1 1-D OBLIGATIONS AND CONTRACTS CASE DIGESTS
ARTICLES 1156 TO 1178
ANG YU V. CA December 02, 1994
Topic: Elements
FACTS: Petitioner Ang Yu Asuncion and Keh Tiong leased a property of respondents Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan in Binondo Manila.
Respondents informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same.
Respondents 6M for the property but petitioners offered 5M. Respondents acceted and asked petitioners to put in writing the terms and conditions but the latter never provided such.
When defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them. Court recognizes the right of first refusal of the petitioner. Notwithstanding the court’s decision, respondent sold the property to Buen Realty and Development Corporation.
ISSUE: Whether or not petitioners can demand specific performance to the respondents to sell to them the property.
HELD: An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The obligation is constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects.
The petitioners never accepted the offer when they refused to make the terms and condition of the sale. As such, respondents has the right to sell the property to other parties.
2 refusal, the remedy is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose
3 PAGUIO v PLDT
December 03, 2002 Topics: Arts. 19 & 21
FACTS: Petitioner Alfredo Paguio was appointed Head of PLDT’s Garnet Exchange. The PLDT implemented the Greater Metro Manila Network Performance Assessment program covering 27 exchanges of the 5 centers. Petitioner wrote the respondent, complaining that the rating and ranking of the Exchanges were unfair. Respondent furnished petitioner with a blank assessment sheet with instruction to rate his own performance. Petitioner gave himself an “outstanding” rating with a total statistical points of 976 based on Garnet’s performance, but respondent Santos reduced it to 958, in turn lowering Garnet’s rank to number four. The respondent issued a memorandum reassigning petitioner to a position in the Office of the GMM East Center Head for Special Assignments. The reassignment was based on the respondent’s well founded conclusion that the petitioner is not a team player and cannot accept the decisions of management. As a result, petitioner filed a complaint for illegal demotion and damages against respondents.
ISSUE: Whether or not the reassignment of the petitioner, Paguio, was valid.
HELD: NO. According to NLRC, the petitioner’s transfer was not justified by the circumstances. It noted that petitioner was well intentioned in criticizing the management of the company and that even as he criticized the management decisions, petitioner nevertheless complied with them. Under Art. 21 of the Civil Code, 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. The illegal transfer of petitioner to a functionless office was clearly an abuse by respondent PLDT of its right to control the structure of its organization. Petitioner is entitled to an award of moral damages as he suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the act complained of.
4 SOLEDAD CARPIO VS LEONORA A. VALMONTE
September 9, 2004 Topic: Arts. 19&21
FACTS: Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon Sierra engaged her services for their church wedding. Valmonte went to the Manila Hotel where the bride and her family were billeted. When she arrived, several persons were already there including the bride, the bride’s parents and relatives, the make-up artist and his assistant, the official photographers, and the fashion designer. Among those present was petitioner Soledad Carpio, an aunt of the bride who was preparing to dress up for the occasion.
Petitioner then ordered one of the ladies to search Valmonte’s bag. It turned out that after Valmonte left the room to attend to her duties, petitioner discovered that the pieces of jewellery which she placed inside the comfort room in a paper bag were lost.
Valmonte was allegedly bodily searched, interrogated and trailed by a security guard throughout the evening. Valmonte was being interrogated by the police officers, petitioner kept on saying the words Siya lang ang lumabas ng kwarto. Valmonte’s car which was parked at the hotel premises was also searched but the search yielded nothing.
20 February 1997, Valmonte filed a suit for damages against her before the Regional Trial Court (RTC) of Pasig City, Branch 268. In her complaint, Valmonte prayed that petitioner be ordered to pay actual, moral and exemplary damages, as well as attorney’s fees.
ISSUE: WON respondent Valmonte is entitled to damages
HELD: Yes! In the sphere of our law on human relations, the victim of a wrongful act or omission, whether done wilfully or negligently, is not left without any remedy or recourse to obtain relief for the damage or injury he sustained. Incorporated into our civil law are not only principles of equity but also universal moral precepts which are designed to indicate certain norms that spring from the fountain of good conscience and which are meant to serve as guides for human conduct. First of these fundamental precepts is the principle commonly known as abuse of rights under Article 19 of the Civil Code. To find the existence of an abuse of right, the following elements must be present: (1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent or prejudicing or injuring another. When a right is exercised in a manner which discards these norms resulting in damage to another, a legal wrong is committed for which the actor can be held accountable. One is not allowed to exercise his right in a manner which would cause unnecessary prejudice to another or if he would thereby offend morals or good customs. Thus, a person should be protected only when he acts in the legitimate exercise of his right, that is when he acts with prudence and good faith; but not when he acts with negligence or abuse. Complementing the principle of abuse of rights are the provisions of Articles 20 and 21 of the Civil Code.
5 In the case at bar, petitioners verbal reproach against respondent was certainly uncalled for considering that by her own account nobody knew that she brought such kind and amount of jewellery inside the paper bag. This being the case, she had no right to attack respondent with her innuendos which were not merely inquisitive but out rightly accusatory. By openly accusing respondent as the only person who went out of the room before the loss of the jewellery in the presence of all the guests therein, and ordering that she be immediately bodily searched, petitioner virtually branded respondent as the thief. True, petitioner had the right to ascertain the identity of the malefactor, but to malign respondent without an iota of proof that she was the one who actually stole the jewellery is an act which, by any standard or principle of law is impermissible. Petitioner had wilfully caused injury to respondent in a manner which is contrary to morals and good customs. Her firmness and resolve to find her missing jewellery cannot justify her acts toward respondent.
6 REGINO VS PANGASINAN COLLEGES
November 18, 2004 Topic: Arts. 19&21
FACTS: Petitioner Khristine Rea M. Regino was a first year computer science student at Respondent Pangasinan Colleges of Science and Technology (PCST). During the second semester of school year 2001-2002, she enrolled in logic and statistics subjects under Respondents Rachelle A. Gamurot and Elissa Baladad, respectively, as teachers.
