Ang Yu vs Court of Appeals G.R. No. 109125 December 2, 1994 Facts:
Herein plaintiff-petitioners (the buyers) are tenants or lessees of the residential and commercial properties owned by respondents Co Unjieng (vendors). On several occasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same. Respondents offered to sell the property for P6M, and plaintiffs counter-offered to buy for P5M. Plaintiffs asked the respondents to put the offer in writing, in which the respondents acceded (to express approval or give consent : give in to a request or demand). Upon receipt of the offer, plaintiffs asked the respondents specify the terms and conditions of the offer to sell. Since no response was made by the respondents, plaintiffs were compelled to file the complaint against respondents compelling them to sell the property.
The lower court decided in favor or the respondents reasoning that since parties did not agree upon the terms and conditions of the proposed sale, hence there was not contract of sale at all. Further, it ruled that if the respondents decide to sell the proper for P11M or lower, then plaintiffs have the right of first refusal. Aggrieved by the decision, plaintiffs appealed to CA.
The Court of Appeals affirmed the decision of the lower court with modification: In resume, there was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. Appellants’ demand for actual, moral and exemplary damages will likewise fail as there exists no justifiable ground for its award.” CA however granted the plaintiffs the right of first refusal regardless if the offer price exceeds P11M.
Plaintiffs appealed with the Supreme court but was denied for insufficiency in form and substance.
While plaintiff asked the SC for reconsideration, respondents transferred the properties in question to respondent Buen Realty and Development Corporation in consideration of P15M.
Buen Realty after the properties came into its possession after the titles had been issued under its name, plaintiffs were asked to vacate the premises. Plaintiffs brought the matter to the trial court to enforce the decision rendered by the CA that plaintiffs has the right of first refusal. The lower court ordered respondents to sell the property to plaintiffs for P15M. Respondents appealed to CA.
The CA reversed the judgment of the lower court declaring that it has no force and effect. Hence this appeal for certiorari.
Issue:
May a buyer (in this case Buen Realty) be bound by the writ of execution by virtue of the notice of lis pendens (while pending lawsuit), carried over on TCT No. 195816 issued in the name of Buen Realty, at the time of the latter’s purchase of the property on 15 November 1991 (time when the decision of CA was still pending execution) from the Cu Unjiengs, given that Buen realty is not a party to the suit when the decision was rendered?
Held:
No. What the petitioners have been granted of in the first place is just a mere ‘right of first refusal’. In the law on sales, the so-called “right of first refusal” is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 1319 9 of the same
Code. An option or an offer would require, among other things, 10 a clear certainty on both the object and
the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor’s eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory juridical relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct.
Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. 11 It is not to say, however, that
disregard thereof, given, for instance, the circumstances expressed in Article 19 12 of the Civil Code, can
warrant a recovery for damages.
The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a “right of first refusal” in favor of petitioners. The consequence of such a declaration entails no more than what has heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first 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. Furthermore, whether private respondent Buen Realty Development Corporation, the alleged purchaser of the property, has acted in good faith or bad faith and whether or not it should, in any case, be considered bound to respect the registration of the lis pendens in Civil Case No. 87-41058 are matters that must be independently addressed in appropriate proceedings. Buen Realty, not having been impleaded in Civil Case No. 87-41058, cannot be held subject to the writ of execution issued by respondent Judge, let alone ousted from the ownership and possession of the property, without first being duly afforded its day in court.
Sagrado Orden v. Nacoco 91 Phil 503 Facts:
On Jan 4, 1942, during the Japanese occupation, Taiwan Tekkosho (Japanese corporation) acquired the plaintiff’s property (land with warehouse in Pandacan, Manila) for Php140K
• On April 4, 1946, after the liberation, the US took control and custody of the aforementioned enemy’s land under Sect 12 of the Trading with the Enemy Act
• In the same year, the Copra Export Management Company occupied the property under custodianship agreement with the United States Alien Property Custodian
• In August 1946, when the Copra Export Management Co. vacated the property, the National Coconut Corporation (NACOCO), the defendant, occupied it next
• Sagrada Orden (plaintiff) files claims on the property with the Court of First Instance of Manila and against the Philippine Alien Property Administrator
• Plaintiff petitions that the sale of the property to Taiwan Tekkosho should be declared null and void as it was executed under duress, that the interest of the Alien Property Custodian be cancelled, and that NACOCO be given until February 28, 1949 to recover its equipment form the property and vacate the premise
• The Republic of the Philippines is allowed to intervene
• CFI: the defendant (Philippine Alien Property Administrator) and the intervenor (RP) are released from any liability but the plaintiff may reserve the right to recover from NACOCO reasonable rentals for the use and occupation of the premises
• The sale of the property to the Taiwan Takkesho was declared void and the plaintiff was given the right to recover Php3,000/month as reasonable rental from August 1946 (date when NACOCO occupied property) to the date NACOCO vacates the premises
• The judgment is appealed to the SC
Issue:
1. Whether or not the defendant is liable to pay rent for occupying the property in question
Held:
1. The CFI’s decision that the defendant should pay rent from August 1946 to February 28, 1949 was reversed, costs against the plaintiff.
Rationale:
Obligations can only arise from four sources: law, contracts or quasi-contracts, crime, or negligence (Art 1089, Spanish Civil Code).
There were no laws or an express agreement between the defendant or the Alien Property Custodian with the plaintiff regarding payment of rent. The property was acquired by the Alien Property Administrator through law (Trading with the Enemy Act) on the seizure of alien property and not as a successor to the interests of the latter. There was no contract of rental b/w them and Taiwan Takkesho. NACOCO entered possession of the property from the Alien Property Custodian without any expectation of liability for its use. NACOCO did not commit any negligence or offense, and there was no contract, implied or otherwise, entered into, that can be used as basis for claiming rent on the property before the plaintiff obtained the judgment annulling the sale to Taiwan Takkesho. The plaintiff has no right to claim rent from NACOCO.
Important Notes
Article 1157 of the New Civil Code states that there are 5 sources of obligations: laws, contracts, quasi-contracts, felonies (acts or omissions punished by law), and quasi-delicts..
PEOPLE’S CAR INC., vs Commando Security L-36840 May 22, 1973 Facts:
Plaintiff, a car dealer, entered into a contract with defendant, a security agency, its duty is to guard the former’s premises from theft, robbery, vandalism and other unlawful acts. On a certain night, the security guard deployed by the defendant, without authority neither from the plaintiff nor from defendant, drove a car, which was entrusted to the plaintiff by a customer for service and maintenance, outside of the plaintiff’s compound and around the city which after the security guard lost control of, fell into a ditch, causing it severe damage. Plaintiff complained against the security guard for qualified theft. While the car is undergoing repair, plaintiff rented a car for its customer for 47 days until the car is fixed, and took pain to repair the damaged car.
