Sie sind auf Seite 1von 61


Case Name Facts/Doctrine

1. Basic Books Basic Books (Phil.), Inc. filed a case to recover from Lopez and Kintanar the sum of
(Phil.), Inc. vs. money and attorney’s fees.
Lopez, et al, 16
SCRA 291 (1966). Lopez, an agent of the plaintiff corporation, received (on consignment basis) various
books for sale on commission basis with a total value of the aforementioned amount
which he failed to account despite repeated demands.

In order to secure the above stated obligation, the parties entered into an agreement
wherein they bound themselves jointly and severally, to pay the aforesaid obligation in
installments with interest of 6% per annum until the obligation is fully paid, with an
accelerating clause in case of default in payment of two successive monthly

No amount had been paid by either of the defendant upon the obligation and continued
to fail and refuse to pay the same despite repeated demands.

Lopez confessed judgment, while Kintanar denied liability under the contract, stating
that it was executed for the purpose of stifling Lopez’ prosection for estafa. The MTC
ordered Lopez to pay Basic Books but absolved Kintanar of liability on the ground that
the agreement which he had signed was based on illegal consideration. Basic Books
appealed to the CFI where the case was again submitted for decision on the same
issue. This time, the validity of the contract was upheld on the court’s finding that Lopez
was indebted to Basic Books and Kintanar knew this. Kintanar, in turn, forwarded the
case to the appellate court which certified the case to the SC on the ground that the
issues presented are questions of law. Was the agreement constituted legal?

HELD: Yes. The agreement that the parties formalized is legal and its cause is not to
avoid the criminal liability of Lopez. Kintanar’s assumption of a joint and several liability
cannot in any way be interpreted or based upon the so-called illegal consideration of
“stifling a criminal prosecution” against Lopez. Even if Kintanar believed that the reason
for him in assuming obligation under the agreement was to aid Lopez from the criminal
case, this cannot be a reason to declare the agreement void. Motive is different from
cause. The cause of the agreement would be the existing account of Lopez with Basic
Books. On the other hand, Lopez’ cause was mere liberality or gratuitousness on his
part that moved him to oblige himself severally with Lopez

The cause or consideration of a contract is the “the essential reason which moves the
contracting parties to enter into it.”
2. Surviving Heirs of Alfredo R. Bautista (Bautista), petitioner’s predecessor, inherited in 1983 a free-patent
Alfredo R. land located in Davao Oriental and covered by OCT No. (1572) P-6144.A few years
Bautista v. Lindo later, he subdivided the property and sold it to several vendees, herein respondents, via
718 SCRA 321, a notarized deed of absolute sale dated May 30, 1991. Two months later, OCT No.
331 (2014). (1572) P-6144 was canceled and Transfer Certificates of Title (TCTs) were issued in
favor of the vendees.

On August 1994, Bautista filed a complaint for repurchase against respondents before
the RTC, anchoring his cause of action on Section 119 of Commonwealth Act No. (CA)
141, otherwise known as the “Public Land Act,” which reads:
“SECTION 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or
legal heirs, within a period of five years from the date of the conveyance.”
During the pendency of the action, Bautista died and was substituted by petitioner,
Efipania. Respondents, Sps. Lindo entered into a compromise agreement with
petitioners, whereby they agree to cede to Epifania 3,230 sq.m..portion of the property
as well as to waive, abandon, surrender, and withdraw all claims and counterclaims
against each other. RTC approve the compromise agreement on January 2011.

Other respondents, filed a Motion to Dismissed on February 2013 alleging lack of

jurisdiction of the RTC on the ground that the complaint failed to state the value of the
property sought to be recovered and alleges that the total value of the properties in
issue is only P16,500 pesos. RTC ruled in favor of the respondent dismissing the case.

HELD: “Although a contract is the law between the parties, the [ ] law which regulate
contracts are deemed written therein and shall limit and govern the relations between
the parties.1
3. Cathay Pacific In respondents’ return flight to Manila from Hongkong, they were deprived of their
Airways, Ltd. v. original seats in Business Class with their companions because of overbooking. Since
Vasquez, 399 respondents were privileged members, their seats were upgraded to First Class.
SCRA 207, 219 Respondents refused but eventually persuaded to accept it. Upon return to Manila, they
(2003). demanded that they be indemnified in the amount of P1million for the “humiliation and
embarrassment” caused by its employees. Petitioner’s Country Manager failed to
respond. Respondents instituted action for damages. The RTC ruled in favor of
respondents. The Court of Appeals affirmed the RTC decision with modification in the
award of damages. Whether or not the petitioners (1) breached the contract of
carriage, (2) acted with fraud

HELD: There is breach of contract when there is “failure without legal reason to comply
with the terms of a contract [ ] or failure to perform any promise which forms the whole
or part of the contract.”
(1) YES. Although respondents have the priority of upgrading their seats, such priority
may be waived, as what respondents did. It should have not been imposed on them
over their vehement objection.
(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on
overbooking of flight as it is within 10% tolerance.
4. Philippine
National Bank v. dee/
Dee, 717 SCRA
14, 29 (2014). Some time in July 1994, respondent Dee bought from respondent Prime East
Properties Inc.5 (PEPI) on an installment basis a residential lot located in Binangonan,
Rizal, with an area of 204 square meters and covered by TCT No. 619608.
Subsequently, PEPI assigned its rights over a 213,093–sq m property on August 1996
to respondent Armed Forces of the Philippines–Retirement and Separation Benefits
System, Inc. (AFP–RSBS), which included the property purchased by Dee.

Thereafter, or on September 10, 1996, PEPI obtained a P205,000,000.00

loan from petitioner Philippine National Bank, secured by a mortgage over several
properties, including Dee’s property. The mortgage was cleared by the Housing and
Land Use Regulatory Board (HLURB) on September 18, 1996.

After Dee’s full payment of the purchase price, a deed of sale was executed
by respondents PEPI and AFP–RSBS on July 1998 in Dee’s favor. Consequently, Dee
sought from the petitioner the delivery of the owner’s duplicate title over the property, to
no avail. Thus, she filed with the HLURB a complaint for specific performance to

1 Surviving Heirs of Alfredo R. Bautista v. Lindo 718 SCRA 321, 331 (2014).
compel delivery of TCT No. 619608 by the petitioner, PEPI and AFP–RSBS, among
others. Whether or not PNB, as mortgagee, was bound by the contract to sell
previously executed over the subdivision lot mortgaged.

HELD: YES. In this case, there are two phases involved in the transactions between
respondents PEPI and Dee – the first phase is the contract to sell, which eventually
became the second phase, the absolute sale, after Dee’s full payment of the purchase
price. In a contract of sale, the parties’ obligations are plain and simple. The law obliges
the vendor to transfer the ownership of and to deliver the thing that is the object of sale.
On the other hand, the principal obligation of a vendee is to pay the full purchase price
at the agreed time. Based on the final contract of sale between them, the obligation of
PEPI, as owners and vendors of Lot 12, Block 21–A, Village East Executive Homes, is
to transfer the ownership of and to deliver Lot 12, Block 21–A to Dee, who, in turn, shall
pay, and has in fact paid, the full purchase price of the property.

It must be stressed that the mortgage contract between PEPI and the
petitioner is merely an accessory contract to the principal three–year loan takeout from
the petitioner by PEPI for its expansion project. It need not be belabored that “a
mortgage is an accessory undertaking to secure the fulfillment of a principal obligation,”
and it does not affect the ownership of the property as it is nothing more than a lien
thereon serving as security for a debt.

But there are cases when the Supreme Court “struck down such contracts as void
when the weaker party is imposed upon in dealing with the dominant bargaining party
and is reduced to the alternative of taking it or leaving it, completely deprived of the
opportunity to bargain on equal footing.

Contracts “can only bind the parties who entered into it, and cannot favor or prejudice a
third person, even if he is aware of such contract, has acted with knowledge thereof[,]”
5. Oco v. Limbaring,
481 SCRA 348,
358 (2006). Contracts “can only bind the parties who entered into it, and cannot favor or prejudice a
third person, even if he is aware of such contract, has acted with knowledge thereof[,]” 2
and even if he incidentally inures benefit to it.3
6. Republic v.
David, 436 SCRA
577, 589 (2004).
Contracts of adhesion, “wherein one party imposes a readymade form of contract on
the other, is not strictly against the law,”
7. Cabanting vs. BPI
Family Savings
Bank, Inc., G. R. Cabanting bought from Diamond Motors / BPI a car on installment basis for which a
No. 201927, promissory note with chattel mortgage was executed. One of the stipulations was that
February 17, any failure to pay an amount on schedule will make the entire outstanding sum to
2016. become due and payable without prior notice and demand. When the two Cabantings
failed to pay some monthly amortizations, BPI sued them for replevin and damages.
Decision was rendered ordering them to pay the car’s unpaid value with damages. The
respondents appealed the decision claiming that there has been no proof of prior
demand and that the stipulation on its waiver must be deemed invalid for being a
contract of adhesion.

Issue 1: W/N a stipulation waiving the necessity of notice and demand is valid

2 Philippine National Bank v. Dee, 717 SCRA 14, 29 (2014).

3 Oco v. Limbaring, 481 SCRA 348, 358 (2006).

Yes. Article 1169 of the Civil Code provides that one incurs in delay or is in default from
the time the obligor demands the fulfillment of the obligation from the obligee.
However, Article 1169 (1) also expressly provides that demand is not necessary under
certain circumstances, and one of these circumstances is when the parties expressly
waive demand.

Issue 2: W/N a contract of adhesion such as in this case is valid


Yes. A contract of adhesion is just as binding as ordinary contracts. Such are not
invalid per se and are not entirely prohibited because the one who adheres to the
contract is in reality free to reject it entirely. If the other party adheres, he gives his

The court may strike down such contracts as void when the weaker party is deprived of
the opportunity to bargain at an equal footing. Here, there is no proof that petitioners
were disadvantaged, uneducated or utterly inexperienced in dealing with financial
institutions; thus, there is no reason for the court to step in and protect the interest of
the supposed weaker party.

These are binding as ordinary contracts, since the “[party] who adheres to the contract
is free to reject it entirely.”4
8. Rizal Commercial
Banking commercial_2444.html
Corporation v.
Court of Appeals, RCBC Binondo Branch initially granted a credit facility of P30M to Goyu & Sons, Inc.
442 SCRA 238, GOYU’s applied again and through Binondo Branch key officer's Uy’s and Lao’s
249 (2004). recommendation, RCBC’s executive committee increased its credit facility to P50M to
P90M and finally to P117M.
As security, GOYU executed 2 real estate mortgages and 2 chattel mortgages in favor
of RCBC.
GOYU obtained in its name 10 insurance policy on the mortgaged properties
from Malayan Insurance Company, Inc. (MICO). In February 1992, he was issued 8
insurance policies in favor of RCBC.
April 27, 1992: One of GOYU’s factory buildings was burned so he claimed against
MICO for the loss who denied contending that the insurance policies were
either attached pursuant to writs of attachments/garnishments or that creditors are
claiming to have a better right
GOYU filed a complaint for specific performance and damages at the RTC
RCBC, one of GOYU’s creditors, also filed with MICO its formal claim over the
proceeds of the insurance policies, but said claims were also denied for the same
reasons that MICO denied GOYU’s claims
RTC: Confirmed GOYU’s other creditors (Urban Bank, Alfredo Sebastian, and
Philippine Trust Company) obtained their writs of attachment covering an aggregate
amount of P14,938,080.23 and ordered that 10 insurance policies be deposited with
the court minus the said amount so MICO deposited P50,505,594.60.
Another Garnishment of P8,696,838.75 was handed down
RTC: favored GOYU against MICO for the claim, RCBC for damages and to pay RCBC
its loan
CA: Modified by increasing the damages in favor of GOYU
In G.R. No. 128834, RCBC seeks right to intervene in the action between Alfredo C.

4 Cabanting vs. BPI Family Savings Bank, Inc., G. R. No. 201927, February 17, 2016.
Sebastian (the creditor) and GOYU (the debtor), where the subject insurance policies
were attached in favor of Sebastian
RTC and CA: endorsements do not bear the signature of any officer of GOYU
concluded that the endorsements favoring RCBC as defective. W/N RCBC as
mortgagee, has any right over the insurance policies taken by GOYU, the mortgagor, in
case of the occurrence of loss

mortgagor and a mortgagee have separate and distinct insurable interests in the same
mortgaged property, such that each one of them may insure the same property for his
own sole benefit
although it appears that GOYU obtained the subject insurance policies naming itself as
the sole payee, the intentions of the parties as shown by their contemporaneous acts,
must be given due consideration in order to better serve the interest of justice and
8 endorsement documents were prepared by Alchester in favor of RCBC
MICO, a sister company of RCBC
GOYU continued to enjoy the benefits of the credit facilities extended to it by
GOYU is at the very least estopped from assailing their operative
The two courts below erred in failing to see that the promissory notes which they ruled
should be excluded for bearing dates which are after that of the fire, are mere
renewals of previous ones
RCBC has the right to claim the insurance proceeds, in substitution of the property lost
in the fire. Having assigned its rights, GOYU lost its standing as the beneficiary of the
said insurance policies
insurance company to be held liable for unreasonably delaying and withholding
payment of insurance proceeds, the delay must be wanton, oppressive, or malevolent -
not shown
Sebastian’s right as attaching creditor must yield to the preferential rights of RCBC over
the Malayan insurance policies as first mortgagee.
Police Power
9. National Power
Corporation vs.
Southern “[ ] contracts have the force of law between the [ ] parties,” 5 and because of this, its
Philippines provisions cannot be unilaterally altered by one of the parties for his or her own benefit
Power and to the detriment of another.
Corporation, 795
SCRA 540, 549

5 CIVIL Code, art. 1159.

10. Games and
Developers, Inc.
vs. Allied Banking Spouses Bienvenida and Benedicto Pantaleon agreed to purchase a parcel of land
Corporation, 762 located at Bayanan, Muntinlupa, owned by petitioner, Games and Garments
SCRA 447, 474 Developers, Inc. (GGDI) for the sums of
(2015). P14,000,000.00 payable to GGDI,

P4,000,000.00 payable to the Cosay Family, and

P1,000,000.00 as attorney’s fees payable to GGDI VP-Legal and counsel Atty. Cesar M.
Lao (Lao).

The parties executed a Memorandum of Agreement (MOA) dated August 22, 1996,
specifying the terms by which the payment will be satisfied.

On August 22, 1996, Mercado, Branch Manager of Allied Bank- Pasong Tamo, issued a
letter addressed to Atty. Lao of GGDI and with Bienvenida’s conforme, printed on the
letterhead of Allied Bank, which reads:

This is with reference to the real property located at National Road, Bayanan,
Muntinlupa City[,] a lot covered by Transfer Certificate of Title (TCT) No. 205965.

Please be advised that Bienvenida Pantaleon/Sucat Import/Export who is purchasing

the above-mentioned property has an approved real estate loan with us in the amount of
PESOS: ELEVEN MILLION ONLY (P11,000,000.00), the portion of the proceeds of
which shall be used to partially liquidate the account with you. Succeeding releases
which is secured by the subject property will be made payable to Games and Garments
Developers, Inc.
After said Transfer Certificate of Title (TCT) covering said property is already transferred
in our client’s name, our mortgage duly annotated thereon, we guarantee to pay directly
ONLY (P8,360,000.00) ninety days from August 23, 1996 or on or before November 21,
It is understood that this guaranty is irrevocable.