In February 2002, PCST held a fund raising campaign dubbed the Rave Party and Dance Revolution, the proceeds of which were to go to the construction of the schools tennis and volleyball courts. Each student was required to pay for two tickets at the price of P100 each. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores; those who refused to pay were denied the opportunity to take the final examinations.
Financially strapped and prohibited by her religion from attending dance parties and celebrations, Regino refused to pay for the tickets. On March 14 and March 15, 2002, the scheduled dates of the final examinations in logic and statistics, her teachers -- Respondents Rachelle A. Gamurot and Elissa Baladad -- allegedly disallowed her from taking the tests. According to petitioner, Gamurot made her sit out her logic class while her classmates were taking their examinations. The next day, Baladad, after announcing to the entire class that she was not permitting petitioner and another student to take their statistics examinations for failing to pay for their tickets, allegedly ejected them from the classroom. Petitioners pleas ostensibly went unheeded by Gamurot and Baladad, who unrelentingly defended their positions as compliance with PCSTs policy.
ISSUE: Whether or not Respondent Colleges abused its right by not permitting Petitioner to take the Final Exams
7 HELD: Yes. Private respondents inhumanly punish students x x x by reason only of their poverty, religious practice or lowly station in life, which inculcated upon [petitioner] the feelings of guilt, disgrace and unworthiness; as a result of such punishment, she was allegedly unable to finish any of her subjects for the second semester of that school year and had to lag behind in her studies by a full year. The acts of respondents supposedly caused her extreme humiliation, mental agony and demoralization of unimaginable proportions in violation of Articles 19, 21 and 26 of the Civil Code.
8 NIKKO HOTEL MANILA GARDEN and RUBY LIM vs. ROBERTO REYES, a.k.a.
"AMAY BISAYA" February 28, 2005 Topics: Arts. 19 & 21
FACTS: This is a petition for review on certiorari of the resolution and the decision of the Court of Appeals whereby making the petitioners liable for moral and exemplary damages. Roberto Reyes, aka “Amay Bisaya”, was at the lobby of the Nikko Hotel Manila Garden when a friend saw him and allegedly invited him to the party. He carried the basket full of fruits being carried by his friend while they were going up the penthouse of the hotel where the party was being held. When the coordinator, Ms. Ruby Lim, saw him, she asked him to just leave the place after eating as he was not invited but he did not. Instead, he shouted at the coordinator. His version was that, in a loud voice, the coordinator shouted at him telling him to leave. He refused as he was allegedly invited by one of the guests who later on denied having invited him. Instead, the guest testified that he carried the basket but warned him not to join as he was not invited, but still he went into the place. He sued the hotel, the coordinator and the guest for damages. The RTC dismissed the complaint due to lack of cause of action. The Court of Appeals reversed, holding that the manner he was asked to leave exposed him to ridicule, thus, held the defendants liable for damages. They appealed, contending that pursuant to the doctrine of volenti non fit injuria, they cannot be made liable for damages as he assumed the risk of being asked to leave and being embarrassed and humiliated in the process, as he was a gate-crasher.
ISSUE: Whether or not the coordinator acted abusively in asking Roberto Reyes, a.k.a. “Amay Bisaya,” to leave the party where he was not invited by the celebrant, thus, becoming liable under Articles 19 and 21 of the Civil Code.
HELD: NO. The coordinator is not liable under Articles 19 and 21 of the Civil Code and was deemed to have acted within the bounds of propriety and good faith.
Upon careful scrutiny of the multiple versions of the incident, it was ruled that it is unlikely to happen that the coordinator exposed him to ridicule and shame because admittedly, Amay Bisaya stated that she was close enough for them to kiss when she asked him to leave the party. This suggests that it was her intention that only he heard what she had to say. It was his reaction to the request that must have made the other guests aware of what had transpired between them.
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
9 negligent in doing so. This doctrine does not find application to the case at bar because even if Reyes assumed the risk of being asked to leave the party, the defendants, 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.
The petition was thus granted and the Decision of the Court of Appeals reversed and set aside. The coordinator did not abuse her right in asking Reyes to leave the party to which he was not invited, hence, he cannot be made liable under Articles 19 and 21 of the New Civil Code. The employer cannot likewise be liable.
10 SAGRADA ORDEN DE PREDICADORES DEL SANTISIMO ROSARIO DE FILIPINAS
VS NATIONAL COCONUT CORPORATION June 30, 1952
Topic: Sources of Obligations
FACTS: The case is an action to recover possession of a piece of real property, a land with warehouses, situated in Pandacan, Manila, and the rentals for its occupation and use. The land belongs to the plaintiff Sagrada Orden, in whose name the title was registered before the war. During the Japanese occupation, the land was acquired by Taiwan Tekkosho, a Japanese corporation, for P140,000. After the liberation from the Japanese forces, the Alien Property Custodian of the USA took possession, control and custody by reason that it belonged to an enemy national, pursuant to section 12 of the Trading with the Enemy Act. Under a custodianship agreement with the US Alien Property Custodian, the property was occupied by Copra Export Management Company. When the property was vacated, herein defendant NACOCO occupied it after representations were made with the Office of the US Alien Property Custodian, by virtue of such representation the defendant was authorized to repair the warehouse on the land. The defendant leased 1/3 of the property in 1948 to Dioscoro Sarile at a monthly rental of P500, then later P1,000, but he was not able to pay such. The plaintiff made an action to recover the land before the Alien Property Custodian, but the action was denied. The plaintiff then elevated the action to court, with the subsequent ruling that, among other things, the plaintiff would have a right to recover from the defendants rentals for its occupation and use of the premises. The court also ruled therein for the cancellation of the title given to Taiwan Tekkosho there being threats, duress and intimidation in its execution, as well as cancellation of all interests and rights of the Alien Property Custodian; and an ultimatum set for NACOCO until it may be ejected from the property.
ISSUE: Whether or not the plaintiff may recover such amounts from the defendant by virtue of its use and occupation of the premises.