Then plaintiff instituted a claim against the defendant for recovery of the actual damages it incurred due to the unlawful act of the latter’s personnel, citing inter alia the Par. 5 of the contract that defendant accepts “sole responsibility for the acts done during their watch hours”. Defendant on the other hand, interposed, that it may be liable but its liability is limited under Par. 4 of said contract providing: “that its liability “shall not exceed one thousand (P1,000.00) pesos per guard post”. To quote the contract:
‘Par. 4. — Party of the Second Part (defendant) through the negligence of its guards, after an investigation has been conducted by the Party of the First Part (plaintiff) wherein the Party of the Second Part has been duly represented shall assume full responsibilities for any loss or damages that may occur to any property of the Party of the First Part for which it is accountable, during the watch hours of the Party of the Second Part, provided the same is reported to the Party of the Second Part within twenty-four (24) hours of the occurrence, except where such loss or damage is due to force majeure, provided however that after the proper investigation to be made thereof that the guard on post is found negligent and that the amount of the loss shall not exceed ONE THOUSAND (P1,000.00) PESOS per guard post.’
‘Par. 5 — The party of the Second Part assumes the responsibility for the proper performance by the guards employed, of their duties and (shall) be solely responsible for the acts done during their watch hours, the Party of the First Part being specifically released from any and all liabilities to the former’s employee or to the third parties arising from the acts or omissions done by the guard during their tour of duty.’ ... 8
The trial court rendered judgment in favor of the defendant limiting its liability to P1,000.00 under par. 4 and said that under paragraph 5, it is the customer who should bring the suit before the court.
Issue:
Whether or not the plaintiff is entitled to recover its expenses from the defendant on account of the latter’s employee’s unlawful act, despite the provision under paragraph 5 it is the 3rd party who should institute
the claim which held the plaintiff harmless from any and all liabilities of the defendant’s employees? Held:
Yes. 3rd parties, the customer in the case at bar, are not bound by the contract between the defendant
and plaintiff. But the plaintiff is in law liable for the damages caused the customer’s car, which had been entrusted into its custody. Plaintiff therefore was in law justified in making good such damages and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages, which had been caused directly by the unlawful and wrongful acts of defendant’s security guard in breach of their contract. As ordained in Article 1159, Civil Code, “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.”
Plaintiff in law could not tell its customer, as per the trial court’s view, that “under the Guard Service Contract it was not liable for the damage but the defendant” — since the customer could not hold defendant to account for the damages as he had no privity of contract with defendant. Such an approach of telling the adverse party to go to court, notwithstanding his plainly valid claim, aside from its ethical deficiency among others, could hardly create any goodwill for plaintiff’s business, in the same way that
defendant’s baseless attempt to evade fully discharging its contractual liability to plaintiff cannot be expected to have brought it more business.
Cangco vs. Manila Railroad (GR 12191, 14 October 1918) Facts:
Petitioner Cangco is employed by defendant Manila Railroad Co. in Manila, and by virtue of his employment, he is entitled free ride from his house in San Mateo to Manila and vice-versa. On a fateful night around 8:00 PM at the station of San Mateo where it was dimly lighted , petitioner while alighting the train (though it was still moving very slowly to the point of stop), not knowing that there are sacks of melon piled at the edge of the platform stepped on the objects, causing him to slip off balance. Plaintiff was drawn under the car in an unconscious condition and as a result seriously injured him. His arm was amputated and he was prevented from working. He spent approx P800 pesos for his medical expenses.
Thereupon, he sued Manila Railroad to recover damages on the ground of negligence of the servants and employees of the defendant. The CFI ruled that although there is an apparent negligence on the part of the defendant through its employees but nevertheless, the plaintiff cannot recover because he had failed to use due caution in alighting from the coach. Hence this appeal.
Issue:
Whether or not Manila Railroad Company is liable to the plaintiff for the negligent acts of its employees, notwithstanding that plaintiff was also negligent?
Held:
Yes! While the plaintiff may have been negligent, the defendant is also negligent. The case falls under the category that of (1) culpa contractual, that is, contract of carriage by providing the passengers safe travel beginning from the time he
It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana and not to culpa contractual.
respondeat superior - One who places a powerful automobile in the hands of a servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence which makes him liable for all the consequences of his imprudence.
Culpa Aquiliana or extra-contractual culpa
The liability arising from extra-contractual culpa is always based upon a voluntary act or omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of law that there was negligence on the part of the master or employer either in selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability.
Distinction between non-contractual and contractual Obligation
The fundamental distinction between obligations of this character and those which arise from contract, rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which creates the vinculum juris, whereas in contractual relations the vinculum juris exists
independently of the breach of the voluntary duty assumed by the parties when entering into the contractual relation.
The mere fact that a person is bound to another by contract does not relieve him from extra-contractual liability to such person.
Comparative negligence - if the accident was caused by plaintiff’s own negligence, no liability is imposed upon defendant’s negligence and plaintiff’s negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence. Test on Contributory negligence.
Was there anything in the circumstances surrounding the plaintiff at the time he alighted from the train which would have admonished a person of average prudence that to get off the train under the conditions then existing was dangerous?
Facts:
On February 2, 1930, a passenger truck and an automobile of private ownership collided while attempting to pass each other on the Talon bridge on the Manila South Road in the municipality of Las Piñas. The diver of the car is an 18 y/o boy, son of the car’s owners. It was found by the trial court that both the boy and the driver of the autobus were negligent by which neither of them were willing to slow up and give the right of way to the other. Plaintiff is the passenger of the bus who as a result of the incident fractured his right leg to his damage and prejudice. Thus, plaintiff sued the boy, his parents as owners of the car, the bus driver and its owner for damages. The trial court ruled in favor of plaintiff.
Hence, this appeal. Issue:
How should civil liability be imposed upon parties in the case at bar? Held:
The case is dealing with the civil liability of parties for obligations which arise from fault or negligence. For the boy, it is his father who is liable (based on culpa aquiliana) to the plaintiff because of the following conditions; first, the car was of general use of the family, second, the boy was authorized or designated by his father to run the car, third, at the time of the collision the car is used for the purpose not of the child’s pleasure but that of the other members of the car owner’s family members. The theory of the law is that the running of the machine by a child to carry other members of the family is within the scope of the owner’s business, so that he is liable for the negligence of the child because of the relationship of master and servant.