On August 23, 1996 GGDI, through its President Sunder Hemandas, executed a Deed
of Sale in favor of the Spouses Pantaleon. However, in the Deed the amount of
purchase price for the subject property was reduced to P11,000,000.00.

On the same day the Deed was executed, RD of Makati cancelled the TCT in the name
of GGDI and issued another in the name of Bienvenida, married to Benedicto
Pantaleon. The notice of lis pendens (concerning the civil case of the Cosay family
against GGDI) was also cancelled and a Real Estate Mortgage in favor of Allied Bank
was annotated to the TCT issued to Bienvenida.

Despite Mercado’s letter dated August 22, 1996, and unbeknownst to GGDI, Allied Bank
already released the proceeds of the approved loan to the spouses Pantaleon on
August 23, 1996.

In a letter dated November 21, 1996 to Allied Bank, thru Mercado, Atty. Lao requested
for the immediate payment of the balance of the purchase price amounting to
P8,360,000.00 considering that the guaranty executed by the bank in favor of GGDI was
irrevocable and the TCT for the subject property was already transferred in Bienvenida’s
name. There being no action on his previous letter, Atty. Lao wrote another letter dated
December 11, 1996 to Allied Bank, thru Mercado, to follow-up on the request for

Bienvenida, in a letter dated January 6, 1997, offered to pay GGDI P1,000,000.00 on or

before January 24, 1997 and the balance of P7,360,000.00 plus interest on March 28,
1997. GGDI received the P1,000,000.00 partial payment from Bienvenida via two
checks dated January 17, 1997 and January 24, 1997 for the amount of P500,000.00
each. Bienvenida then issued two Allied Bank postdated checks for March 28, 1997 for
the amounts of P7,360,000.00 and P442,340.00, to cover the balance of the purchase
price for the subject property and interest, respectively.

Mercado executed another letter dated January 27, 1997 addressed to Atty. Lao,
similarly worded as his letter dated August 22, 1996, except for the penultimate
paragraph which states that “we guarantee to pay directly to you the amount of
FORTY (P7,802,340.00) sixty days from January 27, 1997 or on or before March 28,

When GGDI deposited the two Allied Bank checks dated March 28, 1997 issued by
Bienvenida, said checks were dishonored for being “Drawn Against Insufficient Funds.”

Atty. Lao sent a letter dated August 15, 1997 to the Head Office of Allied Bank in Makati
City, copy furnished Mercado, referring to Mercado’s letter of guaranty dated January
27, 1997 and making a final request for payment of the sum of P7,802,340.00 within
seven days from receipt of the current letter.

Hemandas, President of GGDI, sent a fax letter to Aida T. Yu, Vice President of Allied
Bank, also requesting payment based on Mercado’s letter of guaranty, in response the
bank said,

We asked Mr. Mercado about this and he said that this letter [dated January 27, 1997]
was not really intended as a [guaranty] for anything but was an accommodation to a
request of Atty. Cesar Lao, the Vice President of Games and Garments Developers, Inc.
He even emphasized to Atty. Lao that he was not authorized to issue such [guaranty]
inasmuch as banks are not allowed to do so under the
General Banking Act.

Thus GGDI filed On April 15, 1998, GGDI filed before the RTC a Complaint for Breach
of Contract (Rescission) and Damages with prayer for Preliminary Attachment against
the spouses Pantaleon, Mercado, and Allied Bank.

RTC ruled in favor of GGDI. On Appeal, CA modified the decision of RTC, absolving
Allied Bank.

Issue: Whether or not Allied Bank is bound by the letter of Guaranty executed by

Ruling: Yes.

The letters executed by Mercado are not contracts of guaranty covered by the
prohibition in the General Banking Act, as amended.

It is undisputed that Mercado wrote two “letters of guaranty” dated August 22, 1996 and
January 27, 1997. Although Mercado’s letters used the words “guarantee” and
“guaranty,” the same do not constitute contracts of guaranty covered by the prohibition
under Section 74 of the General Banking Act, as amended. Section 74 of the General
Banking Act, as amended, proscribes banks from entering into “any contract of guaranty
or suretyship” without providing definitions of such contracts. Consequently, we rely on
the general definitions of contracts of guaranty and suretyship under Article 2047 of the
Civil Code:

ART. 2047. By guaranty a person, called the guarantor, binds himself to the creditor to
fulfill the obligation of the principal debtor in case the latter should fail to do so.

If a person binds himself solidarily with the principal debtor, the provisions of Section 4,
Chapter 3, Title I of this Book shall be observed. In such case the contract is called a

There was no express undertaking in Mercado’s letters dated August 22, 1996 and
January 27, 1997 to pay Bienvenida’s debt to GGDI in case Bienvenida failed to do so.
In said letters, Mercado merely acknowledged that Bienvenida and/or her company had
an approved real estate loan with Allied Bank and guaranteed that subsequent releases
from the loan would be made directly to GGDI provided that the certificate of title over
the subject property would be transferred to Bienvenida’s name and the real estate
mortgage constituted on the subject property in favor of Allied Bank would be annotated
on the said certificate. Mercado, by the plain language of his letters, merely committed
to the manner by which the proceeds of Bienvenida’s approved loan from Allied Bank
would be released, but did not obligate Allied Bank to be answerable with its own money
to GGDI should Bienvenida default on the payment of the purchase price for the subject

For this reason, Mercado’s letters may not be deemed as contracts of guaranty,
although they may be binding as innominate contracts. The rule is settled that a contract
constitutes the law between the parties who are bound by its stipulations which, when
couched in clear and plain language, should be applied according to their literal tenor.

We cannot supply material stipulations, read into the contract words it does not contain
or, for that matter, read into it any other intention that would contradict its plain import.
Neither can we rewrite contracts because they operate harshly or inequitably as to one
of the parties, or alter them for the benefit of one party and to the detriment of the other,
or by construction, relieve one of the parties from the terms which he voluntarily
consented to, or impose on him those which he did not.
Other rulings:

1. Based on the doctrine of apparent authority, Allied Bank is bound by the

undertaking in the letters dated August 22, 1996 and January 27, 1997
executed by Mercado as Branch Manager of Allied Bank- Pasong Tamo.

2. For its failure to comply with its undertaking under the letters dated August 22,
1996 and January 27, 1997, Allied Bank is liable to GGDI for
temperate/moderate, exemplary/corrective damages, and attorney’s fees.

3. Allied Bank is a mortgagee in bad faith and the foreclosure on the real estate
mortgage and public auction sale of the subject property are null and void.
Neither can the courts “supply material stipulations, read into the contract words it does
not contain or, for that matter, read into it any other intention that would contradict its
plain import.
11. Edu v. Ericta, 35
SCRA 481, 487.
1. Assailed is the validity of the Reflector Law and Admin Order No. 2 which implements
it. Under the law, a vehicle has to comply with the requirements of having reflective
device prior to being registered at the LTO.

2. The respondent Galo on his behalf and that of other motorists, filed a suit for
certiorari and prohibition with preliminary injunction assailing the validity of the
challenged Act as an invalid exercise of the police power for being violative of the due
process clause. This he followed on May 28, 1970 with a manifestation wherein he
sought as an alternative remedy that, in the event that respondent Judge would hold
said statute constitutional, Administrative Order No. 2 of the Land Transportation
Commissioner, now petitioner, implementing such legislation be nullified as an undue
exercise of legislative power.

Issue: W/N Reflector Law is unconstitutional, and w/n AO2 is valid

YES, both the law and AO 2 are valid.

It is thus obvious that the challenged statute is a legislation enacted under the police
power to promote public safety. What is delegated is authority which is non-legislative in
character, the completeness of the statute when it leaves the hands of Congress being

1. Police Power
It is in the above sense the greatest and most powerful attribute of government. "the
most essential, insistent, and at least illimitable of powers," (Justice Holmes) aptly
pointed out "to all the great public needs."
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits. In the
language of Justice Cardozo: "Needs that were narrow or parochial in the past may be
interwoven in the present with the well-being of the nation.

2. Delegation of Legislative Power

It is a fundamental principle flowing from the doctrine of separation of powers that
Congress may not delegate its legislative power to the two other branches of the
government, subject to the exception that local governments may over local affairs
participate in its exercise. What cannot be delegated is the authority under the
Constitution to make laws and to alter and repeal them; the test is the completeness of
the statute in all its term and provisions when it leaves the hands of the legislature. To
determine whether or not there is an undue delegation of legislative power the inquiry
must be directed to the scope and definiteness of the measure enacted. The legislature
does not abdicate its functions when it describes what job must be done, who is to do it,
and what is the scope of his authority. For a complex economy, that may indeed be the
only way in which the legislative process can go forward. A distinction has rightfully been
made between delegation of power to make the laws which necessarily involves a
discretion as to what it shall be, which constitutionally may not be done, and delegation
of authority or discretion as to its execution to exercised under and in pursuance of the
law, to which no valid objection call be made. The Constitution is thus not to be regarded
as denying the legislature the necessary resources of flexibility and practicability.

To avoid the taint of unlawful delegation, there must be a standard, which implies at the
very least that the legislature itself determines matters of principle and lay down
fundamental policy. Otherwise, the charge of complete abdication may be hard to repel.
A standard thus defines legislative policy, marks its limits, its maps out its boundaries
and specifies the public agency to apply it. It indicates the circumstances under which
the legislative command is to be effected. It is the criterion by which legislative purpose
may be carried out. Thereafter, the executive or administrative office designated may in
pursuance of the above guidelines promulgate supplemental rules and regulations.

The standard may be either express or implied. If the former, the non-delegation
objection is easily met.


Police power is the “state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare.”

the scope of police power is also ever-expanding to meet the exigencies of the times
and even to anticipate the future, if possible

It aims to foster the common good.

It is a fundamental principle flowing from the doctrine of separation of powers that

Congress may not delegate its legislative power to the two other branches of the

A standard thus defines legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it. It indicates the circumstances under which the
legislative command is to be effected

the courts may sustain the validity of these laws if local interest justifies it.

Thus, the laissez faire doctrine or the principle that the “government should not interfere
with commerce” cannot be invoked to bar regulatory measures which would incidentally
interfere with personal liberty, with property and with business and occupations.
12. Philippine
Association of
Service Petitioner, Phil association of Service Exporters, Inc., is engaged principally in the
Exporters, Inc. v. recruitment of Filipino workers, male and female of overseas employment. It challenges
Drilon, 163 SCRA the constitutional validity of Dept. Order No. 1 (1998) of DOLE entitled “Guidelines
386, 391 (1988). Governing the Temporary Suspension of Deployment of Filipino Domestic and
Household Workers.” It claims that such order is a discrimination against males and
females. The Order does not apply to all Filipino workers but only to domestic helpers
and females with similar skills, and that it is in violation of the right to travel, it also being
an invalid exercise of the lawmaking power. Further, PASEI invokes Sec 3 of Art 13 of
the Constitution, providing for worker participation in policy and decision-making
processes affecting their rights and benefits as may be provided by law. Thereafter the
Solicitor General on behalf of DOLE submitting to the validity of the challenged
guidelines involving the police power of the State and informed the court that the
respondent have lifted the deployment ban in some states where there exists bilateral
agreement with the Philippines and existing mechanism providing for sufficient
safeguards to ensure the welfare and protection of the Filipino workers.

Issue: Whether or not there has been a valid classification in the challenged
Department Order No. 1.

Held: SC in dismissing the petition ruled that there has been valid classification, the
Filipino female domestics working abroad were in a class by themselves, because of the
special risk to which their class was exposed. There is no question that Order No.1
applies only to female contract workers but it does not thereby make an undue
discrimination between sexes. It is well settled hat equality before the law under the
constitution does not import a perfect identity of rights among all men and women. It
admits of classification, provided that:

1. Such classification rests on substantial distinctions

2. That they are germane to the purpose of the law

3. They are not confined to existing conditions

4. They apply equally to al members of the same class

In the case at bar, the classifications made, rest on substantial distinctions. Dept. Order
No. 1 does not impair the right to travel. The consequence of the deployment ban has
on the right to travel does not impair the right, as the right to travel is subjects among
other things, to the requirements of “public safety” as may be provided by law.
Deployment ban of female domestic helper is a valid exercise of police power. Police
power as been defined as the state authority to enact legislation that may interfere with
personal liberty or property in order to promote general welfare. Neither is there merit in
the contention that Department Order No. 1 constitutes an invalid exercise of legislative
power as the labor code vest the DOLE with rule making powers.

“[I]t is inborn in the very fact of statehood and sovereignty.”

It aims to provide an efficient and flexible response to the changing circumstances in

society, including imposition or restraint upon liberty or property.
13. Churchill v. Francis A. Churchill and Stewart Tait are engaged in billboard advertising business.
Rafferty, 32 Phil. Their billboards located upon private lands in Rizal were removed upon complaints and
580, 603 (1915). by the orders of the CIR by of subsection (b) of section 100 of Act No. 2339. CIR avers
that the billboard complained of was offensive to the sight and is a nuisance. Was the
enactment assailed by the plaintiffs was a legitimate exercise of the police power of the

HELD: Yes. An Act of the legislature which is foreign to any of the purposes of the police
power and interferes with the ordinary enjoyment of property would, without doubt, be
held to be invalid. But where the Act is reasonably within a proper consideration of and
care for the public health, safety, or comfort, it should not be disturbed by the courts.
The power vested in the legislature by the constitution to make, ordain, and establish all
manner of wholesome and reasonable laws, statutes, and ordinances, either with
penalties or without, not repugnant to the constitution, as they shall judge to be for the
good and welfare of the commonwealth, and of the subjects of the same
14. U.S. v. Toribio, 15 Respondent Toribio is an owner of carabao, residing in the town of Carmen in the
Phil. 85, 98 province of Bohol. The trial court of Bohol found that the respondent slaughtered or
(1910). caused to be slaughtered a carabao without a permit from the municipal treasurer of the
municipality wherein it was slaughtered, in violation of Sections 30 and 33 of Act No.
1147, an Act regulating the registration, branding, and slaughter of Large Cattle. The act
prohibits the slaughter of large cattle fit for agricultural work or other draft purposes for
human consumption.

The respondent counters by stating that what the Act is (1) prohibiting is the slaughter of
large cattle in the municipal slaughter house without a permit given by the municipal
treasurer. Furthermore, he contends that the municipality of Carmen has no slaughter
house and that he slaughtered his carabao in his dwelling, (2) the act constitutes a
taking of property for public use in the exercise of the right of eminent domain without
providing for the compensation of owners, and it is an undue and unauthorized exercise
of police power of the state for it deprives them of the enjoyment of their private

Issue: Whether or not Act. No. 1147, regulating the registration, branding and slaughter
of large cattle, is an undue and unauthorized exercise of police power.

