RCBC v.

CA

Facts:
On March 10, 1993, Atty Felipe Lustre purchased a car from Toyota Shaw Inc. for which he made a payment of
164,620.00, the balance to be paid in 24 equal monthly installment. TO secure the balance, Atty Lustry secured a
promissory note and a contract of chattel mortgage over the vehicle in favor of Toyota Shaw Inc. The contract
provide in paragraph 11 that should the mortgagor default in the payment of any installment, the whole amount
remaining unpaid shall become undue. In addition, the mortgagor shall be liable for 25% of the principal due as
liquidated damages.”

On March 14, 1991, Toyota Shaw Inc. assigned all its right and interest to Rizal Commercial Banking
Corporation(RCBC).

All check dated April 10-January 10 was paid by Atty. Lustre was encashed and it was discovered that that the check
for the 5th installment had not been signed by the lawyer. As consequence, the vendor of the car did not receive
the payment for the 5th instalment and the last two (2) instalments were no longer presented for payment. On the
belief that the lawyer defaulted on his payment, the bank demanded the payment of the balance of debt, including
the liquidated damages since the entire balance became due and demandable. Because the lawyer refused to pay
the balance as well as liquidated damages, a case for replevin and damages was filed with the Regional Trial Court

Issue:
Whether or not Atty. Lustre guilty of delay

Held:
No. Although it is clear in the law that those who are guilty of delay in the performance of their obligations are liable
for damages, the court clarified that one will only be liable for damages if the delay in the performance of the
obligation, was malicious or negligent. The lawyer neither acted maliciously nor negligently in the payment of his
instalments, explained the Court –

Article 1170 of the Civil Code states that those who in the performance of their obligations are guilty of delay are
liable for damages. The delay in the performance of the obligation, however, must be either malicious or negligent.
Thus, assuming that private respondent was guilty of delay in the payment of the value of the unsigned check, private
respondent cannot be held liable for damages. There is no imputation, much less evidence, that private respondent
acted with malice or negligence in failing to sign the check. Indeed, we agree with the Court of Appeals’ finding that
such omission was mere “inadvertence” on the part of private respondent. Toyota salesperson Jorge Geronimo
testified that he even verified whether private respondent had signed all the checks and in fact returned three or
four unsigned checks to him for signing.

SPs Luigi and Guano and Anna Guanio vs. Makati Shangri La
Facts: Spouses Luigi and Anna Hernandez-Guanio booked at the Shangri-la hotel for their wedding reception. Prior
to the event, there were agreements between the parties regarding the food to be served, the number of guest to
attend, and the price per head. According to the complainants, when the actual reception took place, ” the
respondent’s representatives did not show up despite their assurance that they would; their guests complained of
the delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotel’s waiters
were rude and unapologetic when confronted about the delay; and despite Alvarez’s promise that there would be
no charge for the extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for
the three-hour extension of the event up to 4:00 A.M. the next day. They further claim that they brought wine and
liquor in accordance with their open bar arrangement, but these were not served to the guests who were forced to
pay for their drinks. They sent a letter-complaint to hotel and received an apologetic reply from the hotel’s Executive
Assistant Manager in charge of Food and Beverage.
The spouse nevertheless filed a breach of contract and damages before the RTC Makati. Answering, the hotel said
that complainants requested a combination of king prawns and salmon, hence, the price was increased to P1,200.00
per person, but discounted at P1,150.00; that contrary to their claim, the hotel representatives were present during
the event, albeit they were not permanently stationed thereat as there were three other hotel functions; that while
there was a delay in the service of the meals, the same was occasioned by the sudden increase of guests to 470 from
the guaranteed expected minimum number of guests of 350 to a maximum of 380, as stated in the Banquet Event
Order (BEO);2 and the Banquet Service Director in fact relayed the delay in the service of the meals to complainant’s
father.

ISSUE: Whether or not, Makati held liable for damages.