For the chauffer and the bus owner (based on culpa contractual), their liability rests upon the contract (the safety that is assured by the operator upon the passenger) whereas that degree of care expected from the chauffer is lacking.
Facts:
Respondent De Joya, general manager, proposed to the board of Ace Advsertising Corp., to send Ricardo Taylor to the US to take up special studies in television. The Board did not act upon the proposal. Nevertheless, sent Taylor to the US. Respondent assured Antonio Araneta, a compny director, that expenses will be handled by other parties which later was confirmed through a memorandum.
While abroad, Taylor continued to receive his salaries. The items corresponding to his salaries appeared in vouchers prepared upon orders of, and approved by, the respondent. Petitioner Luis Araneta, signed three of the vouchers, others signed by either respondent or Vicente Araneta, the company treasurer. All told, Ace Advertising disbursed P5,043.20 on account of Taylor’s travel and studies.
Then a year after, Ace Advertising filed a complaint before the CFI against respondent for the recovery of the total sum disbursed to Taylor alleging that the trip was made without its knowledge, authority or ratification.
The respondent in his answer denied the charge and claimed that the trip was nonetheless ratified by the company’s board and at any event he had the discretion as general manager to authorize the trip which was for the company’s benefit.
A third party complaint was file by respondent against, Vicente and Luis and Taylor. Respondent proved that some of the checks to cover the expenses of Taylor were signed by Vicente and Luis.
In their defense, Luis and Vicente claimed that they signed the checks in good faith as they were approved by respondent.
The CFI rendered judgement ordering the respondent to pay Ace for the amount disbursed with interest at a legal rate until full payment and dismissed the third party complaint.
Respondent appealed to CA. CA affirmed the decision of trial court with regard to its decision in favor of Ace but reversed the dismissal of the 3rd party complaint. CA found as a factthat Taylor’s trip had neither
been authorized nor ratified by Ace. It held that Luis and Vicente were also privy to the authorized disbursement of corporate monies with the respondent. That when they approved signed the checks, they have given their stamp of approval. As it is established that corporate funds were disbursed unauthorized, the case is of a simple quasi-delict committed by them against the corporation.
Hence, this appeal. Issue:
Whether or not petitioner is guilty of quasi-delict, notwithstanding that he was occupying a contractual position at Ace? Otherwise stated, whether or not quasi-delict (tort) may be committed a party in a contract?
Held:
Yes. The existence of a contract between the parties constitutes no bar to the commission of a tort by one against the other and the consequent recovery of damages. His guilt is manifest on account of, in spite of his being a vice-president and director of Ace, petitioner remained passive, through out the period of Taylor’s trip and to the payment of the latter’s salary. As such he neglected to perform his duties properly to the damage of the firm of which he was an officer.
Facts:
A head-on collision between a taxicab owned by Barredo and a carretela occurred. The carretela was overturned and one of its passengers, a 16-year old boy, the son of Garcia and Almario, died as a result of the injuries which he received. The driver of the taxicab, a employee of Barredo, was prosecuted for the crime and was convicted. When the criminal case was instituted, Garcia and Almario reserved their right to institute a separate civil action for damages. Subsequently, Garcia and Almario instituted a civil action for damages against Barredo, the employer of the taxicab driver.
It was found that Fontanilla has been found to have been previously violating traffic rules.
Barredo set up his defense claiming that being only subsidiarily liable under the RPC and the accused not being imputed nor adjudged to pay damages in a civil action, then it is a bar for an action against him. The CFI ruled in favor of the plaintiff awarding them P2,000.00 against the Barredo.
Issues:
Whether or not an employer (Barredo) should be held principally and directly liable for the negligent act of his employee (or for the criminal act or omission of the employee)?
Apropos the employee is acquitted in the criminal case and the employer is exonerated as subsidiary liable, will it bar the civil action based on quasi-delict a.k.a culpa extra-contractual or culpa aquiliana? Whether or not the law is restrictive on the liability of the employer as subsidiary to that of the accused (confining itself within the provision of the penal code)?
Held:
(1)Yes. An employer (Barredo) is principally liable for the negligent acts (or even criminal acts) of his employee in the performance of his duties) because it is presumed by law that the employer (as well as the father, guardian , etc.) committed an act of negligence in not preventing or avoiding the damage. It is this fault that is condemned by law.
(2) No. The reason for this is that the civil liability of the employer (in the criminal case) is grounded upon the crime committed by its employee, while the liability of the employer (in quasi-delict) is completely attributable to itself independent of the criminal act of the employee that is by not carefully selecting and supervising its employees. Thus:
Cuasi-delitos, include all acts in which “any king of fault or negligence intervenes” which means even if such act or omission has nothing to do with the actual resulting damage, like, for example, then the owner of a taxi company hires a driver who is known to him (or should have been known to him) that the latter is guilty of violating traffic rules. In case the driver causes damage as a result of his performance as a driver, then the owner is liable for the damage, not for the act of omission of the driver (because it is covered by the penal code which makes the criminal or felon primarily liable for his injury cause) but for its negligence in employing the driver.
(3)Articles 20 and 21 of the Penal Code, after distributing in their own way the civil responsibilities among those who, for different reasons, are guilty of felony or misdemeanor, make such civil responsibilities applicable to enterprises and establishments for which the guilty parties render service, but with subsidiary character, that is to say, according to the wording of the Penal Code, in default of those who are criminally responsible. In this regard, the Civil Code does not coincide because article 1903 says: “The obligation imposed by the next preceding article is demandable, not only for personal acts and omissions, but also for those of persons for whom another is responsible.” (N.B. cause of liability is the bond or tie between the one who caused the injury and his employer, father, guardian, etc.) Among the persons enumerated are the subordinates and employees of establishments or enterprises, either for acts during their service or on the occasion of their functions. It is for this reason that it happens, and it is so observed in judicial decisions, that the companies or enterprises, after taking part in the criminal cases because of their subsidiary civil responsibility by reason of the crime, are sued and sentenced directly and separately with regard to the obligation, before the civil courts.
Workmen and employees should be carefully chosen and supervised in order to avoid injury to the public. It is the masters or employers who principally reap the profits resulting from the services of these servants and employees. It is but right that they should guarantee the latter’s careful conduct for the personnel and patrimonial safety of others.
We will not use the literal meaning of the law to smother and render almost lifeless a principle of such ancient origin and such full-grown development as culpa aquiliana or cuasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code.