Held: It is a valid exercise of police power of the state.

legislative power is neither final nor conclusive, and in fact, its proper exercise is subject
to judicial inquiry
15. Soriano vs.
Laguardia, 587 On August 10, 2004, at around 10:00 p.m., petitioner, as host of the program Ang Dating
SCRA 79, 120 Daan, aired on UNTV 37, made obscene remarks against INC. Two days after, before
(2009). the MTRCB, separate but almost identical affidavit-complaints were lodged by Jessie L.
Galapon and seven other private respondents, all members of the Iglesia ni Cristo
(INC), against petitioner in connection with the above broadcast. Respondent Michael
M. Sandoval, who felt directly alluded to in petitioner’s remark, was then a minister of
INC and a regular host of the TV program Ang Tamang Daan.
Whether or not Soriano’s statements during the televised “Ang Dating Daan” part of the
religious discourse and within the protection of Section 5, Art.III.
No. Under the circumstances obtaining in this case, therefore, and considering the
adverse effect of petitioner’s utterances on the viewers’ fundamental rights as well as
petitioner’s clear violation of his duty as a public trustee, the MTRCB properly
suspended him from appearing in Ang Dating Daan for three months. Furthermore, it
cannot be properly asserted that petitioner’s suspension was an undue curtailment of
his right to free speech either as a prior restraint or as a subsequent punishment. Aside
from the reasons given above (re the paramount of viewers rights, the public trusteeship
character of a broadcaster’s role and the power of the State to regulate broadcast
media), a requirement that indecent language be avoided has its primary effect on the
form, rather than the content, of serious communication. There are few, if any, thoughts
that cannot be expressed by the use of less offensive language.

Primarily, the Congress has acknowledged that it “[c]annot possibly provide for all the
details in the enforcement of a particular statute,

[a]dministrative regulations or ‘subordinate legislation’ calculated to promote the public

interest” are necessary due to the growing complexity of modern life, the multiplication
of the subjects of governmental regulations, and the increased difficulty of administering
the law.”6

6 Soriano, 587 SCRA at 120.

16. Fernando v. St.
College, 693 Respondent SSC’s property is enclosed by a tall concrete perimeter fence. Marikina City
SCRA 141, 156 enacted an ordinance which provides that walls and fences shall not be built within a
(2013). five-meter allowance between the front monument line and the building line of an
The City Government of Marikina sent a letter to the respondents ordering them to
demolish, replace, and move back the fence. As a response, the respondents filed a
petition for prohibition with an application for a writ of preliminary injunction and
temporary restraining order before the Regional Trial Court of Marikina. The RTC
granted the petition and the CA affirmed. Hence, this certiorari.

Issue: Is Marikina Ordinance No. 192, imposing a five-meter setback, a valid exercise of
police power?

Ruling: No. “Police power is the plenary power vested in the legislature to make statutes
and ordinances to promote the health, morals, peace, education, good order or safety
and general welfare of the people.” Two tests have been used by the Court – the
rational relationship test and the strict scrutiny test:
Under the rational relationship test, an ordinance must pass the following requisites:
(1) the interests of the public generally, as distinguished from those of a particular class,
require its exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals.
The real intent of the setback requirement was to make the parking space free
for use by the public and not for the exclusive use of respondents. This would be
tantamount to a taking of private property for public use without just compensation.
Anent the objectives of prevention of concealment of unlawful acts and “un-
neighborliness” due to the walls and fences, the parking area is not reasonably
necessary for the accomplishment of these goals. The Court, thus, finds Section 5 of the
Ordinance to be unreasonable and oppressive. Hence, the exercise of police power is
not valid.
The State, through the Congress, has delegated the exercise of police power to local
government units as agencies of the State, as embodied in “the General Welfare
Clause,” under the 1991 Local Government Code.7

7 Fernando v. St. Scholastica’s College, 693 SCRA 141, 156 (2013).

17. Pangasinan
Co. v. Public This is a case on the certificate of public convenience of petitioner Pangasinan
Service Transportation Co. Inc (Pantranco). The petitioner has been engaged for the past
Commission, 70 twenty years in the business of transporting passengers in the province of Pangasinan
Phil. 221, 232 and Tarlac, Nueva Ecija and Zambales. On August 26, 1939, Pantranco filed with the
(1940). Public Service Commission (PSC) an application to operate 10 additional buses. PSC
granted the application with 2 additional conditions which was made to apply also on
their existing business. Pantranco filed a motion for reconsideration with the Public
Service Commission. Since it was denied, Pantranco then filed a petition/ writ of


Whether the legislative power granted to Public Service Commission:

- is unconstitutional and void because it is without limitation
- constitutes undue delegation of powers


The challenged provisions of Commonwealth Act No. 454 are valid and constitutional
because it is a proper delegation of legislative power, so called “Subordinate
Legislation”. It is a valid delegation because of the growing complexities of modern
government, the complexities or multiplication of the subjects of governmental regulation
and the increased difficulty of administering the laws. All that has been delegated to the
Commission is the administrative function, involving the use of discretion to carry out the
will of the National Assembly having in view, in addition, the promotion of public interests
in a proper and suitable manner.

The Certificate of Public Convenience is neither a franchise nor contract, confers no

property rights and is a mere license or privilege, subject to governmental control for the
good of the public. PSC has the power, upon notice and hearing, “to amend, modify, or
revoked at any time any certificate issued, whenever the facts and circumstances so
warranted. The limitation of 25 years was never heard, so the case was remanded to
PSC for further proceedings.

In addition, the Court ruled that, “the liberty and property of the citizens should be
protected by the rudimentary requirements of fair play. Not only must the party be given
an opportunity to present his case and to adduce evidence tending to establish the
rights that he asserts but the tribunal must consider the evidence presented. When
private property is affected with a public interest, it ceased to be juris privati or private
use only.


S]tatutes enacted for the regulation of public utilities, being a proper exercise by the
state of its police power, are applicable not only to those public utilities coming into
existence after its passage, but likewise to those already established and in operation
Consumer Protection
18. Abe vs. Foster
Corporation “[t]he constitutional guaranty of non-impairment of obligations of contract is limited by
the exercise of the police power of the State, in the interest of public health, safety,
morals and general welfare.
19. Goodyear
Philippines, Inc. and-eugenia-padua-2/
v. Sy, 474 SCRA
427 (2005). Goodyear Philippines was the owner of an Isuzu car which was hijacked in 1986.
Goodyear reported it to the police. PNP issued an alert alarm on the stolen vehicle.
Later that year the car was recovered. Goodyear told PNP to lift the alarm from the
recovered car.
In 1996, Goodyear sold the car to Sy. In 1997, Sy sold the car to Jose Lee. Lee tried to
register the car in his name but he was not able to do so because apparently PNP did
not lift the alert alarm over the said car. The car was impounded and PNP sued Lee. Lee
told Sy about it.
Sy then sue Goodyear for breach of warranty. Sy argued that Goodyear has the duty to
convey the vehicle to Sy free from all liens, encumbrances and legal impediments. The
RTC ruled in favor of Goodyear. CA reversed the RTC decision.
ISSUE: Whether or not there was a breach of warranty.
HELD: No. In a contract of sale, there are implied warranties: first, the vendor has a
right to sell the thing at the time that its ownership is to pass to the vendee, as a result of
which the latter shall from then on have and enjoy the legal and peaceful possession of
the thing; and, second, the thing shall be free from any charge or encumbrance not
declared or known to the vendee.
Goodyear did not break any of those. Certainly, the impoundment of the car was not
Goodyear’s fault and it was not a legal impediment that deprived Sy from ownership of
said car. When Sy sold the car to Lee, Sy was already the absolute owner. This is
because when Goodyear sold the car to Sy, Goodyear transferred full ownership to Sy.
It was just unfortunate that the PNP did not lift the alert alarm from the said car placed
on it in 1986. Certainly, Goodyear has no control over the PNP and PNP’s inaction is a
purely administrative and government in nature. Hence, Goodyear did not breach its
obligation as a vendor to Sy; neither did it violate Sy’s right for which he could maintain
an action for the recovery of damages. Without this crucial allegation of a breach or
violation, no cause of action exists.
A warranty is defined in jurisprudence as “an affirmation of fact or any promise made by
a seller in relation to the thing sold, and that the decisive test is whether the seller
assumes to assert a fact of which the buyer is ignorant of.”
20. Carrascoso, Jr. v.
Court of Appeals, Leviste
477 SCRA 666,
689 (2005).
“Breach of [express warranties make] the seller liable for damages.”
21. Nutrimix Feeds
Corp. v. Court of
Appeals, 441 Spouses Restituto Nonato and Ester Nonato purchased a volkswagen from the People’s
SCRA 357, 369 Car Inc on installment basis.
(2004). 1. To secure their complete payment, Nonato executed a promissory note and a
chattel mortgage in favor of People’s Car Inc.
2. Subsequently, People’s Car Inc assigned its rights and interest over the note and
mortagge in favor of Investor’s Finance Corp (IFC).
3. For failure of the spouses to pay two or more installments, despite demands, the
car was repossessed by IFC.
4. Despite repossession, IFC still demanded from Nonato that they pay the balance
of the price of the car. IFC, then, filed a complaint for the payment of the price of the car
with damages
5. Nonato, in their defense, argued that when the company repossessed the car, IFC
had, by that act, effectively cancelled the sale of the vehicle. As such, it was barred from
exacting the recovery of the unpaid balance of the purchase price as mandated by Art
6. The trial court rendered in favor of IFC and ordered the spouses Nonato pay the
balance of the purchase price of the car with interest. CA affirmed the same.

ISSUE: WON a vendor or his assignee, who had cancelled the sale of a motor vehicle
for failure of the buyer to pay two or more of the stipulated installments, may also
demand payment of the balance of the purchase price

No. The applicable law in the case at bar is Art 1484 which provides that:
In a contract of sale of personal property the price of which is payable in installments,
the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted,
should the vendee's failure to pay cover two or more installments. In this case, he shall
have no further action against the purchaser to recover any unpaid balance of the price.
Any agreement to the contrary shall be void.
This provision means that should the vendee or the purchaser of a personal property
default in the payment of two or more of the agreed installments, the vendor or the seller
has the option to avail any of these 3 remedies—either to exact fulfillment by the
purchaser of the obligation, or to cancel the sale, or to foreclose the mortgage on the
purchased personal property, if one was constituted. These remedies have been
recognized as an alternative, not cumulative, that the exercise of one should bar the
exercise of the others.

In the present case, it is not disputed that IFC had taken possession of the car
purchased by the Nonatos after the spouses defaulted in their payments. The defense
of IFC that it the repossession of the vehicle was only for the purpose of appraising its
value and for storage and safekeeping pending full payment of the spouses is
untenable. The receipt issued by IFC to the spouses when it took possession of the
vehicle that the vehicle could be redeemed within 15 days. This could only mean that
should the spouses fail to redeem the car within the period provided, IFC would retain
permanent possession of the vehicle. IFC even notified the spouses Nonato that the
value of the car was not sufficient to cover the balance of the purchase price and there
was no attempt at all on the part of the company to return the car.

The acts performed by IFC are consistent with the conclusion that it had opted to cancel
the sale of the vehicle. Therefore, it is barred from exacting payment from the petitioners
of the balance of the price of the vehicle which it had already repossessed (it cannot
have its cake and eat it too)

For breach of warranties against hidden defects, the following requisites must be
present: (1) defect must be hidden; (2) defect must exist at the time of the sale; (3)
defect must ordinarily have been excluded from the contract; (4) defect must be
important, i.e. rendering the thing unfit or considerably decreases fitness; (5) action
must be filed within the prescriptive period
22. Robles vs. “tort” as a “private or civil wrong or injury, other than breach of contract,” which gives rise
Castillo, 61 O.G. to an action for damages.
1220, 5 C.A.R.
[2s] 213.
23. Taylor v. Manila
Electric v_5380.html
Company, 16
Phil. 8, 15 David Taylor, 15 years of age, the son of a mechanical engineer, more mature than the
(1910). average boy of his age, and having considerable aptitude and training in mechanics with
a boy named Manuel Claparols, about 12 years of age, crossed the footbridge to the
Isla del Provisor, for the purpose of visiting Murphy, an employee of the defendant, who
and promised to make them a cylinder for a miniature engine
After leaving the power house where they had asked for Mr. Murphy, they walked across
the open space in the neighborhood of the place where the company dumped in the
cinders and ashes from its furnaces
they found some twenty or thirty brass fulminating caps scattered on the ground
These caps are approximately of the size and appearance of small
pistol cartridges and each has attached to it 2 long thin wires by means
of which it may be discharged by the use of electricity
They are intended for use in the explosion of blasting charges of
dynamite, and have in themselves a considerable explosive power
the boys picked up all they could find, hung them on stick, of which each took end, and
carried them home
After crossing the footbridge, they met Jessie Adrian, less than 9 years old, and
they went to Manuel's home
The boys then made a series of experiments with the caps
trust the ends of the wires into an electric light socket - no result
break the cap with a stone - failed
opened one of the caps with a knife, and finding that it was filled with a
yellowish substance they got matches
David held the cap while Manuel applied a lighted match to the contents
An explosion followed, causing more or less serious injuries to
all three
Jessie, who when the boys proposed putting a match to
the contents of the cap, became frightened and started
to run away, received a slight cut in the neck
Manuel had his hand burned and wounded
David was struck in the face by several particles of the
metal capsule, one of which injured his right eye to
such an extent as to the necessitate its removal by the
Trial Court: held Manila Electric Railroad And Light Company liable

1. W/N the elemnents of quasi-delict to make Manila Electric Railroad And Light
Company liable - NO
2. W/N Manila Electric Railroad and Light Co. sufficiently proved that they employed all
the diligence of a good father of a family to avoid the damage - NO

while we hold that the entry upon the property without express invitation or permission
would not have relieved Manila Electric from responsibility for injuries incurred, without
other fault on his part, if such injury were attributable to his negligence, the negligence in
leaving the caps exposed on its premises was not the proximate cause of the injury

cutting open the detonating cap and putting match to its contents was the proximate
cause of the explosion and of the resultant injuries inflicted

Manila Electric is not civilly responsible for the injuries thus incurred


The elements of a quasi-delict are: (1) damages to the plaintiff; (2) negligent act or
omission of the defendant or some other person for whose acts he is responsible; (3)
connection of cause and effect between the negligent act or omission of the defendant
and the damages incurred by the plaintiff
24. Pangonorom, et
al. vs. People of the 10th day of July, 1989, in Quezon City the abovenamed accused, being then the
the Philippines, driver and person in charge of a motor vehicle, striked and collided with a car, belonging
455 SCRA 211, to Mary Berba and driven by Carlos Berba y Remulla.
221 (2005).
That because of the rainy weather, the bus that Olimpio was driving swerved to avoid a
vehicle however bumped to the car of Berba that caused collision to the other car in
front of them.

Olimpio entered into a plea of not guilty. But the RTC finds accused Olimpio guilty which
is also affirmed by the CA. Motion for reconsideration is further denied.

Ruling: The Court finds the petition w/o merit.

Article 365 of the Revised Penal Code states that reckless imprudence consists in
voluntarily, but without malice, doing or failing to do an act from which material damage
results by reason of inexcusable lack of precaution on the part of the person performing
or failing to perform such act, taking into consideration (1) his employment or
occupation; (2) his degree of intelligence; (3) his physical condition; and (4) other
circumstances regarding persons, time and place.
Olimpio is a professional driver who has been in the employ of the MMTC since 1984.
[17] As a public utility driver, Olimpio should have as his primary concern the safety not
only of himself or of his passengers, but, also the safety of his fellow motorists.
Considering that it had just rained, it was still drizzling and the road was slippery when
the subject incident took place,[18] Olimpio should have been more cautious and
prudent in driving his passenger bus.
Subsidiary liability of the Metro Manila Transit Corporation

Pursuant to Article 103, an employer may be subsidiarily liable for the employees civil
liability in a criminal action when there is adequate evidence establishing (1) that he is
indeed the employer of the convicted employee; (2) that he is engaged in some kind of
industry; (3) that the employee committed the offense in the discharge of his duties; and
(4) that the execution against the employee has not been satisfied due to insolvency.