HELD: NO. The defendant-appellant is not liable for the value of such use and occupation. If he would be liable at all, its obligations must arise from any of the four sources of obligations (law, contract or quasi-contract, crime or negligence). The defendant entered the premises and occupied it with the permission of the Alien Property Administration, which had the legal control and administration thereof by express provision of law. The occupation was without any negligence on the part of the defendant.
11 Another ground which would justify why claims for rentals cannot be made is because there was no express agreement between the Alien Property Custodian and the defendant-appellant for such. The existence of an implied agreement to that effect is contrary to the circumstances.
12 INTESTATE ESTATE OF THE LATE RICARDO PRESBITERIO VS COURT OF
APPEALS January 21, 1993 Topic: Sources of Obligations
FACTS: On 19 August 1981, Ricardo Presbitero, Sr. entered into two (2) written contracts with private respondent Leonardo Cañoso. In the first, Presbitero retained the services of the later to negotiate with the Land Bank of the Philippines (LBP) and the Ministry of Agrarian Reform (MAR) for the saleof Hacienda Maria, owned by the former. The hacienda had been placed under Operation Land Transfer pursuant to Presidential Decree No. 27. The private respondent bound himself "to finish the processing and submission of documents with in (sic) the period of One hundred (sic) Twenty Days (120 days) to Manila, by the Land Bank of the Philippines and Ministry of Agrarian Reform Cotabato City and shall be subjected to the delay of the approval of the DBP additional loan negotiated by RICARDO P. PRESBITERO in Bacolod City . . . ." In the second contract, denominated as a "Contract of Service," 4 Presbitero bound himself to
compensate the private respondent "for his efforts, services and other related expenses in making the necessary follow up (sic) of the preparation, production of pertinent documents required," and "to effect the recovery of the proceed (sic) of the land transfer payment from the Land Bank of the Philippines," in an amount equivalent to "Twenty Five per cent (25%) of the gross total sales of my properties described above which is (sic) subject of Operation Land Transfer."-- a third agreement was entered into with the private respondent in Bacolod City under which the latter's original fee of 25% was reduced to 17 1/2%.
When his claim was finally approved, Presbitero sent two (2) letters to the LBP concerning the release of a part of the proceeds to the private respondent. The first letter, dated 16 May 1983 and addressed to the LBP President, 5requested that the "amount equivalent to Seventeen and One Half (17 1/2%) per cent be released in the name of Leonardo Cañoso, proportionate to (sic) cash and Land Bank Bonds, on every releases (sic) until the final release of the claim." The second, dated 14 June 1983, 6 made reference to the LBP's letter of 6 June 1983 and requested that he (Presbitero) be notified in writing upon receipt; the latter also informed the LBP that he will "personally release the cash and bonds to Mr. Cañoso due to advances made by him during the processing of the documents." However, when a part of the proceeds was released, the private respondent was not given his share as agreed upon. Hence, the latter filed a complaint against Presbitero.
On 18 April 1988, the trial court handed down a decision in favor of the private respondent.
Which was appealed to CA. In its decision, 12 respondent Court modified the decision appealed
from by reducing the principal award to the private respondent from 25% to 17 1/2% of the amount to be collected by Presbitero from the LBP.
ISSUE: Whether or not the respondent committed a breach of his obligation
HELD: NO. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Unless the stipulations in a contract are
13 contrary to law, morals, good customs, public order or public policy, the same are binding as between the parties.
In this case, the contracts entered into by the parties were valid contracts. The two (2) complementary instruments gave rise to reciprocal obligations which are defined as those that arise from the same cause, and in which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other.
In the interpretation of contracts, it is the general rule that if the terms thereof are clear as to the intention of the contracting parties, the literal meaning of the stipulations shall control. Furthermore, subsequent or contemporaneous acts of the contracting parties shall be considered in judging their intention.
And even if We are to assume that the private respondent breached the agreement by not fully accomplishing his obligation within the stipulated period, said breach was not of a nature which would justify a rescission of the contract, that rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement; the question of whether a breach of contract is substantial depends upon the attending circumstances. In the case at bar, no substantial breach was committed by the private respondent sufficient enough to warrant a rescission.
14 MMTC VS COURT OF APPEALS
August 1, 2002
Topic: Sources of Obligations
FACTS: On December 24, 1986, Florentina Sabalburo along with her companions were on their way to Baclaran to buy food for their Noche Buena. While crossing the street, the victims were hit by a passenger bus driven by Apolinario Ajoc and owned by petitioner Metro Manila Transit Corporation (MMTC). The victims were taken to the hospital and were given medical attention, but Florentina Sabalburo never recovered and died.
Private respondents filed a complaint for damages alleging that Ajoc had driven in a wanton and reckless manner which caused the untimely death of the victim. Petitioners denied the complaint and contended that it was the victim’s negligence that caused her own death for she darted across the road despite the green light traffic sign. Furthermore, they presented their recruitment guidelines and company policies on safety as a defense that there was no negligence on their part.
The trial court ruled in favor of the private respondents and ordered herein petitioner and driver Ajoc to jointly and severally pay private respondents for damages (solidarily liable). Petitioner MMTC claimed that it should not be held vicariously liable for it has observed diligence in the selection and supervision of its drivers, particularly with regard to safety measures which can be inferred from their company policies and Ajoc's act of bringing the victim to the hospital.
ISSUE: Whether or not petitioner MMTC should be held solidarily liable for a quasi-delict committed by its employee?
HELD: YES. Under Article 2180 of the Civil Code, “[t]he obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible… [e]mployers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.”
The Court stated that “whenever an employee's negligence causes damage or injury to another, there instantly arises a presumption juris tantum that there was negligence on the part of the employer, either in the selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in vigilando). Hence, to escape solidary liability for a quasi-delict committed by his employee, an employer must rebut the presumption by presenting convincing proof that in the selection and supervision of his employee, he has exercised the care and diligence of a good father of a family.”
15 In the case at bar, the Court ruled that mere showing of recruitment guidelines and company policies for safety were not sufficient to exempt MMTC from the liability arising from the negligence of its employee. There must be satisfactory showing that MMTC followed these guidelines in order to disprove the presumption of negligence on its part.