HELD:
What applies in the present case is Article 1170 of the Civil Code which reads:
Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any
manner contravene the tenor thereof, are liable for damages.
Breach of contract is defined as the failure without legal reason to comply with the terms of a contract. It is also
defined as the failure without legal excuse, to perform any promise which forms the whole or part of the contract.
In absolving the hotel from damages, the Supreme Court noted that: “The appellate court, and even the trial court,
observed that petitioners were remiss in their obligation to inform respondent of the change in the expected number
of guests. The observation is reflected in the records of the case. Petitioners’ failure to discharge such obligation
thus excused, as the above-quoted paragraph 4.5 of the parties’ contract provide, respondent from liability for “any
damage or inconvenience” occasioned thereby”
As the petitioner’s claim that respondent departed from its verbal agreement with petitioners, the same fails given
that the written contract which the parties entered into the day between the event, being the law between them.
Nevertheless, on grounds of equity, the High Court awarded P50,000.00 in favour of the complainants and justified
it by saying:
“The exculpatory clause notwithstanding, the Court notes that respondent could have managed the “situation”
better, it being held in high esteem in the hotel and service industry. Given respondent’s vast experience, it is safe
to presume that this is not its first encounter with booked events exceeding the guaranteed cover. It is not audacious
to expect that certain measures have been placed in case this predicament crops up. That regardless of these
measures, respondent still received complaints as in the present case, does not amuse.
Respondent admitted that three hotel functions coincided with petitioners’ reception. To the Court, the delay in
service might have been avoided or minimized if respondent exercised prescience in scheduling events. No less than
quality service should be delivered especially in events which possibility of repetition is close to nil. Petitioners are
not expected to get married twice in their lifetimes.
Narciso Gutierez Vs. Bonifacio Gutierez Maria V. Gutierez, and Saturnino Cotertes

Facts: On February 2, 1930, a passenger truck and an automobile collided. The truck was driven by Abelardo Velasco
and was owned by Saturnino Cortez. The automobile was driven by Bonifacio Gutierez, 18 years old and was owned
by his Mother and Father. During the collision the father was not in the car but the mother and several member of
the family were accommodated therein. The collision resulted in Narciso Gutierez fractured right leg which required
medical attendance.

Issue: Who has the liability for the injury suffered by Narciso Gutierez?
Held: Manuel Gutierez (father of the automibile’s driver), Abelardo Velasco (driver of the truck) and Saturnino
Cortez(Father of the Authomobile).
Liability of Manuel Gutierez liability-It may be explained that he youth of Bonifacio was incompetent chauffer, 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. Based on these facts, Liability of father Article 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 US
jurisprudence shows that “the head of a house, the owner of an automobile, who maintains it for the general use of
his family is liable for its negligent operation by one of his children.” 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
Liability of the truck owner and driver-The liability of the truck owner and the driver is based from contract. There is
negligent on the part of the chauffeur although the evidence is not as clear as to the other defendant. Based on the
facts, one of two derives approaching a narrow bridge from opposite directions, when neither willing to slow up and
give the right way to the other, with the inevitable result of the collision and an accident.

Manuel de Guia Vs. The Manila Electric railroad and light company.
Facts: On September 4, 1915 at 8 o’clock in the evening, Manuel De Guia boarded a car at the end of the line with
the intention of coming to the Caloocan. At about 30 meters from the starting point the car entered a switch, the
plaintiff remaining on the back platform holding the right hand of the right hand door. Upon the coming out of the
switch, the small switch of the rear truck left the track, run for a short distance along the macadam filing, which was
flush with rails and struck a concrete post at the left of the tract. The post was shuttered and as the stopped the
plaintiff was thrown against the door with some violence, receive buises and possible certain internal injuries, the
extent of which is a subject of dispute.

Issue: Whether or not, the defendant is liable for damages?

Held: Yes. The court found negligence on the part of the Motorman in driving the car. It result that the company is
liable for the damages resulting to the plaintiff as consequence of that negligence. The plaintiff had boarded the car
as a passenger for the city of Manila and the campany undertook to convey him to hire. The relation between the
parties was, therefore the contractual nature, and the duty of the carrier I to be determined with reference to the
principle of contract law, that is, the company was bound to convey and deliver the plaintiff safely and securely with
reference to the degree of care which, under the circumstances, is required by law and custom applicable to the
case (art. 1258, civil code). Upon failure to comply with that obligation the company incurred the liability defined in
article 1103-1107 of the Civil Code.
Ignacio del Prado Vs. MANILA ELECTRIC

Facts: On the morning of November 18, 1925, one Teodorico Florenciano, was in charge of car No. 74 running from
east to west on R. Hidalgo Street. Plaintiff Ignacio Del Prado ran across the street to catch the car. The motorman
eased up but did not put the car into complete stop. Plaintiff was able to get hold of the rail and step his left foot
when the car accelerated. As a result, plaintiff slipped off and fell to the ground. His foot was crushed by the wheel
of the car. He filed a complaint for culpa contractual.

