CHAPTER 1

GENERAL PROVISIONS
1156. An obligation is a juridical necessity to give, to
do, or not to do.Chapter 1
GENERAL PROVISIONS
Art. 1156
An obligation is a juridical necessity to give, to do or not to do.

JURIDICAL NECESSITY – juridical tie;

connotes that in case of
noncompliance, there will be legal sanc
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal sanctions
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal sanctions
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal sanctions
URIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal sanctions
URIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal sanctions
URIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal sanctions
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal
sanctions.
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal
sanctions.
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal
sanctions.
JURIDICAL NECESSITY – juridical tie;
connotes that in case of
noncompliance, there will be legal
sanctions.
 Obligation – the duty of a person to satisfy a specific demandable
claim of another person which, if breached, is enforceable in court
 Juridical Necessity – juridical tie; connotes that incase of
noncompliance, there will be legal sanctions.

Note: Art. 1156 refers only to civil obligations which are enforceable in
court when breached. It does not cover natural obligations (Arts.
 1423‐1430, NCC) because these are obligations that cannot be
enforced in court being based merely on equity and natural law and
not on positive law. (Pineda, Obligations and Contracts, 2000 ed,
p.3)

Elements of an Obligation:
1. An active subject - one who is demanding the performance of the
obligation. It is he who in his favor the obligation is constituted,
established or created. He is called the creditor (CR) or obligee.
2. A passive subject - One bound to perform the prestation to give, to
do, or not to do. He is called the debtor (DR) or obligor.
3. The object or prestation - the conduct which has to be observed by
the debtor/obligor; a conduct that may consist of giving, doing, or not
doing something
What are the different kinds of prestation?
 To give - Consists in the delivery of a movable or immovable
thing to the creditor
 To do - Covers all kinds of works or services whether physical
or mental
 Not to do - Consists in refraining from doing some acts
The object must be:
 Licit or lawful;
 Possible, physically & judicially;
 Determinate or determinable; and
 Pecuniary value or possible equivalent in money.
Note: Absence of either of the first three (licit, possible and/or
determinate) makes the object void
1. TO GIVE – delivery of a thing to the
creditor (in sale,
deposit, pledge, donation);
2. TO DO – covers all kinds of works or
services
(contract for professional services);
3. NOT TO DO – consists of refraining from
doing some
acts (in following rules and regulations)
4. The efficient cause - the reason why the obligation exists; the
vinculum juris or juridical tie
Note: What is vinculum juris?
It is the efficient cause or juridical tie by virtue of which the
debtor has become bound to perform the prestation.

What are natural obligations?

They are real obligations to which the law denies an action, but which the
debtor may perform voluntarily.

Natural Obligation Civil Obligation

 Based on equity and  Based from law, contracts,
natural law quasi‐ contracts, delicts, and
quasi‐delicts
 Cannot be enforced in  Can be enforced in court
court because the obligee because the obligee has a
has no right of action to right of action
compel its performance (Pineda,Obligations and
Contracts, 2000 ed, p. 636)

May natural obligations be converted into civil obligations?

Yes, by way of novation. The natural obligation becomes a valid cause for
a civil obligation after it has been affirmed or ratified anew by the debtor.
(Pineda, Obligations and Contracts, 2000 ed, p. 634)

Art. 1157
Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.

Source Obligation Perfection

From the time designated by
Law ex lege the law creating or regulating
them.
Contracts ex contractu GR: From the time of the
perfection of the contract (i.e.
 meeting of the minds)

XPNs:
1. When the parties made
stipulation on the right of the
creditor to the fruits of the
thing;
2. When the obligation is
subject to a suspensive
condition or period; arises
upon fulfillment of the
condition or expiration of the
period.
Quasi-contact ex quasi-contractu
Acts or
ex maleficio or From the time designated by
omissions
ex delicto the law creating or regulating
punished by law
them.
ex quasi-maleficio
Quasi-delicts
or ex quasi-delicto

Art. 1158
Obligations derived from law are not presumed. Only those expressly
determined in this Code or in special laws are demandable, and shall
be regulated by the precepts of the law which establishes them; and
as to what has not been foreseen, by the provisions of this Book.

Characteristics of obligation ex lege:

1. Does not need the consent of the obligor;
2. Must be expressly set forth in the law creating it and not merely
presumed; and
3. In order that the law may be a source of obligation, it should be the
creator of the obligation itself.

 These obligations shall be regulated by the provisions of the law

which establishes them. The Civil Code is applicable suppletorily.

 If regarding an obligation ex lege, there is a conflict between the

New Civil Code and a special law, the latter prevails unless the
contrary has been expressly stipulated in the New Civil Code.

Art. 1159
Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.

Requisites for a contract to give rise to obligations ex contractu:

1. It must contain all the essential requisites of a contract; and
2. It must not be contrary to law, morals, good customs, public order,
and public policy.

 Compliance in good faith is the performance in accordance with the

stipulation, clauses, terms and conditions of the contract.

 Parties may freely enter into any stipulations provided such are not
contrary to law, morals, good customs, public order or public policy

May a party unilaterally evade his obligation in the contract?

GR: Neither party may unilaterally evade his obligation.
XPNs: Unilateral evasion is allowed when the:
1. Contract authorizes such evasion and
2. Other party assents thereto

What governs obligations arising from contracts?

GR: These obligations shall be governed primarily by the stipulations,
clauses, terms and conditions of the parties’ agreements.
XPN: Contracts with prestations that are unconscionable or unreasonable.

 In case of unconscionable penalty for breach of contract, or

liquidated damage, the same may be reduced by the court. (Pineda,
Obligations and Contracts, p.13, 2000 ed)

Note: In contracts where public interest is involved (as in the case of labor
agreements), the government has a right to intervene for the
protection of the whole. (Leyte Land Trans. v. Leyte Farmer’s Union,
GR L-1977, May 12, 1948).

Differences between an Obligation and a Contract

An obligation is the result of a contract (or some other source) while a
contract, if valid, always results in obligations. But not all obligations come
from contracts.

A contract always presupposes a meeting of the minds; this is not

necessarily true for all kinds of obligations.
Innominate contracts or “contratos innominados”:
 (a) Do ut des — I give that you may give.
(b) Do ut facias — I give that you may do.
(c) Facio ut des — I do that you may give.
(d) Facio ut facias — I do that you may do.

Example: A worked for B as interpreter. Even without an express

agreement as to compensation, A is entitled to compensation
because of facio ut des — I do the interpreting that you may
give the money. (Perez v. Pomar, 2 Phil. 682).

Art. 1160
Obligations derived from quasi-contracts shall be subject to the
provisions of Chapter 1, Title XVII, of this Book.

 Quasi-contract is a juridical relation arising from lawful, voluntary

and unilateral acts based on the principle that no one should unjustly
enrich himself at the expense of another.
 Since a quasi‐contract is a unilateral contract created by the sole act
or acts of the gestor, there is no express consent given by the other
party. The consent needed in a contract is provided by law through
presumption. (Pineda, Obligations and Contracts, p. 15, 2000 ed)

Forms of quasi-contract:
1. Negotiorium gestio – unauthorized management; Arises whenever a
person voluntarily takes charge of the agency or management of
another’s abandoned business or property without the latter’s
authority

2. Solutio indebiti – undue payment; Arises when a person unduly

delivers a thing through mistake to another who has no right to
demand it (must not be through liberality or some other cause)

Is a Quasi-Contract an Implied Contract?

No, because in a quasi-contract (unlike in an implied contract) there is NO
meeting of the minds.

Art. 1161
Civil obligations arising from criminal offenses shall be governed by
the penal laws, subject to the provisions of Article 2177, and of the
pertinent provisions of Chapter 2, Preliminary Title, on Human
Relations, and of Title XVIII of this Book, regulating damages.
  Delict is an act or omission punished by law.

What is the basis for civil liability arising from delicts as according to the
penal code?
Art. 100 of the Revised Penal Code provides that: “Every person criminally
liable for a felony is also civilly liable.”

Note: An insane man who commits a crime is exempted from criminal

liability, but his guardian can be held civilly liable unless the latter
was diligent in his task of taking care of the insane. If there is no
guardian, or if said guardian (in the proper case) is insolvent, the
property of the insane man can be made liable. (See Arts. 12 and
101, R.P.C.).

Effect of Acquittal in Criminal Case:

1. When due to reasonable doubt – no civil liability
2. When due to exempting circumstances – there is civil liability
3. When there is preponderance of evidence – there is civil liability

Effect of Aggravating and Mitigating Circumstances:

In crimes, the damages to be adjudicated may be, respectively, increased
or lessened according to the aggravating or mitigating circumstances. (Art.
2204, Civil Code).

Scope of Civil Liability: Crimes without Civil Liability:

1. Restitution, 1. Contempt,
2. Reparation for damage 2. Insults to persons in authority,
caused, and 3. Gambling, and
3. Indemnity for 4. Violations of traffic regulations
Consequential damages (De Leon, 2003 ed.,p. 23)

Art. 1162
Obligations derived from quasi-delicts shall be governed by the
provisions of Chapter 2, Title XVII of this Book, and by special laws.