16 MAKATI STOCK EXCHANGE, INC. VS MIGUEL CAMPOS
April 26, 2009
Topic: Sources of Obligations
FACTS: SEC Case No. 02-94-4678 was instituted on February 10, 1194 by respondent Miguel V. Campos with the Securities, Investigation and Clearing Department (SICD) of the Securities and Exchange Commission (SEC), a petition against Makati Stock Exchange, Inc. (MKSE). The petition sought to:
1. Nullify Resolution dated June 3, 1993 of the MKSE Board of Directors, which
allegedly deprived him of his right to participate equally in the allocation of the Initial Public Offerings (IPO) of corporations registered with MKSE
2. Deliver the IPO shares he was allegedly deprived of, for which he would pay the
IPO prices
3. Pay 2 million pesos as moral damages, 1 million pesos as exemplary damages and
500,000 as attorney’s fees and litigation expenses.
The SICD issued an order granting respondent’s petition for issuance of TRO to enjoin petitioners from implementing the resolution of the MKSE Board of Directors. On March 11, 1994 petitioner’s filed a motion to dismiss on the grounds that petition became moot and academic due to cancellation of MKSE license, SICD had no jurisdiction and petition failed to state cause of action. The SICD denied the motion to dismiss. Petitioners challenged order of the SICD before the SEC en banc through petition for certiorari. The SEC en banc nullified the order of the SICD and dismissed respondent’s petition before the SICD.
The respondent filed a petition for Certiorari with the Court of Appeals and was granted. Petitioners filed a motion for reconsideration but were denied. Thus, Petition for Review on Certiorari under Rule 45 seeking the reversal of the Decision2 dated 11 February 1997 and Resolution dated 18 May 1999 of the Court of Appeals in CA-G.R. SP No. 38455 was brought to the Supreme Court for resolution.
ISSUE: Whether or not the petition of the respondent, Miguel V. Campos, failed to state a cause of action.
HELD: The respondent’s Petition in SEC Case No. 02-94-4678 should be dismissed for failure to state a cause of action. It does not matter that the SEC en banc, in its Order dated 14 August 1995 in SEC-EB No. 403, overstepped its bounds by not limiting itself to the issue of whether respondent’s Petition before the SICD sufficiently stated a cause of action. The SEC en banc may have been mistaken in considering extraneous evidence in granting petitioners’ Motion to Dismiss, but its discussion thereof are merely superfluous and obiter dictum. In the main, the
17 SEC en banc did correctly dismiss the Petition in SEC Case No. 02-94-4678 for its failure to state the basis for respondent’s alleged right, to wit:
Private respondent Campos has failed to establish the basis or authority for his alleged right to participate equally in the IPO allocations of the Exchange. He cited paragraph 11 of the amended articles of incorporation of the Exchange in support of his position but a careful reading of the said provision shows nothing therein that would bear out his claim. The provision merely created the position of chairman emeritus of the Exchange but it mentioned nothing about conferring upon the occupant thereof the right to receive IPO allocations.
18 THE METROPOLITAN BANK AND TRUST COMPANY vs. ANA GRACE
ROSALES AND YO YUK TO January 13, 2014 Topic: Sources of Obligations
FACTS: In 2000, respondents Ana Grace Rosales and Yo Yuk To opened a Joint Peso Account with petitioner Metropolitan Bank and Trust Company's Pritil-Tondo Branch. In May 2002, respondent Rosales accompanied her client Liu Chiu Fang to petitioner’s branch in Escolta to open a savings account. Since Liu Chiu Fang could speak only in Mandarin, respondent Rosales acted as an interpreter for her. Respondents then opened a Joint Dollar Account. On July 2003, the petitioner bank issued a "Hold Out" order against respondents’ accounts and filed a criminal case of estafa through False Pretences, Misrepresentation, Deceit, and Use of Falsified Documents against Rosales. Petitioner accused respondent Rosales as the one responsible for the unauthorized and fraudulent withdrawal of from Liu Chiu Fang’s dollar account. On December 15, 2003, the Office of the City Prosecutor of Manila issued a Resolution dismissing the criminal case for lack of probable cause.
On September 10, 2004, respondents filed before the Regional Trial Court (RTC) of Manila a Complaint44 for Breach of Obligation and Contract with Damages. Respondents assailed the validity of the "Hold Out" status issued by the respondent bank on their accounts. Respondents alleged that they attempted several times to withdraw their deposits but were unable to because petitioner had placed their accounts under "Hold Out" status. No explanation, however, was given by petitioner as to why it issued the "Hold Out" order. On the other hand, petitioner alleged that respondents have no cause of action because it has a valid reason for issuing the "Hold Out" order which is due to the fraudulent scheme employed by respondent Rosales.
While the case for breach of contract was being tried, the City Prosecutor of Manila issued a Resolution reversing the dismissal of the criminal complaint. An Information was then filed charging respondent Rosales with Estafa before the RTC of Manila. The RTC rendered a Decision finding petitioner liable for damages for breach of contract. It ruled that it is the duty of petitioner to release the deposit to respondents as the act of withdrawal of a bank deposit is an act of demand by the creditor.
Aggrieved, petitioner appealed to the CA. The CA then affirmed the ruling of the RTC. Petitioner sought reconsideration but the same was denied by the CA. Hence, this petition.
19 ISSUES:
a.) Whether petitioner breached its contract with respondents b.) Whether petitioner is liable for damages
HELD:
a.) Yes. Petitioner claims that it did not breach its contract with respondents because it has a valid reason for issuing the "Hold Out" order. Petitioner anchors its right to withhold respondents’ deposits on the Application and Agreement for Deposit Account. However, the court held that Petitioner’s reliance on the "Hold Out" clause in the Application and Agreement for Deposit Account is misplaced. The "Hold Out" clause applies only if there is a valid and existing obligation arising from any of the sources of obligation enumerated in Article 115779 of the Civil Code, to wit: law, contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to show that respondents have an obligation to it under any law, contract, quasi-contract, delict, or quasi-delict. And although a criminal case was filed by petitioner against respondent Rosales, this is not enough reason for petitioner to issue a "Hold Out" order as the case is still pending and no final judgment of conviction has been rendered against respondent Rosales. In fact, it is significant to note that at the time petitioner issued the "Hold Out" order, the criminal complaint had not yet been filed. Thus, considering that respondent Rosales is not liable under any of the five sources of obligation, there was no legal basis for petitioner to issue the "Hold Out" order. Accordingly, we agree with the findings of the RTC and the CA that the "Hold Out" clause does not apply in the instant case.
