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TORTS MIDTERM REVIEWER

I. INTRODUCTION: TORTS AND DAMAGES 1. Classes of Torts Art. 1156. An obligation


is a juridical necessity to give, to do or not to do. Art. 1157. Obligations ari
se from: (1) (2) (3) (4) Law; Contracts; Quasi-contracts; Acts or omissions puni
shed by law; and (5) Quasi-delicts.
Art. 1158. Obligations derived from law are not presumed. Only those expressly d
etermined in this Code or in special laws are demandable, and shall be regulated
by the precepts of the law which establishes them; and as to what has not been
foreseen, by the provisions of this Book. Art. 1159. Obligations arising from co
ntracts have the force of law between the contracting parties and should be comp
lied with in good faith.
Art. 1160. Obligations derived from quasi-contracts shall be subject to the prov
isions of Chapter 1, Title XVII, of this Book.
Art. 1161. Civil obligations arising from criminal offenses shall be governed by
the penal laws, subject to the provisions of Article 2177, and of the pertinent
provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XV
III of this Book, regulating damages.
Art. 1162. Obligations derived from quasi-delicts shall be governed by the provi
sions of Chapter 2, Title XVII of this Book, and by special laws. Tort – A civil w
rong, other than breach of contract for which the court will provide a remedy in
the form of an action for damages (Jarencio’s definition) Atty. Abaño’s definition: A
tort is an act which causes damage to another person. [Therefore, under his def
inition, a tort encompasses a broader concept than a quasi-delict; it also inclu
des breach of contract and crimes] The tort is the cause, while the effect is ma
nifested in damages. Classes of Actions
1. 2. 3. 4.
Quasi-Delict: based on negligence Breach of Contract: based on the existence of
a contract Torts in Human Relations: based on intentional acts of the tort-feaso
r Crime: based on a violation of a penal statute
2. Twofold Meaning of Damages
1. 2.
Damages as the loss, prejudice, or injury resulting from the act of a person; an
d Damages as compensation for such loss, prejudice, or injury
3. Culpa Aquiliana/Contractual/Criminal
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Problem: A bus falls off a cliff due to the driver’s fault. What actions may be fi
led by the heirs of the passengers who died in the accident? Answer: Three actio
ns may be filed based on culpa aquiliana, culpa contractual, and culpa criminal.
The distinctions among the three are as follows: CULPA AQUILIANA OBJECT ACTION
Complaint is against negligence Damages for quasidelict Driver, Bus Company, or
Both Preponderance of Evidence *once the driver is proven negligent, employer is
presumed negligent (rebuttable presumption) Exercise of ordinary diligence on t
he part of the driver; Exercise of diligence in the selection and supervision of
the driver on the part of the employer CULPA CONTRACTUAL Violation of contract
of carriage Breach of contract with damages Employer bus company Preponderance o
f Evidence CRIMINAL PROSECUTION Criminal negligence Criminal prosecution, which
includes civil liability under Art. 100 of the RPC Driver Proof beyond reasonabl
e doubt
AGAINST QUANTUM OF EVIDENCE
DEFENSES
Exercise of extraordinary diligence (in contract of carriage, the diligence requ
ired of the common carrier is extraordinary)
If driver cannot pay the civil damages, the employer is subsidiarily liable. The
employer does not have any defense in this case. The negligence of the employee
is conclusive as to the employer for purposes of subsidiary liability
Note: You can file more than one of these cases. You can file any or all, depend
ing on the circumstances. The only limitation is against double recovery. (See I
mson case). CASES Cancio v. Isip Cancio filed 3 counts of violation of BP22 agai
nst Isip, who had issued 3 bad checks. The case was dismissed. Subsequently, 3 c
ases for estafa were filed. The case was dismissed again. Cancio then filed a ci
vil case for collection of sum of money to recover the value of the 3 checks fro
m Isip. Isip moved to dismiss on the ground that the action is barred by res jud
icata and that Cancio was guilty of forum shopping. ISSUES: 1. 2. Whether the ci
vil action for collection is barred by res judicata. Whether there was forum sho
pping.
HELD: No to both. An act or omission causing damage to another may give rise to
two separate civil liabilities: 1. 2. ex delicto under Art. 100 of the RPC; and
independent civil liabilities such as: a. b. those not arising from an act or om
ission complained of as a felony, such as culpa contractual, violations of Artic
les 31, 32, and 34 of the Civil Code, and culpa aquiliana under Article 2176 of
the Civil Code; where the injured party is granted a right to file an action ind
ependent and distinct from the criminal action (ex: Art. 33 of the Civil Code) 2
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Either may be enforced against the offender, but the offended party cannot recov
er damages twice for the same act or omission or under both causes. Under the Ru
les on Criminal Procedure, civil liability ex delicto is deemed instituted with
the criminal action, but the offended party may file the separate civil action b
efore the prosecution starts to present evidence. However, the independent civil
actions may be filed separately and prosecuted independently even without any r
eservation in the criminal action. In this case, the basis of the complaint is c
ulpa contractual. It is an independent civil action which is based on Isip’s breac
h of a contractual obligation. This may proceed independently of the criminal pr
oceedings, regardless of the result of the latter. There is no res judicata beca
use there is no identity of causes of action. Imson v. CA This case arose from a
vehicular collision involving Imson’s car and a truck registered under the names
of FNCB and Holiday Hills. The collision seriously injured Imson and totally wre
cked his car. Imson filed a complaint for damages against: 1. 2. 3. 4. the the t
he the owners of the truck truck driver beneficial owners of the truck truck ins
urer
All the defendants, except the insurer, defaulted. Imson and the insurer entered
into a compromise, whereby the insurer paid him 70K in full settlement of his c
laims against the insurer. The RTC thus dismissed the claim against the insurer.
Holiday Hills, as owner of the truck, then moved to dismiss the case against al
l the other defendants on the ground that they were all indispensable parties un
der a common cause of action. It argued that the dismissal of the case against t
he insurer must result in the dismissal of the case against all of them. ISSUE:
Whether the action should be dismissed as against the other defendants. HELD: No
. The action should not be dismissed against the other defendants because there
is no identity in the causes of action against them. The rule is where the compl
aint alleges a common cause of action against defendants who are all indispensab
le parties to the case, its dismissal against any one of them by virtue of a com
promise agreement with the plaintiff results in a dismissal of the case against
the others, including those in default. For this doctrine to apply, however, the
requisites are: 1. 2. there must be a common cause of action; and all defendant
s are indispensable parties.