 Quasi-delict is an act or omission arising from fault or negligence

which causes damage to another, there being no pre‐existing
contractual relations between the parties.
 Culpa aquiliana (quasi-delicts) can refer to acts which are criminal in
character, whether the same be voluntary or negligent. (Elcano v
Hill, 77 SCRA 98)
Requirements before a person can be held liable for a quasi-delict:
1. There must be fault or negligence attributable to the person charged;
2. There must be damage or injury; and
3. There must be a direct relation of cause and effect between the fault
or negligence on the one hand and the damage or injury on the
other hand (proximate cause).

Note:
1. Proximate cause is that adequate and efficient cause, which in the
natural order of events, necessarily produces the damages or injury
complained of.
2. There are instances when “although there is damages, there is no
legal injury or wrong” (damnum absque injuria — damage without
legal injury).

Definition of Negligence:
1. “Negligence is the failure to observe, for the protection of the
interests of another person, that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such
other person suffers injury.” (U.S. v. Barrias, 23 Phil. 434).
2. As defined by the Civil Code, negligence is the omission of that
diligence which is required by the circumstances of person, place,
and time.

Elements of a quasi‐delict:
1. Act or omission;
2. Fault or negligence attributable to the person charged;
3. Damage or injury;
4. Direct relation of cause and effect between the act arising from
fault/negligence and the damage or injury (proximate cause); and
5. No pre‐existing contractual relation between the parties.

Chapter 2
NATURE AND EFFECT OF OBLIGATIONS

Nature of Obligations:
1. Personal Obligations: obligations to do or not to do; where the
subject matter is an act to be done or not to be done
a. Positive – obligation to do
i. Not purely personal act ‐ to have obligation executed at
debtor's expense plus damages
 ii. Purely personal act ‐ damages only
b. Negative – obligation not to do
i. To have the prohibited thing undone plus damages.
However, if thing cannot be physically or legally undone,
only damages may be demanded.
2. Real Obligations: obligations to give; where the subject matter is a
thing which the obligor must deliver to the obligee
a. Determinate or specific – object is particularly designated or
physically segregated from all other things of the same class
b. Generic – object is designated by its class or genus
c. Limited Generic – generic objects confined to a particular
class

Art. 1163
Every person obliged to give something is also obliged to take care
of it with the proper diligence of a good father of a family, unless the
law or the stipulation of the parties requires another standard of care.

 Diligence of a good father of a family – ordinary care or that

diligence which an average or reasonably prudent person would
exercise over his own property

Rule on Standard of Care:

1. That which the law requires; or
2. That stipulated by the parties; or
3. In the absence of the two, diligence of a good father of a family

Art. 1164
The creditor has a right to the fruits of the thing from the time the
obligation to deliver it arises. However, he shall acquire no real right
over it until the same has been delivered to him.

When obligation to deliver arises:

GR: From the time of the perfection of the contract (meeting of the minds
between the parties)
XPN:
a. when the parties made a stipulation as regards the right of the
creditor to the fruits of the thing;
b. when the obligation is subject to a suspensive condition or period;
arises upon fulfillment of the condition or arrival of the period
 Personal Right Real Right
 Jus ad rem, a right  Jus in re, a right enforceable
enforceable only against a against the whole world
definite person or group of
persons

 Right pertaining to a  Right pertaining to a person

person to demand from over a specific thing, without
another, as a definite a definite passive subject
passive subject, the against whom the right may
fulfillment of the prestation be personally enforced
to give, to do or not to do.

What is the nature of the right of the creditor with respect to the fruits?
1. Before delivery – personal right
2. After delivery – real right

Art. 1165
When what is to be delivered is a determinate thing, the creditor, in
addition to the right granted him by Article 1170, may compel the
debtor to make the delivery.

If the thing is indeterminate or generic, he may ask that the obligation

be complied with at the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing to two
or more persons who do not have the same interest, he shall be
responsible for fortuitous event until he has effected the delivery.

Specific Generic
 Deliver the thing agreed  Deliver the thing which is
upon (Art. 1165, NCC) neither of superior nor
inferior quality
 Take care of the thing with  Specific performance i.e.
the proper diligence of a delivery of another thing
good father of a family within the same genus as the
unless the law requires or thing promised if such thing
parties stipulate another is damaged due to lack of
standard of care (Art. 1163, care or a general breach is
 NCC) committed

 Deliver all accessions,  If the object is generic, but

accessories and fruits of the source is specified or
the thing (Art. 1166, NCC) delimited, the obligation is to
preserve the source
 Pay damages in case of  Pay damages in case of
breach of obligation by breach of obligation by
reason of delay, fraud, reason of delay, fraud,
negligence, contravention negligence, contravention of
of the tenor thereof the tenor thereof (Art. 1170)
 Fortuitous event  Obligation is not
extinguishes the obligation extinguished (genus nun
quam peruit – genus never
perishes)

Duties of debtor in an obligation to give a generic thing:

1. To deliver the thing which is neither of superior nor of inferior quality
2. To pay damages in case of breach of the obligation by reason of
delay, fraud, negligence or contravention of the tenor of the
obligation.

In failing to deliver a thing, what are the remedies of the creditor?

Specific Generic
 Specific performance  Specific performance
 Rescission (action to (delivery of any thing
rescind under Art. 1380, belonging to the same
NCC) species)
 Resolution (action for  Ask that the obligation be
cancellation under Art. complied with at the debtor’s
1191, NCC) expense
 Resolution or specific
performance, with damages
in either case (Art. 1191,
NCC)
 Damages, in both cases (Art. 1170, NCC)
Note: May be exclusive or in addition to the above ‐
mentioned remedies (Pineda, Obligations and Contracts,
2000 ed, p. 37)
Art. 1166
The obligation to give a determinate thing includes that of delivering
all its accessions and accessories, even though they may not have
been mentioned.

 Accessions – additions to or improvements upon a thing.

Ex: air conditioner in a car.
 Accessories – things joined to, or included with the principal thing for
its better use, embellishment or completion.
Ex: key of a house; frame of a picture (De Leon, 2003 ed., pp. 37-
38)

Note: In obligation to deliver a specific thing, the creditor has the right to
demand preservation of the thing, its accessions, accessories, and the
fruits. The creditor is entitled to the fruits and interests from the time the
obligation to deliver the thing arise.

Art. 1167
If a person obliged to do something fails to do it, the same shall be
executed at his cost.

This same rule shall be observed if he does it in contravention of the

tenor of the obligation. Furthermore, it may be decreed that what has
been poorly done be undone.

When may a thing be ordered undone?

1. if made poorly
2. negative personal obligations

Art. 1168
When the obligation consists in not doing, and the obligor does what
has been forbidden him, it shall also be undone at his expense.

What are the instances where the remedy under Art. 1168 is not available?
1. Where the effects of the act which is forbidden are definite in
character – even if it is possible for the creditor to ask that the act be
undone at the expense of the debtor, consequences contrary to the
object of the obligation will have been produced which are
permanent in character.
2. Where it would be physically or legally impossible to undo what has
been undone – because of:
a. The very nature of the act itself;
 b. A provision of law; or
c. Conflicting rights of third persons.

Note: In either case, the remedy is to seek recovery for damages.

Art. 1169
Those obliged to deliver or to do something incur in delay from the
time the obligee judicially or extra judicially demands from them the
fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order

that delay may exist:
(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation it
appears that the designation of the time when the thing is to be
delivered or the service is to be rendered was a controlling motive for
the establishment of the contract; or
(3) When demand would be useless, as when the obligor has
rendered it beyond his power to perform.

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. From the moment one of the parties
fulfills his obligation, delay by the other begins.

What are the requisites of delay?

1. Obligation must be due, demandable and liquidated;
2. Debtor fails to perform his positive obligation on the date agreed
upon;
3. A judicial or extra‐judicial demand made by the creditor upon the
debtor to fulfill, perform or comply with his obligation; and
4. Failure of the debtor to comply with such demand.

Note: In reciprocal obligations, the moment one party is ready to comply

with his obligation, delay by the other begins. There is no need for
demand from either party.

What are the kinds of delay or default?

1. Mora solvendi – default on the part of the debtor/obligor
a. Ex re – default in real obligations (to give)
 b. Ex personae – default in personal obligations (to do)
2. Mora accipiendi – default on the part of the creditor/obligee
3. Compensatio morae – default on the part of both the debtor and
creditor in reciprocal obligation

What are the requisites of mora solvendi?

1. Obligation pertains to the debtor;
2. Obligation is determinate, due and demandable, and liquidated;
3. Obligation has not been performed on its maturity date;
4. There is judicial or extrajudicial demand by the creditor;
5. Failure of the debtor to comply with such demand

What are the effects of mora solvendi?