In view of the foregoing, the court find that petitioner is guilty of breach of contract when it unjustifiably refused to release respondents’ deposit despite demand.
b.) Yes. Having breached its contract with respondents, petitioner is liable for damages. In cases of breach of contract, moral damages may be recovered only if the defendant acted fraudulently or in bad faith,80 or is "guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligations." In this case, a review of the circumstances surrounding the issuance of the "Hold Out" order reveals that petitioner issued the order in bad faith. The court find that petitioner indeed acted in a wanton, fraudulent, reckless, oppressive or malevolent manner when it refused to release the deposits of respondents without any legal basis.
20 GEORGE BACHELDER VS THE CENTRAL BANK OF THE PHILIPPINES
March 29, 1972 Topic: Article 1158
FACTS: Monetary Board Resolution No. 857 requires Filipino and American resident
contractors for constructions in U.S. military bases in the Philippines to surrender to the Central Bank their dollar earnings under their respective contracts but were entitled to utilize 90% of their surrendered dollars for importation at the preferred rate of commodities for use within or outside said U.S. military bases. Resolution 695 moreover, denies their right to reacquire at the preferred rate ninety per cent (90%) of the foreign exchange the sold or surrendered earnings to Central Bank for the purpose of determining whether the imports against proceeds of contracts entered into prior to April 25, 1960 are classified as dollar-to-dollar transactions or not.
George Batchelder, an American Citizen permanently residing in the Philippines who is engaged in the Construction Business, surrendered to the Central Bank his dollar earnings amounting to U.S. $199,966.00. He compels Central Bank of the Philippines to resell to him$170,210.60 at the preferred rate of exchange of two Philippine pesos for one American dollar, more specifically P2.00375 which was denied by the court.
He then contended that said decision failed to consider that if there was no contract obligating the bank to resell to him at the preferred rate, the judgment of the lower court can and should nevertheless be sustained on the basis of there being such an obligation arising from law. ISSUE: Whether or not Central Bank has the obligation arising from law to resell theUS$154,094.56 to Batchelder at the preferred rate?
HELD: The Supreme Court ruled in the negative. As set forth in such pleading: "We contend that Monetary Board Resolution No. 857, dated June 17, 1960, as amended by Monetary Board Resolution No. 695, dated April 28, 1961, does not give right to Filipino and resident American contractors undertaking construction projects in U.S. military bases to reacquire at the preferred rate ninety per cent (90%) of the foreign exchange sold or surrendered to defendant Central Bank thru the authorized agent banks. Nor does said resolution serve as a general authorization or license granted by the Central Bank to utilize the ninety per cent (90%) of their dollar earnings. M.B. Resolution No. 857, as amended, merely laid down a general policy on the utilization of the dollar earnings of Filipino and resident American contractors undertaking projects in U.S. military bases, ... ."Further, there is this equally relevant portion in such motion to dismiss: "It is clear from the aforecited provisions of said memorandum that not all imports against proceeds of contracts entered into prior to April 25, 1960 are entitled to the preferred buying rate of
21 exchange. Only imports against proceeds of contracts entered into prior to April 25, 1960, not otherwise classified as dollar-to-dollar transactions, are entitled to the preferred rate of exchange. It is for this reason that the contractor is required to first file an application with defendant Central Bank (Import Department) thru the Authorized Agent Banks, for the purpose of determining whether the imports against proceeds of contracts entered into prior to April 25, 1960 are classified as dollar-to-dollar transactions (which are not entitled to the preferred rate of exchange), or not (which are entitled to the preferred rate of exchange), and that if said imports are entitled to the preferred rate of exchange, defendant Central Bank would issue a license to the contractor for authority to buy foreign exchange at the preferred rate for the payment of said imports."
Had there been greater care therefore on the part of the plaintiff to show why in his opinion he could assert a right in accordance not with a contract binding on the Central Bank, because there is none, but by virtue of compliance with rules and regulations of an administrative tribunal, then perhaps a different outcome would have been justified.
22 ARTURO PELAYO VS MARCELO LAURON
January 12, 1909 Topic: Article 1158
FACTS: Oct. 13, 1906, nighttime – Arturo Pelayo, a physician based in Cebu, was called to the house of Marcelo Lauron & Juana Abella (defendants) in San Nicolas. Their daughter-in-law was about to give birth & they requested him to render medical assistance. Since it was a difficult birth, he had to perform a surgery to remove the fetus using forceps. He also removed the afterbirth. He finished all of these until the following morning.
He visited the patient several times the following day. Just & equitable value for the services he rendered: P500.00. Without any good reason, defendants refused to pay said amount. Thus he filed a case praying for a judgment in his favor against defendants for the sum of P500.00 + costs along with other relief that may be deemed proper.
The Defendants alleged that their daughter-in-law died in consequence of the childbirth. Also, that their son & daughter-in-law lived independently & her giving birth in their house was only accidental. They prayed that they be absolved.
CFI: Defendants absolved due to lack of sufficient evidence to establish right of action.
ISSUE: WON the defendants are bound to pay the bill for the services Pelayo has rendered.
HELD: NO. CFI judgment affirmed. Rendering of medical assistance in case of illness is among the mutual obligations to which spouses are bound by way of mutual support. (Arts. 142 & 143, CC) The party bound to give support should therefore be liable for all the expenses including the fees of the physician. Thus, it is the husband’s obligation to pay Pelayo and not the defendants. The husband would still be liable even if his parents were the one who called & requested for Pelayo’s assistance. The defendants are not under any obligation to pay the fees claimed (An obligation according to CC Art. 1089 is created by law, contracts, quasi-contracts, & by illicit acts & omissions or by those in which any kind of fault/negligence occurs.). There was no contract between Pelayo & the defendants thus they can’t be compelled to pay him.