This doctrine is NOT applicable in this case because there is no identity of cau
se of action. The causes of action against each of the defendants are different.
They are as follows: 1. 2. 3. against the driver: quasi-delict under 2176 again
st the owners of the truck: quasi-delict under 2180 (vicarious liability) agains
t the insurance company: contract (third party liability clause of its insurance
contract with the owners of the truck allows the third party to collect directl
y from the insurer even if there is really not contractual relationship between
them).
Moreover, the defendants are not all indispensable parties. The truck driver is
the only one who is indispensable. All the others are merely necessary or proper
parties. BLTB v. CA Quasi-delict is different from criminal negligence; it is a
n independent source of obligation. Aboitiz Shipping v. CA A common carrier is b
ound to observe extraordinary diligence. If a passenger dies or is injured in th
e course of the voyage, there is a presumption of fault or negligence. This give
s rise to an action for breach of contract of carriage. Dangwa Transport v. CA
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In an action based on contact of carriage, the court need not make an express fi
nding or fault or negligence in order to hold the carrier liable. By the contrac
t of carriage, the carrier assumes the express obligation to transport the passe
nger to his destination safely and to observe extraordinary diligence. Any injur
y that might be suffered by the passenger is right away attributable to the faul
t or negligence of the carrier. II. QUASI-DELICT 1. Elements Art. 2176. 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 pr
e-existing contractual relation between the parties, is called a quasi-delict an
d is governed by the provisions of this Chapter. The elements of a quasi-delict
are: 1. 2. 3. Fault or Negligence Damage Causal connection between the negligenc
e and the damage
Problem: X was driving a car when he ran over a stone. The stone hit a pedestria
n on the head. The pedestrian died. Is X liable for quasi-delict? Answer: No, be
cause there was no negligence on the part of X. Problem: A supplier’s employees we
nt on strike, as a result of which the supplier failed to deliver his goods to h
is client. Can the client sue the supplier for quasi-delict? Answer: No. Althoug
h there was damage, there was no negligence. [Client should sue based on breach
of contract instead] CASES: Andamo v. IAC Emmanual and Natividad Andamo owned a
parcel of land adjacent to that of the Missionaries of Our Lady of La Sallette.
Within the land or Our Lady, waterpaths and an artificial lake were constructed,
allegedly inundating and eroding the Andamos’ land. This caused a young man to dr
own, damaged the Andamos’ crops and fences, and endangered their lives. The Andamo
s instituted a criminal action against the officers and directors of Our Lady fo
r destruction by means of inundation under Art. 324 of the RPC. Subsequently, th
ey filed a civil case for damages against the respondents. Upon motion of respon
dents, the civil case was dismissed for lack of jurisdiction, since the criminal
case instituted ahead of the civil case was still unresolved. This was based on
the provision of the Rules of Court which provides that criminal and civil acti
ons arising from the same offense may be instituted separately, but after the cr
iminal action has been commenced, the civil action cannot be instituted until fi
nal judgment has been rendered in the criminal action. ISSUE: Whether the civil
action should have been dismissed. HELD: No. The civil action should not have be
en dismissed since it was based, not on crime, but on quasi-delict. All the elem
ents of a quasi-delict are present: 1. 2. 3. damages suffered by the plaintiff;
fault or negligence of the defendant or some other person for whose acts he must
respond; and connection of the cause and effect between the fault or negligence
of the defendant and the damages incurred by the plaintiff.
In this case, the waterpaths and contrivances built by respondent are alleged to
have inundated the land of petitioners. This was caused by the failure of the d
efendant to install drainage pipes that could have prevented the inundation. The
re is therefore a causal connection between the act of building the waterpaths w
ithout providing for an adequate drainage system and the damage sustained by the
petitioners. Article 2176 covers not only acts “not punishable by law” but also act
s criminal in character, whether intentional and voluntary or negligent. Consequ
ently, a separate civil action lies against the offender in a criminal act, whet
her or not he is criminally prosecuted and found guilty or acquitted, provided t
hat the offended party is not allowed to recover damages on both scores and woul
d only be entitled to the bigger award of the two. Digests by Sheryl, Cayo, Rosa
Lecture Notes and Notes from Jona Bautista’s Reviewer 4
FGU Insurance v. CA A car owned by Soriano and being driven by Jacildone collide
d with another car owned by Filcar and rented and driven by Dahl-Jensen, a forei
gner. FGU Insurance Corp., Soriano’s insurer, paid Sorian 25K for the damage. By w
ay of subrogation, FGU sued Dahl-Jensen, Filcar, and Fortune Insurance (insurer
of Filcar) for quasi-delict. The case was dismissed by the RTC on the ground of
failure of FGU to substantiate the claim for subrogation. The CA affirmed by bas
ed on another ground: only the fault or negligence of Dahl-Jensen (who was dropp
ed from the complaint because summons could not be served on him) was sufficient
ly proved but not that of Filcar. There was therefore no cause of action against
Filcar for quasi-delict. ISSUE: Whether the registered owner of a vehicle is li
able for damages suffered by third persons although the vehicle is leased to ano
ther. HELD: No. Filcar is not liable. To sustain a claim based on quasi-delict,
the following requisites must concur: 1. 2. 3. damages suffered by the plaintiff
; fault or negligence of the defendant or some other person for whose acts he mu
st respond; and connection of the cause and effect between the fault or negligen
ce of the defendant and the damages incurred by the plaintiff.
In this case, petitioner failed to prove the fault or negligence of Filcar. The
negligence was solely attributable to Dahl-Jensen, thus making the damage his pe
rsonal liability. Filcar had not participation therein. Article 2180 on vicariou
s liability of owners of motor vehicles is not applicable since there is no empl
oyer-employee relationship between Filcar and Dahl-Jensen. Equitable Lease v. Su
yom A road tractor driven by Raul Tutor slammed into a house/tindahan. Three per
sons were pinned to death under the engine of the tractor; four were injured. Tu
tor was charged with and convicted of reckless imprudence resulting in multiple
homicide and multiple physical injuries. Since the Official Receipt and Certific
ate of Registration of the vehicle showed the registered owner to be “Equitable Le
asing/leased to Edwin Lim,” respondents filed a complaint for damages against Equi
table, Tutor, and Ecatine [seems to be a corporation of Edwin Lim]. Tutor, Lim,
and Ecatine were subsequently dropped from the complaint because they could not
be found. Equitable, in its answer, raised the defense that the vehicle had alre
ady been sold to Ecatine and that Equitable was no longer in possession and cont
rol thereof at the time of the incident. It also claimed that Tutor was an emplo
yee of Ecatine, not Equitable. It seems that Equitable and Lim had a finance lea
se agreement whereby Equitable would remain the registered owner until the vehic
le was fully paid by Lim. In this case, the vehicle was fully paid and a deed of
sale had already been executed. However, there was failure to register the deed
of sale with the LTO. The RTC and CA found Equitable to be liable. ISSUE: Wheth
er Equitable is liable. HELD: Equitable is liable. It is liable because it was t
he registered owner at the time of the accident. The registered owner is the law
ful operator insofar as third persons are concerned and consequently, it is dire
ctly and primarily responsible for the consequences of its operation. In contemp
lation of law, the owner/operator of record is the employer of the driver, the a
ctual operator and employer being considered as merely its agent. The same princ
iple applies even if the registered owner of any vehicle does not use it for pub
lic service. This is not inconsistent with the earlier FGU case, wherein the own
er of the vehicle was absolved from liability because of the absence of the vinc
ulum juris of an employer-employee relationship between the owner and the driver
. In the present case, though in fact, there is no employer-employee relationshi
p between Equitable and Tutor, the law deems the registered owner to be the empl
oyer of the driver, and the actual operator is deemed to be the owner’s agent. Aga
in, under law, Equitable is the owner, Ecatine is Equitable’s agent, Tutor is Equi
table’s employee. Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona
Bautista’s Reviewer 5
The failure of Equitable and/or Ecatine to register the sale with the LTO should
not prejudice respondents, who have the legal right to rely on the legal princi
ple that the registered vehicle owner is liable for the damages caused by the ne
gligence of the driver. 2. No Double Recovery Rule Art. 2177. Responsibility for
fault or negligence under the preceding article is entirely separate and distin
ct from the civil liability arising from negligence under the Penal Code. But th
e plaintiff cannot recover damages twice for the same act or omission of the def
endant. Broader concept of Civil Liability A single act can give rise to two kin
ds of liability – civil liability for quasi-delict and liability for crime. Under
the liability for crime, the defendant has two kinds of liability – criminal liabi
lity and civil liability. This is illustrated by the following diagram: Civil li
ability | | Quasi-Delict Crime | | Criminal liability Civil liability Problem: X
filed a claim for 100K in damages in an action for quasi-delict. The judge awar
ded 50K. Can X filed a criminal action to recover the remaining 50K? Answer: No,
this would violate the principle of res judicata. The victim had the opportunit
y to present evidence in the criminal case. If he files another case, he will be
merely presenting the same evidence. CASES: Jarantilla v. CA Jose Kuan Sing was
crossing the street when he was sideswiped by a Volkswagen Beetle driven by Edg
ar Jarantilla. Sing instituted a criminal action against Jarantilla for serious
physical injuries through reckless imprudence. Sing intervened in the prosecutio
n through a private prosecutor and did not reserve his right to institute a sepa
rate civil action. Jarantilla was acquitted because of reasonable doubt. Sing su
bsequently instituted a civil action for damages involving the same subject matt
er and act complained of as in the criminal case. The trial court found in favor
of Sing and awarded actual and moral damages, attorney’s fees, and costs. The CA
affirmed. ISSUE: Whether Sing could have filed the separate civil action despite
Jarantilla’s acquittal in the criminal action. HELD: Yes, the civil action was pr
operly filed. The same act or omission (in this case, the negligent sideswiping
of private respondent) can create two kinds of liability on the part of the offe
nder: 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 th
e culprit, subject to the caveat under Article 2177 of the Civil Code that the o
ffended party cannot recover damages under both types of liability. The only ins
tance where a civil action cannot be instituted after the dismissal of the crimi
nal case is where such dismissal was accompanied by a statement of the court dec
laring that the act complained of never happened. Atlantic Gulf and Pacific v. C
A This is a resolution of a MR.
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The Castillos filed an action for damages against AG&P alleging that the latter’s
operations on the former’s property caused the soil to become “infertile, salty, unp
roductive and unsuitable for agriculture.” The Castillos also averred that AG&P’s he
avy equipment was parked on the former’s land without rental having been paid. The
trial court granted damages for both “the damage to the land” and “rentals for the sa
me property.” ISSUE: Whether the grant of the damages amounts to double recovery.
HELD: It does not amount to double recovery. It is clearly apparent that AG&P wa
s guilty of two culpable transgressions on the property rights of the Castillos,
that is, for the ruination of the agricultural fertility or utility of the soil
of their property and, further, for the unauthorized use of said property as a
dump site or depot for petitioner s heavy equipment and trucks. Damages were cor
rectly awarded for the destruction of the land and for the reasonable value for
the use of the premises. Article 2177 provides that the plaintiff cannot recover
damages twice for the same act or omission of the defendant. In this case, ther
e were two separate acts or omissions. III. NEGLIGENCE 1. Concept of Negligence
Art. 1173. The fault or negligence of the obligor consists in the omission of th
at diligence which is required by the nature of the obligation and corresponds w
ith the circumstances of the persons, of the time and of the place. When neglige
nce shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2, shal
l apply.
If the law or contract does not state the diligence which is to be observed in t
he performance, that which is expected of a good father of a family shall be req
uired. Negligence – Want of care required by the nature of the obligation and the
circumstances of the persons, time, and place. CASES Citytrust v. IAC Emme Herre
ro issued several postdated checks from her account with Citytrust. She deposite
d cash in order to cover the checks. However, in filling up the deposit slip, sh
e omitted a zero and wrote 2900823 instead of 29000823. Her checks were dishonor
ed. Herrero filed a complaint for damages against Citytrust. The trial court dis
missed the complaint. The CA reversed and awarded nominal and temperate damages
and attorney’s fees. ISSUE: Whether Citytrust is liable for damages. HELD: Citytru
st is liable. Banking is a business affected with public interest and because of
the nature of its functions, the bank is under obligation to treat the accounts
of its depositors with meticulous care, always having in mind the fiduciary nat
ure of their relationship. Even if the account number were erroneous, Herrero’s na
me was clearly written on the deposit slip. The teller should have noticed that
there were only seven numbers instead of eight. Besides, the use of numbers is s
imply for the convenience of the bank and the depositor’s name should still be con
trolling. In fact, there were other instances where Herrero put down the wrong a
ccount number but the deposits were still properly made. This indicates that the
re are ways and means whereby deposits with erroneous account numbers can still
be credited to the proper account. It is the bank’s obligation to see to it that a
ll funds invested with it are properly accounted for and duly posted in its ledg
ers.
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The CA, however, erred in awarding nominal and temperate damages concurrently; t
he two are incompatible. Nominal damages are merely to recognize the violation o
f a right and not to indemnify. Temperate damages are designed to indemnify one
for pecuniary loss the amount of which cannot be proved with reasonable certaint
y. Only nominal damages are warranted in this case. Reyes v. CA, FEBTC Reyes and
Puyat-Reyes, as Philippine Racing Club representatives, were to attend a racing
conference in Sydney. In order to pay for the conference fees, they sent the cl
ub’s cashier to FEBTC to apply for a foreign exchange demand draft for AU$1610, pa
yable to the conference organizer. The application was denied at first because F
EBTC did not have an account in any Sydney bank. However, a roundabout way was f
ound whereby the remittance of the money could be achieved. FEBTC would draw a d
emand draft against Westpac Bank in Sydney and the latter would reimburse itself
from FEBTC’s account in Westpac NY. This arrangement has been resorted to since t
he 1960s and there has never been a problem. When the conference organizer prese
nted the demand draft, it was dishonored. However, FEBTC’s account in Westpac NY h
ad been debited. In response to the organizer’s complaint of the dishonor, FEBTC i
nformed Westpac Sydney to reimburse itself from FEBTC’s Westpac NY account. FEBTC
also instructed Westpac NY to honor the claim for reimbursement. Despite this, t
he draft was dishonored a second time. When the Puyats arrived in Sydney to regi
ster [they arrived separately], they were denied because the drafts had been dis
honored twice. This allegedly caused them much humiliation, shock, trembling leg
s, etc. However, after agreeing to pay in cash, they were admitted to the confer
ence. Upon getting back to Manila, the Puyats filed a complaint for damages agai
nst FEBTC claiming that as a result of the dishonor, they were exposed to unnece
ssary shock, social humiliation, and deep mental anguish in a foreign country, a
nd in the presence of an international audience. ISSUE: Whether FEBTC is liable
for damages. HELD: It is not liable. The degree of diligence required of FEBTC,
in this case, is that degree of diligence expected of an ordinary prudent person
under the circumstances obtaining. The rule that a bank, due to the nature of i
ts relationship with the client, must exercise extraordinary diligence applies o
nly when the bank is acting in its fiduciary capacity, as was seen in the Citytr
ust case. In the present circumstance, the relationship between FEBTC and the Pu
yats was merely that of seller and buyer, with the subject matter being a demand
draft. That ordinary diligence was observed is evident from the numerous follow
ups that FEBTC undertook in order to get the demand draft paid. It did all that
it could have reasonably done. The reason the demand draft was dishonored was b
ecause Westpac Sydney mistakenly read FEBTC’s cable message to it [a 1 was read as
a 7]. As a result, Westpac Sydney did not recognize the cable message as a requ
est for a demand draft. Adzuara v. CA Adzuara, a law student, was driving his Ga
lant along QC Ave.; in the car with him were his two friends. He collided with a
Corona driven by Martinez. It appears that Martinez was executing a U-turn when
Adzuara suddenly rammed the side of his car. The Corona was flung 20 meters fro
m the point of impact and it landed atop the center island of QC Ave. Martinez f
iled a complaint for reckless imprudence resulting in damage to property with le
ss serious physical injuries [Martinez’s daughter was confined]. The right to inst
itute a separate civil action was reserved. The RTC found Adzuara guilty after t
he following facts were established: • • • Adzuara was going much faster than the 40 k
ph. he claimed. This is evident from the damage to the Corona and from the dista
nce it was flung. Adzuara had a red light. Martinez had a green light. Adzuara d
id not stop at the last clear chance when he saw that Martinez had almost comple
tely negotiated the U-turn.
ISSUE: Whether Adzuara is guilty of negligence. HELD: Guilty. The facts found by
the lower court warrant such a finding. Digests by Sheryl, Cayo, Rosa Lecture N
otes and Notes from Jona Bautista’s Reviewer 8
Negligence is the want of care required by the circumstances. It is a relative o
r comparative, not an absolute, term and its application depends upon the situat
ion of the parties and the degree of care and vigilance which the circumstances
reasonably require. What degree of care and vigilance then did the circumstances
require? At half past 1:00 o clock in the morning along an almost deserted aven
ue, ordinary care and vigilance would suffice. This may consist of keeping a wat
chful eye on the road ahead and observing the traffic rules on speed, right of w
ay and traffic light. The claim of petitioner that Martinez made a swift U-turn
which caused the collision is not credible since a U-turn is done at a much slow
er speed to avoid skidding and overturning, compared to running straight ahead.
Nonetheless, no evidence was presented showing skid marks caused by the car driv
en by Martinez if only to demonstrate that he was driving at a fast clip in nego
tiating the U-turn. On the other hand, the speed at which petitioner drove his c
ar appears to be the prime cause for his inability to stop his car and avoid the
collision. His assertion that he drove at the speed of 40 kph. is belied by Mar
tinez who testified that when he looked at the opposite lane for any oncoming ca
rs, e saw none; then a few seconds later, he was hit by Adzuara s car. The exten
t of the damage on the car of Martinez and the position of the cars after the im
pact further confirm the finding that petitioner went beyond the speed limit req
uired by law and by the circumstances. Picart v. Smith The test for determining
negligence: Would a prudent man in the position of the person to whom the neglig
ence is attributed foresee harm to the person injured as a reasonable consequenc
e of the course about to be pursued? If so, the law imposes a duty on the actor
to refrain from that course or to take precaution against its mischievous result
s, and the failure to do so constitutes negligence. Reasonable foresight of harm
, followed by the ignoring of the admonition of this provision, is the constitut
ive fact in negligence. 2. Negligence as Proximate Cause Proximate Cause – that ca
use which, in the natural and continuous sequence, unbroken by an efficient supe
rvening cause, produces the injury and without which the injury would not have o
ccurred. Subido v. CA This case involves an accident between a truck [or bus] be
longing to Laguna Tayabas Bus Company (LTB) and driven by Mudales and a truck ow
ned by Sabido and driven by Lagunda. The two vehicles were going in opposite dir
ections when they met at a curve in the road. Custodio, a passenger of LTB was h
anging [sabit] on the left side of the vehicle. He died after being sideswiped b
y Sabido’s truck. The CFI held the vehicle owners and the drivers solidarily liabl
e. LTB and its driver were liable for violating the contract of carriage; Sabido
and his driver were liable for quasi-delict. ISSUE: Whether Sabido and his driv
er were guilty of negligence; whether they should be held solidarily liable with
LTB. HELD: They are both guilty of contributory negligence. Though LTB and its
driver were guilty of negligence for allowing Custodio to hang from the left sid
e of the bus, Sabido and his driver were guilty of contributory negligence becau
se the truck was running at a considerable speed, despite the fact that it was n
egotiating a sharp curve, and, instead of being close to its right side of the r
oad, said truck was driven on its middle portion and so near the passenger bus c
oming from the opposite direction as to sideswipe a passenger riding on its runn
ing board. Though the negligence of LTB and its driver are independent from the
negligence of Sabido and his driver, both acts of negligence are the proximate c
ause of the death of Custodio. In fact, the negligence of the first two would no
t have produced this result without the negligence of Sabido and his driver. Wha
t is more, Sabido’s driver’s negligence was the last, in point of time, for Custodio
was on the running board of the carrier s bus sometime before petitioners truc
k came from the opposite direction, so that, in this sense, Sabido’s truck had the
last clear chance. Even though LTB’s liability arises from breach of contract and
Sabido’s arises from quasi-delict, they are solidarily liable because the rule is
that where both negligent acts, in combination, are the direct and proximate ca
use of a single injury to a third person and it is impossible to determine in wh
at proportion each contributed to the injury, either is responsible for the whol
e injury, even though his act alone might not have caused the entire injury, or
the same damage might have resulted from the acts of the other tort-feasor. Ridj
o Tape v. CA Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bau
tista’s Reviewer 9
Petitioners were being charged by MERALCO P415,317.66 for allegedly unregistered
electric consumption (URE) for the period of November 1990 to February 1991. ME
RALCO justified its demand on the ground that the URE was due to defects of the
electric meter. When petitioners refused to pay, MERALCO notified them of discon
nection which prompted petitioners to file for preliminary injunction and/or TEM
PORARY RESTRAINING ORDER which was granted. ON July 1992, petitioners received a
nother demand letter, this time requiring them to pay P89,710.58 for URE from Ju
ly 1991 to April 1992, the deficiency again due to the defective meter. Petition
ers again filed for the consolidation of the two cases, and after trial, the inj
unction was made permanent. CA reversed the decision of RTC ISSUE: Whether petit
ioners should be made to pay the said amounts for their unregistered electric co
nsumption during the said periods which was due to the defects of the electric m
eter HELD: No. MERALCO’s failure to make the necessary repairs and replacement of
the defective electric meter installed within the premises of petitioners was ob
viously the proximate cause of the instant dispute between the parties. Indeed,
if an unusual electric consumption was not reflected in the statements of accoun
t of petitioners, MERALCO, considering its technical knowledge and vast experien
ce in providing electric service, could have easily verified any possible error
in the meter reading. In the absence of such a mistake, the electric meters them
selves should be inspected for possible defects or breakdowns and forthwith repa
ired and, if necessary, replaced. Furthermore, if MERALCO discovered that contra
ptions or illegal devices were installed which would alter the result of the met
er reading, then it should have filed the appropriate criminal complaint against
petitioners. Notice of a defect need not be direct and express; it is enough th
at the same had existed for such a length of time that it is reasonable to presu
me that it had been detected, and the presence of a conspicuous defect which has
existed for a considerable length of time will create a presumption of construc
tive notice thereof. Hence, MERALCO s failure to discover the defect, if any, co
nsidering the length of time, amounts to inexcusable negligence. Furthermore, th
at as a public utility, MERALCO has the obligation to discharge its functions wi
th utmost care and diligence The liability of petitioners for consumed but unrec
orded electricity must therefore be limited by reason of MERALCO’s negligence- onl
y the estimated consumption on a three-month average before the controversial pe
riod (P168,342.75). Ermitano v. CA, BPI Luis Ermitano was a credit cardholder to
gether with his wife Manuelita who had an extension, in BPI with a credit limit
of 10,000 which they often exceeded and BPI never seemed to have minded for the
past 2 years. Manuelita’s bag one day was snatched, and that night she informed by
telephone BPI of the loss. This was followed by a letter the next day, surrende
ring her husband’s card as well, stating that she shall not be responsible for any
and all charges incurred after August 29,1989 (the day of loss), and sought for
replacement cards instead. However in their monthly billing statement the thief
went on some kind of a shopping spree amounting to 3,ooo (that’s double a social
sin for you!) So she wrote again disclaiming responsibility. BPI pointed out the
stipulation in the contract they had signed stated "In the event the card is lo
st or stolen, the cardholder agrees to immediately report its loss or theft in w
riting to BECC ... purchases made/incurred arising from the use of the lost/stol
en card shall be for the exclusive account of the cardholder and the cardholder
continues to be liable for the purchases made through the use of the lost/stolen
BPI Express Card until after such notice has been given to BECC and the latter
has communicated such loss/theft to its member establishments." Luis threatened
that such was a contract of adhesion and that they’d sue for damages if BPI still
insisted on having them pay when they already complied with the requirement of n
otifying them on time and should thus be absolved from any liability.
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Despite their refusal to pay, their cards were still renewed and some time in 19
91, when Luis was paying for gas, lo and behold his card was dishonored! BPI inf
ormed them that they had exceeded their credit limit and because inclusive in th
eir monthly bill, the unauthorized payments from his lost card were still carrie
d over. So Luis sued, and won, CA reversed ISSUE: Whether petitioners should be
liable for the unauthorized payments in their credit card until such a time the
bank had been able to notify all its member establishments even when they had al
ready exercised due diligence in complying promptly with the requirement of noti
fying BPI of the theft. HELD: No. Prompt notice by the cardholder to the credit
card company of the loss or theft of his card should be enough to relieve the fo
rmer of any liability occasioned by the unauthorized use of his lost or stolen c
ard. The questioned stipulation in this case, which still requires the cardholde
r to wait until the credit card company has notified all its member-establishmen
ts, puts the cardholder at the mercy of the credit card company which may delay
indefinitely the notification of its members to minimize if not to eliminate the
possibility of incurring any loss from unauthorized purchases. Or, as in this c
ase, the credit card company may for some reason fail to promptly notify its mem
bers through absolutely no fault of the cardholder. To require the cardholder to
still pay for unauthorized purchases after he has given prompt notice of the lo
ss or theft of his card to the credit card company would simply be unfair and un
just. Benguet Electric v CA Jose Bernardo managed a stall at the Baguio City mea
t market. On 14 January 1985 at around 7:50 in the morning, Jose together with o
ther meat vendors went out of their stalls to meet a jeepney loaded with slaught
ered pigs in order to select the meat they would sell for the day. Jose was the
very first to reach the parked jeepney. Grasping the handlebars at the rear entr
ance of the vehicle, and as he was about to raise his right foot to get inside,
Jose suddenly stiffened and trembled as though suffering from an epileptic seizu
re. Romeo Pimienta who saw Jose thought he was merely joking but noticed almost
in disbelief that he was already turning black. In no time the other vendors rus
hed to Jose and they discovered that the antenna of the jeepney bearing the pigs
had gotten entangled with an open electric wire at the top of the roof of a mea
t stall. Pimienta quickly got hold of a broom and pried the antenna loose from t
he open wire. But shortly after, Jose released his hold on the handlebars of the
jeep only to slump to the ground. His spouse and children filed a claim against
BENECO, who then in turn filed a third party complaint against the owner of the
jeep, who according to BENECO was the proximate, if not, sole cause of the deat
h ISSUE: Whether BENECO was negligent. HELD: Yes. There is no question that as a
n electric cooperative holding the exclusive franchise in supplying electric pow
er to the towns of Benguet province, its primordial concern is not only to distr
ibute electricity to its subscribers but also to ensure the safety of the public
by the proper maintenance and upkeep of its facilities. It is clear to then tha
t BENECO was grossly negligent in leaving unprotected and uninsulated the splici
ng point between the service drop line and the service entrance conductor, which
connection was only eight (8) feet from the ground level, in violation of the P
hilippine Electrical Code. By leaving an open live wire unattended for years, BE
NECO demonstrated its utter disregard for the safety of the public. Indeed, Jose
Bernardo s death was an accident that was bound to happen in view of the gross
negligence of BENECO. BENECO theorizes in its defense that the death of Jose Ber
nardo could be attributed to the negligence of Canave, Jr., in parking his jeepn
ey so close to the market stall which was neither a parking area nor a loading a
rea, with his antenna so high as to get entangled with an open wire above the Di
masupil store. But this line of defense must be discarded. Canave s act of parki
ng in an area not customarily used for that purpose was by no means the independ
ent negligent act adverted to by BENECO in citing Manila Electric Co. v. Ronquil
lo. Canave was well within his right to park the vehicle in the said area where
there was no showing that any municipal law or ordinance was violated nor that t
here was any foreseeable danger posed by his act. One thing however is sure, no
accident would have happened had BENECO installed the connections in accordance
with the prescribed vertical clearance of fifteen (15) feet. St. Mary’s v. Carpita
nos Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Rev
iewer 11
St. Mary’s Academy of Dipolog City conducted an enrollment drive for the school ye
ar 1995-1996. A facet of the enrollment campaign was the visitation of schools f
rom where prospective enrollees were studying. As a student of St. Mary’s Academy,
Sherwin Carpitanos was part of the campaigning group. On the fateful day, Sherw
in, along with other high school students were riding in a Mitsubishi jeep owned
by defendant Vivencio Villanueva on their way to Larayan Elementary School. The
jeep was driven by James Daniel II then 15 years old and a student of the same
school. Allegedly, the latter drove the jeep in a reckless manner and as a resul
t the jeep turned turtle. Sherwin Carpitanos died as a result of the injuries he
sustained from the accident. The parents claimed damages from the school, and w
on. ISSUE: Whether St. Mary’s should be liable for the death of a student as a res
ult of a car accident in an authorized school activity HELD: No. The Court of Ap
peals mistakenly held petitioner St. Mary’s Academy liable for the death of Sherwi
n Carpitanos under Articles 218[7] and 219[8] of the Family Code, pointing out t
hat petitioner was negligent in allowing a minor to drive and in not having a te
acher accompany the minor students in the jeep. Under Article 218 of the Family
Code, the following shall have special parental authority over a minor child whi
le under their supervision, instruction or custody: (1) the school, its administ
rators and teachers; or (2) the individual, entity or institution engaged in chi
ld care. This special parental authority and responsibility applies to all autho
rized activities. Under Article 219 of the Family Code, if the person under cust
ody is a minor, those exercising special parental authority are principally and
solidarily liable for damages caused by the acts or omissions of the unemancipat
ed minor while under their supervision, instruction, or custody. However, for pe
titioner to be liable, there must be a finding that the act or omission consider
ed as negligent was the proximate cause of the injury caused because the neglige
nce must have a causal connection to the accident. In this case, the respondents
failed to show that the negligence of petitioner was the proximate cause of the
death of the victim. In their comment to the petition, respondents Daniel spous
es and Villanueva admitted the documentary exhibits establishing that the cause
of the accident was the detachment of the steering wheel guide of the jeep. Henc
e, the cause of the accident was not the recklessness of James Daniel II but the
mechanical defect in the jeep of Vivencio Villanueva. Further, there was no evi
dence that petitioner school allowed the minor James Daniel II to drive the jeep
of respondent Vivencio Villanueva. It was Ched Villanueva, the grandson, who ha
d possession and control of the jeep. He was driving the vehicle and he allowed
James Daniel II, a minor, to drive the jeep at the time of the accident. Hence,
liability for the accident, whether caused by the negligence of the minor driver
or mechanical detachment of the steering wheel guide of the jeep, must be pinne
d on the minor’s parents primarily. The negligence of petitioner St. Mary’s Academy
was only a remote cause of the accident. Between the remote cause and the injury
, there intervened the negligence of the minor’s parents or the detachment of the
steering wheel guide of the jeep. 3. Proof of Negligence Food Terminal Incorpora
ted vs. CA. and Basic Foods Corp. Food Terminal Incorporated (FTI) is engaged in
the business of warehousing storage of goods or merchandise for compensation at
its refrigerated warehouse in Taguig, Metro Manila. Basic Foods is engaged in t
he production of food and allied products. In its manufacture of food, Basic Foo
ds uses Red Star compressed yeast, which requires storage in a refrigerated spac
e to avoid spoilage. It deposited 1,770 cartons of yeast with FTI for cold stora
ge. 383 cartons worth P161k were damaged, allegedly because of FTI’s failure to ma
intain the proper temperature.
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FTI claims that it exercised utmost diligence; that any damage sustained was due
to the fault of Basic Foods; that under the contract, FTI would not be liable f
or damage to goods beyond its reasonable control; and that Basic Foods was estop
ped from filing the action because it acknowledged receipt of the yeast in good
order. The RTC dismissed; the CA held that there was negligence. ISSUE: Whether
FTI was guilty of negligence in the storage of Basic Foods’ yeast. HELD: FTI was n
egligent. In the first place, the issue is factual, thus, the ruling of the Cour
t of Appeals is binding on the parties and may not be reviewed on appeal via cer
tiorari. In the second place, petitioner practically admitted that it failed to
maintain the agreed temperature of the cold storage area at 2 to 4 degrees centi
grade at all times, and this caused the deterioration of the yeast stored therei
n. Nonetheless, petitioner claimed that temperature was not the sole cause for t
he deterioration of respondent s goods. Since negligence has been established, p
etitioner s liability for damages is inescapable. Morris v. CA Morris and Whitti
er were American citizens employed in the Philippines. They were booked as first
-class passengers on a 3:50 pm Scandinavian Airline System (SAS) flight from Man
ila to Tokyo. On the day of departure, Morris and Whittier checked in at the air
port at 3:10 pm. However, they were told that they could not be accommodated on
the plane because their seats had been given to other passengers. Apparently, th
e economy class of the flight had been overbooked and the seats of the first cla
ss passengers who had not checked in at least 40 minutes before departure time w
ere given to economy class passengers. Morris and Whittier filed a claim against
SAS for moral and exemplary damages. ISSUE: Whether Morris and Whittier are ent
itled to moral and exemplary damages. HELD: No, they are not. In awarding damage
s for breach of contract of carriage, the breach must be wanton and deliberately
injurious, or the one responsible acted fraudulently or with malice or bad fait
h. Where in breaching the contract of carriage, the defendant airline is not sho
wn to have acted fraudulently or in bad faith, liability for damages is limited
to the natural and probable consequences of the breach of obligation which the p
arties had foreseen or could have reasonably foreseen. Such liability does not i
nclude moral and exemplary damages. Moral damages may be recovered only where (a
) the mishap results in the death of a passenger; and (b) it is proved that the
carrier was guilty of fraud and bad faith even if death does not result. Bad fai
th does not simply connote bad judgment of negligence. It imports a dishonest pu
rpose or some moral obliquity and conscious doing of a wrong, a breach of known
duty through some motive or interest or ill will that partakes of the nature of
fraud. In this case, what happened was attributable to the fault of Morris and W
hittier, since they failed to check in on time. SAS could not be faulted for not
entertaining their tickets and papers for processing, since the checking in of
passengers for the flight was finished. There was no fraud or bad faith as would
justify an award of moral damages. 4. Presumption of Negligence The plaintiff m
ay invoke the following principles in order to impute presumed negligence on the
defendant: a. b. c. d. res ipsa loquitur respondeat superior violation of traff
ic rules dangerous weapons and substances
In these cases, there is no need for the plaintiff to show that the defendant wa
s negligent. There is a rebuttable presumption of negligence on the part of the
defendant. It is incumbent upon the defendant to prove that he exercised the deg
ree of care required by the circumstances. If he fails to prove this, he shall b
e liable for damages. a. Res ipsa loquitur Statement of the rule: “Where the thing
which caused the injury complained of is shown to be under the management of de
fendant or his servants and the accident is such as in the ordinary course of th
ings Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Re
viewer 13
does not happen if those who have its management or control use proper care, it
affords reasonable evidence, in absence of explanation by defendant, that the ac
cident arose from want of care.” Elements: 1. 2. 3. CASES: Africa v. Caltex A fire
broke out at a Catex station in Manila. It started while gasoline was being hos
ed from a tank truck into the underground storage, right at the opening of the r
eceiving tank where the nozzle of the hose was inserted. The fire spread to and
burned several neighboring houses. The owners of the burned properties filed a c
omplaint for damages against Caltex, as the owner of the station, and Boquiren,
as the agent in charge of operation. ISSUE: Whether Caltex was negligent under t
he doctrine of res ipsa loquitur. HELD: Caltex was negligent. First of all, it w
as necessary to rely on the doctrine of res ipsa loquitur because certain report
s made by officers of the police and fire departments were ruled to be inadmissi
ble in evidence for being hearsay. Res ipsa loquitur is a rule to the effect tha
t “Where the thing which caused the injury complained of is shown to be under the
management of defendant or his servants and the accident is such as in the ordin
ary course of things does not happen if those who have its management or control
use proper care, it affords reasonable evidence, in absence of explanation by d
efendant, that the accident arose from want of care.” The rule applies in this cas
e. The gasoline station, with all its appliances, equipment and employees, was u
nder the control of appellees. A fire occurred therein and spread to and burned
the neighboring houses. The persons who knew or could have known how the fire st
arted were appellees and their employees, but they gave no explanation thereof w
hatsoever. It is a fair and reasonable inference that the incident happened beca
use of want of care. The station is in a very busy district and pedestrians ofte
n pass through or mill around the premises. Aside from this, it is used as a car
barn for around ten taxicabs owned by Boquiren. Also, there is a store located a
round one meter from the hole of the underground tank. At this store, people han
g out and possibly smoke cigarettes. It was even alleged that the fire was cause
d by a match which came into contract with the dense fumes. Furthermore, the con
crete walls adjoining the neighborhood are only 2 ½ meters high at most and cannot
prevent the flames from leaping over it in case of fire. Another issue was whet
her Caltex should be liable as the principal of Boquiren. It was held that Calte
x was liable because there was an agency relationship and Boquiren was not an in
dependent contractor. Caltex owned the station and exercised control over it. th
e thing which caused the injury is under the exclusive control of the defendant;
ordinarily, such event will not happen unless there is negligence; defendant fa
ils to give an explanation for the happening of the event.