The provisions of the Revised Penal Code on subsidiary liability Articles 102 and 103
are deemed written into the judgments in cases to which they are applicable. Thus, in
the dispositive portion of its decision, the trial court need not expressly pronounce the
subsidiary liability of the employer.[32]
The subsidiary liability of the employer arises only after conviction of the employee in
the criminal action.[33] In the present case, there exists an employer-employee
relationship between petitioners, the MMTC is engaged in the transportation industry,
[34] and Olimpio has been adjudged guilty of a wrongful act and found to have
committed the offense in the discharge of his duties.[35] However, there is no proof here
of Olimpios insolvency. The judgment of conviction against Olimpio has not attained
finality. This being so, no writ of execution can issue against him to satisfy his civil
liability. Only after proof of the accused-employees insolvency may the subsidiary
liability of his employer be enforced.
Once the judgment of conviction against Olimpio becomes final and executory, and after
the writ of execution issued against him is returned unsatisfied because of his
insolvency, only then can a subsidiary writ of execution be issued against the MMTC
after a hearing set for that precise purpose. It is still too early to hold the MMTC
subsidiarily liable with its accused-employee considering that there is no proof yet of
Olimpios insolvency.

The negligence varies depending on the nature of the situation and other factors, such
as the person’s employment, degree of intelligence, physical condition and other
25. American
Express inc-vs-noel-cordero/
International vs.
Cordero, 473 American Express International was a foreign corporation that issued charge cards used
SCRA 42, 48 to purchase goods and services at accredited merchants worldwide to its customers.
(2005). Nilda Cordero, wife of respondent Noel Cordero, was issued an American
Express charge card. An extension charge card, was likewise issued to respondent Noel
Cordero which he also signed. Respondent, together with his family went on a three-day
holiday trip to Hong Kong. The group went to the Watson’s Chemist Shop. While there,
Noel picked up chocolate candies and handed his American Express
extension charge card to the sales clerk to pay for his purchases. Susan Chong, the
store manager, informed respondent that she had to confiscate the card. Thereupon,
she cut respondent’s American Express card in half with a pair of scissors. This,
according to respondent, caused him embarrassment and humiliation. Hence, Nilda had
to pay for the purchases using her own American Express charge card.
The card was placed in the Inspect Airwarn Support System, asystem utilized by
petitioner as a protection both for the company and the cardholdersagainst the
fraudulent use of their charge cards. Once a card suspected of unauthorized use is
placed in the system, the person to whom the card is tendered must verify the identity of
the holder. If the true identity of the card owner is established, the card is honored and
the charges are approved. Otherwise, the card is revoked or confiscated.
Respondent filed with the Regional Trial Court a complaint for damages against
petitioner. He prayed for the award of moral damages and exemplary damages, as well
as attorney’s fees as a result of the humiliation he suffered. According to the trial court,
petitioner should have informed respondent that on November 1, 1991, a person in
Hong Kong attempted to use a charge card bearing similar number to that of
respondent’s card and that petitioner’s inexcusable failure to do so is the proximate
cause of the “confiscation and cutting of respondent’s extension card which exposed the
latter to public humiliation for which the petitioner should be held liable. Upon appeal,
the Court of Appeals affirmed the trial court’s decision.
Whether the lower courts gravely erred in awarding moral damages,
exemplary damages and attorney’s fees to Cordero.
Ruling of the Court:
YES. The Court ruled that petitioner can revoke respondent’s card without notice,
as was done. The subject card would not have been confiscated and cut had
respondent talked to petitioner’s representative and identified himself as the
genuine cardholder. As explained by respondent himself, he could have used his card
upon verification by the sales clerk of Watson that indeed he is
the authorized cardholder. That could have been accomplished had respondent talked
to petitioner’s representative, enabling the latter to determine that respondent was
indeed the true holder of the card. Clearly, no negligence which breached the contract
could have been attributed to petitioner. If at all, the cause of respondent’s humiliation
and embarrassment was his refusal to talk to petitioner’s representative. It was thus safe
to conclude that there was no negligence on the part of petitioner and that, therefore, it
cannot be held liable to respondent for damages.
If the law or contract does not specify the degree of diligence required, that which is
expected of a good father of a family or ordinary diligence shall be required. 8 But “to
constitute quasi-delict, the [negligent act or omission] must be the proximate cause of
the damage or injury of the plaintiff
26. Vda. de Bataclan
vs. Medina, 102 Pass-midnight in September 1952, Juan Bataclan rode a bus owned by Mariano Medina
Phil. 181, 186 from Cavite to Pasay. While on its way, the driver of the bus was driving fast and when

8 CIVIL CODE, art. 1173.

(1957). he applied the brakes it cause the bus to be overturned. The driver, the conductor, and
some passengers were able to free themselves from the bus except Bataclan and 3
others. The passengers called the help of the villagers and as it was dark, the villagers
brought torch with them. The driver and the conductor failed to warn the would-be
helpers of the fact that gasoline has spilled from the overturned bus so a huge fire
ensued which engulfed the bus thereby killing the 4 passengers trapped inside. It was
also found later in trial that the tires of the bus were old.
ISSUE: Whether or not the proximate cause of the death of Bataclan et al was their
burning by reason of the torches which ignited the gasoline.
HELD: No. The proximate cause was the overturning of the bus which was caused by
the negligence of the driver because he was speeding and also he was already advised
by Medina to change the tires yet he did not. Such negligence resulted to the
overturning of the bus. The torches carried by the would-be helpers are not to be
blamed. It is just but natural for the villagers to respond to the call for help from the
passengers and since it is a rural area which did not have flashlights, torches are the
natural source of lighting. Further, the smell of gas could have been all over the place
yet the driver and the conductor failed to provide warning about said fact to the villagers.

“Proximate cause” is “‘that cause, which, in natural and continuous sequence, unbroken
by any efficient intervening cause, produces the injury, and without which the result
would not have occurred
27. Gashem Shookat
Baksh vs. Court
of Appeals, et al., medical course in Dagupan City, who courted private respondent Marilou Gonzales, and
219 SCRA 115, promised to marry her. On the condition that they would get married, she reciprocated
128 (1993). his love. They then set the marriage after the end of the school semester. He visited
Marilou’s parents to secure their approval of marriage. In August 1987, he forced her to
live with him, which she did. However, his attitude toward her changed after a while; he
would maltreat and even threatened to kill her, from which she sustained injuries. Upon
confrontation with the barangay captain, he repudiated their marriage agreement, saying
that he was already married to someone living in Bacolod.
Marilou then filed for damages before the RTC. Baksh denied the
accusations but asserted that he told her not to go to his place since he discovered her
stealing his money and passport. The RTC ruled in favor of Gonzales. The CA affirmed
the RTC decision.
1. Whether or not breach of promise to marry is an actionable wrong.
2. Whether or not Art. 21 of the Civil Code applies to this case.
3. Whether or not pari delicto applies in t his case.
The existing rule is that a breach of promise to marry per se is not an
actionable wrong.
This, notwithstanding, Art. 21 is designed to expand the concept of torts or
quasi-delict in this jurisdictions by granting adequate legal remedy for the untold number
of moral wrongs which is impossible for human foresight to specifically enumerate and
punish in the statute books.
Art. 21 defines quasi-delict:
Whoever by act or omission causes damage to another, there being fault or
negligence is obliged to pay for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called quasi-delict and is
governed by the (Civil Code).
It is clear that petitioner harbors a condescending if not sarcastic regard for
the private respondent on account of the latter’s ignoble birth, inferior educational
background, poverty and, as perceived by him, dishonorable employment. From the
beginning, obviously, he was not at all moved by good faith and an honest motive.
Thus, his profession of love and promise to marry were empty words directly intended to
fool, dupe, entice, beguile and deceive the poor woman into believing that indeed, he
loved her and would want her to be his life partner. His was nothing but pure lust which
he wanted satisfied by a Filipina who honestly believed that by accepting his proffer of
love and proposal of marriage, she would be able to enjoy a life of ease and security.
Petitioner clearly violated the Filipino concept of morality and so brazenly defied the
traditional respect Filipinos have for their women. It can even be said that the petitioner
committed such deplorable acts in blatant disregard of Article 19 of the Civil Code which
directs every person to act with justice, give everyone his due, and observe honesty and
good faith in the exercise of his right and in the performance of his obligations.
No foreigner must be allowed to make a mockery of our laws, customs and
She is not in pari delicto with the petitioner. Pari delicto means in equal fault.
At most, it could be conceded that she is merely in delicto.
Equity often interfered for the relief of the less guilty of the parties, where his
transgression has been brought about by the imposition of undue influence of the party
on whom the burden of the original wrong principally rests, or where his consent to the
transaction was itself procured by fraud.

Generally, the civil law concept of quasi-delicts in Philippines involves negligent acts or
omissions and excludes malicious or intentional acts, 9 while tort includes both negligent
and intentional criminal acts

28. Casupanan, et al.
vs. Laroya, 388 no.html
SCRA 28, 35
(2002). As a result of a vehicular accident between two vehicles, one driven by Mario Llavore
Laroya and the other owned by Roberto Capitulo and driven by Avelino Casupanan, two
cases were filed before the MCTC of Capas, Tarlac. Laroya filed a criminal case against
Casupanan for reckless imprudence resulting in damage to property. This case was on
its preliminary investigation stage when Casupanan and Capitulo filed a civil case
against Laroya for quasi-delict. However, upon motion of Laroya on the ground of forum-
shopping, the MCTC dismissed the civil case. On Motion for Reconsideration,
Casupanan and Capitulo insisted that the civil case is a separate civil action which can
proceed independently of the criminal case. Casupanan and Capitulo then filed a
petition for certiorari before the Regional Trial Court (RTC) of Capas, Tarlac. But the
RTC ruled that the order of dismissal issued by the MCTC is a final order which
disposes of the case and therefore, the proper remedy should have been an appeal.
Hence, Casupanan and Capitulo filed this petition.
Casupanan and Capitulo’s contention: that if the accused in a criminal case has a
counterclaim against the private complainant, he may file the counterclaim in a separate
civil action at the proper time. They contend that an action on quasi-delict is different
from an action resulting from the crime of reckless imprudence, and an accused in a
criminal case can be an aggrieved party in a civil case arising from the same incident.
They maintain that under Articles 31 and 2176 of the Civil Code, the civil case can
proceed independently of the criminal action. Finally, they point out that Casupanan was
not the only one who filed the independent civil action based on quasi-delict but also
Capitulo, the owner-operator of the vehicle, who was not a party in the criminal case.
Laroya’s contention: that the petition is fatally defective as it does not state the real
antecedents. Laroya further alleges that Casupanan and Capitulo forfeitedtheir right to
question the order of dismissal when they failed to avail of the proper remedy of appeal.
Laroya argues that there is no question of law to be resolved as the order of dismissal is
already final and a petition for certiorari is not a substitute for a lapsed appeal.
ISSUE/HELD: WON an accused in a pending criminal case for reckless imprudence can
validly file, simultaneously and independently, a separate civil action for quasi-delict
against the private complainant in the criminal case. AFFIRMATIVE
The Court held that the MCTC dismissed the civil action for quasi-delict on the ground of
forum-shopping under Supreme Court Administrative Circular No. 04-94. The MCTC did
not state in its order of dismissal that the dismissal was with prejudice. Under the
Administrative Circular, the order of dismissal is without prejudice to refiling the
complaint, unless the order of dismissal expressly states that it is with prejudice. Thus,
the MCTC's dismissal, being silent on the matter, is a dismissal without prejudice.
Section 1 of Rule 41 provides that an order dismissing an action without prejudice is not
appealable. The remedy of the aggrieved party is to file a special civil action under Rule
65. Clearly, the Capas RTC's order dismissing the petition for certiorari on the ground
that the proper remedy is an ordinary appeal, is erroneous.
Laroya filed the criminal case for reckless imprudence resulting in damage to property
based on the Revised Penal Code while Casupanan and Capitulo filed the civil action
for damages based on Article 2176 of the Civil Code. Although these two actions arose
from the same act or omission, they have different causes of action. The criminal case is
based on culpa criminal punishable under the Revised Penal Code while the civil case is
based on culpa aquiliana actionable under Articles 2176 and 2177 of the Civil Code. And
par 6, sec 1 of Rule 111.
Since the present Rules require the accused in a criminal action to file his counterclaim
in a separate civil action, there can be no forum-shopping if the accused files such
separate civil action.
Under the present Rule 111, the offended party is still given the option to file a separate
civil action to recover civil liability ex-delicto by reserving such right in the criminal action
before the prosecution presents its evidence. Also, the offended party is deemed to
make such reservation if he files a separate civil action before filing the criminal action. If
the civil action to recover civil liability ex-delicto is filed separately but its trial has not yet
commenced, the civil action may be consolidated with the criminal action. The
consolidation under this Rule does not apply to separate civil actions arising from the
same act or omission filed under Articles 32, 33, 34 and 2176 of the Civil Code.
Section 2, Rule 111 of the present Rules did not change the rule that the separate civil
action, filed to recover damages ex-delicto, is suspended upon the filing of the criminal
action. Section 2 of the present Rule 111 also prohibits the filing, after commencement
of the criminal action, of a separate civil action to recover damages ex-delicto.
Section 3 of the present Rule 111, like its counterpart in the amended 1985 Rules,
expressly allows the "offended party" to bring an independent civil action under Articles
32, 33, 34 and 2176 of the Civil Code. As stated in Section 3 of the present Rule 111,
this civil action shall proceed independently of the criminal action and shall require only
a preponderance of evidence. In no case, however, may the "offended party
recover damages twice for the same act or omission charged in the criminal action."
There is no question that the offended party in the criminal action can file an
independent civil action for quasi-delict against the accused. Section 3 of the present
Rule 111 expressly states that the "offended party" may bring such an action but the
"offended party" may not recover damages twice for the same act or omission charged
in the criminal action. Clearly, Section 3 of Rule 111 refers to the offended party in the
criminal action, not to the accused.
Thus, the offended party can file two separate suits for the same act or omission. The
first a criminal case where the civil action to recover civil liability ex-delicto is deemed
instituted, and the other a civil case for quasi-delict — without violating the rule on non-
forum shopping. The two cases can proceed simultaneously and independently of each
other. The commencement or prosecution of the criminal action will not suspend the civil
action for quasi-delict. The only limitation is that the offended party cannot
recover damages twice for the same act or omission of the defendant. In most cases,
the offended party will have no reason to file a second civil action since he cannot
recover damages twice for the same act or omission of the accused. In some instances,
the accused may be insolvent, necessitating the filing of another case against his
employer or guardians.

Similarly, the accused can file a civil action for quasi-delict for the same act or omission
he is accused of in the criminal case. This is expressly allowed in paragraph 6, Section
1 of the present Rule 111 which states that the counterclaim of the accused "may be
litigated in a separate civil action." This is only fair for two reasons. First, the accused is
prohibited from setting up any counterclaim in the civil aspect that is deemed instituted
in the criminal case. The accused is therefore forced to litigate separately his
counterclaim against the offended party. If the accused does not file a separate civil
action for quasi-delict, the prescriptive period may set in since the period continues to
run until the civil action for quasi-delict is filed.