23 RODOLFO MORLA vs. CORAZON NISPEROS BELMONTE, et al.
December 7, 2011
Topic: Art. 1159 – Obligations arising from contracts have the force of law.
FACTS: Spouses Alfredo Nisperos and Esperanza Urbano (the Nisperos spouses) were the original homesteaders of a public land known and identified as Lot No. 4353 of Pls. 62, by virtue of Original Certificate of Title (OCT) No. P-1542. The Nisperos spouses executed a Partial Deed of Absolute Sale, wherein they sold a portion of Lot No. 4353 (subject land) to the brothers Ramon and Rodolfo Morla (the Morla brothers). The Morla brothers acknowledged and confirmed in writing (the 1988 contract) that they had bought from the Nisperos spouses the subject land, and that they had agreed to give the Nisperos spouses a period of ten (10) years within which to repurchase the subject land for the price of Two Hundred Seventy-Five Thousand Pesos (₱275,000.00). Thereafter the Nisperos spouses filed a Complaint for Repurchase and/or Recovery of Ownership Plus Damages against the Morla brothers. They alleged that the deed of sale was registered by the Morla brothers only when they had signified their intention to repurchase their property. In response, the Morla brothers claimed that the Nisperos spouses had no cause of action, as the repurchase of the subject land was improper for being outside the five-year period provided under Section 119 of Commonwealth Act No. 141.
ISSUE: Whether or not the repurchase of the Nisperos spouses of the land sold to the Morla brothers within a period of ten (10) years was valid.
HELD: Yes. The Court is in full accord with the clear findings and apt ruling of the lower courts. Nowhere in Commonwealth Act No. 141 does it say that the right to repurchase under Section 119 thereof could not be extended by mutual agreement of the parties involved. Neither would extending the period in Section 119 be against public policy as the evident purpose of the Public Land Act, especially the provisions thereof in relation to homesteads, is to conserve ownership of lands acquired as homesteads in the homesteader or his heirs. What cannot be bartered away is the homesteaders right to repurchase the homestead within five years from its conveyance, as this is what public policy by law seeks to preserve. This, in the Court’s opinion, is the only logical meaning to be given to the law, which must be liberally construed in order to carry out its purpose.
Petitioner does not dispute that the 1988 contract was executed freely and willingly between him and his late brother, and the Nisperos spouses. The freedom of contract is both a constitutional and statutory right, and the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
24 customs, public order, or public policy. The 1988 contract neither shortens the period provided under Section 119 nor does away with it. Instead, it gives the Nisperos spouses more time to reacquire the land that the State gratuitously gave them. The 1988 contract therefore is not contrary to law; instead it is merely in keeping with the purpose of the homestead law. Since the 1988 contract is valid, it should be given full force and effect. In Roxas v. De Zuzuarregui, Jr., the Court held:
It is basic that a contract is the law between the parties. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good customs, public order or public policy, the same are binding as between the parties.
Petitioner, who freely signed the 1988 contract, cannot now be allowed to renege on his obligation under it, simply because he changed his mind. The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them. Petitioner is thus bound by the terms of the 1988 Contract, and must comply with it in good faith. Since the right to repurchase was exercised by the Nisperos spouses before the expiration of the time given to them by the Morla brothers, the lower courts correctly ruled in their favor.
25 FAUSTO BARREDO v. SEVERINO GARCIA and TIMOTEA ALMARIO.
08 July 1942 Topic: Article 1159
FACTS: In the morning of 03 May 1936, the taxi cab driven by Pedro Fontanilla and a carratela guided by Pedro Dimapilis had a head-on collision, and as a result, one of the passengers of the carratela, Faustino Garcia, suffered injuries from which cause his death. A criminal action was filed against Fontanilla, and was later on convicted. Severino Garcia and Timotea Almario, parents of the deceased, brought an action to court against Fausto Barredo, being the sole proprietor of the taxi franchise and employer of Fontanilla.
ISSUE: Whether or not plaintiffs may bring a separate civil action against Barredo, making him, therefore, primarily and directly responsible under Article 1903 of the Civil Code.
HELD: Yes. The Court affirmed the decision of the Court of Appeals which ruled that the liability sought to be imposed upon Barredo in this action is not a civil obligation arising from a felony, but an obligation imposed in Article 1903 of the Civil Code by reason of his negligence in the selection or supervision of his servant or employee. A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code, with a substantivity all its own, and individuality that is entirely apart and independent from a delict or crime. Upon this principle, and on the spirit of Article 1903 of the Civil Code, the primary and direct responsibility of employers may be safely anchored.
26 FGU INSURANCE CORPORATION VS. G.P. SARMIENTO TRUCKING
CORPORATION August 6, 2002 Topic: Culpa Contractual
FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.
FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CII’s rights & interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental.
GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier.
The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding that GPS was not a common carrier defined under the law & existing jurisprudence. The subsequent motion for reconsideration having been denied, FGU interposed an appeal to the CA. The CA rejected the FGU’s appeal & ruled in favor of GPS. It also denied petitioner’s motion for reconsideration.
ISSUES: Whether or not GPS, either as a common carrier or a private carrier, may be presumed to have been negligent when the goods it undertook to transport safely were subsequently damaged while in its protective custody & possession.
HELD: GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the contract & the failure of its compliance justify, prima facie, a corresponding right of relief. The law will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract
27 confers upon the injured party a valid cause for recovering that which may have been lost/suffered
Agreements can accomplish little unless they are made the basis for action. The effect of every infraction is to create a new duty, or to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.
A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of care & corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.
Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his negligence/fault. The driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality/juridical position. Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioner’s civil action against the driver can only be based on culpa aquiliana, which would require the claimant for damages to prove the defendant’s negligence/fault.