Batiquin v. CA Dr. Batiquin performed a Caesarean section on Mrs. Villegas. Afte
r the delivery of her baby, Mrs. Villegas began to suffer abdominal pains and fe
ver. When, despite taking medication prescribed by Dr. Batiquin, she still did n
ot get well, Mrs. Villegas consulted another doctor, Doctor Kho. Doctro Kho sugg
ested that they open her up again. During surgery, Doctor Kho found lots of pus
and several cysts in Mrs. Villegas’s ovaries. She then discovered a piece of rubbe
r which seemed like a part of a rubber glove or a rubber drain stuck near Mrs. V
illegas’s uterus. This rubber glove was the cause of the infection of Mrs. Villega
s’s internal organs. After it was taken out, Mrs. Villegas regained her health. Mr
s. Villegas filed an action for damages against Dr. Batiquin. ISSUE: Whether Mrs
. Villegas is entitled to damages. Digests by Sheryl, Cayo, Rosa Lecture Notes a
nd Notes from Jona Bautista’s Reviewer 14
HELD: Yes. The rule of res ipsa loquitur (the thing speaks for itself) is applic
able in this case. Under this doctrine, the happening of an injury permits an in
ference of negligence where plaintiff produces substantial evidence that the inj
ury was caused by an agency or instrumentality under the exclusive control and m
anagement of the defendant, and that the occurrence was such that in the ordinar
y course of things would not happen if reasonable care had been used. The doctri
ne of res ipsa loquitur as a rule of evidence is peculiar to the law of negligen
ce which recognizes that prima facie negligence may be established without direc
t proof and furnishes a substitute for specific proof of negligence. The doctrin
e can be invoked only when, under the circumstances, direct evidence is absent a
nd not readily available. In this case, all the requisites for recourse to the d
octrine are present. First, the entire proceedings of the caesarean section were
under the exclusive control of Dr. Batiquin. Mrs. Villegas did not have any dir
ect evidence as to the actual culprit or the exact cause of the foreign object f
inding its way into her body, which could not have occurred unless through the i
ntervention of negligence. Second, since aside from the caesarean section, Ville
gas underwent no other operation which could have caused the piece of rubber to
appear in her uterus, it stands to reason that such could only have been a by-pr
oduct of the caesarean section performed by Dr. Batiquin. Dr. Batiquin failed to
overcome the presumption of negligence arising from resort to the doctrine of r
es ipsa loquitur. She is therefore liable for negligently leaving behind a piece
of rubber in Villegas’s abdomen and for all the adverse effects thereof. Reyes v.
Sisters of Mercy Jorge Reyes had been suffering from recurring fever with chill
s for around 5 days. Home medication afforded him no relief so he went to Mercy
Community Clinic. Because typhoid was common at the time, the Widal Test was per
formed. Jorge came out positive for typhoid. Dr. Blanes ordered that Jorge be te
sted for compatibility with chloromycetin, an antibiotic. Nurse Pagente administ
ered the test. As there was no adverse reaction, Dr. Blanes administered 500 mg
of the antibiotic. Another dose was given 3 hours later. Subsequently, Jorge dev
eloped high fever and experienced vomiting and convulsions. He then turned blue
due to deficiency in oxygen – cyanosis – and died. The cause of death was stated to
be “ventricular arrhythmia secondary to hyperpyrexia and typhoid fever.” ISSUE: Whet
her the Sisters of Mercy Hospital/the doctors were negligent. HELD: Not negligen
t. The doctrine of res ipsa loquitur is not applicable in this case. Though expe
rt testimony is usually needed to prove malpractice, where common knowledge and
experience teach that the injury would not have occurred if due care had been ex
ercised, the doctrine of res ipsa loquitur can be invoked to establish negligenc
e. The elements of res ipsa loquitur are: a. b. c. the accident will not normall
y occur unless someone is negligent; the instrumentality which caused the injury
was under the control of the person in charge; and the injury was not due to th
e voluntary act of the person injured.
In this case, Jorge’s death was not unusual because he had been suffering from fev
er and chills 5 days prior to admission. Furthermore, as to the charge of misdia
gnosis, res ipsa loquitur cannot apply to suits involving the merits of a diagno
sis.
b. respondeat superior Art. 1755. A common carrier is bound to carry the passeng
ers safely as far as human care and foresight can provide, using the utmost dili
gence of very cautious persons, with a due regard for all the circumstances. Art
. 1756. In case of death of or injuries to passengers, common carriers are presu
med to have been at fault or to have acted negligently, unless they prove that t
hey observed extraordinary diligence as prescribed in Articles 1733 and 1755.
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Art. 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance ov
er the goods and for the safety of the passengers transported by them, according
to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expresse
d in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary di
ligence for the safety of the passengers is further set forth in Articles 1755 a
nd 1756.
Art. 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or wilful acts of the former s employees, although such
employees may have acted beyond the scope of their authority or in violation of
the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exerci
sed all the diligence of a good father of a family in the selection and supervis
ion of their employees. Respondeat superior – means “let the employer/principal” be re
sponsible Under this principle, if the negligence of the employee has been prove
d, there is no need to prove the negligence of the employer. The employer is alr
eady presumed negligent in the hiring and/or supervision of the employee. This p
resumption is, however, rebuttable and not conclusive. As will be shown in the f
ollowing cases, the doctrine of respondeat superior is applicable not only to co
mmon carriers but to other instances where an employee or agent, not necessarily
of a common carrier, is negligent. CASES: City of Manila v. IAC Vivencio Sto. D
omingo died in 1971 and was buried in a lot in the North Cemetery. The lot was l
eased to his widow Irene Sto. Domingo until 2021. However, apart from the receip
t issued by the city for the rental of the lot, there were no other records stat
ing the term of the lease. In 1978, the Mayor of Manila, believed in good faith
that the lease in favor of Irene Sto. Domingo was covered by Administrative Orde
r No. 5, series of 1975 which provided for the lease of the burial lots only for
a period of 5 years. Thinking that the lease in favor of Sto. Domingo had alrea
dy terminated by this time, the mayor certified that the lot in which Vivencio w
as buried was ready for exhumation. In accordance with this certification, the a
uthorities of the North Cemetery exhumed the remains of Vivencio and put them in
a bag which was then stored inside a bodega. The lot was then leased to another
party. During All Saints Day, