoka.

 Ruby Lim claims that she asked Reyes to leave courteously prior, therefor, inquiring about his presence from Dr. Filart’s sister Zenaida Fruto and she affirmed that her sister did not invite him which Dr.Filart assented to during the trial that she did not invite Reyes he merely offered to carry the fruit basket and started having a conversation with Capt.Batung.

Issues:

1. Whether or not Ruby Lim acted abusively in asking Roberto Reyes, a.k.a. “Amay Bisaya,” to leave the party where he was not invited by the celebrant thereof

2. . Parenthetically, and if Ruby Lim were so liable, whether or not Hotel Nikko, as her employer, is solidarily liable with her.

Held:

1. In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and shame, it is highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel business for twenty years wherein being polite and discreet are virtues to be emulated, the testimony of Mr.

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Reyes that she acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court was correct in observing that –

Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made such that they nearly kissed each other, the request was meant to be heard by him only and there could have been no intention on her part to cause embarrassment to him. It was plaintiff’s reaction to the request that must have made the other guests aware of what transpired between them.

Moreover, another problem with Mr. Reyes’s version of the story is that it is unsupported. It is a basic rule in civil cases that he who alleges proves. Mr. Reyes, however, had not presented any witness to back his story up. All his witnesses – Danny Rodinas, Pepito Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the party.

Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs from that of its employee.

Article 19, known to contain what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social grievances. Article 19 states: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Elsewhere, we explained that when “a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.” The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties. These standards are the following: act with justice, give everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure.

Its elements are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith;

(3) for the sole intent of prejudicing or injuring another.

When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages arising from a violation of lawwhich does not obtain herein as Ms. Lim was perfectly within her right to ask Mr. Reyes to leave. Article 21, on the other hand, states:

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal;

(2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to injure.

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A common theme runs through Articles 19 and 21, and that is, the act complained of must be intentional.

2. Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit

injuria, they cannot be made liable for damages as respondent Reyes assumed the risk

of being asked to leave (and being embarrassed and humiliated in the process) as he was a “gate-crasher.”

The doctrine of volenti non fit injuria (“to which a person assents is not esteemed in law as injury”) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent in doing so. As formulated by petitioners, however, this doctrine does not find application to the case at bar because even if respondent Reyes assumed the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were still under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame.

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ST. MARY’S ACADEMY vs. WILLIAM CARPITANOS and LUCIA S.

CARPITANOS et al.

[G.R. No. 143363. February 6, 2002]

Facts:

 From 13 to 20 February 1995, defendant-appellant St. Mary’s Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of the enrollment campaign was the visitation of schools from where prospective enrollees were studying.

 As a student of St. Mary’s Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was driven by James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned turtle. Sherwin Carpitanos died as a result of the injuries he sustained from the accident.

 RTC & CA Ruling: Petioner is ordered to pay damages to the parents of the deceased Issue: Whether or not St. Mary’s Academy should he held primarily liable.

Held:

Under Article 218 of the Family Code, the following shall have special parental authority over a minor child while under their supervision, instruction or custody: (1) the school, its

administrators and teachers; or (2) the individual, entity or institution engaged in child care. This special parental authority and responsibility applies to all authorized activities, whether inside or outside the premises of the school, entity or institution. Thus, such authority and responsibility applies to field trips, excursions and other affairs of the pupils and students outside the school premises whenever authorized by the school or its teachers.

Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special parental authority are principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor while under their supervision, instruction, or custody. However, for petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident.

“In order that there may be a recovery for an injury, however, it must be shown that the ‘injury for which recovery is sought must be the legitimate consequence of the wrong done; the connection between the negligence and the injury must be a direct and natural sequence of events, unbroken by intervening efficient causes.’ In other words, the negligence must be the proximate cause of the injury. For, ‘negligence, no matter in what it consists, cannot create a right of action unless it is the proximate cause of the injury complained of.’ And ‘the proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any

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efficient intervening cause, produces the injury, and without which the result would not have occurred.’”

In this case, the respondents failed to show that the negligence of petitioner was the proximate cause (is that cause, which, in natural and continuous sequence, unbroken by any efficient

intervening cause, produces the injury, and without which the result would not have occurred of) the death of the victim.

Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the

detachment of the steering wheel guide of the jeep.

Significantly, respondents did not present any evidence to show that the proximate cause of the accident was the negligence of the school authorities, or the reckless driving of James Daniel II. Hence, the respondents’ reliance on Article 219 of the Family Code that “those given the authority and responsibility under the preceding Article shall be principally and solidarily liable for damages caused by acts or omissions of the unemancipated minor” was unfounded. Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and he allowed James Daniel II, a minor, to drive the jeep at the time of the accident.

Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor’s parents primarily. The negligence of petitioner St. Mary’s Academy was only a remote cause of the accident. Between the remote cause and the injury, there intervened the negligence of the minor’s parents or the detachment of the steering wheel guide of the jeep.

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SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO v.

MAKATI SHANGRI-LA

G.R. No. 190601 February 7, 2011

Facts:

 For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio (petitioners) booked at the Shangri-la Hotel Makati (the hotel).

 Petitioners claim that during the reception, respondent’s representatives, Catering Director Bea Marquez and Sales Manager Tessa Alvarez, did not show up despite their assurance that they would; their guests complained of the delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotel’s waiters were rude and unapologetic when confronted about the delay; and despite Alvarez’s promise that there would be no charge for the extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for the three-hour extension of the event up to 4:00 A.M. the next day.

 Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and Resort, Inc. (respondent) and received an apologetic reply from Krister Svensson, the hotel’s Executive Assistant Manager in charge of Food and Beverage. They nevertheless filed a complaint for breach of contract and damages before the Regional Trial Court (RTC) of Makati City.

 RTC Ruling: The trial court observed that from “the tenor of the letter . . . the

defendant[-herein respondent] admits that the services the plaintiff[-herein petitioners] received were unacceptable and definitely not up to their standards.

 CA Ruling: reversed the trial court’s decision, it holding that the proximate cause of petitioners’ injury was an unexpected increase in their guests

Issue: Whether or not there is breach of contract. Held:

The pertinent provisions of the Banquet and Meeting Services Contract between the parties read:

4.5. The ENGAGER must inform the HOTEL at least forty eight (48) hours

before the scheduled date and time of the Function of any change in the

minimum guaranteed covers. In the absence of such notice, paragraph 4.3 shall apply in the event of under attendance. In case the actual number of attendees exceed the minimum guaranteed number by ten percent (10%), the HOTEL shall

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not in any way be held liable for any damage or inconvenience which may be caused thereby. The ENGAGER shall also undertake to advise the guests of the situation and take positive steps to remedy the same.

Breach of contract is defined as the failure without legal reason to comply with the

terms of a contract. It is also defined as the [f]ailure, without legal excuse, to perform any promise which forms the whole or part of the contract.

The exculpatory clause notwithstanding, the Court notes that respondent could have managed the “situation” better, it being held in high esteem in the hotel and service industry. Given respondent’s vast experience, it is safe to presume that this is not its first encounter with booked events exceeding the guaranteed cover. It is not audacious to expect that certain measures have been placed in case this predicament crops up. That regardless of these measures, respondent still received complaints as in the present case, does not amuse. Respondent admitted that three hotel functions coincided with petitioners’ reception. To the Court, the delay in service might have been avoided or minimized if respondent exercised prescience in scheduling events. No less than quality service should be delivered especially in events which possibility of repetition is close to nil. Petitioners are not expected to get married twice in their lifetimes.

In the present petition, under considerations of equity, the Court deems it just to award the amount of P50,000.00 by way of nominal damages to petitioners, for the discomfiture that they were subjected to during to the event. The Court recognizes that every person is entitled to respect of his dignity, personality, privacy and peace of mind. Respondent’s lack of prudence is an affront to this right.

Oblicon Case Book

Obligations and Contracts

Case Book

Table of Contents

MARIANO UN OCAMPO III v PEOPLE OF THE PHILIPPINES

G.R Nos. 156547-51. February 4, 2008

LEUNG BEN v P. J. O'BRIEN

G.R. No. L-13602 April 6, 1918

Issue: Whether or not the statutory obligation to restore money won at gaming

an obligation arising from "contract, express or implied.

ARTURO PELAYO v MARCELO LAURON ET AL.

G.R. No. L-4089 January 12, 1909

ASJ CORPORATION AND ANTONIO SAN JUAN v SPS.

EFREN & MAURA EVANGELISTA

G.R. NO. 158086 February 14, 2008

ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS,

INC., v. ERNESTO QUIAMCO

G.R. No. 146322 December 6, 2006

NIKKO HOTEL MANILA GARDEN and RUBY LIM vs ROBERTO

REYES, a.k.a. “AMAY BISAYA,”

[G.R. No. 154259. February 28, 2005] 452 S 352

ST. MARY’S ACADEMY vs. WILLIAM CARPITANOS and LUCIA S.

CARPITANOS et al.

[G.R. No. 143363. February 6, 2002]

SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO v.

MAKATI SHANGRI-LA

G.R. No. 190601 February 7, 2011