28 VILLANUEVA vs DOMINGO
September 20, 2004 Topic: Culpa Aquiliana
FACTS: This is a petition to review the decision made by Court of Appeals in the above case which affirming Notradamus Villanueva (petitioner) to be held liable with the respondents Leandro Luis and Priscilla Domingo for the damages.
On October 22, 1991 at about 9:45pm in the evening, Priscilla R. Domingo together with Leandro Luis R. Domingo Domingo was cruising along the middle lane of South Superhighway at moderate speed from north to south. Suddenly, towards their path was also a car darted directly in their direction causing the hitting and bumping the left front portion of their car. As a result of the impact, the said car also hit three parked vehicles at the roadside. It found out that the car was driven by Renato Ocfemia with an expired license and also positive for alcoholic breath.
Upon filing the case made by the respondents, it appears that the owner of the car driven by Ocfemia was registered under the name of Nostradamus Villanueva. Under the law, the registered owner of the car is also liable to pay for the damages. The court ordered that Villanueva, as the owner of the car, should also liable for the damages made by Ocfemia through the accident. Villanueva claimed that he was no longer the owner of the car at the time of the mishap because it was swapped with a Pajero owned by Albert Jaucian (an agent of Auto Palace Car Exchange). It was also found out that there still no transferring of ownership happened between the two, and according to Motor Vehicle Registration, the car is still registered under Nostradamus Villanueva.
ISSUE: Whether or not the registered owner of a motor vehicle be held liable for damages arising from a vehicular accident involving his motor vehicle while being operated by the employee of its buyer without the latters consent and knowledge?
HELD: YES. It has been consistently ruled that the registered owner of any vehicle is directly and primarily responsible to the public and third persons while it is being operated. The rationale behind such doctrine was explained way back in 1957 in Erezo vs. Jepte:
The principle upon which this doctrine is based is that in dealing with vehicles registered under the Public Service Law, the public has the right to assume or presume that the registered owner is the actual owner thereof, for it would be difficult for the public to enforce the actions that they
29 may have for injuries caused to them by the vehicles being negligently operated if the public should be required to prove who the actual owner is. How would the public or third persons know against whom to enforce their rights in case of subsequent transfers of the vehicles? We do not imply by his doctrine, however, that the registered owner may not recover whatever amount he had paid by virtue of his liability to third persons from the person to whom he had actually sold, assigned or conveyed the vehicle.
The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no vehicle may be used or operated upon any public highway unless the same is property registered. It has been stated that the system of licensing and the requirement that each machine must carry a registration number, conspicuously displayed, is one of the precautions taken to reduce the danger of injury to pedestrians and other travelers from the careless management of automobiles. And to furnish a means of ascertaining the identity of persons violating the laws and ordinances, regulating the speed and operation of machines upon the highways (2 R.C.L. 1176). Not only are vehicles to be registered and that no motor vehicles are to be used or operated without being properly registered for the current year, but that dealers in motor vehicles shall furnish thee Motor Vehicles Office a report showing the name and address of each purchaser of motor vehicle during the previous month and the manufacturers serial number and motor number. (Section 5(c), Act No. 3992, as amended.)
Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as amended). The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefore can be fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways:
One of the principal purposes of motor vehicles legislation is identification of the vehicle and of the operator, in case of accident; and another is that the knowledge that means of detection are always available may act as a deterrent from lax observance of the law and of the rules of
30 conservative and safe operation. Whatever purpose there may be in these statutes, it is subordinate at the last to the primary purpose of rendering it certain that the violator of the law or of the rules of safety shall not escape because of lack of means to discover him. The purpose of the statute is thwarted, and the displayed number becomes a share and delusion, if courts would entertain such defenses as that put forward by appellee in this case. No responsible person or corporation could be held liable for the most outrageous acts of negligence, if they should be allowed to pace a middleman between them and the public, and escape liability by the manner in which they recompense servants. (King vs. Brenham Automobile Co., Inc. 145 S.W. 278, 279.)
The main purpose of vehicle registration is the easy identification of the owner who can be held responsible for any accident, damage or injury caused by the vehicle. Easy identification prevents inconvenience and prejudice to a third party injured by one who is unknown or unidentified. To allow a registered owner to escape liability by claiming that the driver was not authorized by the new (actual) owner results in the public detriment the law seeks to avoid.
Finally, the issue of whether or not the driver of the vehicle during the accident was authorized is not at all relevant to determining the liability of the registered owner. This must be so if we are to comply with the rationale and principle behind the registration requirement under the motor vehicle law.
31 HERMANA R. CEREZO VS. DAVID TUAZON
March 23, 2004
Topic: Employee/employer solidarily liable
FACTS: Noontime, June 26, 1993 -- A Country Bus Lines passenger bus collided with a tricycle in Pampanga. The driver of the tricycle Tuazon filed a complaint for damages against Mrs. Cerezo, the owner of the bus lines, her husband, Atty. Cerezo, and bus driver Foronda. According to the facts alleged in the complaint, Tuazon was driving on the proper lane. There was a "Slow Down" sign which Foronda ignored. After the complaint was filed, alias summons was served upon the person of Atty. Cerezo, the Tarlac Provincial Prosecutor. In their reply, Mrs. Cerezo contended that the trial court did not acquire jurisdiction because there was no service of summons on Foronda. Moreover, Tuazon failed to reserve his right to institute a separate civil action for damages in the criminal action.
ISSUE: Whether or not Mrs. Cerezo is liable for damages?
HELD: YES. Mrs. Cerezo's contention is wrong. Tuazon's case is not based on criminal law but on quasi-delict under the Civil Code. The same negligent act may produce civil liability arising from a delict under Art. 103, RPC, or may give rise to an action for quasi-delict under Art. 2180, C.C. An aggrieved party may choose between the two remedies. An action based on quasi-delict may proceed independently from the criminal action. There is, however, a distinction between civil liability arising from a delict and civil liability arising from a quasi-delict. The choice of remedy whether to sue for a delict or a quasi-delict, affects the procedural and jurisdictional issues of the action.