Issue: Whether Meralco is liable for breach of contract of carriage.

Held: We may observe at the outset that there is no obligation on the part of a street railway company to stop its
cars to let on intending passengers at other points than those appointed for stoppage. Nevertheless, although the
motorman of this car was not bound to stop to let the plaintiff on, it was his duty to do no act that would have the
effect of increasing the plaintiff's peril while he was attempting to board the car. The premature acceleration of the
car was, in our opinion, a breach of this duty.
The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and a failure on the
part of the carrier to use due care in carrying its passengers safely is a breach of duty (culpa contractual).
Furthermore, the duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as
well as to those alighting therefrom.

SAN PEDRO BUS LINE Vs. NAVARO

FACT: On April 21 1943, the plaintiff as a passenger rode San Pedro Bus Line owned and operated by the defendant;
and when it’s on its way the bus collided with another vehicle, causing serious physical injury to the plaintiff. As a
result thereof, the damages, for actual expenses and loss of earning power in the total of P4,500 which the plaintiff
sought to recover from the defendant. The defendant admitted the occurance of the accident injuries received the
plaintaiff but disclaim for responsibility.

Issue: Whether or not the defendant liable despite of the dismissal of the criminal case charged against him.
Held: Yes, the action was not based on tort or quasi delict, but was one for breach off a carrier’s contract, there
being a clear distinction between culpa as a source and creator of obligatons(aquiliana) and culpa in the performance
of an already existing obligation.

Ysmael vs. BarrettoG.R. No. L-28028; November 25, 1927Keywor !

Defendants (carrier) stipulate that it is not liable for loss or damage to an amount exceeding P300 per package of
silk
DOCTRINE:
A common carrier cannot lawfully stipulate for exemption from liability unless such exemption is just and reasonable
and the contract is freely and fairly made.
FACTS:
In this action plaintiff, a domestic corporation seeks to recover from the defendants P 9,940 the alleged value of four
cases of merchandise which it delivered to the steamship Andres, at Manila to be shipped to Surigao, but which were
never delivered to Salomon Sharuff, the consignee, or returned to the plaintiff.
The defendants alleged that under provision 12 of the bill of lading, the carrier shall not be liable for loss or damage
from any cause or for any reason to an amount exceeding three hundred pesos (P300) Philippine currency for any
single package of silk or other valuable cargo. Thus, the defendants alleged that they are not liable in excess of three
hundred pesos (P300) for any package of silk.
The lower court points out that the conditions (provision) in question “are not printed on the triplicate copies which
were delivered to the plaintiff,” and that by reason thereof they “are not binding upon the plaintiff” and thus
rendered judgment for the plaintiff for the full amount of its claim.

ISSUE:
Whether or not provision 12 in the bill of lading is reasonable.
HELD:
No. A common carrier cannot lawfully stipulate for exemption from liability unless such exemption is just and
reasonable and the contract is freely and fairly made.
In The Case at Bar,
The ship in question was a common carrier and as such, must have been operated as a public utility. It is a matter
of common knowledge that large quantities of silk are imported in the Philippine Islands and that after being
imported; they are sold by the merchants in Manila and other large seaports, and then shipped to different points
and places in the Islands.
Hence, there is nothing unusual about the shipment of silk. In truth and in fact, it is a matter of usual and ordinary
business" –There was no fraud or concealment in the shipment in question. Clause 12 above quoted places a limit
of P300 “for any single package of silk." The evidence shows that 164 “cases” were shipped, and that the value of
each case was never near P2, 500. In this situation, the limit of defendants, “liability for each case of silk” for loss or
damage from any cause or for any reason” would put it in the power of the defendants to have taken the whole
cargo of 164 cases of silk at a valuation of P300 for each case, or less than one-eight of its actual value. If that rule of
law should be sustained, no silk should ever be shipped from one island to another in the Philippines, Such a
limitation of value is unconscionable and void as against public policy.