N.B. It is that Bond ( in the performance of the subordinate of the act) which will determine whether or not the superior (employer, parents may be held liable.
El Cano vs Hill Facts:
Defendant Reginald Hill, a minor, married at the time of the occurrence, killed Agapito. He was apprehended and charged appropriately before CFI. He acquitted on the ground that his act was not criminal, because of “lack of intent to kill, coupled with mistake.”
Thereupon, the parents of Agapito, filed a complaint for recovery of damages against the defendant and his father, the defendant Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the son of the plaintiffs.
Defendants filed a motion to dismiss on the grounds that: first, the civil action is barred by the acquittal of Reginald, and; second, the father cannot be held liable for the act of his son because the latter is already married at the time of the commission, thus, is already emancipated.
Issues:
Whether or not quasi-delict is restricted to negligence and cannot apply to voluntary acts or omissions producing injury ( or felony)?
Whether or not a father may be held liable for the act of his emancipated child constituting quasi-delict? Held:
No. To repeat the Barredo case, under Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or ‘culpa aquiliana’ although it mentions the word “negligence” but according to Justice Bocobo it must be construed according to “the spirit that giveth lift- rather than that which is literal that killeth the intent of the lawmaker should be observed in applying the same.” Criminal prosecution and civil action are two different things.
On the second issue (obsolete), Yes, the father may be held liable. While it is true that marriage of a child emancipates him from the parental authority of his parents, what matters really is whether or not such minor is completely emancipated as defined by law. In the case at bar, his emancipation is only partial for as provided by law he can sue and be sued in court with the assistance of his parents, he cannot manage his own properties without the approval of his parents, and third as in the facts, he relies for subsistence from his parents.
Occena vs Icamina 1990 (Antique) Facts:
On May 31, 1979, herein petitioner Eulogio Occena instituted before the Second Municipal Circuit Trial Court of Sibalom Antique, Criminal Case No. 1717, a criminal complaint for Grave Oral Defamation against herein private respondent Cristina Vegafria for allegedly openly, publicly and maliciously uttering the following insulting words and statements: “Gago ikaw nga Barangay Captain, montisco, traidor, malugus, Hudas,” which, freely translated, mean: “You are a foolish Barangay Captain, ignoramus, traitor, tyrant, Judas” and other words and statements of similar import which caused great and irreparable damage and injury to his person and honor.
Accused pleaded not guilty. Trial ensued and judgment was rendered finding the accused guilty beyond reasonable doubt for slight oral deflation sentencing her to pay a fine of P50.00 and subsidiary in case of insolvency but no damages were awarded to petitioner as held by the trial court.
Disagreeing, petitioner sought relief with the RTC which affirmed the decision of the MTC. Hence, this appeal.
Issue:
Whether or not the instant appeal should be dismissed on the ground that the decision rendered by the RTC has become final?
Whether or not damages are warranted to petitioner? Held:
No. While the criminal aspect of the case has become final, the civil aspect did not due to the timely appeal filed by petitioner with regard to the civil aspect of the case (Peeple vs Coloma).
Yes. Every person criminally liable for a felony is also civilly liable (Art. 100, RPC). Likewise, article 2219 of the New Civil Code provides that moral damages may be recovered in libel, slander or any other form of defamation.
In the ultimate analysis, what gives rise to the civil liability is really the obligation of everyone to repair or to make whole the damage caused to another by reason of his act or omission, whether done intentional or negligently and whether or not punishable by law.
Banal vs Tadeo 1987 Facts:
Petitioner herein is one of the complainants in the criminal cases filed against Rosario Claudio. Claudio is charged with 15 separate information for violation of BP 22. Claudio pleaded not guilty, thus trial ensued. Petitioner moved to intervene through private prosecutor but it was rejected by respondent judge on the ground that the charge is for the violation of Batas Pambansa Blg. 22 which does not provide for any civil liability or indemnity and hence, “it is not a crime against property but public order.” Petitioner filed a motion for reconsideration but was denied by the respondent judge. Hence this appeal.
Issue:
Whether or not a private prosecutor may intervene in the prosecution for violation of BP 22 (a special penal law) which does not provide for civil liability?
Note:
Intervention of a private prosecutor is for the purpose of protecting the private interest of the complainant to recover damages.
Held:
Yes! Under Art. 100 of the RPC, ‘every person criminally liable for a felony is also civilly liable.’ Thus a person committing a felony offends namely (1) the society in which he lives in or the political entity called the State whose law he had violated; and (2) the individual member of that society whose person, right, honor, chastity or property was actually or directly injured or damaged by the same punishable act or omission.
While an act or omission is felonious because it is punishable by law, it gives rise to civil liability not so much because it is a crime but because it caused damage to another. Viewing things pragmatically, we can readily see that what gives rise to the civil liability is really the obligation and the moral duty of everyone to repair or make whole the damage caused to another by reason of his own act or omission, done intentionally or negligently, whether or not the same be punishable by law. In other words, criminal liability will give rise to civil liability only if the same felonious act or omission results in damage or injury to another and is the direct and proximate cause thereof. Damage or injury to another is evidently the foundation of the civil action. Such is not the case in criminal actions for, to be criminally liable, it is enough that the act or omission complained of is punishable, regardless of whether or not it also causes material damage to another. (Sangco, Philippine Law on Torts and Damages, 1978, Revised Edition, pp. 246-247).
Article 20 of the New Civil Code provides:
“Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.”
Regardless, therefore, of whether or not a special law so provides, indemnification of the offended party may be had on account of the damage, loss or injury directly suffered as a consequence of the wrongful act of another.
Bricktown vs Amor Tierra Devt. 1994
A contract, once perfected, has the force of law between the parties with which they are bound to comply in good faith and from which neither one may renege without the consent of the other. The autonomy of contracts allows the parties to establish such stipulations, clauses, terms and conditions as they may deem appropriate provided only that they are not contrary to law, morals, good customs, public order or public policy. The standard norm in the performance of their respective covenants in the contract, as well as in the exercise of their rights thereunder, is expressed in the cardinal principle that the parties in that juridical relation must act with justice, honesty and good faith.
Southeastern College vs CA 1998 (Quantum of proof; Fortuitous Event) Facts:
Private respondents are owners of a house at 326 College Road, Pasay while petitioner owns a four-storey school building along the same College Road. That on October 11, 1989, a powerful typhoon hit Metro Manila. Buffeted by very strong winds, the roof of the petitioner’s building was partly ripped off and blown away, landing on and destroying portions of the roofing of private respondents’ house. When the typhoon had passed, an ocular inspection of the destroyed building was conducted by a team of engineers headed by the city building official.