Tuazon's action is based on quasi-delict under Art. 2180: Employer's liability. Foronda is not an indispensable party, contrary to Mrs. Cerezo's contention. An indispensable party is one whose interest is affected by the court's action in the litigation, and without whom no final resolution of the case is possible. However, Mrs. Cerezo's liability as an employer in action for quasi-delict is not only solidary, it is also primary and direct.
The responsibility of two or more persons who are liable for a quasi-delict is solidary. Where there is a solidary liability on the part of the debtors, as in this case, each debtor is liable for the entire obligation. Hence, each debtor is liable to pay for the entire obligation in full. There is no merger or renunciation of rights, but only mutual representation. Where the obligation of the parties is solidary, either of the parties is indispensable, and the other is not even a necessary
32 party because complete relief is available from either. Therefore, jurisdiction over Foronda is not even necessary as Tuazon may collect from Mrs. Cerezo alone.
Moreover, an employer's liability based on a quasi-delict is primary and direct, while the employer's liability based on a delict is merely subsidiary. The word “primary and direct,” as contrasted with “subsidiary,” refers to the remedy provided by law for enforcing the obligation rather than to the character and limits of the obligation. Although liability under Art. 2180 originates from the negligent act of the employee; the aggrieved party may sue the employer directly. When an employee causes damage, the law presumes that the employer has himself committed an act of negligence in not preventing or avoiding the damage. This is the fault that the law condemns. While the employer is civilly liable in a subsidiary capacity for the employee's criminal negligence, the employer is also civilly liable directly and separate for his own civil negligence in failing to exercise due diligence in selecting and supervising his employee. The idea that the employer's liability is wholly subsidiary is wrong.
The action can be brought directly against the person responsible (for another) without including the author of the act. The action against the principal is accessory in the sense that it implies the existence of a prejudicial act committed by the employee, but is not subsidiary in the sense that it cannot be instituted till after the judgment against the author of the act or at least, that it is subsidiary to the principal action; action for responsibility (of the employer) is in itself a principal action.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the employer for the criminal negligence of the employee as provided in Art. 103, RPC. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved party must initiate a criminal action where the employee's delict and corresponding primary liability are established. If the present action proceeds from a delict, then the trial court's jurisdiction over Foronda is necessary.
However, the action filed by Tuazon was based on a quasi-delict, which is separate and independent from an action based on a delict. Hence, there was no need to reserve the filing of a separate civil action. The purpose of allowing the filing of an independent action based on quasi-delict against the employer is to facilitate the remedy for civil wrongs.
33 LRTA VS NATIVIDAD
February 6, 2003
Topic: Employer/employee solidarily liable
FACTS: The case before the Court is an appeal from the decision and resolution of the Court of Appeals, exonerating Prudent Security Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a "token" (representing payment of the fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding or an altercation between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was killed instantaneously.
ISSUE: Whether or not LRTA and Roman should be liable according to the contract of carriage.
HELD: The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. The statutory provisions render a common carrier liable for death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of strangers if the common carrier’s employees through the exercise of due diligence could have prevented or stopped the act or omission.
In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure. In the absence of satisfactory explanation by the carrier on how the accident occurred, which petitioners, according to the appellate court, have failed to show, the presumption would be that it has been at fault,an exception from the general rule that negligence must be proved.
34 The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under the contract of carriage.
This Court is concluded by the factual finding of the Court of Appeals that "there is nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not been duly proven x x x." This finding of the appellate court is not without substantial justification in our own review of the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or omission, he must also be absolved from liability. Needless to say, the contractual tie between the LRT and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made liable only for his own fault or negligence.
35 VIRON TRANSPORTATION CO. VS ALBERTO DELOS SANTOS
November 22, 2000
Topic: If employer sued, employee not indispensable party
FACTS: Viron set of Facts: On August 16, 1993, at around 2:30 in the afternoon, the Viron Transit Bus, owned by Viron Transportation Co., driven by Wilfredo Villanueva along MacArthur Highway within the vicinity of Tarlac coming from the North going to Manila.
It was following the Forward Cargo Truck proceeding from the same direction then being driven by Alberto delos Santos. The cargo truck swerved to the right shoulder of the road and, while about to be overtaken by the bus, again swerved to the left to occupy its lane. It was at that instance that the collision occurred, the left front side of the truck collided with the right front side of the bus causing the two vehicles substantial damages.
Santos set of Facts: At about 12:30 in the afternoon of August 16, 1993, Santos was driving said truck along the National Highway within the vicinity of Tarlac. The Viron bus, tried to overtake his truck, and he swerved to the right shoulder of the highway, but as soon as he occupied the right lane of the road, the cargo truck which he was driving was hit by the Viron bus on its left front side, as the bus swerved to his lane to avoid an incoming bus on its opposite direction. The lower court dismissed Viron’s complaint and sustained Santos’ counterclaim for damages. It ordered the petitioner to pay the following amounts: (1) P19,500.00, with interest thereon at 6% per annum from the date of complaint, as actual damages, until the same shall have been fully paid and satisfied; (2) P10,000.00 as additional compensatory damages for transportation and accommodations during the trial of this case; (3) P10,000.00 for and as attorney’s fees; and (4) Costs of suit
ISSUE: Whether or not Viron Transportation Co. was liable for damages caused by their driver?
HELD: VIRON TRANSCO IS LIABLE EVEN IF THEY EXERCISED DILIGENCEOF A GOOD FATHER OF THE FAMILY IN SELECTING ANDSUPERVISING THEIR EMPLOYEES.
Transportation Co., Inc., as the registered owner of the bus involved in the vehicular accident originally brought the action for damages against Santos. We find that the counter claim of Santos alleges the ultimate facts constituting their cause of action. It is not necessary to state that
36 petitioner was negligent in the supervision or selection of its employees, as its negligence is presumed by operation of law.
As employers of the bus driver, the petitioner is, under Article 2180 of the Civil Code, directly and primary liable for the resulting damages. The presumption that they are negligent flows from the negligence of their employee. That presumption, however, is only juris tantum , not juris et de jure. Their only possible defense is that they exercised all the diligence of a good father of a family to prevent the damage. Article 2180 reads as follows:
“The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.
♦Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.