1. Debtor may be liable for damages or interests; and
2. When it has for its object a determinate thing, debtor may bear the
risk of loss of the thing even if the loss is due to fortuitous event (Art.
1165, NCC).

What are the requisites of mora accipiendi?

1. Offer of performance by a capacitated debtor;
2. Offer must be to comply prestation as it should be performed; and
3. Refusal of the creditor without just cause.

What are the effects of mora accipiendi?

1. Responsibility of DR is limited to fraud and gross negligence
2. DR is exempted from risk of loss of thing; CR bears risk of loss
3. Expenses by DR for preservation of thing after delay is chargeable
to CR
4. If the obligation bears interest, DR does not have to pay from time of
delay
5. CR liable for damages
6. DR may relieve himself of obligation by consigning the thing

What are the rules on default?

1. Unilateral obligations
GR: Default or delay begins from extrajudicial or judicial demand –
mere expiration of the period fixed is not enough in order that
DR may incur delay.
XPNs:
a. The obligation or the law expressly so dictates;
b. Time is of the essence;
 c. Demand would be useless, as DR has rendered it beyond his
power to perform; or
d. DR has acknowledged that he is in default.
2. Reciprocal obligations
GR: Fulfillment by both parties should be simultaneous.
XPN: When different dates for the performance of obligation is fixed
by the parties.

 Reciprocal Obligations are obligations created and established at

the same time, out of the same cause and which results in the
mutual relationship between the parties.
 In reciprocal obligations one party incurs in delay from the moment
the other party fulfills his obligation, while he himself does not
comply or is not ready to comply in a proper manner with what is
incumbent upon him.

Note: If neither party complies with his prestation, default of one

compensates for the default of the other.

Art. 1170
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.

What are the forms of breach of obligations?

1. Voluntary – debtor is liable for damages if he is guilty of:
a. Default (mora)
b. Fraud (dolo) - is the deliberate or intentional evasion of the
normal fulfillment of an obligation.
i. Causal Fraud (dolo causante): fraud employed in the
execution of the contract
ii. Incidental Fraud (dolo incidente): fraud in performance
of obligation already existing because of a contract
c. Negligence (culpa) - Consists in the omission of that diligence
which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the
time and of the place.

i. Quasi-Delict (culpa aquiliana)- source of obligation

ii. Contractual Negligence (culpa contractual)- negligence

in the performance of a contract
 d. Breach through contravention of the tenor thereof
Note: Debtor is liable for damages.
2. Involuntary – debtor is unable to perform the obligation due to
fortuitous event thus not liable for damages
Note: Debtor is not liable for damages.

OBLIGATION AND CONTRACTS

CASE DIGESTS

Africa v Caltex, G.R. No. L-12986

Facts:

In the afternoon of March 18, 1948 a fire broke out at the Caltex
service station at the corner of Antipolo Street and Rizal Avenue, Manila. It
started while gasoline was being hosed from a tank truck into the
underground storage, right at the opening of the receiving tank where the
nozzle of the hose was inserted. The fire spread to and burned several
neighboring houses, including the personal properties and effects inside
them. Petitioners sued respondents, Caltex (Phil.) Inc. and Mateo
Boquiren, the first as alleged owner of the station and the second as its
agent in charge of operation. Negligence on the part of both of them was
attributed as the cause of the fire. The action is for damages under Articles
1902 and 1903 of the old Civil Code.

The trial court and the Court of Appeals found that petitioners failed
to prove negligence and that respondents had exercised due care in the
premises and with respect to the supervision of their employees.

Issue:

Without proof as to the cause and origin of the fire, would the
doctrine of res ipsa loquitur apply such that the defendants can be
presumed negligent?

Ruling:
 The trial court and the appellate court refused to apply the doctrine
on the grounds that "as to (its) applicability, in the Philippines, there seems
to be nothing definite," and that while the rules do not prohibit its adoption
in appropriate cases, "in the case at bar, however, we find no practical use
for such doctrine."

Decisions of the Court of Appeals do not lay down doctrines binding

on the Supreme Court, but we do not consider this a reason for not
applying the particular doctrine of res ipsa loquitur in the case at bar.
Gasoline is a highly combustible material, in the storage and sale of which
extreme care must be taken. On the other hand, fire is not considered a
fortuitous event, as it arises almost invariably from some act of man.

In resolving the issue of negligence, the Supreme Court of Louisiana

held that predicated on these circumstances and the further circumstance
of defendant's failure to explain the cause of the fire or to show its lack of
knowledge of the cause, plaintiff has evoked the doctrine of res ipsa
loquitur. There are many cases in which the doctrine may be successfully
invoked and this, is one of them. Where the thing which caused the injury
complained of is shown to be under the management of defendant or his
servants and the accident is such as in the ordinary course of things does
not happen if those who have its management or control use proper care,
it affords reasonable evidence, in absence of explanation by defendant,
that the accident arose from want of care.

Legaspi Oil Co., Inc. v Court of Appeals, GR No. 96505

Facts:

Petitioner Legaspi Oil Company had several transactions with

Oseraos through the agents of the latter. The transactions involve the sale
of copras (coconut husk) by private respondent to the petitioner. The
selling price of Oseraos for every 100 kilos of copras depends on the
prevailing market price at the time the contract was entered into.

In one transaction, Oseraos committed to sell 100 tons of copra to

Legaspi Oil for the price of P82 per 100 kilos with delivery terms of 20 days
effective 8 March 1975. After the period to deliver had lapsed, Oseraos
was only able to sell 46,334 kilos of copra thus leaving a balance of 53,666
kilos as per running account. Accordingly, demands were made upon
Oseraos to deliver the balance with a final warning embodied in a letter
dated 6 October 1976 that failure to deliver will mean cancellation of the
contract, the balance to be purchased at open market and the price
deferential to be charged against Oseraos. Since there was still no
compliance, Legaspi Oil purchased the undelivered balance from the open
market at the prevailing price of P168 per 100 kilos, or a price differential
of P86 per 100 kilos, a net loss of P46,154.76 chargeable against private
respondent.

Issue:

Whether or not Oseraos is liable for damages arising from fraud or

bad faith in deliberately breaching the contract of sale entered into by the
parties.

Ruling:

Despite repeated demands by petitioner# private respondent failed

to fulfill his contractual obligation to deliver the remaining 53,666 kilograms
of copra. Based on the foregoing facts, the actuality of private
respondent5s fraud cannot be gainsaid. In general fraud may be defined
as the voluntary execution of a wrongful act, or a willful omission, knowing
and intending the effects which naturally and necessarily arise from such
act or omission. The conduct of the private respondent clearly manifests
his deliberate fraudulent intent to evade his contractual obligation for the
price of copra had in the meantime more than doubled from P86 to P168
per 100 kilograms. Under Art. 1170 of the Civil Code, 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. Pursuant to said article, private respondent is liable for
damages.

Rep. of the Phil. v. Luzon Stevedoring Corp. G.R. No. L-21749

Facts:

Barge owned by Luzon Stevedoring Corporation was being towed

down the Pasig River by tugboats belonging to the same corporation. The
barge rammed against one of the wooden piles of the Nagtahan Bailey
Bridge, smashing the posts and causing the bright to list. The river, at that
time, was swollen and the current swift, on account of the heavy downpour
of Manila and the surrounding provinces. Republic of the Philippines (PH)
sued LSC for actual and consequential damages caused by its employees.

Issue:

Whether or not the collision of LSC’s barge with the supports or

piers of the Nagtahan Bridge was in law caused by fortuitous event or
force majeure

Ruling:

No. Considering that the Nagtahan bridge was an immovable and

stationary object and uncontrovertibly provided with adequate openings for
the passage of water craft, including barges like of NSC’s, it is undeniable
that the unusual event that the barge, exclusively controlled by appellant,
rammed the bridge supports raises a presumption of negligence on the
part of appellant or its employees manning the barge or the tugs that
towed it.

NLS stresses the precautions taken by it: (1) that it assigned two of
its most powerful tugboats to tow down river its barge, and (2) that it
assigned to the task the more competent and experienced among its
patrons, (3) had the towlines, engines and equipment double-checked and
inspected; (4) that it instructed its patrons to take extra precautions. These
very precautions, completely destroy the NLS’ defense.

Force majeure by definition, are extraordinary events not

foreseeable or avoidable, events that could not be foreseen, or which,
though foreseen, were inevitable.” It is, therefore, not enough that the
event should not have been foreseen or anticipated, as is commonly
believed, but it must be one impossible to foresee or to avoid. The more
difficulty to foresee the happening is not impossibility to foresee the same.
The very measures adopted by NSC prove that the possibility of danger
was not only foreseeable, but actually foreseen, and was not caso fortuito.

LSC, knowing and appreciating the perils posed by the swollen

steam and its swift current, voluntarily entered into a situation involving
obvious danger; it therefore assured the risk, and cannot shed
responsibility merely because the precautions it adopted turned out to be
insufficient.