Although these two actions arose from the same act or omission, they have different
causes of action.
29. Jarantilla vs.
Court of Appeals,
171 SCRA 429, Private respondent Jose Kuan Sing was "side-swiped by a Volkswagon Beetle driven by
437 (1989). Edgar Jarantilla in the evening of July 7, 1971 in lznart Street, Iloilo City" towards the
direction of the provicional capitol resulting to serious physical injuries thru reckless
Sing did not reserve his right to institute a separate civil action. Jarantilla was eventually
acquitted because of reasonable doubt.
On October 30, 1974, Sing filed a complaint (civil case) against the Jarantilla in the
former Court of First Instance of Iloilo, Branch IV, in which civil action involved the same
subject matter and act complained of in the dismissed criminal case. RTC wanted to
“enrich our jurisprudence.” So RTC denies motion to dismiss, grants damages to Sing,
proposed that the case be elevated to the SC by certiorari. CA affirmed.
ISSUE: Whether Sing, who was the complainant in the dismissed criminal action
(grounded on reasonable dobut) for physical injuries and who participated in the
prosecution without reserving the civil action can file a separate action for civil liability
arising from the same act or omission.
HELD: YES, because the civil action here is not based on DELICT, but on QUASI-
Well settled is the rule that the same act or omission can create two kinds of liability on
the part of the offender, that is, civil liability ex delicto and civil liability ex quasi delicto.
Since the same negligence can give rise either to a delict or crime or to a quasi-delict or
tort, either of these two types of civil liability may be enforced against the culprit, subject
to Article 2177 of the Civil Code that the offended party cannot recover damages under
both types of liability.
Where the offended party elected to claim damages arising from the offense charged in
the criminal case through her intervention as a private prosecutor, the final judgment
rendered therein constituted a bar to the subsequent civil action based upon the same
The well-settled doctrine is that a person, while not criminally liable may
still be civilly liable. 'The judgment of acquittal extinguishes the civil
liability of the accused only when it includes a declaration that the facts
from which the civil liability might arise did not exist'
Another consideration in favor of Sing is the doctrine that the failure of the court to make
any pronouncement, favorable or unfavorable, as to the civil liability of the accused
amounts to a reservation of the right to have the civil liability litigated and determined in
a separate action. The rules nowhere provide that if the court fails to determine the civil
liability it becomes no longer enforceable.
Furthermore, in the present case the civil liability sought to be recovered through the
application of Article 29 is no longer that based on or arising from the criminal offense.
There is persuasive logic in the view that, under such circumstances, the acquittal of the
accused foreclosed the civil liability based on Article 100 of the Revised Penal Code
which presupposes the existence of criminal liability or requires a conviction of the
offense charged. Divested of its penal element by such acquittal, the causative act or
omission becomes in effect a quasi-delict, hence only a civil action based thereon may
be instituted or prosecuted thereafter, which action can be proved by mere
preponderance of evidence. 28 Complementary to such considerations, Article 29
enunciates the rule, as already stated, that a civil action for damages is not precluded by
an acquittal on reasonable doubt for the same criminal act or omission.
Since this action is based on a quasi-delict, the failure of the respondent to reserve his
right to file a separate civil case and his intervention in the criminal case did not bar him
from filing such separate civil action for damages
the same act or omission can give rise to two kinds of civil liabilities on the part of the
offender, i.e. civil liability ex delicto under Article 100 of the Revised Penal Code and civil
liability ex quasi delicto under the Civil Code
30. Spouses Santos,
et al. vs. Pizardo,
et al., 465 SCRA Dionisio M. Sibayan was charged with reckless imprudence resulting to multiple
232. 239 (2005). homicide and multiple physical injuries due to the vehicle collision between Viron Transit
bus driven by Sibayan and a Lite Van Ace. However the municipal circuit trial court was
no pronouncement of civil liability. The petitioners filed a complaint for damages to the
respondents pursuant to their reservation to file a separate civil action citing Sibayan’s
judgment conviction. And it was moved to dismiss by the Viron Transit. The petitioners
opposed and contends that the motion to dismiss that be ten (10) years from the
judgment of criminal action is the prescription and therefore it is within the period since it
was just barely two (2) years had elapse.

The complaint was dismissed by the trial court due to the ground that the cause of
action had prescribed; based on quasi-delict that it prescribes four (4) years from the
accrual of the cause of action. Again the petitioners filed a reconsideration that the
complaint is not based on quasi- delict but on the final judgment of conviction in the
criminal case which prescribes ten (10) years upon the finality of the judgment. The
motion for reconsideration of the petitioners was denied by the trial court based on
quasi-delict in Article 1146 of the Civil Code that the complaint was filed more than four
(4) years after the vehicular activities therefore it prescribes already.

On the petition for certiorari the petitioners filed to the Court of Appeals it was dismissed
the same error in the choice or mode of appeal. It also denies the petitioners’ motion for
and the petitioners failed to allege that the petition was brought within the recognized
exceptions for the allowance of certiorari in lieu of appeal. Petitioners insist that it should
be enforced in the complaint that arose in ex delicto and not based on quasi-delict.
Since the action is based on the criminal liability of private respondents, the cause of
action accrued from the finality of the judgment of conviction. Private respondents
insisted, pointing out the averments in the complaint make out a cause of action for
quasi delict in Article 2176 and 2180 of the Civil Code. The prescriptive period of four (4)
years should be reckoned from the time the accident took place. Viron transit also
alleges that its subsidiary liability cannot be enforced since Sibayan was not ordered to
pay damages in the criminal case, in sitting Art. 103 of Revised Penal Code the civil
aspect of the case were instituted in the criminal case and no reservation to file a
separate civil case was made. Respondents likewise allege that the petitioners should
have appealed the adverse order of the trial court. Petitioners filed a reply and the
private respondents also filled a rejoinder both in reiteration of their arguments. Hence
this petition.


Whether or not the dismissal of the action was based on culpa aquiliana is a bar to the
enforcement of the subsidiary liability of the employer?


The dismissal of the action based on culpa aquiliana is not a bar to the subsidiary
liability of the employer. Because the Article 103 of the R.P.C. operates with controlling
force to obviate the possibility of the aggrieved party being deprived of indemnity even
after the rendition of a final judgment convicting the employee. The trial court should not
have dismissed the complaint on the ground of prescription, but instead allowed the
complaint for damages ex delicto to be prosecuted on the merits, this does not offend
the policy that the reservation or institution of a separate civil waives the other civil
actions but this is merely an avoidance of multiple suits. The action for damages based
on quasi- delict should be considered waived no occasion for petitioners to file multiple
suits against private respondets as available to them is to pursue damages ex delicto.
An aggrieved party may file both a criminal case and a civil case for quasi-delict on the
same negligent act or omission
31. Daywalt v. La
Corporacion de
los Padres Teodorica Endencia executed a contract whereby she obligated herself to convey to
Agustinos, 39 Geo W. Daywalt a 452-hectare parcel of land for P 4000. They agreed that a deed
Phil. 587 (1919). should be executed as soon as Endencia’s title to the land was perfected in the Court of
Land Registration and a Torrens title issued in her name. When the Torrens title was
issued, Endencia found out that the property measured 1248 hectares instead of 452
hectares, as she initially believed. Because of this, she became reluctant to transfer the
whole tract to Daywalt, claiming that she never intended to sell so large an amount and
that she had been misinformed as to its area. Daywalt filed an action for specific
performance. The SC ordered Endencia to convey the entire tract to Daywalt.
Meanwhile, La Corporacion de los Padres Agustinos Recoletos (Recoletos), was a
religious corp., w/c owned an estate immediately adjacent to the property sold by
Endencia to Daywalt. It also happened that Fr. Sanz, the representative of the
Recoletos, exerted some influence and ascendancy over Endencia, who was a woman
of little force and easily subject to the influence of other people. Fr. Sanz knew of the
existence of the contracts with Daywalt and discouraged her from conveying the entire
Daywalt filed an action for damages against the Recoletos on the ground that it
unlawfully induced Endencia to refrain from the performance of her contract for the sale
of the land in question and to withhold delivery of the Torrens title. Daywalt’s claim for
damages against the Recoletos was for the huge sum of P 500000 [in the year 1919],
since he claims that because of the interference of the Recoletos, he failed to
consummate a contract with another person for the sale of the property and its
conversion into a sugar mill.
Issue: whether Recoletos is liable to Daywalt? Held: No, it is not liable.
The stranger who interferes in a contract between other parties cannot become more
extensively liable in damages for the non-performance of the contract than the party in
whose behalf he intermediates. Hence, in order to determine the liability of the
Recoletos, there is first a need to consider the liability of Endencia to Daywalt. The
damages claimed by Daywalt from Endencia cannot be recovered from her, first,
because these are special damages w/c were not w/in the contemplation of the parties
when the contract was made, and secondly, these damages are too remote to be the
subject of recovery. Since Endencia is not liable for damages to Daywalt, neither can the
Recoletos be held liable. As already suggested, by advising Endencia not to perform the
contract, the Recoletos could in no event render itself more extensively liable than the
principal in the contract.
32. Silva v. Peralta,
110 Phil. 57
(1961). Saturnino Silva, an American citizen and US Army officer, was married to one Priscilla
Isabel of Australia. While deployed in the Philippines, Saturnino married appellee Esther
which was allegedly executed since no documents for the purpose of marriage were
prepared. The said marriage produced a child. While in the US for medical treatment,
Saturnino divorced therein Priscilla and contracted another marriage now with appellant
Elenita Ledesma. Upon Saturnino’s return to the Philippines, Esther demanded support
for the child and upon his refusal, instituted a suit. Thereupon, Elenita moved to enjoin
Esther from representing herself as wife of Saturnino and prayed for the award of moral
damages for the humiliation and distress she suffered upon learning his husband had a
child. Esther filed a counterclaim for actual damages and fees due to the harassment
and moral damages caused by Saturnino’s marital relation with Elenita and his
subsequent refusal to acknowledge their offspring. The trial court found for Esther.
Appellant spouses now prays for reconsideration of the decision alleging the award of
the pecuniary damages is unwarranted by law.
Whether or not appellee Esther Peralta is entitled to damages because of Saturnino’s
affair and abandonment.
Ruling: YES.
The damages awarded to appellee are a natural and direct consequence of Silva’s
deceitful maneuvers in making love to appellee, and inducing her to yield to his
advances and live with him as his wife (when Silva knew all the time that he could not
marry Esther Peralta because of his undissolved marriage to an Australian woman, a
prior wedlock that he concealed from appellee). It is clear that Esther Peralta would not
have consented to the liaison had there been no concealment of Silva’s previous
marriage, or that the birth of the child was a direct result of this connection. That Esther
had to support the child because Silva abandoned her before it was born is likewise
patent upon the record, and we cannot see how said appellant can be excused from
liability therefor.
Silva’s seduction and subsequent abandonment of appellee and his illegitimate child
were likewise the direct cause for the filling of the support case in Manila, and in order to
prosecute the same, appellee had to quit her employment in Davao. While the case
could have been filed in Davao, we do not believe that this error in selecting a more
favorable venue (due to her unfamiliarity with the technicalities of the law) should be
allowed to neutralized the appellant Silva’s responsibility as the primary causative factor
of the prejudice and damage suffered by appellee.
33. Elcano and
Elcano vs. Hill
and Hill, 77 Reginald Hill, a minor, caused the death of Agapito (son of Elcano). Elcano filed a
SCRA 98 (1977). criminal case against Reginald but Reginald was acquitted for “lack of intent coupled
with mistake.” Elcano then filed a civil action against Reginald and his dad (Marvin Hill)
for damages based on Article 2180 of the Civil Code. Hill argued that the civil action is
barred by his son’s acquittal in the criminal case; and that if ever, his civil liability as a
parent has been extinguished by the fact that his son is already an emancipated minor
by reason of his marriage.

ISSUE: Whether or not Marvin Hill may be held civilly liable under Article 2180.

HELD: Yes. The acquittal of Reginald in the criminal case does not bar the filing of a
separate civil action. A separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that
the offended party is not allowed, if accused is actually charged also criminally, to
recover damages on both scores, and would be entitled in such eventuality only to the
bigger award of the two, assuming the awards made in the two cases vary. In other
words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers
exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas
the civil liability for the same act considered as a quasi-delict only and not as a crime is
not extinguished even by a declaration in the criminal case that the criminal act charged
has not happened or has not been committed by the accused. Briefly stated, culpa
aquiliana includes voluntary and negligent acts which may be punishable by law.

While it is true that parental authority is terminated upon emancipation of the child
(Article 327, Civil Code), and under Article 397, emancipation takes place “by the
marriage of the minor child”, it is, however, also clear that pursuant to Article 399,
emancipation by marriage of the minor is not really full or absolute. Thus “Emancipation
by marriage or by voluntary concession shall terminate parental authority over the
child’s person. It shall enable the minor to administer his property as though he were of
age, but he cannot borrow money or alienate or encumber real property without the
consent of his father or mother, or guardian. He can sue and be sued in court only with
the assistance of his father, mother or guardian.” Therefore, Article 2180 is applicable to
Marvin Hill – the SC however ruled since at the time of the decision, Reginald is already
of age, Marvin’s liability should be subsidiary only – as a matter of equity