In their report, they imputed negligence to the petitioner for the structural defect of the building and improper anchorage of trusses to the roof beams to cause for the roof be ripped off the building, thereby causing damage to the property of respondent.
Respondents filed an action before the RTC for recovery of damages based on culpa aquiliana. Petitioner interposed denial of negligence and claimed that the typhoon as an Act of God is the sole cause of the damage. RTC ruled in their favor relying on the testimony of the City Engineer and the report made after the ocular inspection. Petitioners appeal before the CA which affirmed the decision of the RTC.
Hence this present appeal. Issue:
(1) Whether the damage on the roof of the building of private respondents resulting from the impact of the falling portions of the school building’s roof ripped off by the strong winds of typhoon “Saling”, was, within legal contemplation, due to fortuitous event?
(2) Whether or not an ocular inspection is sufficient evidence to prove negligence? Held:
On the first issue, Yes, petitioner should be exonerated from liability arising from the damage caused by the typhoon. Under Article 1174 of the Civil Code, Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.
In order that a fortuitous event may exempt a person from liability, it is necessary that he be free from any previous negligence or misconduct by reason of which the loss may have been occasioned. 12 An act of
God cannot be invoked for the protection of a person who has been guilty of gross negligence in not trying to forestall its possible adverse consequences. When a person’s negligence concurs with an act of God in producing damage or injury to another, such person is not exempt from liability by showing that the immediate or proximate cause of the damages or injury was a fortuitous event. When the effect is found to be partly the result of the participation of man — whether it be from active intervention, or neglect, or failure to act — the whole occurrence is hereby humanized, and removed from the rules applicable to acts of God.
In the case under consideration, the lower court accorded full credence to the finding of the investigating team that subject school building’s roofing had “no sufficient anchorage to hold it in position especially when battered by strong winds.” Based on such finding, the trial court imputed negligence to petitioner and adjudged it liable for damages to private respondents.
There is no question that a typhoon or storm is a fortuitous event, a natural occurrence which may be foreseen but is unavoidable despite any amount of foresight, diligence or care. In order to be exempt from liability arising from any adverse consequence engendered thereby, there should have been no human participation amounting to a negligent act. In other words; the person seeking exoneration from liability must not be guilty of negligence. Negligence, as commonly understood, is conduct which naturally or
reasonably creates undue risk or harm to others. It may be the failure to observe that degree of care, precaution, and vigilance which the circumstances justify demand, or the omission to do something which a prudent and reasonable man, guided by considerations which ordinarily regulate the conduct of human affairs, would do.
On the second issue, it bears emphasizing that a person claiming damages for the negligence of another has the burden of proving the existence of fault or negligence causative of his injury or loss. The facts constitutive of negligence must be affirmatively established by competent evidence, 19 not merely by
presumptions and conclusions without basis in fact. Private respondents, in establishing the culpability of petitioner, merely relied on the aforementioned report submitted by a team which made an ocular inspection of petitioner’s school building after the typhoon. As the term imparts, an ocular inspection is one by means of actual sight or viewing. What is visual to the eye through, is not always reflective of the real cause behind.
In the present case, other than the said ocular inspection, no investigation was conducted to determine the real cause of the partial unroofing of petitioner’s school building.
Barzaga vs CA 1998 (DELAY) Facts:
Petitioner’s wife died and her wish is to be buried before Christmas.
After her death on Dec 21, 1990, in fulfillment of her wishes, petitioner went to respondent’s store to inquire the availability of materials to be used in building his wife’s niche. Respondent’s employee advised petitioner that to come back the following morning. That following morning, petitioner made a payment of P2,100 to secure the delivery of the materials. However, the materials were not delivered on time. Several times petitioner went to respondent’s store to ask for the delivery. Later that day, the petitioner was forced to dismiss his laborer since there is nothing to work with for the materials did not arrive.
Petitioner however purchased the materials from other stores.
After his wife was buried, he sued respondent for damages because of delay
For his part, respondent offered a lame excuse of fortuitous event that the reason for delay is because the trucks tires were flat.
Issue:
Whether or not respondent is guilty of delay that will entitle petitioner for damages, although it was not specified in the invoice the exact time of delivery?
Held:
Yes! The law expressly provides that those who in the performance of their obligation are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable for damages. (Art 1170 of the Civil Code).
The appellate court appears to have belittled petitioner’s submission that under the prevailing circumstances time was of the essence in the delivery of the materials to the grave site. However, we find petitioner’s assertion to be anchored on solid ground. The niche had to be constructed at the very least on the twenty-second of December considering that it would take about two (2) days to finish the job if the interment was to take place on the twenty-fourth of the month. Respondent’s delay in the delivery of the construction materials wasted so much time that construction of the tomb could start only on the twenty-third. It could not be ready for the scheduled burial of petitioner’s wife. This undoubtedly prolonged the wake, in addition to the fact that work at the cemetery had to be put off on Christmas day.
This case is clearly one of non-performance of a reciprocal obligation. 7 In their contract of purchase and
sale, petitioner had already complied fully with what was required of him as purchaser, i.e., the payment of the purchase price of P2,110.00. It was incumbent upon respondent to immediately fulfill his obligation to deliver the goods otherwise delay would attach.
NPC vs CA, ECI 1986 (Quasi-Delict; Fortuitous Event) Facts:
ECI entered into a contract with NAWASA to undertake a construction of a tunnel from Ipo Dam to Bicti including all materials, equipment and labor for the said construction for 800 days. The project involved 2 phases. The first involves tunnel works and the second consists of outworks at both ends of the tunnel. As soon as ECI finished the tunnel works in Bicti, it transferred all its equipments to Ipo Dam to finish the second phase of the project.
The record shows that on November 4,1967, typhoon ‘Welming’ hit Central Luzon, passing through defendant’s (NPC) Angat Hydro-electric Project and Dam at lpo, Norzagaray, Bulacan. Strong winds struck the project area, and heavy rains intermittently fell. Due to the heavy downpour, the water in the reservoir of the Angat Dam was rising perilously at the rate of sixty (60) centimeters per hour. To prevent an overflow of water from the dam, since the water level had reached the danger height of 212 meters above sea level, the defendant corporation caused the opening of the spillway gates.”
ECI sued NPC for damages. The trial court and the court of appeals found that defendant NPC was negligent when opened the gates only at the height of the typhoon holding that it could have opened the spill gates gradually and should have done so before the ‘typhoon’ came. Thus both courts awarded ECI for damages.