Nakpil v Court of Appeals, G.R. No. L-47851

Facts:

Private respondents – Philippine Bar Association (PBA) – a non-

profit organization formed under the corporation law decided to put up a
building in Intramuros, Manila. Hired to plan the specifications of the
building were Juan Nakpil & Sons, while United Construction was hired to
construct it. The proposal was approved by the Board of Directors and
signed by the President, Ramon Ozaeta. The building was completed in
1966.
In 1968, there was an unusually strong earthquake which caused
the building heavy damage, which led the building to tilt forward, leading
the tenants to vacate the premises. United Construction took remedial
measures to sustain the building.

PBA filed a suit for damages against United Construction, but United
Construction subsequently filed a suit against Nakpil and Sons, alleging
defects in the plans and specifications.

Technical Issues in the case were referred to Mr. Hizon, as a court

appointed Commissioner. PBA moved for the demolition of the building,
but was opposed. PBA eventually paid for the demolition after the building
suffered more damages in 1970 due to previous earthquakes. The
Commissioner found that there were deviations in the specifications and
plans, as well as defects in the construction of the building.

Issue:

Is the petitioner liable for damages in this case?

Ruling:

Yes. The petitioner made substantial deviations from the plans and
specifications and failed to observe requisite workmanship standards in the
construction of the building while their architect drew plans that contain
defects and other inadequacies.
 Art. 1174 of the NCC, however, states that no person shall be
responsible for events, which could not be foreseen. But to be exempt from
liability due to an act of God, the ff must occur:
1. Cause of breach must be independent of the will of the debtor
2. Event must be unforeseeable or unavoidable
3. Event must be such that it would render it impossible for the
debtor to fulfill the obligation
4. Debtor must be free from any participation or aggravation of the
industry to the creditor.

In the case at bar, although the damage was ultimately caused by

the earthquake which was an act of God, the defects in the construction,
as well as the deviations in the specifications and plans aggravated the
damage, and lessened the preventive measures that the building would
otherwise have had.

Tan v. Inchausti & Co., G.R. No. L-6472, Mar. 7, 1912

Facts:

Three bill of lading were executed.

To this end 3 bills of lading were executed (38, 39, and 76). The
steamer Sorsogo arrived at the port of Gubat on 28 November 1908 and
as the lorcha Pilar the other vessel to which the merchandise was to be
transshipped for its transportation to Samar was not yet there. The cargo
was unloaded and stored in the defendant company’s warehouses at that
port. The lorcha Pilar arrived several days later and the merchandise
owned by Sip and other goods were transported to Catarman, Samar.

On 5 December 1908, however, before the Pilar could leave for its
destination a heavy and strong wind caused the lorcha to wrecked and its
cargo including Sip’s package were scattered. Workmen of Inchausti tried
to save the merchandize but it is already futile so they proceeded to have it
sold at public auction before a notary for the sum of P1,693.67.

A complaint was filed against Inchausti because the same neither

carried nor delivered his merchandise to Ong Bieng Sip, in Catarman, but
unjustly and negligently failed to do so, with the result that the said
merchandise was almost totally lost, and thus claimed the value of the
merchandise which was P20,000, legal interest thereon from 25 November
1908, and the cost of the suit.

Issue:

WON Inchausti is liable for the shipwreck?

Ruling:

No. The Supreme Court reversed the judgment appealed from, and
absolved Inchausti & Co., without special finding as to costs; holding that
Inchausti is not liable for the loss and damage of the goods shipped on the
lorcha Pilar by the Chinaman, Ong Bieng Sip, in as much as such loss and
damage were the result of a fortuitous event or force majeure, and there
was no negligence or lack of care and diligence on the part of Inchausti or
its agents.

Wreck of lorcha due to fortuitous event; Loss cannot be attributed to

Inchausti or its agents. From the moment that it is held that the loss of the
said lorcha was due to force majeure, a fortuitous event, with no
conclusive proof of negligence or of the failure to take the precautions such
as diligent and careful persons usually adopt to avoid the loss of the boat
and its cargo, it is neither just nor proper to attribute the loss or damage of
the goods in question to any fault, carelessness, or negligence on the part
of Inchausti and its agents and, especially, the patron of the lorcha Pilar.

Phil Com Satellite Corp v Globe, GR 147324

Facts:

On 07 May 1991, Philcomsat and Globe entered into an Agreement

whereby Philcomsat obligated itself to establish, operate and provide an
IBS Standard B earth station (earth station) within Cubi Point for the
exclusive use of the USDCA. The term of the contract was for 60 months,
or five (5) years. In turn, Globe promised to pay Philcomsat monthly rentals
for each leased circuit involved. At the time of the execution of the
Agreement, both parties knew that the Military Bases Agreement between
the Republic of the Philippines and the US (RP-US Military Bases
Agreement) was to expire. Under Section 25, Article XVIII of the 1987
Constitution, foreign military bases, troops or facilities, which include those
located at the US Naval Facility in Cubi Point, shall not be allowed in the
Philippines unless a new treaty is duly concurred in by the Senate and
ratified by a majority of the votes cast by the people in a national
referendum when the Congress so requires, and such new treaty is
recognized as such by the US Government.

Subsequently, Philcomsat installed and established the earth station

at Cubi Point and the USDCA made use of the same.

On 16 September 1991, the Senate passed and adopted a

resolution expressing its decision not to concur in the ratification of the
Treaty of Friendship, Cooperation and Security and its Supplementary
Agreements that was supposed to extend the term of the use by the US of
Subic Naval Base, among others.

In a letter dated 06 August 1992, Globe notified Philcomsat of its

intention to discontinue the use of the earth station in view of the
withdrawal of US military personnel from Subic Naval Base after the
termination of the RP-US Military Bases Agreement. Globe invoked as
basis for the letter of termination Section 8 (Default) of the Agreement.
Issue:

Whether or not the non-ratification by the Senate of the Treaty of

Friendship, Cooperation and Security and its Supplementary Agreements
constitutes force majeure (fortuitous event) which exempts Globe from
complying with its obligations under the Agreement.

Ruling:

Yes. Globe asserts that Section 8 of the Agreement is not contrary to

Article 1174 of the Civil Code because said provision does not prohibit
parties to a contract from providing for other instances when they would be
exempt from fulfilling their contractual obligations. Globe also claims that
the termination of the RP-US Military Bases Agreement constitutes force
majeure and exempts it from complying with its obligations under the
Agreement.

Philcomsat and Globe agreed in Section 8 of the Agreement that the

following events shall be deemed events constituting force majeure:

1. Any law, order, regulation, direction or request of the Philippine

Government;
2. Strikes or other labor difficulties;
3. Insurrection;
 4. Riots;
5. National emergencies;
6. War;
7. Acts of public enemies;
8. Fire, floods, typhoons or other catastrophies or acts of God;
9. Other circumstances beyond the control of the parties.

Article 1174, which exempts an obligor from liability on account of

fortuitous events or force majeure, refers not only to events that are
unforeseeable, but also to those which are foreseeable, but inevitable:

Art. 1174. Except in cases 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.

Clearly, the foregoing facts are either unforeseeable, or foreseeable

but beyond the control of the parties. There is nothing in the enumeration
that runs contrary to, or expands, the concept of a fortuitous event under
Article 1174.

MIAA v ALA Industries Corp. G.R. No. 147349

Facts:

MIAA awarded a contract involving the structural repair and

waterproofing of the International Passenger Terminal (IPT) and
International Container Terminal (ICT) buildings of the Ninoy Aquino
International Airport (NAIA) to ALA, which submitted the second lowest
and most advantageous bid. The contract contains escalation clauses and
price adjustments.

ALA made the necessary repairs and waterproofing. After

submission of its progress billings to MIIA, ALA received partial payments.
But progress billing No. 6 remained unpaid despite repeated demands by
ALA. The petitioner unilaterally rescinded the contract on the ground that
respondent failed to complete the project within the agreed completion
date.
 ALA objected to the rescission made by MIAA and reiterated its
claims with damages. Both parties executed a compromise agreement with
judicial approval.

However, MIAA defaulted in payment and attributed its delay to the

Christmas season, for them a Fortuitous Event, which prompted the trial
court to deny motion for execution against ALA. But the CA reversed the
order and issued a writ of execution to enforce ALA’s claim to the extent of
MIAA’s remaining balance.

The MIAA invoked Article 1229 of the Civil Code to reduce the
penalty.

Issue:

Whether or not the Article 1229 of the Civil Code is applicable to the
petitioner’s case.

Ruling:

No, the Court holds that such provision is applicable only to

contracts that are the subjects of litigation, not to final and executory
judgments.

Basic is the rule that if a party fails or refuses to abide by a

compromise agreement, the other may either enforce it or regard it as
rescinded and insist upon the original demand. For failure of petitioner to
abide by the judicial compromise, respondent chose to enforce it. The
latter’s course of action was in accordance with the very stipulations in the
Agreement that the lower court could not change.

Respondent is thus entitled to a writ of execution for the total amount

contained in the Compromise Agreement. The Court cannot reduce it. The
partial payment made by petitioner does not at all contravene Article 1229
of the Civil Code, which is applicable only to contracts that are the subjects
of litigation, not to final and executory judgments.

Thus, the petition is DENIED.

Japan Airlines v CA, GR 118664

Facts:
 Private respondents boarded a JAL flight in San Francisco,
California bound for Manila. It included an overnight stopover at Narita,
Japan at JAL’s expense. Due to the Mt. Pinatubo eruption, private
respondents’ trip to Manila was cancelled. JAL rebooked all the Manila-
bound passengers and paid for the hotel expenses of their unexpected
overnight stay. The flight of private respondents was again cancelled due
to NAIA’s indefinite closure. JAL informed the respondents that it would no
longer defray their hotel and accommodation expense during their stay in
Narita. The respondents were forced to pay for their accommodations and
meal expenses for 5 days.

Issue:

1. Whether or not JAL has the obligation to shoulder the hotel and
meal expenses even if the delay was caused by force majeure

2. Whether or not the award of damages was proper

Ruling:

1. When a party is unable to fulfill his obligation because of force

majeure, the general rule is that he cannot be held liable for
damages for non-performance. When JAL was prevented from
resuming its flight to Manila due to the effects of the eruption,
whatever losses or damages in the form of hotel and meal expenses
the stranded passengers incurred cannot be charged to JAL. The
predicament of the private respondents was not due to the fault or
negligence of JAL. JAL had the duty to arrange the respondents’
flight back to Manila. However, it failed to look after the comfort and
convenience of its passengers when it made the passengers
arrange their flight back to Manila on their own and after waiting in
the airport for a whole day.

2. Yes, the award of nominal damages is proper. Nominal damages

are adjudicated in order that a right of a plaintiff, which has been
violated or invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying any loss suffered
by him.

Rodriguez v CA (Association of Law Students in the Ph)

Facts:

A fire broke out which razed two apartment buildings, owned by

plaintiffs-appellants Rodriguezes and partially destroying a commercial
building. They filed a case for damages against defendants-appellees
Vilorias and Young. The complaint alleged that by reason of the gross
negligence and want of care of the construction workers and employees of
the defendants-appellees, the bunkhouse or workers’ quarters in the
construction site caught fire spreading rapidly, burning the adjacent
buildings owned by plaintiffs-appellants.

Defendant-appellee Young, the building contractor, contended that

he cannot be held responsible even if there was negligence on the part of
the employees for he had exercised the diligence of a good father of a
family in the selection and supervision of his workers. As counterclaim,
defendant-appellee Young sought for moral damages, exemplary damages
and attorney’s fees.

The Vilorias also alleged that plaintiffs-appellants had no cause of

action against them. The fire court not have been caused by gross
negligence of their workers for they did not have any worker in the
construction of their building. The said construction was being undertaken
by the independent contractor, Young, who hired and supervised his own
workers. As counterclaim, they prayed for moral damages, exemplary
damages and attorney’s fees.

After trial and reception of evidence, the court a quo resolved that
the fire was not caused by an instrumentality within the exclusive control of
the defendants-appellants. The decision stated that plaintiffs-appellants
failed to establish that the fire was the result of defendants-appellees’ or
their workers’ negligence.

The CA affirmed the trial court’s decision but the award of damages
in favor of defendants-appellees including the award of attorney’s fees are
DELETED and SET ASIDE.

Issue:

Whether or not Sec 44, Rule 130 of the Rules of Court is not
applicable to the case at bar, therefore making the Fire Investigation
Report inadmissible in evidence.
Ruling:

The instant petition is DENIED and the challenged decision of CA is

AFFIRMED in toto.

NO, the rule is applicable; the Report admissible. Section 44 of Rule

130, which reads as follows:

Sec. 44. Entries in official records. — Entries in official records made

in the performance of his duty by a public officer of the Philippines, or by a
person in the performance of a duty specially enjoined by law, are prima
facie evidence of the facts therein stated.

Petitioners assert that the Fire Investigation Report by an official of

the Cebu City Fire Station should have been admitted in evidence as an
exception to the hearsay rule [as stated in #2 above].] The trial and
appellate courts rejected this applying Africa v. Caltex (Phil.) Inc., wherein
this Court laid down the three requisites for admissibility under the
aforesaid section, viz.:

(1) That the entry was made by a police officer, or by another person
especially enjoined by law to do so;
(2) That it was made by the police officer in the performance of his
duties, or by such other person in the performance of a duty especially
enjoined by law; and
(3) That the public officer or other person had sufficient knowledge
of the facts by him stated, which must have been acquired by him
personally or through official information.
Elaborating on the third requisite, this Court further stated that for
the statements acquired by the public officer under the third requisite to
qualify as “official information,” it is necessary that the persons who gave
the statements “not only must have personal knowledge of the facts stated
but must have the duty to give such statements for record.”

Some confusion surrounds the issue of admissibility of the Fire

Investigation Report. The record discloses that the officer who signed the
report, Fire Major Eduardo P. Enriquez, was subpoenaed at the request of
and testified in open court for petitioners. Private respondents objected
said report, for being “hearsay and incompetent evidence.” The trial court
then denied their admission “for being hearsay.
 In light of the purposes for which the exhibits in question were
offered, the trial court erred in rejecting all of them as hearsay. Since Major
Enriquez himself took the witness stand and was available for cross-
examination, the portions of the report which were of his personal
knowledge or which consisted of his perceptions and conclusions were not
hearsay. The rest of the report, such as the summary of the statements of
the parties based on their sworn statements (which were annexed to the
Report) as well as the latter, having been included in the first purpose of
the offer, may then be considered as independently relevant statements
which were gathered in the course of the investigation and may thus be
admitted as such, but not necessarily to prove the truth thereof. It has been
said that:

Where, regardless of the truth or falsity of a statement, the fact that it

has been made is relevant, the hearsay rule does not apply, but the
statement may be shown. Evidence as to the making of such statement is
not secondary but primary, for the statement itself may constitute a fact in
issue, or be circumstantially relevant as to the existence of such a fact.

When Major Enriquez took the witness stand, testified for petitioners
on his Report and made himself available for cross-examination by the
adverse party, the Report, insofar as it proved that certain utterances were
made (but not their truth), was effectively removed from the ambit of the
aforementioned Section 44 of Rule 130. Properly understood, this section
does away with the testimony in open court of the officer who made the
official record, considers the matter as an exception to the hearsay rule
and makes the entries in said official record admissible in evidence as
prima facie evidence of the facts therein stated. The underlying reasons for
this exceptionary rule are necessity and trustworthiness, as explained in
Antillon v. Barcelon. 29
The litigation is unlimited in which testimony by officials is daily
needed; the occasions in which the officials would be summoned from his
ordinary duties to declare as a witness are numberless. The public officers
are few in whose daily work something is not done in which testimony is
not needed from official sources. Were there no exception for official
statements, hosts of officials would be found devoting the greater part of
their time to attending as witnesses in court or delivering their deposition
before an officer. The work of administration of government and the
interest of the public having business with officials would alike suffer in
consequence. For these reasons, and for many others, a certain verity is
accorded such documents, which is not extended to private documents. (3
Wigmore on Evidence, sec. 1631).
 The law reposes a particular confidence in public officers that it
presumes they will discharge their several trusts with accuracy and fidelity;
and, therefore, whatever acts they do in discharge of their duty may be
given in evidence and shall be taken to be true under such a degree of
caution as the nature and circumstances of each case may appear to
require.

It would have been an entirely different matter if Major Enriquez was

not presented to testify on his report. In that case the applicability of
Section 44 of Rule 130 would have been ripe for determination, and this
Court would have agreed with the CA that said report was inadmissible
since the aforementioned third requisite was not satisfied. The statements
given by the sources of information of Major Enriquez failed to qualify as
“official information,” there being no showing that, at the very least, they
were under a duty to give the statements for record.

Adorable v CA, GR 119466

Facts:

Saturnino Bareng was the registered owner of two parcels of land.

The petitioners were lessees of a 200 sq. m. portion of one of his lots.
Saturnino Bareng and his son, Francisco Bareng, obtained a loan from
petitioners amounting to P26,000, in consideration of which they promised
to transfer the possession and enjoyment of the fruits of their lot.

Francisco sold a portion of their land to Jose Ramos. The portion of

land being rented to petitioners was included in the portion sold to Jose
Ramos. The Barengs failed to pay their loan.
A demand letter was sent to Francisco Bareng, but he refused to
pay. Petitioners, learning of the sale made by Francisco Bareng to Jose
Ramos, then filed a complaint with the Regional Trial Court for the
annulment or rescission of the sale on the ground that the sale was
fraudulently prepared and executed.

Issue:

Whether or not the Adorables had the right to annul or rescind the
contract of sale on the ground that the Barengs failed to pay the loan from
them.
Ruling:

The petitioners contend that the sale is void due to the fact that the
Barengs owe them a loan.