fraud and inducement
34. Singapore
Airlines Limited
vs. Court of Sancho Rayos was an overseas contract worker who had a renewed contract with the
Appeals, et al. Arabian American Oil Company (Aramco) for the period covering April 16, 1980, to April
243 SCRA 143, 15, 1981. Part of Aramco's policy to its employees returning to Dhahran, Saudi Arabia
152 (1995). from Manila are allowed to claim reimbursement for amounts paid for excess baggage
of up to 50 kilograms, as long as it is properly supported by receipt.
April 1980 - Rayos took a Singapore Airlines (SIA) flight to report for his new
assignment, with a 50-kilogram excess baggage for which he paid P4,147.50. Aramco
reimbursed said. amount upon presentation of the excess baggage ticket.
December 1980 - Rayos learned that he was one of several employees being
investigated by Aramco for fraudulent claim and asked his wife Beatriz in Manila to seek
a written confirmation from SIA that he indeed paid for an excess baggage of 50
In SIA’s records- mager Johnny Koo notified Beatriz who was assisted by a lawyer and
threatened them of filing a lawsuit, that SIA is unable to issue certification requested by
the spouses citing that only 3 kilograms were entered as excess and not 50 kilograms
April 1981 - Aramco gave Rayos his travel documents without a return visa. His
employment contract was not renewed.
August 1981 - spouses Rayos, sued SIA for damages stating his non renewal was
caused by SIA.
SIA claimed that it was not liable to the Rayoses because the tampering was committed
by its handling agent, Philippine Airlines (PAL) and filed a Third party complaint against
PAL - countered that its personnel did not collect any charges for excess baggage; that
it had no participation in the tampering of any excess baggage ticket; and that if any
tampering was made, it was done by Singapore Airline’s personnel.
RTC – rendered Judgement in favor of plaintiff Rayoses and held Singapore airlines
liable for damages
- On 3rd party complaint, PAL was also liable to the Rayoses
All parties appealed to the CA
SIA’s appeal – dismissed for non payment of docket fees
Rayos – withdrew appeal when SIA satisfied judgment of RTC and paid P802, 435.00
On the appeal of PAL - claimed that the spouses Rayos had no valid claim against SIA
because it was the inefficiency of Rayos which led to the non-renewal of his contract
with Aramco, and not the alleged tampering of his excess bagged ticket.
Petitioner SIA argued that the only issue in the said appeal is whether or not it was
entitled to reimbursement from PAL, (citing the case of Firestone Tire and Rubber
Company of the Philippines v. Tempongko). SIA set up the defense that the excess
baggage ticket was indeed tampered with but it was committed by PAL's personnel.
Appellate court granted PAL's appeal and absolved it from any liability to SIA.
There is no question that a third-party defendant is allowed to set up in his answer the
defenses which the third-party plaintiff (original defendant) has or may have to the
plaintiff's claim. There are, however, special circumstances present in this case which
preclude third-party defendant PAL from benefiting from the said principle.
However, while the third-party defendant; would benefit from a victory by the third-party
plaintiff against the plaintiff, this is true only when the third-party plaintiff and third-party
defendant have non-contradictory defenses. Here, the defendant and third-party
defendant had no common defense against the plaintiffs' (Rayos) complaint, and they
were even blaming each other for the fiasco.
One of the defenses available to SIA was that the plaintiffs had no cause of action, that
is, it had no valid claim against SIA. SIA investigated the matter and discovered that
tampering was, indeed, committed, not by its personnel but by PAL's. This became its
defense as well as its main cause of action in the third-party complaint it filed against
PAL could have used the defense that the plaintiffs had no valid claim against it or
against SIA. This could be done indirectly by adopting such a defense in its answer to
the third-party complaint if only SIA had raised the same in its answer to the main
complaint, or directly by so stating in unequivocal terms in its answer to SIA's complaint
that SIA and PAL were both blameless
PAL opted to deny any liability which it imputed to SIA's personnel. It was only on appeal
— in a complete turn around of theory — that PAL raised the issue of no valid claim by
the plaintiff against SIA. This simply cannot be allowed.
A third party complaint involves an action separate and distinct from, although related to
the main complaint. A third party defendant who feels aggrieved by some allegations in
the main complaint should, should aside from answering the third party complaint, also
answer the main complaint.
In the case at bar, appellate court was in error when it opined that SIA's answer inured
to the benefit of PAL for the simple reason that the complaint and the third-party
complaint are actually two separate cases involving the same set of facts which is
allowed by the court to be resolved in a single proceeding only to avoid a multiplicity of
actions. Such a proceeding obviates the need of trying two cases, receiving the same or
similar evidence for both, and enforcing separate judgments therefore.
While such a complaint speaks of a single suit, a third-party complaint involves an action
separate and distinct from, although related to the main complaint. A third-party
defendant who feels aggrieved by some allegations in the main complaint should, aside
from answering the third-party complaint, also answer the main complaint.
The law provides that “[t]he responsibility of two or more persons who are liable for
quasi-delict is solidary,”10 where the sharing of liability between such solidary tortfeasors
is pro-rata.

10 CIVIL CODE, art. 2194.

35. Cerezo vs.
Tuazon, 426 A Country Bus Lines passenger bus collided with a tricycle in Pampanga. The driver of
SCRA 167, 186 the tricycle Tuazon filed a complaint for damages against Mrs. Cerezo, the owner of the
(2004). bus lines, her husband, Atty. Cerezo, and bus driver Foronda.

According to the facts alleged in the complaint, Tuazon was driving on the proper lane.
There was a "Slow Down" sign which Foronda ignored. After the complaint was filed,
alias summons was served upon the person of Atty. Cerezo, the Tarlac Provincial

In their reply, Mrs. Cerezo contended that the trial court did not acquire jurisdiction
because there was no service of summons on Foronda. Moreover, Tuazon failed to
reserve his right to institute a separate civil action for damages in the criminal action.


Whether or not Mrs. Cerezo is liable for damages


Mrs. Cerezo's contention is wrong. Tuazon's case is not based on criminal law but on
quasi-delict under the Civil Code.

The same negligent act may produce civil liability arising from a delict under Art. 103,
RPC, or may give rise to an action for quasi-delict under Art. 2180, C.C. An aggrieved
party may choose between the two remedies. An action based on quasi-delict may
proceed independently from the criminal action. There is, however, a distinction between
civil liability arising from a delict and civil liability arising from a quasi-delict. The choice
of remedy whether to sue for a delict or a quasi-delict, affects the procedural and
jurisdictional issues of the action.

Tuazon's action is based on quasi-delict under Art. 2180: Employer's liability.

Foronda is not an indispensable party, contrary to Mrs. Cerezo's contention. An

indispensable party is one whose interest is affected by the court's action in the
litigation, and without whom no final resolution of the case is possible. However, Mrs.
Cerezo's liability as an employer in action for quasi-delict is not only solidary, it is also
primary and direct.

The responsibility of two or more persons who are liable for a quasi-delict is solidary.
Where there is a solidary liability on the part of the debtors, as in this case, each debtor
is liable for the entire obligation. Hence, each debtor is liable to pay for the entire
obligation in full. There is no merger or renunciation of rights, but only mutual
representation. Where the obligation of the parties is solidary, either of the parties is
indispensable, and the other is not even a necessary party because complete relief is
available from either. Therefore, jurisdiction over Foronda is not even necessary as
Tuazon may collect from Mrs. Cerezo alone.

Moreover, an employer's liability based on a quasi-delict is primary and direct, while the
employer's liability based on a delict is merely subsidiary. The words "primary and
direct," as contrasted with "subsidiary," refers to the remedy provided by law for
enforcing the obligation rather than to the character and limits of the obligation. Although
liability under Art. 2180 originates from the negligent act of the employee, the aggrieved
party may sue the employer directly. When an employee causes damage, the law
presumes that the employer has himself committed an act of negligence in not
preventing or avoiding the damage. This is the fault that the law condemns. While the
employer is civilly liable in a subsidiary capacity for the employee's criminal negligence,
the employer is also civilly liable directly and separate for his own civil negligence in
failing to exercise due diligence in selecting and supervising his employee. The idea that
the employer's liability is wholly subsidiary is wrong.

The action can be brought directly against the person responsible (for another) without
including the author of the act. The action against the principal is accessory in the sense
that it implies the existence of a prejudicial act committed by the employee, but is not
subsidiary in the sense that it cannot be instituted till after the judgment against he
author of the act or at least, that it is subsidiary to the principal action; action for
responsibility (of the employer) is in itself a principal action.

In contrast, an action based on a delict seeks to enforce the subsidiary liability of the
employer for the criminal negligence of the employee as provided in Art. 103, RPC. To
hold the employer liable in a subsidiary capacity under a delict, the aggrieved party must
initiate a criminal action where the employee's delict and corresponding primary liability
are established. If the present action proceeds from a delict, then the trial court's
jurisdiction over Foronda is necessary.

However, the action filed by Tuazon was based on a quasi-delict, which is separate and
independent from an action based on a delict. Hence, there was no need to reserve the
filing of a separate civil action. The purpose of allowing the filing the of an independent
action based on quasi-delict against the employer is to facilitate the remedy for civil
Vicarious liability imposes direct and primary liability and not subsidiary to the liability of
the person for whom he is responsible.
36. Metro Manila
Corporation v.
Court of Appeals, The liability of a person vicariously liable arises from the presumption of negligence on
223 SCRA 521, his part in failing to exercise due diligence over the acts of the person for whom he is
538 (1993). liable to prevent such person from causing damage.
37. Cangco vs.
Manila Railroad
Co., 38 Phil. 768, ose Cangco was an employee of Manila Railroad Company as clerk. He lived in San
776 (1918). Mateo which is located upon the line of the defendant railroad company. He used to
travel by trade to the office located in Manila for free. On January 21, 1915, on his way
home by rail and when the train drew up to the station in San Mateo, he rose from his
seat, making his exit through the door. When he stepped off from the train, one or both
of his feet came in contact with a sack of watermelons causing him to slip off from under
him and he fell violently on the platform. He rolled and was drawn under the moving car.
He was badly crushed and lacerated. He was hospitalized which resulted to amputation
of his hand. He filed the civil suit for damages against defendant in CFI of Manila
founding his action upon the negligence of the employees of defendant in placing the
watermelons upon the platform and in leaving them so placed as to be a menace to the
security of passengers alighting from the train. The trial court after having found
negligence on the part of defendant, adjudged saying that plaintiff failed to use due
caution in alighting from the coach and was therefore precluded from recovering, hence
this appeal.
Is the negligence of the employees attributable to their employer whether the negligence
is based on contractual obligation or on torts?
YES. It cannot be doubted that the employees of defendant were guilty of negligence in
piling these sacks on the platform in the manner stated. It necessarily follows that the
defendant company is liable for the damage thereby occasioned unless recovery is
barred by the plaintiff’s own contributory negligence. It is to note that the foundation of
the legal liability is the contract of carriage. However Art. 1903 relates only to culpa
aquiliana and not to culpa contractual, as the Court cleared on the case of Rakes v.
Atlantic Gulf. It is not accurate to say that proof of diligence and care in the selection
and control of the servant relieves the master from liability fro the latter’s act. The
fundamental distinction between obligation of this character and those which arise from
contract, rest upon the fact that in cases of non-contractual obligations it is the wrongful
or negligent act or omission itself which creates the vinculum juris, whereas in
contractual relations the vinculum exists independently of the breach of the voluntary
duty assumed by the parties when entering into the contractual relation. When the
source of obligation upon which plaintiff’s cause of action depends is a negligent act or
omission, the burden of proof rest upon the plaintiff to prove negligence. On the other
hand, in contractual undertaking, proof of the contract and of its nonperformance is
suffient prima facie to warrant recovery. The negligence of employee cannot be invoked
to relieve the employer from liability as it will make juridical persons completely immune
from damages arising from breach of their contracts. Defendant was therefore liable for
the injury suffered by plaintiff, whether the breach of the duty were to be regarded as
constituting culpa aquiliana or contractual. As Manresa discussed, whether negligence
occurs as an incident in the course of the performance of a contractual undertaking or is
itself the source of an extra-contractual obligation, its essential characteristics are
identical. There is always an act or omission productive of damage due to carelessness
or inattention on the part of the defendant. The contract of defendant to transport plaintiff
carried with it, by implication, the duty to carry him in safety and to provide safe means
of entering and leaving its trains. Contributory negligence on the part of petitioner as
invoked by defendant is untenable. In determining the question of contributory
negligence in performing such act- that is to say, whether the passenger acted prudently
or recklessly- age, sex, and physical condition of the passenger are circumstances
necessarily affecting the safety of the passenger, and should be considered. It is to be
noted that the place was perfectly familiar to plaintiff as it was his daily routine. Our
conclusion is there is slightly underway characterized by imprudence and therefore was
not guilty of contributory negligence. The decision of the trial court is REVERSED.
The rationale for imputing negligence is either due to moral culpability or public policy
reasons, thus extending responsibility for the negligence of persons, by legal fiction, to
others who have absolute or limited control over them.
38. Baliwag Transit
vs. Court of Leticia Garcia, and her 5-year old son, Allan Garcia, boarded Baliwag Transit Bus 2036
Appeals, et al., bound for Cabanatuan City driven by Jaime Santiago. They took the seat behind the
262 SCRA 230, driver.
234 (1996).
At about 7:30 p.m., in Malimba, Gapan, Nueva Ecija, the bus passengers saw a cargo
truck, owned by A & J Trading, parked at the shoulder of the national highway. Its left
rear portion jutted to the outer lane, as the shoulder of the road was too narrow to
accommodate the whole truck. A kerosene lamp appeared at the edge of the road
obviously to serve as a warning device. The truck driver, and his helper were then
replacing a flat tire.

Bus driver Santiago was driving at an inordinately fast speed and failed to notice the
truck and the kerosene lamp at the edge of the road. Santiago’s passengers urged him
to slow down but he paid them no heed. Santiago even carried animated conversations
with his co-employees while driving. When the danger of collision became imminent, the
bus passengers shouted “Babangga tayo!”. Santiago stepped on the brake, but it was
too late. His bus rammed into the stalled cargo truck killing him instantly and the truck’s
helper, and injury to several others among them herein respondents.

Thus, a suit was filed against Baliwag Transit, Inc., A & J Trading and Julio Recontique
for damages in the RTC of Bulacan. After trial, it found Baliwag Transit, Inc. liable for
having failed to deliver Garcia and her son to their point of destination safely in violation
of Garcia’s and Baliwag Transit’s contractual relation; and likewise found A & J and its
truck driver liable for failure to provide its cargo truck with an early warning device in
violation of the Motor Vehicle Law. All were ordered to pay solidarily the Garcia

On appeal, the CA modified the trial court’s Decision by absolving A & J Trading from


Whether or not Baliwag should be held solely liable for the injuries.



As a common carrier, Baliwag breached its contract of carriage when it failed to deliver
its passengers, Leticia and Allan Garcia to their destination safe and sound. A common
carrier is bound to carry its passengers safely as far as human care and foresight can
provide, using the utmost diligence of a very cautious person, with due regard for all the
circumstances. In a contract of carriage, it is presumed that the common carrier was at
fault or was negligent when a passenger dies or is injured. Unless the presumption is
rebutted, the court need not even make an express finding of fault or negligence on the
part of the common carrier. This statutory presumption may only be overcome by
evidence that the carrier exercised extraordinary diligence as prescribed in Articles 1733
and 1755 of the Civil Code.
When an employee’s negligent act causes damage or injury to others, there is a
presumption that the employer was also negligent in either the selection or supervision
of such employee, but this presumption may be rebutted upon proving that he exercised
the diligence of a good father of a family
39. Poblete vs.
Fabros, 93 SCRA
200, 205 (1979).
The basis of the employer’s liability is not respondeat superior, “where the negligence of
the employee is conclusively presumed to be the negligence of the employer,” but the
employer’s own negligence.
40. Metro Manila
Transit vs-CA
Corporation vs.
Court of Appeals,
298 SCRA 495 On August 9, 1986, an MMTC Bus driven by Musa hit Liza Rosalie who was then
(1998). crossing Katipunan Avenue in Quezon City. An eye witness said the girl was already
near the center of the street when the bus hit her. She fell to the ground upon impact,
rolled between the two front wheels of the bus, and was run over by the left rear tires
thereof. Her body was dragged several meters away from the point of impact. Liza
Rosalie was taken to the Philippine Heart Center but died. Pedro Musa was found guilty
of reckless imprudence resulting in homicide.

The spouses Rosales filed an independent civil action for damages against
MMTC, Musa, MMTC Acting General Manager Conrado Tolentino, and the Government
Service Insurance System (GSIS). They subsequently amended their complaint to
include Feliciana Celebrado, a dispatcher of the MMTC, as a defendant therein. In a
decision rendered on March 6, 1990, the Regional Trial Court of Quezon City found
MMTC and Musa guilty of negligence and ordered them to pay damages and attorneys

Both parties raised the matter to the Supreme Court.






3) WON all the defendants, now private respondents, are solidarily liable.


the factual conclusions of the Court of Appeals which affirm those of the trial court bars
a reversal of the finding of liability against petitioners MMTC and Musa. Only where it is
shown that such findings are whimsical, capricious, and arbitrary can they be

Art. 2180 of the Civil Code, which provides that employers shall be liable for the
damages caused by their employees and household helpers acting within the scope of
their assigned tasks, even though the former are not engaged in any business or
industry. The responsibility of employers for the negligence of their employees in the
performance of their duties is primary, that is, the injured party may recover from the
employers directly, regardless of the solvency of their employees. The losses caused by
the torts of employees, which as a practical matter are sure to occur in the conduct of
the employers enterprise, are placed upon that enterprise itself, as a required cost of
doing business.

Presumption of Negligence on the part of the Employer

The law imposes the burden of proof of innocence on the vehicle owner. If the
driver is negligent and causes damage, the law presumes that the owner was negligent
and imposes upon him the burden of proving the contrary.
Employers may be relieved of responsibility for the negligent acts of their
employees within the scope of their assigned tasks only if they can show that they
observed all the diligence of a good father of a family to prevent damage.[16] For this
purpose, they have the burden of proving that they have indeed exercised such
diligence, both in the selection of the employee who committed the quasi-delict and in
the supervision of the performance of his duties.

Art. 2194 provides that the responsibility of two or more persons who are liable
for a quasi-delict is solidary. The liability of the registered owner of a public service
vehicle for damages arising from the tortious acts of the driver is primary, direct, and
joint and several or solidary with the driver.

Selection of Employees

Employers are required to examine them as to their qualifications, experience,

and service records.

Supervision of Employees

Employers should formulate standard operating procedures, monitor their

implementation, and impose disciplinary measures for breaches thereof.
The losses caused by the torts of employees, which as a practical matter are sure to
occur in the conduct of the employers enterprise, are placed upon that enterprise
itself, as a required cost of doing business ( … ) because, having engaged in an
enterprise, which will on the basis of all past experience involve harm to others through
the tort of employees, and sought to profit by it, it is just that he, rather than the innocent
injured plaintiff, should bear them; and because he is better able to absorb them, and
to distribute them, through prices, rates or liability insurance, to the public, and
so to shift them to society, to the community at large ( … )

Furthermore, this vicarious liability of employers would also give employers the greatest
incentive to be more diligent in selection and supervision of his employees and to
ensure that the business is conducted safely
41. Cuison v. Norton
and Harrison Co.,
55 Phil. 18 Ora was the owner of a truck which transports lumbers owned by Norton & Harrison Co.
(1930). Ora employed two minors as his helpers in securing the lumbers from the lumberyard. In
August 1928, while the truck filled with with lumber was at a stop, the lumbers slid from
the truck thereby pinning the 7 year old son of Cuison which caused the boy’s death.
Cuison sued Norton and the 2 minors for damages amounting to P30,000.00 for the
death of his son.

ISSUE: Whether or not Norton is liable as an employer.

HELD: Yes. Although the lower court did not determine the nature of relationship
between Ora and Norton it can be deduced from the testimonies given that Ora, as
owner of the truck is a contractor of Norton. But at the same time, he is also an
employee of Norton because he also acts as a foreman of the company. This being
established, Norton is liable as an employer because of Ora’s negligence in directing his
men in terms of securing the lumbers. The pertinent provisions apply:

Any person who by an act or omission causes damage to another by his fault or
negligence shall be liable for the damage so done. Article 1903, paragraphs 4 and 7 of
the [old Civil] Code provides: Owners or directors of any establishment or business are,
in the same way, liable for any damages caused by their employees while engaged in
the branch of the service in which employed, or an occasion of the performance of their
duties. The liability imposed by this article shall cease in case the persons subject
thereto prove that they exercised all the diligence of a good father of a family to prevent
the damage.

Norton failed to prove that they exercised diligence in the selection of their employees.
Note further that the basis of civil liability of an employer is not respondeat superior but
the relationship of paterfamilias (or pater familias – can be spelled both ways). The
theory of pater familias bases the liability of the master ultimately on his own negligence
i.e. selection of employees, and not that of his servant.

As opposed to civil law doctrine of vicarious liability, where the liability of the employer is
based on the relationship of pater familias
42. Nogales v.
Capitol Medical no-142625-19-december-2006/
Center G.R. No.
142625, Pregnant with her fourth child, Corazon Nogales (“Corazon”), who was then 37 years
December 19, old, was under the exclusive prenatal care of Dr. Oscar Estrada (“Dr. Estrada”)
2006. beginning on her fourth month of pregnancy or as early as December 1975. While
Corazon was on her last trimester of pregnancy, Dr. Estrada noted an increase in her
blood pressure and development of leg edema indicating preeclampsia, which is a
dangerous complication of pregnancy. Around midnight of 25 May 1976, Corazon
started to experience mild labor pains prompting Corazon and Rogelio Nogales
(“Spouses Nogales”) to see Dr. Estrada at his home. After examining Corazon, Dr.
Estrada advised her immediate admission to the Capitol Medical Center (“CMC”). The
following day, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse noted
the written admission request of Dr. Estrada. Upon Corazon’s admission at the CMC,
Rogelio Nogales (“Rogelio”) executed and signed the “Consent on Admission and
Agreement” and “Admission Agreement.” Corazon was then brought to the labor room of
the CMC. Corazon died at 9:15 a.m. The cause of death was “hemorrhage, post

Petitioners filed a complaint for damages with the Regional Trial Court of Manila against
CMC, Dr. Estrada, and the rest of CMC medical staff for the death of Corazon. In their
defense, CMC pointed out that Dr. Estrada was a consultant to be considered as an
independent-contractor, and that no employer-employee relationship existed between
the former and the latter.

After more than 11 years of trial, the trial court rendered judgment on 22 November
1993 finding Dr. Estrada solely liable for damages. Petitioners appealed the trial court’s
decision. Petitioners claimed that aside from Dr. Estrada, the remaining respondents
should be held equally liable for negligence. Petitioners pointed out the extent of each
respondent’s alleged liability.

On appeal, the Court of Appeals affirmed the trial court’s ruling and applied the
“borrowed servant doctrine” to release the liability of other medical staff. This doctrine
provides that once the surgeon enters the operating room and takes charge of the
proceedings, the acts or omissions of operating room personnel, and any negligence
associated with such acts or omissions, are imputable to the surgeon. While the
assisting physicians and nurses may be employed by the hospital, or engaged by the
patient, they normally become the temporary servants or agents of the surgeon in
charge while the operation is in progress, and liability may be imposed upon the
surgeon for their negligent acts under the doctrine of respondeat superior.

ISSUE: Whether CMC is vicariously liable for the negligence of Dr. Estrada as its
attending independent-contractor physician considering that facts of the instant case.


In general, a hospital is not liable for the negligence of an independent contractor-

physician. There is, however, an exception to this principle. The hospital may be liable if
the physician is the “ostensible” agent of the hospital. This exception is also known as
the “doctrine of apparent authority.”xxx The doctrine of apparent authority essentially
involves two factors to determine the liability of an independent-contractor physician.
The first factor focuses on the hospital’s manifestations and is sometimes described as
an inquiry whether the hospital acted in a manner which would lead a reasonable
person to conclude that the individual who was alleged to be negligent was an employee
or agent of the hospital. In this regard, the hospital need not make express
representations to the patient that the treating physician is an employee of the hospital;
rather a representation may be general and implied. xxx The second factor focuses on
the patient’s reliance. It is sometimes characterized as an inquiry on whether the plaintiff
acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary
care and prudence.
43. Gilbert v.
Municipal hospital may be held vicariously liable for the negligence of a physician, even if he is an
Hospital, 156 independent contractor, unless the patient knows, or should have known, that the
Ill.2d 511, 622 physician is an independent contractor
N.E.2d 788
(1993). (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to
conclude that the individual who was alleged to be negligent was an employee or agent
of the hospital;
(2) where the acts of the agent create the appearance of authority, the plaintiff must also
prove that the hospital had knowledge of and acquiesced in them; and
(3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence

The first element is satisfied if the hospital holds itself as a provider of emergency room
care, without informing the patient that the physician is an independent contractor. 11 The
third element is satisfied if the plaintiff relies upon the hospital to provide emergency
room care, instead of a specific physician

11 Id.
44. Professional
Services Inc., v.
Agana, 513 Natividad Agana was rushed to Medical City because of difficulty of bowel movement
SCRA 478, 504 and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from cancer of the
(2007). sigmoid. Dr. Ampil performed an anterior resection surgery on her, and finding that the
malignancy spread on her left ovary, he obtained the consent of her husband, Enrique,
to permit Dr. Fuentes to perform hysterectomy on her. After the hysterectomy, Dr.
Fuentes showed his work to Dr. Ampil, who examined it and found it in order, so he
allowed Dr. Fuentes to leave the operating room. Dr. Ampil was about to complete the
procedure when the attending nurses made some remarks on the Record of Operation:
“sponge count lacking 2; announced to surgeon search done but to no avail continue for
closure” (two pieces of gauze were missing). A “diligent search” was conducted but they
could not be found. Dr. Ampil then directed that the incision be closed.
A couple of days after, she complained of pain in her anal region, but the doctors
told her that it was just a natural consequence of the surgery. Dr. Ampil recommended
that she consult an oncologist to examine the cancerous nodes which were not removed
during the operation. After months of consultations and examinations in the US, she was
told that she was free of cancer. Weeks after coming back, her daughter found a piece
of gauze (1.5 in) protruding from her vagina, so Dr. Ampil manually extracted this,
assuring Natividad that the pains will go away. However, the pain worsened, so she
sought treatment at a hospital, where another 1.5 in piece of gauze was found in her
vagina. She underwent another surgery.
Sps. Agana filed a complaint for damages against PSI (owner of Medical City), Dr.
Ampil, and Dr. Fuentes, alleging that the latter are liable for negligence for leaving 2
pieces of gauze in Natividad’s body, and malpractice for concealing their acts of
negligence. Enrique Agana also filed an administrative complaint for gross negligence
and malpractice against the two doctors with the PRC (although only the case against
Dr. Fuentes was heard since Dr. Ampil was abroad). Pending the outcome of the cases,
Natividad died (now substituted by her children). RTC found PSI and the two doctors
liable for negligence and malpractice. PRC dismissed the case against Dr. Fuentes. CA
dismissed only the case against Fuentes.


WON CA erred in holding Dr. Ampil liable for negligence and malpractice. NO; DR.
WON CA erred in absolving Dr. Fuentes of any liability. NO
WON PSI may be held solidarily liable for Dr. Ampil’s negligence. YES


Previously, employers cannot be held liable for the fault or negligence of its
professionals. However, this doctrine has weakened since courts came to realize that
modern hospitals are taking a more active role in supplying and regulating medical care
to its patients, by employing staff of physicians, among others. Hence, there is no
reason to exempt hospitals from the universal rule of respondeat superior. Here are the
Court’s bases for sustaining PSI’s liability:

Ramos v. CA doctrine on E-E relationship

For purposes of apportioning responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals and their attending and visiting
physicians. [LABOR LESSON: power to hire, fire, power of control]
Agency principle of apparent authority / agency by estoppel
Imposes liability because of the actions of a principal or employer in somehow
misleading the public into believing that the relationship or the authority exists [see NCC
PSI publicly displays in the Medical City lobby the names and specializations of their
physicians. Hence, PSI is now estopped from passing all the blame to the physicians
whose names it proudly paraded in the public directory, leading the public to believe that
it vouched for their skill and competence.
If doctors do well, hospital profits financially, so when negligence mars the quality of its
services, the hospital should not be allowed to escape liability for its agents’ acts.
Doctrine of corporate negligence / corporate responsibility
This is the judicial answer to the problem of allocating hospital’s liability for the negligent
acts of health practitioners, absent facts to support the application of respondeat
This provides for the duties expected [from hospitals]. In this case, PSI failed to perform
the duty of exercising reasonable care to protect from harm all patients admitted into its
facility for medical treatment. PSI failed to conduct an investigation of the matter
reported in the note of the count nurse, and this established PSI’s part in the dark
conspiracy of silence and concealment about the gauzes.
PSI has actual / constructive knowledge of the matter, through the report of the
attending nurses + the fact that the operation was carried on with the assistance of
various hospital staff
It also breached its duties to oversee or supervise all persons who practice medicine
within its walls and take an active step in fixing the negligence committed
PSI also liable under NCC 2180
It failed to adduce evidence to show that it exercised the diligence of a good father of
the family in the accreditation and supervision of Dr. Ampil

In case the elements to establish either doctrines of respondeat superior or apparent
authority, case law also provides that the “doctrine of corporate negligence” can be
another basis to hold hospitals liable for the negligent acts of physicians and other
health practitioners
45. Tongko v. The
Manufacturers Co-Phils-Inc
Life Insurance
Co. (Phils.), Inc., The parties’ characterization of the contract cannot be set aside because it embodies
622 SCRA 58 their intent and they are governed by this understanding throughout their relationship.
46. Royale Homes
Association v. The legal characterization of the parties of the nature of their relationship cannot be
Alcantara, 731 conclusive and binding on the courts, because the characterization of the juridical
SCRA 147, 160 relationship of their agreements is a matter of law that is for the courts to determine
47. Makati Shangri-
La Hotel And DIGEST-docx
Resort, Inc. v.
Harper et. al, 679 While lease contracts contemplated under the Civil Code and the resulting relationships
SCRA 444, 472 therein are more personal in nature, jurisprudence enlightens us that the services of
(2012). hotels and inns are likened to a common carrier’s business, because it is imbued with
public interest.

Since the law likens the business of hotels or innss to that of common carriers, a higher
degree of care and responsibility is required from them in conducting their business and
delivery of services

“hotelkeepers are bound to provide not only lodging for their guests but also security to
the persons and belongings of their guests,” because these twin duties of hotelkeepers
constitute the essence of their business

hotel is civilly liable for damages for the murder of a Norweigan national for the hotel’s
negligence in failing to provide "basic and adequate security measures expected of a
five-star hotel.

there is much greater reason to apply the same if not greater degree of care and
responsibility when the lives and personal safety of their guests are involved
48. Ibasco v.
Caguioa, 143
SCRA 538 But actual knowledge of a third person as to the existence of the lease constitutes
(1986). constructive registration as to him
49. De Grano v.
Lacaba, 589
SCRA 148,158-9 Possession de facto” refers the actual or physical possession of a property, without
(2009). transfer of property rights or interest, as opposed to “possession de jure” where right of
possession is involved
50. Goldstein v.
Roces, 34 Phil.
562 (1916).
M. Goldstein v. Roces, et al. G.R. No. L-8697, March 30, 1916 Arellano, C. J.
Facts: Alejandro Roces leased to M. Goldstein, who is the proprietor of a saloon named
Luzon Café, the first floor of a building belonging to them. They leased the rest of the
premises to the proprietor of the Hotel de Francia. The proprietor of the hotel requested
that another story be added to the building. Roces acceded to the request. The
proprietor then hired the services of a contractor to do the work. The contractor deemed
it necessary to open holes for the insertion of the uprights. When it rained, water leaked
through these holes. It stained the walls and furniture. M. Goldstein incurred expenses
for the repairs. Thus he suffered losses. He sued Roces based on Article 1654 which
provides that the lessor is obliged to maintain the lessee in the peaceful enjoyment of
the lease during all the time covered by the contract. The trial court ruled in favor of
Roces. Issue: Did the act of the lessor, in allowing another to introduce improvements in
the leased premises, thereby causing damage to another lessee, a violation of his
obligation to maintain the lessee in the peaceful enjoyment of the leased premises?
Held: No. The lessor must see to it that the enjoyment is not interrupted or disturbed,
either by others' acts, save in the case provided for in the Article 1664, or by his own. In
this case, it is not disputed that M. Goldstein maintained his peaceful enjoyment, or his
quiet and peaceable possession of the floor he occupies. That there was a disturbance
of the peace or order in which he maintained his things in the leased story does not
mean that he lost the peaceful enjoyment of the thing rented. Had the lessor attempted
to render ineffective the right of the lessee to use the thing leased as agreed upon, then
he could have been liable. That was not present in this case. Therefore, the action
should have not been brought against the lessor, but against the contractor, the tort
feasor, who disturbed his enjoyment of the leased premises. Also, the distinction
between legal trespass and trespass in fact must be emphasized. To the latter, the
lessor is not liable. Article 1664 speaks of trespass in fact only in the use of the property
leased. If such trespass is translated into anything material which affects the property
itself, such as when a third person claims a legal right to the property, then it becomes a
trespass in law in which the lessor shall become liable
A lessee acquires not only the physical possession of the lessor’s property but also
certain property rights of a lessor, which the lessee can generally exercise and enjoy for
the duration of the lease agreement

lessors are not liable to lessees for the damages and injuries arising from robbery, theft
and other crimes for the duration of the lease period, since these are instances of mere
disturbances without legal grounds
51. Ong Lim Sing, Jr.
v. FEB Leasing v_9662.html
and Finance
Corp., 524 SCRA FEB Leasing and Finance Corporation (FEB) leased equipment and motor vehicles to
333,336 (2007). JVL Food Products with a monthly rental of P170,494
At the same date, Vicente Ong Lim Sing, Jr. (Lim) an executed an Individual Guaranty
Agreement with FEB to guarantee the prompt and faithful performance of the terms and
conditions of the lease agreement
JVL defaulted in the payment of the monthly rentals resulting to arrears of
P3,414,468.75 and refused to pay despite demands
FEB filed a complaint for damages and replevin against JVL, Lim and John Doe
JVL and Lim admitted the existence of the lease agreement but asserted that it is in
reality a sale of equipment on installment basis, with FEB acting as the financier
RTC: Sale on installment and the FEB elected full payment of the obligation so for the
unreturned units and machineries the JVL and Lim are jointly and severally liable to pay
CA: granted FEB appeal that it is a financial lease agreement under Republic Act (R.A.)
No. 8556 and ordered JVL and Lim jointly and severally to pay P3,414,468.75
ISSUE: W/N JVL and Lim should jointly and severally be liable for the insured financial

HELD: YES. CA affirmed.

contract of adhesion is as binding as any ordinary contract

The Lease Contract with corresponding Lease Schedules with Delivery and Acceptance
Certificates is, in point of fact, a financial lease within the purview of R.A. No. 8556
FEB leased the subject equipment and motor vehicles to JVL in consideration of a
monthly periodic payment of P170,494.00. The periodic payment by petitioner is
sufficient to amortize at least 70% of the purchase price or acquisition cost of the said
movables in accordance with the Lease Schedules with Delivery and Acceptance
JVL entered into the lease contract with full knowledge of its terms and conditions.
Lim, as a lessee, has an insurable interest in the equipment and motor vehicles leased.
In the financial lease agreement, FEB did not assume responsibility as to the quality,
merchantability, or capacity of the equipment. This stipulation provides that, in case of
defect of any kind that will be found by the lessee in any of the equipment, recourse
should be made to the manufacturer. “The financial lessor, being a financing company,
i.e., an extender of credit rather than an ordinary equipment rental company, does not
extend a warranty of the fitness of the equipment for any particular use. Thus, the
financial lessee was precisely in a position to enforce such warranty directly against the
supplier of the equipment and not against the financial lessor. We find nothing contra
legem or contrary to public policy in such a contractual arrangement
Also, since a lessee has a legal possession over the property leased and an insurable
interest over it, such that he would be “directly damnified in case of loss, damage, or
destruction of any of the properties leased[,]
52. Rivera v. Halili, L-
16159, Sept. 30, Petitioner Lester Halili filed a petition to declare his marriage to respondent Chona
1963. Santos-Halili null and void on the basis of his psychological incapacity to perform the
essential obligations of marriage. He alleged that he wed respondent in civil rites
thinking that it was a joke. After the ceremonies, they never lived together as husband
and wife. However, they started fighting constantly a year later, at which point petitioner
decided to stop seeing respondent and started dating other women. It was only upon
making an inquiry that he found out that the marriage was not "fake."
Whether or not his marriage to respondent ought to be declared null and void on the
basis of his psychological incapacity.
In the recent case of Te v. Yu-Te and the Republic of the Philippines, this Court
reiterated that courts should interpret the provision on psychological incapacity on a
case-to-case basis - guided by experience, the findings of experts and researchers in
psychological disciplines and by decisions of church tribunals.
In Te, this Court defined dependent personality disorder characterized by a pattern of
dependent and submissive behavior. Such individuals usually lack self-esteem and
frequently belittle their capabilities; they fear criticism and are easily hurt by others'

Dependent personality disorder usually begins in early adulthood. Individuals who have
this disorder may be unable to make everyday decisions without advice or reassurance
from others, may allow others to make most of their important decisions (such as where
to live), tend to agree with people even when they believe they are wrong, have difficulty
starting projects or doing things on their own, volunteer to do things that are demeaning
in order to get approval from other people, feel uncomfortable or helpless when alone
and are often preoccupied with fears of being abandoned.

It has been sufficiently established that petitioner had a psychological condition that was
grave and incurable and had a deeply rooted cause. Based on the foregoing, it has
been shown that petitioner is indeed suffering from psychological incapacity that
effectively renders him unable to perform the essential obligations of marriage and thus
the Court declared the marriage null and void.
Failure of a lessee to possess the leased object because of persons unwilling to vacate
the premises due to previous transactions with the lessor is a breach of the obligations
of the lessor to deliver the premises leased and to maintain lessee’s peaceful and
adequate possession thereof.
53. Delos Santos v.
Tan Khey, 58
O.G. 7693 (1962) there is no more need for a guest to actually deliver his personal properties to the hotel
or innkeeper and his employees, it is already sufficient that these things are within the
hotel or inn

But the amount of diligence the hotel exercised ensuring the safety and security of the
hotel’s premises shall be considered in determining its liabilities
54. Rallos vs. Felix
Go Chan & Sons
Corporation, 81
SCRA 251, 259 essential elements of agency:
(1978). (1) there is consent, express or implied, of the parties to establish the relationship; (2)
the object is the execution of a juridical act in relation to a third person; (3) the agents
acts as a representative and not for himself; and (4) the agent acts within the scope of
his authority.
55. Victorias Milling
Co., Inc. v. Court No-117356
of Appeals, 333
SCRA 663, 675 St. Therese Merchandising regularly bought sugar from Victorias Milling Co., Inc. In the
(2000). course of their dealings, Victorias Milling issued several Shipping List/Delivery Receipts
(SLDRs) to St. ThereseMerchandising as proof of purchases. Among these was SLDR
No. 1214M which covers 25,000 bagsof sugar. Each bag contained 50 kilograms and
priced at P638.00 per bag. The transaction it coveredwas a direct sale.

On October 25, 1989, St. Therese Merchandising sold to Consolidated Sugar Corp. its
rights in SLDRNo. 1214M for P14,750,000.00. Consolidated Sugar Corp. issued checks
in payment. That same day,Consolidated Sugar Corp. wrote Victorias Milling that it had
been authorized by St. ThereseMerchandising to withdraw the sugar covered by SLDR
No. 1214M.

Consolidated Sugar Corp. surrendered SLDR No. 1214M to Victorias Milling’s NAWACO
warehouseand was allowed to withdraw sugar. However, after 2,000 bags had been
released, Victorias Millingrefused to allow further withdrawals of sugar against SLDR
No. 1214M because, according to it, St. Therese Merchandising had already withdrawn
all the sugar covered by the cleared checks.
WON the contract was one of agency or sale

Victorias Milling heavily relies upon St. Therese Merchandising’s letter of authority
allowingConsolidated Sugar Corp. to withdraw sugar against SLDR No. 1214M to show
that the latter was St. Therese Merchandising’s agent. The pertinent portion of said letter
reads: “This is to authorizeConsolidated Sugar Corporation or its representative to
withdraw for and in our behalf (stress supplied)the refined sugar covered by Shipping
List/Delivery Receipt = Refined Sugar (SDR) No. 1214 datedOctober 16, 1989 in the
total quantity of 25, 000 bags.”

Art. 1868. By the contract of agency a person binds himself to render some service or to
do somethingin representation or on behalf of another, with the consent or authority of
the latter.

The basis of agency is representation. On the part of the principal, there must be an
actual intention toappoint or an intention naturally inferable from his words or actions;
and on the part of the agent,there must be an intention to accept the appointment and
act on it, and in the absence of such intent,there is generally no agency. One factor
which most clearly distinguishes agency from other legalconcepts is control; one person
- the agent - agrees to act under the control or direction of another -the principal.

Victorias Milling failed to sufficiently establish the existence of an agency relation
betweenConsolidated Sugar Corp. and St. Therese Merchandising. The fact alone that it
(St. ThereseMerchandising) had authorized withdrawal of sugar by Consolidated Sugar
Corp. “for and in our (St. Therese Merchandising’s) behalf” should not be eyed as
pointing to the existence of an agencyrelation. Further, Consolidated Sugar Corp. has
shown that the 25,000 bags of sugar covered by theSLDR No. 1214M were sold and
transferred by St. Therese Merchandising to it. A conclusion that therewas a valid sale
and transfer to Consolidated Sugar Corp. may, therefore, be made thus
capacitatingConsolidated Sugar Corp. to sue in its own name, without need of joining its
imputed principal St. Therese Merchandising as co-plaintiff.

Consolidated Sugar Corp. was a buyer of the SLDFR form, and not an agent of STM.
Consolidated SugarCorp. was not subject to St. Therese Merchandising’s control. That
no agency was meant to beestablished by the Consolidated Sugar Corp. and STM is
clearly shown by Consolidated Sugar Corp.’scommunication to petitioner that SLDR No.
1214M had been “sold and endorsed” to it.27 The use of the words “sold and endorsed”
means that St. Therese Merchandising and Consolidated Sugar Corp.intended a
contract of sale, and not an agency.
control, where the agent is under the control of the principal, who allows the agent to
enter into contracts with third parties in its own behalf
56. Pacific
Commercial Co.
v. Yatco, 68 Phil. A commission agent is “one engaged in the purchase or sale for another of personal
398, 401-2 property which, for this purpose, is placed in his possession and at his disposal
A broker is only an intermediary between the seller and the buyer, but has no relation,
custody or possession of the thing he sells.
57. Behn, Meyer and
Co., Ltd. v.
Nolting and A “broker” refers to a person or entity engaged as a middleman to bring parties together
Garcia , 35 Phil. in matters pertaining to trade, commerce or navigation for compensation commonly
274 (1916) called brokerage
58. Schmid and
RJL Martinez,
166 SCRA 493, He is “engaged, for others, on a commission, negotiating contracts relative to property
501 (1988). with the custody of which he has no concern; the negotiator between other parties,
never acting in his own name but in the name of those who employed him
59. Domingo v.
Domingo, 42
SCRA 131 “[a] broker may also be appointed with powers to enter into juridical acts on behalf of the
(1971). principal, in which case, he is truly an agent.”
60. Macondray & Co.
v. Sellner, 33
Phil. 370 (1916).
61. Litonjua, Jr. v.
Eternit Corp., 490
SCRA 204
62. Phil. Health-Care
Providers 171052-january-28-2008/
(Maxicare) v.
Estrada, 542
SCRA 616, 625
63. Guardex v.
NLRC, 191
SCRA 487
64. Araneta, Inc. v.
Del Paterno, 91
Phil. 786, 804-5
65. People's
Service (Bombo
Radyo Phils.,
Inc.) vs.
Secretary of the
Department of
Labor and
Employment, 667
SCRA 539, 546
66. Francisco vs.
National Labor
Relations [t]his two-tiered test ( … ) which would take into consideration the totality of
Commission, 500 circumstances surrounding the true nature of the relationship between the parties ( … )
SCRA 690, 698 appropriate in this case where there is no written agreement or terms of reference to
(2006). base the relationship on [.] and due to the complexity of the relationship based on the
various positions and responsibilities given to the worker ( … .)

the relationship between employer and employee depends upon the circumstances of
the whole economic activity,12 including:
(1) the extent to which the services performed are an integral part of the employers
(2) the extent of the workers investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise;
(6) the permanency and duration of the relationship between the worker and the
employer; and
(7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business
67. Insular Life v.
NLRC, G.R. No.
November 15,
68. Besa v. Trajano,
146 SCRA 501
69. Mafinco v. Ople,
70 SCRA 139
70. Bernarte v.
(PBA), 657
SCRA 745

12 Id. at 698.
71. Sandigan
Savings and
Loan Bank, Inc.
v. National Labor
Commission, 324
Phil. 348, 358
72. Cosmopolitan
Funeral Homes, Maalat-and-NLRC-G-R-No-86693-187-SCRA-108-July-2-1990
Inc. v. Maalat,
187 SCRA 108,
112 (1990).
73. Sonza v. ABS-
Corporation, 431
SCRA 583, 594-
595 (2004).
74. Tocao v. Court of
Appeals, 342
SCRA 20, 37
75. Litonjua, Jr. v.
Litonjua, Sr., 477 digest
SCRA 576, 585
76. Kilosbayan v.
Guingona, 232
SCRA 110, 143-
44 (1994).
77. Tuason v.
Bolaños, 95 Phil.
106, 109 (1954).
78. Mendoza v.
Paule, 579 SCRA
341, 354 (2009).
79. Philex Mining
Corp. v.
Commissioner of
Revenue, 551
SCRA 428, 438-9
Joint Ventures
80. Aurbach, et. al. v.
Sanitary Wares
Corporation, 180
SCRA 130
Click Wrap Agreements
81. ProCD v.
Ziedenberg, 86
F.3d 1447 (7th
Cir. 1996).
82. CompuServe v.
Patterson, 89
F3d 1257 (6th Cir
83. Radio
Communications philippines-inc-v-alfonso-verchez-et-al/
of the
Philippines, Inc.
v. Verchez, 481
SCRA 384, 401
84. Norton
Resources and
Corporation v. All
Asia Bank
Corporation, 605
SCRA 370, 381
85. Spouses
Borromeo v. Hon.
Court of Appeals,
573 Phil. 400,
412 (2008).

Airbnb v.
nn. 44 Misc.
3d, 351

Airbnb Inc v.
n, et al, U.S.
District Court,
District of
New York,
No. 16-08239

Chicago Lawyers’
for Civil
Rights Under
the Law v.
519 F.3d 666,
(7th Cir.

CompuServe v.
Patterson, 89 F3d
1257 (6th Cir 1996).

Gabrielle v. Allegro
Hotels, 210
F. Supp. 2d
62, 72 (D.R.I.

Hofer v. Gap, Inc.,

516 F. Supp.
2d 161, 180
(D. Mass

Holstein v. Phillips,
146 N.C. 366

ProCD v. Ziedenberg,
86 F.3d 1447 (7th Cir.