NPC assails the decision of the CA as being erroneous on the grounds, inter alia, that the loss sustained by ECI was due to force majeure. It argued that the rapid rise of water level in the reservoir due to heavy rains brought about by the typhoon is an extraordinary occurrence that could not have been foreseen. On the other hand, ECI assails the decision of the court of appeals modifying the decision of the trial court eliminating the awarding of exemplary damages.
Hence this present appeal. Issues:
1. Whether or not NPC is liable for damages even though the cause of the damage is due to a force majeure? Otherwise stated, whether or not the damage sustained by ECI could be attributed to NPC notwithstanding the occurrence of a force majeure?
2. Whether or not ECI is entitled to exemplary damages? Held:
Yes. NPC was undoubtedly negligent because it opened the spillway gates of the Angat Dam only at the height of typhoon “Welming” when it knew very well that it was safer to have opened the same gradually and earlier, as it was also undeniable that NPC knew of the coming typhoon at least four days before it actually struck. And even though the typhoon was an act of God or what we may call force majeure, NPC cannot escape liability because its negligence was the proximate cause of the loss and damage. As we have ruled in Juan F. Nakpil & Sons v. Court of Appeals, (144 SCRA 596, 606-607):
Thus, if upon the happening of a fortuitous event or an act of God, there concurs a corresponding fraud, negligence, delay or violation or contravention in any manner of the tenor of the obligation as provided for in Article 1170 of the Civil Code, which results in loss or damage, the obligor cannot escape liability.
The principle embodied in the act of God doctrine strictly requires that the act must be one occasioned exclusively by the violence of nature and human agencies are to be excluded from creating or entering into the cause of the mischief. When the effect, the cause of which is to be considered, is found to be in part the result of the participation of man, whether it be from active intervention or neglect, or failure to act, the whole occurrence is thereby humanized, as it was, and removed from the rules applicable to the acts of God. (1 Corpus Juris, pp. 1174-1175).
Thus, it has been held that when the negligence of a person concurs with an act of God in producing a loss, such person is not exempt from liability by showing that the immediate cause of the damage was the act of God. To be exempt from liability for loss because of an act of God, he must be free from any previous negligence or misconduct by which the loss or damage may have been occasioned. (Fish & Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan 49 O.G. 4379; Limpangco & Sons v. Yangco Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657).
Substantial evidence is defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion (Philippine Metal Products, Inc. v. Court of Industrial Relations, 90 SCRA 135 [1979]; Police Commission v. Lood, 127 SCRA 757 [1984]; Canete v. WCC, 136 SCRA 302 [1985])
Exemplary Damages
No. As to the question of exemplary damages, we sustain the appellate court in eliminating the same since it found that there was no bad faith on the part of NPC and that neither can the latter’s negligence be considered gross. In Dee Hua Liong Electrical Equipment Corp. v. Reyes, (145 SCRA 713, 719) we ruled:
Neither may private respondent recover exemplary damages since he is not entitled to moral or compensatory damages, and again because the petitioner is not shown to have acted in a wanton, fraudulent, reckless or oppressive manner (Art. 2234, Civil Code; Yutuk v. Manila Electric Co., 2 SCRA 377; Francisco v. Government Service Insurance System, 7 SCRA 577; Gutierrez v. Villegas, 8 SCRA 527; Air France v. Carrascoso, 18 SCRA 155; Pan Pacific (Phil.) v. Phil. Advertising Corp., 23 SCRA 977; Marchan v. Mendoza, 24 SCRA 888).
Comments:
Under Art. 1170 of the Civil Code, “When those who in the performance of their obligations are guilty of fraud, delay, or negligence, or in any manner contravene in the tenor of the obligation, are liable for damages.” What the provision contemplates is that there is an express obligation between the obligor and the obligee arising from a contractual obligation that must be complied with in good faith. And what the aforestated provision liable for damages is that breach either because of fraud, delay, or negligence, or contravention to the tenor of obligation. Hence it should not be applied generally in all cases, especially in quasi-delict which is treated specifically by law. In the case at bar, ECI and NPC has no pre-existing obligation arising from a contract. Although negligence is indubitably present in the case, there cannot be located from the facts that there is a prior obligation arising form NPC and ECI. But instead the applicable law in the case at bar is Art. 2176 which provides, “Whoever by act or omission causes damage to another, there being fraud or negligence, is obliged to pay for the damage done. Such fault of negligence, if there is no pre-existing contractual relation between the parties, is called quasi-delict and is governed by the provisions of this chapter.” I should rather say that the Honorable Supreme Court misplaced the application of the law.
I should further say that the Act of God Doctrine should be applied inversely to that
Facts:
A Deed of Absolute Sale with Assumption of Mortgage was executed between Manuel Behis as vendor/assignor and Rayandayan and Arceño as vendees/assignees for the sum of P250,000.00. On the same day, Rayandayan and Arceño together with Manuel Behis executed another Agreement embodying the real consideration of the sale of the land in the sum of P2,400,000.00. Thereafter, Rayandayan and Arceño negotiated with the principal stockholder of the bank, Engr. Edilberto Natividad in Manila, for the assumption of the indebtedness of Manuel Behis and the subsequent release of the mortgage on the property by the bank.
Rayandayan and Arceño did not show to the bank the Agreement with Manuel Behis providing for the real consideration of P2,400,000.00 for the sale of the property to the former. Subsequently, the bank consented to the substitution of plaintiffs as mortgage debtors in place of Manuel Behis in a Memorandum of Agreement between private respondents and the bank with restructured and liberalized terms for the payment of the mortgage debt.
Instead of the bank foreclosing immediately for non-payment of the delinquent account, petitioner bank agreed to receive only a partial payment of P143,000.00 by installment on specified dates. After payment thereof, the bank agreed to release the mortgage of Manuel Behis; to give its consent to the transfer of title to the private respondents; and to the payment of the balance of P200,000.00 under new terms with a new mortgage to be executed by the private respondents over the same land.
However, petitioner bank did not comply with the MOA with respondents because of a supervening event namely the protest made by Cristina Behis, wife of Manual Behis, alleging that she did not consent to the negotiation made as regards the Deed of absolute sale with Assumption of Mortgage by her husband with the respondents and that her signature was forged by respondents. The petitioner bank then told respondents to settle the matter with Mrs. Behis.
At that point, petitioner bank cancelled its MOA with respondents because: first, the latter failed to settle the protest of Mrs. Behis; and, secondly, the terms of the Memorandum of Agreement have not been fully complied with as the payments were not made on time on the dates fixed therein; and third, their consent to the Memorandum of Agreement was secured by the plaintiffs thru fraud as the Bank was not shown the Agreement containing the real consideration of P2,400.000.00 of the sale of the land of Manuel Behis to plaintiffs.
Thereafter, the petitioner bank returned the initial payment of P143,000.00 to respondents.
In the mean time, petitioner entered into an agreement with Halsema Bank that the latter would assume the mortgage of Manuel Behis in consideration of P521,765.45.
Thereafter, respondents brought the matter before the RTC which ruled that the MOA is valid.
The case was elevated to the CA on certiorari. The respondent Court affirmed the validity of the MOA dismissing the claim of the respondent that their consent to the agreement made with respondents to assume the mortgage of Manuel Behis, and awarding the respondents for damages.
Hence this present appeal. Issues:
Whether or not respondents are guilty of fraud (which would make the contract between respondents and petitioner viod) when it did not show or it concealed from the petitioner the Agreement (between respondents and Manuel Behis) the consideration of P2.4, and rather what was only shown was the first agreement with regard to the Deed of Sale with Assumption of Mortgage?
Held:
No. This brings us to the first issue raised by petitioner bank that the Memorandum of Agreement is voidable on the ground that its consent to enter said agreement was vitiated by fraud because private respondents withheld from petitioner bank the material information that the real consideration for the sale with assumption of mortgage of the property by Manuel Behis to Rayandayan and Arceño is P2,400,000.00, and not P250,000.00 as represented to petitioner bank. According to petitioner bank, had it known of the real consideration for the sale, i.e. P2.4 million, it would not have consented into entering the Memorandum of Agreement with Rayandayan and Arceño as it was put in the dark as to the real capacity and financial standing of private respondents to assume the mortgage from Manuel Behis. Petitioner bank pointed out that it would not have assented to the agreement, as it could not expect the private respondents to pay the bank the approximately P343,000.00 mortgage debt when private respondents have to pay at the same time P2,400,000.00 to Manuel Behis on the sale of the land.
The kind of fraud that will vitiate a contract refers to those insidious words or machinations resorted to by one of the contracting parties to induce the other to enter into a contract which without them he would not have agreed to. 13 Simply stated, the fraud must be the determining cause of the contract, or must have
caused the consent to be given. It is believed that the non-disclosure to the bank of the purchase price of the sale of the land between private respondents and Manuel Behis cannot be the “fraud” contemplated by Article 1338 of the Civil Code. 14 From the sole reason submitted by the petitioner bank that it was kept
in the dark as to the financial capacity of private respondents, we cannot see how the omission or concealment of the real purchase price could have induced the bank into giving its consent to the agreement; or that the bank would not have otherwise given its consent had it known of the real purchase price.
The deceit which voids the contract exists where the party who obtains the consent does so by means of concealing or omitting to state material facts, with intent to deceive, by reason of which omission or concealment the other party was induced to give a consent which he would not otherwise have given (Tolentino, Commentaries and Jurisprudence on the Civil Code, Vol. IV, p. 480). In this case, the consideration for the sale with assumption of mortgage was not the inducement to defendant bank to give a consent which it would not otherwise have given.
Consequently, not all the elements of fraud vitiating consent for purposes of annulling a contract concur, to wit: (a) It was employed by a contracting party upon the other; (b) It induced the other party to enter into the contract; (c) It was serious; and; (d) It resulted in damages and injury to the party seeking annulment. 18 Petitioner bank has not sufficiently shown that it was induced to enter into the agreement by
the non-disclosure of the purchase price, and that the same resulted in damages to the bank. Indeed, the general rule is that whosoever alleges fraud or mistake in any transaction must substantiate his allegation, since it is presumed that a person takes ordinary care for his concerns and that private transactions have been fair and regular. Petitioner bank’s allegation of fraud and deceit have not been established sufficiently and competently to rebut the presumption of regularity and due execution of the agreement.
Facts:
In 1956, Sofia Castro-Crouch (plaintiff-respondent) was vacationing in Pangasinan in her parent’s house. That same year in November, her mother, Consolacion died. On the day of her mother’s death she addressed a telegram to her father Ignacio who was then in the US announcing Consolacion’s death. The telegram was accepted by Telefast (defendant-petitioner) in its Dagupan office after payment of required fees or charges.
The telegram never reached the addressee. Consolacion was interred without her husband and children besides Sofia.
Sofia went back to the US and learned that the telegram never reached her father. Thus, she and her siblings and their father sued Telefast for damages arising from the breach of contract by the defendant. Petitioner-defendant Telefast interposed that the reason why the telegram never reached the addressee is because of “technical and atmospheric factors beyond its control.” It appears though that no attempt made by defendant to inform Sofia for that matter or any reason at all that explains why the telegram reached the addressee.
The CFI ruled in favor of Sofia and her co-plaintiffs awarding her damages she prayed for. Telefast appealed before the IAC which affirmed the decision of the CFI.
Hence this appeal. Issues:
Whether or not petitioner is liable for damages arising from the breach of contract even though that there was a technical and atmospheric factors that lead to its failure to comply with terms of the contract? Held:
Yes. Art. 1170 of the Civil Code provides, “Those who in the performance of their obligation are guilty of fraud, delay, negligence, and those who in any manner contravene the tenor thereof, are liable for damages. Art. 2176 also provides that “whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done.
In the case at bar, petitioner and private respondent Sofia C. Crouch entered into a contract whereby, for a fee, petitioner undertook to send said private respondent’s message overseas by telegram. This, petitioner did not do, despite performance by said private respondent of her obligation by paying the required charges. Petitioner was therefore guilty of contravening its obligation to said private respondent and is thus liable for damages.
Also, it is evident that petitioner did not do anything to advise the plaintiff of the circumstances which lead to its failure to comply with its obligation. It is apparent that such tantamount to gross negligence. Hence bad faith.
Agcaoili vs GSIS 1988 (Art 1169; Compensatio Morae; pg 109) Facts:
In 1964, plaintiff Agcaoili applied with the defendant GSIS to purchase a house and lot in Marikina. In the following year in a letter, respondent approved petitioner’s application with the advise ‘to occupy the said house immediately’ and ‘failure to occupy the same from the receipt of the notice, plaintiff’s application shall be considered disapproved and will be awarded to another applicant.’
Plaintif lost no time in occupying the house. However, he could not stay in it and had to leave the following day because the house was nothing more than a shell, in such a state of incompleteness that civilized occupation was not possible. Agcaoili did however ask a homeless friend, a certain Villanueva, to stay in the premises as some sort of watchman, pending completion of the construction of the house. Agcaoili thereafter complained to the GSIS, to no avail.
The GSIS asked Agcaoili to pay the monthly amortizations and other fees. Agcaoili paid the first monthly installment and the incidental fees, 3 but refused to make further payments until and unless the GSIS
completed the housing unit. What the GSIS did was to cancel the award and require Agcaoili to vacate the premises. 4 Agcaoili reacted by instituting suit in the Court of First Instance of Manila for specific
performance and damages.
The CFI ruled in favor of Agcaoili declaring the cancellation of the award illegal and viod and ordering GSIS to respect and enforce the aforesaid award, and to complete the house in question to make the same habitable and authorizing GSIS to collect the monthly amortization only after said house shall have been completed.
Hence this present appeal. GSIS argued the following:
1. Agcaoili had no right to suspend payment of amortizations on account of the incompleteness of his housing unit, since said unit had been sold “in the condition and state of completion then existing ... (and) he is deemed to have accepted the same in the condition he found it when he accepted the award.
2. Perfection of the contract of sale between it and Agcaoili being conditioned upon the latter’s immediate occupancy of the house subject thereof, and the latter having failed to comply with the condition, no contract ever came into existence between them.
Issues:
1. Whether or not Agcaoli may suspend payment of amortization on account of the incompleteness of his housing unit, since said unit had been sold “in the condition and state of completion then existing ... (and) he is deemed to have accepted the same in the condition he found it when he accepted the award? Whether or not there was a valid contract of sale between Agcaoili and GSIS?
2. Whether or not Agcaolili repudiated his contract with GSIS? Held:
On the first issue, Yes, because Art. 1169 of the Civil Code provides that “in reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.” Certainly, the prestation of the contract which was ratified upon approval of GSIS (presupposing the meeting of the minds of GSIS and Agcaoli) is the house and lot, on the condition that the house should be habitable. Thus: “There was then a perfected contract of sale between the parties; there had been a meeting of the minds upon the purchase by Agcaoili of a determinate house and lot in the GSIS Housing Project at Nangka Marikina, Rizal at a definite price payable in amortizations at P31.56 per month, and from that moment the parties acquired the right to reciprocally demand performance.” There would be no sense to require the awardee to immediately occupy and live in a shell of a house, a structure consisting only of four walls with openings, and a roof, and to theorize, as the GSIS does, that this was what was intended by the parties, since the contract did not clearly impose upon it the obligation to deliver a habitable house, is to advocate an absurdity, the creation of an unfair situation. By any objective interpretation of its terms, the contract can only be understood as imposing on the GSIS an obligation to deliver to Agcaoili a reasonably habitable dwelling in return for his undertaking to pay the stipulated price. Since GSIS did not fulfill that obligation, and was not willing to put the house in habitable state, it cannot invoke Agcaoili’s suspension of payment of amortizations as cause to cancel the contract between them. It is axiomatic that “(i)n reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.” 15
Nakpil and Sons Vs Court of appeals 1986 Facts:
Philippine Bar Association, an NGO, entered into a contract with UCCI on administration basis and Nakpil & Sons to construct a building; the latter will provide the design and specifications of the said building. Two years after the building is constructed and is being leased by PBA, an earthquake, unusually strong hit Metro Manila. As a result, the building is severely damaged (partially collapsed) which compelled the tenants to vacate the premises. PBA, sued UCCI and Nakpil. Since the case involves a high degree of technicality to ascertain the cause of action, the trial court appointed a Commissioner to report to him his findings.
According to the Commissioner the damage is caused by: 1. Earthquake
2. defects in the plans and specifications prepared by the third-party defendants’ architects. 3. deviations from said plans and specifications by the defendant contractors
4. failure of the latter to observe the requisite workmanship in the construction of the building and of the contractors, architects
5. failure of the owners to exercise the requisite degree of supervision in the construction of subject building
The trial court agreed with the findings of the Commissioner except as to the holding that the owner is charged with full nine supervision of the construction. The Court sees no legal or contractual basis for such conclusion. Defendants appealed the decision of the trial court to CA.
CA’s decision is to affirm the lower courts decision with the additional P200K damages. Issue:
The pivotal issue in this case is whether or not an act of God-an unusually strong earthquake-which caused the failure of the building, exempts from liability, parties who are otherwise liable because of their negligence.
Held:
No. ART 1723 NCC
Liability of the engineer or architect is if the building should collapse within 15 years because of a defect in the plans and specification OR due to the defects in the ground.
The liability of the contractor lies if the building should collapse w/in 15 years because of (1) defects in the CONSTRUCTION (2) USE of materials of INFERIOR QUALITY furnished by contractor or (3) VIOLATION of the terms of the contract.
If the construction was supervised by the engineer or architect, he shall be solidarily liable with the contractor.
If the owner of the building accepts the building after it is constructed does not mean a WAIVER of any cause of action by reason of defects. The action should be brought within 10 years.
Upon the other hand, 1174 of NCC:
Except in cases expressly specified by law, or otherwise when it is declared in stipulation or when from the nature of the obligation requires the assumption of risk, no person shall be liable for those events which could not be foreseen, or which, though foreseen, were ineveitable.
Elements of 1174, fortuitous event
(a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable or unavoidable;
(c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and
(d) the debtor must be free from any participation in, or aggravation of the injury to the creditor. In any event, the relevant and logical observations of the trial court as affirmed by the Court of Appeals that “while it is not possible to state with certainty that the building would not have collapsed were those defects not present, the fact remains that several buildings in the same area withstood the earthquake to which the building of the plaintiff was similarly subjected,” cannot be ignored.
One who negligently creates a dangerous condition cannot escape liability for the natural and probable consequences thereof, although the act of a third person, or an act of God for which he is not responsible, intervenes to precipitate the loss.
As already discussed, the destruction was not purely an act of God. Truth to tell hundreds of ancient buildings in the vicinity were hardly affected by the earthquake. Only one thing spells out the fatal difference; gross negligence and evident bad faith, without which the damage would not have occurred.
UP v. Delos Angeles Facts:
UP petitioner entered into a contract with ALUMCO respondent, a logging company, where the latter is granted a right to cut,collect and remove timber from the land grant in return for a consideration of money. But respondent incurred unpaid account amounting to P220K and despite repeated demands, it still failed to settle its dues. UP sent a notice to rescind the contract, and respondent executed an instrument,