While the petitioners have an interest in securing payment of loan

they extended, their right to seek payment does not in any manner attach
to a particular portion of the patrimony of their debtor, Francisco Bareng.

Article 1164. The creditor has a right to the fruits of the thing from
the time the obligation to deliver it arises. However, he shall acquire no
real right over it until the same has been delivered to him.

The petitioners' right against the Barengs is only a personal right to

receive payment for the loan; it is not a real right over the lot subject of the
deed of sale.

Cheng v CA, GR 144169

Facts:

On October 4, 1985, the Philippine Agricultural Trading Corporation

shipped on board the vessel M/V PRINCE ERIC, owned by petitioner,
3,400 bags of copra at Masbate for delivery to Dipolog City. The said
shipment of copra was covered by a marine insurance policy issued by
American Home Insurance Company (respondent Philam's assured).

M/V PRINCE ERIC, however, sank somewhere between Negros

Island and Northeastern Mindanao, resulting in the total loss of the
shipment. Because of the loss, the insurer, American Home, paid the
amount of P354,000.00 (the value of the copra) to the consignee.

Having been subrogated into the rights of the consignee, American

Home instituted a Civil Case in the RTC to recover the money paid to the
consignee, based on breach of contract of carriage

While the case was still pending petitioner executed deeds of

donations of parcels of land in favor of his children, herein co-petitioners
Sandra Joy and Ray Steven.

The trial court rendered judgment against petitioner Khe Hong

Cheng. When the sheriff, accompanied by counsel of respondent Philam,
went to Butuan City on January 17, 1997, to enforce the alias writ of
execution, they discovered that petitioner Khe Hong Cheng no longer had
any property and that he had conveyed the subject properties to his
children.

Philam filed a complaint with the Regional Trial Court of Makati City,
Branch 147, for the rescission of the deeds of donation executed by
petitioner Khe Hong Cheng in favor of his children and for the nullification
of their titles

Issue:

When did the four-year prescriptive period as provided for in Article

1389 of the Civil Code for respondent Philam to file its action for rescission
of the subject deeds of donation commence to run

Ruling:

Article 1389 of the Civil Code simply provides that, “The action to
claim rescission must be commenced within four years.” Since this
provision of law is silent as to when the prescriptive period would
commence, the general rule, i.e, from the moment the cause of action
accrues, therefore, applies. Article 1150 of the Civil Code is particularly
instructive:

Art. 1150. The time for prescription for all kinds of actions, when
there is no special provision which ordains otherwise, shall be counted
from the day they may be brought.

For accion pauliana to accrue, the following requisites must concur:

1) That the plaintiff asking for rescission has a credit prior to the
alienation, although demandable later;
2) That the debtor has made a subsequent contract conveying a
patrimonial benefit to a third person;
3) That the creditor has no other legal remedy to satisfy his claim,
but would benefit by rescission of the conveyance to the third person;
4) That the act being impugned is fraudulent;
5) That the third person who received the property conveyed, if by
onerous title, has been an accomplice in the fraud

An accion pauliana thus presupposes the following:

1) A judgment;
 2) the issuance by the trial court of a writ of execution for the
satisfaction of the judgment, and
3) the failure of the sheriff to enforce and satisfy the judgment of the
court.

Gutierrez v Gutierrez

Facts:

On February 2, 1930, a passenger truck and an automobile of

private ownership collided while attempting to pass each other on a bridge.
The truck was driven by the chauffeur Abelardo Velasco, and was owned
by saturnine Cortez. The automobile was being operated by Bonifacio
Gutierrez, a lad 18 years of age, and was owned by Bonifacio’s father and
mother, Mr. and Mrs. Manuel Gutierrez. At the time of the collision, the
father was not in the car, but the mother, together with several other
members of the Gutierrez family were accommodated therein.

The collision between the bus and the automobile resulted in

Narciso Gutierrez suffering a fractured right leg which required medical
attendance for a considerable period of time.

Issue:

Whether or not both the driver of the truck and automobile are liable
for damages and indemnification due to their negligence. What are the
legal obligations of the defendants?

Ruling:

Bonifacio Gutierrez’s obligation arises from culpa aquiliana. On the

other hand, Saturnino Cortez’s and his chauffeur Abelardo Velasco’s
obligation rise from culpa contractual.

The youth Bonifacio was na incompetent chauffeur, that he was

driving at an excessive rate of speed, and that, on approaching the bridge
and the truck, he lost his head and so contributed by his negligence to the
accident. The guaranty given by the father at the time the son was granted
a license to operate motor vehicles made the father responsible for the
acts of his son. Based on these facts, pursuant to the provisions of Art.
1903 of the Civil Code, the father alone and not the minor or the mother
would be liable for the damages caused by the minor.

The liability of Saturnino Cortez, the owner of the truck, and his
chauffeur Abelardo Velasco rests on a different basis, namely, that of
contract.

Arrieta v. Nationall Rice and Corn Corp, 10 SCRA 79

Facts:

Mrs. Paz Arrieta participated in public bidding called by NARIC on

May 19, 1952 for the supply of 20,000 metric tons of Burmese rice. Her bid
was $203.00 per metric ton, it was the lowest that’s why the contract was
awarded to her.

On July 1,1952, Arrieta and NARIC entered into contract. Arrieta

was obligated to deliver 20,000 metric ton of Burmese rice at $203.00 per
metric ton to NARIC. In return, NARIC committed itself to pay for the
imported rice “ by means of an irrevocable, confirmed and assignable letter
of credit in US currency in favour of Arrieta and/or supplier in Burma
(THIRI SETKYA), immediately.”

NARIC took the first step to open the letter of credit on July 30, 1952
by forwarding to the PNB its application for commercial letter of credit.
Arrieta with the help of a counsel, advised NARIC of the necessity for the
opening of the letter because she tender her supplier in Ragoon, Burma of
5 % of the price of 20,000 tons at $180.70 and if she didn’t comply the 5%
will be confiscated if the required letter of credit is not received by them
before August 4, 1952.
PNB informed NARIC that their application of credit letter amounting
to $3,614,000.00 was approved with the condition of 50% marginal cash
be paid. NARIC does not meet the condition. The allocation of Arrieta’s
supplier in Ragoon was cancelled and the 5% deposit was forfeited.

Issue:

Does NARIC liable for damages?

Ruling:
 Yes, because the reason of the cancellation of the contract by
Arrieta in Ragoon, Burma was the failure of NARIC to open the letter of
credit within a specific period of time. One who assumes contractual
obligation and fails to perform in which he knew and was aware when he
entered in the contract, should be liable for his failure to do what is
required by a law. Under the Art. 1170 of the Civil Code, not only the
debtors guilty of fraud, negligence or default but also a debtor of every, in
general, who fails in the performance of his obligation is bound to
indemnify for the losses and damages caused thereby.

Necesito v Paras, GR L-10605

Facts:

In 1954, Severina Garces and her one- year old son, Precillano
Necesito boarded Philippine Rabbit Bus Lines (PRBL) in Pangasinan.

After passing a wooden bridge, the front wheels of the truck

suddenly swerved to the right such that the driver lost control, and after
wrecking the bridge’s wooden rails, the truck fell on its right side into a
creek where water was breast deep.

The mother, Severina Garces, was drowned; the son, Precillano

Necesito, was injured, suffering abrasions and fracture of the left femur.
Consequently, their money, wrist watch and cargo of vegetables were lost.

Later, two actions for damages and attorney’s fees totalling over
P85,000 having been filed in the CFI of Tarlac against the carrier.
However, the latter pleaded that the accident was due to “engine or
mechanical trouble” independent or beyond the control of the defendants
or of the driver Bandonell. It was found out that the accident was caused
by the fracture of the right steering knuckle.

After trial, the court, holding that the accident was exclusively due to
fortuitous event, dismissed the action.

Plaintiffs appealed directly to the SC in view of the amount in

controversy. Thus, this case.

Issue:
 1. Whether or not carrier is liable for damages caused by
mechanical defect?
2. Whether or not the carrier has exercised the required
extraordinary diligence in handling the passengers.

Ruling:

1. Yes. A carrier is liable to its passengers caused by mechanical

defects of the conveyance. The carrier, while it is not an insurer of the
safety of the passengers, should nevertheless be held to answer for the
flaws of its equipment if such flaws were at all discoverable. In this
connection, the manufacturer will not relieve the carrier from liability. The
rationale of the carrier’s liability is the fact that the passenger has no privity
with the manufacturer of the defective equipment; hence, he has no
remedy against him, while the carrier usually has.

2. No. The liability of the carrier depends on its negligence, his

failure to exercise the “utmost” degree of diligence that the law requires,
and by Art. 1756, in case of a passenger’s death or injury the carrier bears
the burden of satisfying the court that he has duly discharged the duty of
prudence required. In this case, the monthly visual inspection of the
steering knuckle by the carrier did not measure up to the required legal
standard of “utmost diligence of very cautious person.

Mechanical defects are not force majeure if the same were

discoverable by regular and adequate inspections. The prevailing rule in
this jursdiction is that the carrier is liable to its passengers for damages
caused by mechanical defects of the conveyance. For the purposes of this
doctrine, the manufacturer is considered the agent of the carrier.

La Mallorca v De Jesus, GR L-21486

Facts:

The suit arose by reason of the death of Lolita de Jesus, 20-year old
daughter of Valentin de Jesus and wife of Manolo Tolentino, in a head-on
collision between petitioner's bus, on which she was a passenger, and a
freight truck traveling in the opposite direction, in a barrio in Marilao
Bulacan, in the morning of October 8, 1959. The immediate cause of the
collision was the fact that the driver of the bus lost control of the wheel
when its left front tire suddenly exploded. The court a quo sentenced the
defendant, now petitioner, to pay to plaintiffs actual, compensatory, and
moral damages; and counsel fees. CA affirmed.

Issue:

(1) WON the petitioners are liable for the consequences of the
accident.
(2) WON petitioners are liable for moral damages.
(3) WON the tire blow-out is a fortuitous event

Ruling:

Judgment affirmed.

(1) Petitioner maintains that a tire blow-out is a fortuitous event and

gives rise to no liability for negligence. Both the CFI and the CA found that
the bus was running quite fast immediately before the accident.
Considering that the tire which exploded was not new, petitioner describes
it as so very worn out, the plea of caso fortuito by petitioner cannot be
entertained. The cause of the blow-out was a mechanical defect of the
conveyance or a fault in its equipment which was easily discoverable if the
bus had been subjected to a more thorough check-up before it took to the
road. Hence, petitioners are liable for the accident.

(2) The second issue raised by petitioner is already a settled one. In

this jurisdiction moral damages are recoverable by reason of the death of a
passenger caused by the breach of contract of a common carrier, as
provided in Article 1764, in relation to Article 2206, of the Civil Code.

(3) No. The accident was caused by a mechanical defect which

could have been corrected if the bus has been subjected to a more
thorough check up before it took the road. Therefore the owner of the
vehicle is liable. Moral damages are recoverable by reason of the death of
the passenger caused by the breach of contract of a common carrier as
provided in Art 2206 of the New Civil Code.

Juntilla v Fontanar, GR L-45637

Facts:

The plaintiff was a passenger of the public utility jeepney on the

course of the trip from Danao City to Cebu City. The jeepney was driven by
defendant Berfol Camoro. It was registered under the franchise of
defendant Clemente Fontanar but was actually owned by defendant
Fernando Banzon.

When the jeepney reached Mandaue City, the right rear tire
exploded causing the vehicle to turn turtle. In the process, the plaintiff who
was sitting at the front seat was thrown out of the vehicle. Upon landing on
the ground, the plaintiff momentarily lost consciousness. When he came to
his senses, he found that he had a lacerated wound on his right palm.
Aside from this, he suffered injuries on his left arm, right thigh and on his
back.

Petitioner Roberto Juntilla filed for breach of contract with damages

against Clemente Fontanar, Fernando Banzon and Berfol Camoro.

The respondents filed their answer, alleging that the accident that
caused losses to the petitioner was beyond the control of the respondents
taking into account that the tire that exploded was newly bought and was
only slightly used at the time it blew up.

Issue:

Whether or not the accident in question was due to a fortuitous

event

Ruling:

In the case at bar, there are specific acts of negligence on the part of
the respondents. The records show that the passenger jeepney turned
turtle and jumped into a ditch immediately after its right rear tire exploded.
The evidence shows that the passenger jeepney was running at a very fast
speed before the accident. We agree with the observation of the petitioner
that a public utility jeep running at a regular and safe speed will not jump
into a ditch when its right rear tire blows up. There is also evidence to
show that the passenger jeepney was overloaded at the time of the
accident. The petitioner stated that there were three (3) passengers in the
front seat and fourteen (14) passengers in the rear.
While it may be true that the tire that blew-up was still good because
the grooves of the tire were still visible, this fact alone does not make the
explosion of the tire a fortuitous event. No evidence was presented to
show that the accident was due to adverse road conditions or that
precautions were taken by the jeepney driver to compensate for any
conditions liable to cause accidents. The sudden blowing-up, therefore,
could have been caused by too much air pressure injected into the tire
coupled by the fact that the jeepney was overloaded and speeding at the
time of the accident.

Austria v CA, GR L-29640

Facts:

Maria G. Abad received from Guillermo Austria one (1) pendant with
diamonds to be sold on commission basis or to be returned on demand.
While walking home, two men snatched her purse containing jewelry and
cash, and ran away. Thus, Abad failed to return the jewelry or pay its value
notwithstanding demands. Austria filed an action against Abad and Abad’s
husband for recovery of the pendant or of its value, and damages. Abad
raised the defense that the alleged robbery had extinguished their
obligation.

Issue:

1. Whether or not in a contract of agency (consignment of good for

sole) it is necessary that there be prior conviction for robbery before
the loss of the article shall exempt the consignee from liability for
such loss.
2. Whether or not Abad was negligent.

Ruling:

1. No. To avail of the exemption granted in the law, it is not necessary

that the persons responsible for the occurrence should be found or
punished, it would only be sufficient to establish that the enforceable
event, the robbery in this case did take place without any
concurrence fault on the debtor’s part, and this can be done by
preponderance of evidence.

A court finding that a robbery has happened would not necessary

mean that those accused in the criminal action should be found
guilty of the crime; nor would a ruling that those actually accused did
not commit the robbery be inconsistent with a finding that a robbery
did take place.
 2. No. In 1961, when the robbery in question did take place, for at that
time criminality had not by far reached the levels attained in the
present day. The diligence that Abad portrayed when she went
home before she was robbed was not a sign of negligence on her
part.

Southeastern College v CA, GR No. 126389

Facts:

Private respondents are owners of a house near the petitioner’s

four-story school building along the same road. During a typhoon, the roof
of the petitioner’s building was partly ripped off and blown away by strong
winds, landing on and destroying portions of the roofing of private
respondents’ house. In the aftermath, an ocular inspection of the destroyed
building was spearheaded by the city building official. In his report, he
imputed negligence to the petitioner for the structural defect of the building
and improper anchorage of trusses to the roof beams which caused the
roof be ripped off the building, thereby causing damage to the property of
respondents. Respondents filed an action before the RTC for recovery of
damages based on culpa aquiliana. Petitioner contested that it had no
liability, attributing the damage to a fortuitous event. RTC ruled in favor of
respondents which was affirmed by the CA. Hence present petition.

Issue:

Whether or not the damage, in legal sense, can be attributed to a

fortuitous event.

Ruling:

Yes. The court ruled that petitioner is not liable, the damage being
attributable to a fortuitous event.

Art 1174 of the Civil Code states that: “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”.

To be liable for a fortuitous event, the respondent must prove that

petitioners were negligent, with which they fall short, merely relying on the
report of the city building official. This is the same official that have
approved the building plans of petitioner, who made clear that there were
no prior complaints regarding the building. Since storms are common in
the country, the part of the building in question should have failed against
stronger typhoons that preceded said storm, which it had not. Furthermore,
petitioner was able to present evidence that regular maintenance was
carried out. Respondents also failed to support the claim of the actual loss
they suffered, merely relying on estimates without considering that wear
and tear of respondents’ home which may have had a contributory effect to
the damage. Petition is granted and challenged decision is reversed.

Vasquez v CA, GR No. 118971

Facts:

Sometime in April 1986, petitioner and some 37 families from Tondo

Foreshore Area went to see then NHA general Manager Lito Atienza
regarding their complaint against their barangay Chairman, Jaime Olmedo.
After the meeting, petitioner and his companions were interviewed by
reporters of the newspaper Ang Tinig ng Masa. The article was published
containing such statements from the petitioner imputing that Olmedo,
through connivance with NHA officials, was able to obtain title to several
lots in the area and that he was involved in illegal activities such as
attempted murder, gambling and stealing. Olmeda filed a complaint for
libel.

Issue:

Whether or not the petitioner is guilty of libel

Ruling:

Elements of libel under Art. 353 of RPC: (a) allegation of a

discreditable act or condition concerning another; (b) publication of the
charge; (c) identity of the person defamed; and (d) existence of malice.
 An allegation is defamatory if it ascribes to a person the commission
of a crime, the possession of a vice or defect, real or imaginary, or any act,
omission, condition, status or circumstance which tends to dishonor or
discredit or put him in contempt, or which tends to blacken the memory of
one who is dead.

There is publication if the material is communicated to a third person

– it is not required that the person defamed has read or heard about the
libelous remark. In determining the meaning of any publication alleged to
be libelous the words shall be taken in their ordinary sense.

To satisfy the element of identifiability, it must be shown that at least

a third person or stranger was able to identify the defamed person as an
object of the defamatory statement.

Under Art. 361 of RPC, if the defamatory statement is made against

a public official with respect to the discharge of his official duties and
functions and the truth of the allegation is shown, the accused will be
entitled to an acquittal even though he does not prove the imputation was
published with good motives and for justifiable ends. Even if the
defamatory statement is false, no liability can attach if it relates to official
conduct, unless the public official concerned proves that the statement was
made with actual malice – that is with knowledge is false or with reckless
disregard of whether it was false or not. In this case, petitioner was able to
prove his allegation of land grabbing based on a letter of NHA Inspector
General, and the memoranda of the NHA general manager. With regard to
those charge of involvement in illegal activities there are in fact charges
filed, the truth of which were not in issue.

Elcano v. Hill, 77 SCRA 98

Facts:

Respondent Reginald Hill killed the son of the plaintiffs named

Agapito Elcano. A criminal complaint was instituted against him but he was
acquitted on the ground that his act was not criminal, because of lack of
intent to kill, couple with mistake. Subsequently, plaintiffs filed a complaint
for recovery of damages against defendant Reginald Hill, a minor, married
at the time of the occurrence, and his father, the defendant Marvin Hill,
with who he was living and getting subsistence, for the same killing. A
motion to dismiss was filed by the defendants. The Court of First Instance
of Quezon City denied the motion. Nevertheless, the civil case was finally
dismissed upon motion for reconsideration.

Issues:

1. WON the present civil action for damages is barred by the

acquittal of Reginald in the criminal case.
2. WON Article 2180 (2nd and last paragraphs) of the Civil Code
may be applied against Atty. Hill, notwithstanding the undisputed fact that
at the time of the occurrence complained of. Reginald, though a minor,
living with and getting subsistence from his father, was already legally
married.

Ruling:

1. No, the present civil action for damages is not barred by the
acquittal of Reginald in the criminal case. Firstly, there is a distinction as
regards the proof required in a criminal case and a civil case. To find the
accused guilty in a criminal case, proof of guilt beyond reasonable doubt is
required, while in a civil case, preponderance of evidence is sufficient to
make the defendant pay in damages. Furthermore, a civil case for
damages on the basis of quasi-delict does is independently instituted from
a criminal act. As such the acquittal of Reginald Hill in the criminal case
has not extinguished his liability for quasi-delict, hence that acquittal is not
a bar to the instant action against him.

2. Yes, the above mentioned provision may still be applied against

Atty Marvin Hill. Although parental authority is terminated upon
emancipation of the child, emancipation by marriage is not absolute, i.e. he
can sue and be sued in court only with the assistance of his father, mother
or guardian. As in the present case, killing someone else contemplated
judicial litigation, thus, making Article 2180 apply to Atty. Hill. However,
inasmuch as it is evident that Reginald is now of age, as a matter of equity,
the liability of Atty. Hill has become milling, subsidiary to that of his son.

Dyogi v. Yatco, 100 Phil 1095

Facts:
 An automobile driven by one
Ligayu run over and mortally
injured Teresita Dyogi.
The driver was charged with
information of homicide due to
negligence. As a result, a
civil action for damages against
the owner of the car and the
driver were brought by the
the husband and children of the
deceased. On the other hand,
defendant argued that
this civil action was dismissed
on the ground that the cause of
action arose out of
criminal case which was still
pending and which is not among
those provided for in Art.
33 of the New Civil Code.
Supreme Court allowed the
mandamus filed by petitioners.
An automobile driven by one
Ligayu run over and mortally
injured Teresita Dyogi.
The driver was charged with
information of homicide due to
negligence. As a result, a
civil action for damages against
the owner of the car and the
driver were brought by the
the husband and children of the
deceased. On the other hand,
defendant argued that
this civil action was dismissed
on the ground that the cause of
action arose out of
criminal case which was still
pending and which is not among
those provided for in Art.
33 of the New Civil Code.
Supreme Court allowed the
mandamus filed by petitioners.
An automobile driven by one
Ligayu run over and mortally
injured Teresita Dyogi.
The driver was charged with
information of homicide due to
negligence. As a result, a
civil action for damages against
the owner of the car and the
driver were brought by the
the husband and children of the
deceased. On the other hand,
defendant argued that
this civil action was dismissed
on the ground that the cause of
action arose out of
criminal case which was still
pending and which is not among
those provided for in Art.
33 of the New Civil Code.
Supreme Court allowed the
mandamus filed by petitioners.
An automobile driven by one
Ligayu run over and mortally
injured Teresita Dyogi.
The driver was charged with
information of homicide due to
negligence. As a result, a
civil action for damages against
the owner of the car and the
driver were brought by the
the husband and children of the
deceased. On the other hand,
defendant argued that
this civil action was dismissed
on the ground that the cause of
action arose out of
criminal case which was still
pending and which is not among
those provided for in Art.
33 of the New Civil Code.
Supreme Court allowed the
mandamus filed by petitioners.
An automobile driven by one
Ligayu run over and mortally
injured Teresita Dyogi.
The driver was charged with
information of homicide due to
negligence. As a result, a
civil action for damages against
the owner of the car and the
driver were brought by the
the husband and children of the
deceased. On the other hand,
defendant argued that
this civil action was dismissed
on the ground that the cause of
action arose out of
criminal case which was still
pending and which is not among
those provided for in Art.
33 of the New Civil Code.
Supreme Court allowed the
mandamus filed by petitioners.
An automobile driven by one Ligayu run over and mortally injured
Teresita Dyogi. The driver was charged with information of homicide due to
negligence. As a result, a civil action for damages against the owner of the
car and the driver were brought by the the husband and children of the
deceased. On the other hand, defendant argued that this civil action was
dismissed on the ground that the cause of action arose out of criminal case
which was still pending and which is not among those provided for in Art.
33 of the New Civil Code. Supreme Court allowed the mandamus filed by
petitioners.

Issue:

Whether or not civil action was dismissed on the ground that the
cause of action arose out of criminal case which was still pending and
which is not among those provided for in Art. 33 of the New Civil Code.

Ruling:

No. The Court held that the reason most often given n for this
doctrine is that the two proceedings are not between the same parties.
Different rules as to the competency of witness and the weight of evidence
necessary to the findings in the two proceedings always exists. Under the
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 culpa aquiliana."

Bernaldes v. Bohol Land Transpo.

Facts:

Plaintiff-Appellants, Jovito Bernaldes and his brother, Nicasio,

boarded one of appellee's passenger trucks (B.L.T. Co. No. 322 with plate
No. 1470) in the town of Guindulman, Bohol, on the way to Tagbilaran.
However, the bus fell off a deep a high cliff in barrio Balitbiton, municipality
of Garcia-Hernandez, resulting in the death of Nicasio and in serious
physical injuries to Jovito.

Hence, a complaint for damages against apellee, Bohol Land

Transportation Co. was filed. On the other hand, defendant moved for the
dismissal of the complaint on two grounds:
(1) That the cause of action alleged therein was barred by a prior
judgment, and
(2) That it did not state a cause of action.
 Subsequently, it was established that in Criminal Case No. 2775 of
the same court at the hearing on the motion to dismiss that the driver of
the bus involved in the accident, was charged with double homicide thru
reckless imprudence but was acquitted on the ground that his guilt had not
been established beyond reasonable doubt.

Further, appellees, through their attorneys, intervened in the

prosecution of said case and did not reserve the right to file a separate
action for damages. The motion on the ground of bar by prior judgment
and dismissal of the case were sustained by the lower court. The offended
party appeals.

Issue:

Whether or not a civil action for damages against the owner of a

public vehicle, based on breach of contract of carriage, may be filed after
the criminal action instituted against the driver has been disposed of, if the
aggrieved party did not reserve his right to enforce civil liability in a
separate action.

Ruling:

The Court found the appeal interposed by appellants to be

meritorious as pursuant to Article 31 of the Civil Code which provides that
when the civil action is based upon an obligation not arising from the act or
omission complained of as a felony, such civil action may proceed
independently of the criminal proceedings and regardless of the result of
the latter.

Thus, the Court held the following grounds for finding the appeal
meritorious:
1. The civil action instituted against appellee in this case is based on
alleged culpa contractual incurred by it due to its failure to carry safely the
late Nicasio Bernaldes and his brother Jovito to their place of destination,
whereas the criminal action instituted against appellee's driver involved
exclusively the criminal and civil liability of the latter arising from his
criminal negligence. In other words, appellant's action concerned the civil
liability of appellee as a common carrier, regardless of the liabilities of its
driver who was charged in the criminal case
2. True, appellants, through private prosecutors, were allowed to
intervene whether properly or improperly we do not here decide in the
criminal action against appellee's driver, but if that amounted inferentially
to submitting in said case their claim for civil indemnity, the claim could
have been only against the driver but not against appellee who was not a
party therein
3. The failure of the court to make any pronouncement in its decision
concerning the civil liability of the driver and/or of his employer must
therefore be due to the fact that the criminal action did not involve at all
any claim for civil indemnity
4. Appellee's driver was acquitted only on reasonable doubt, a civil
action for damages against him may be instituted for the same act or
omission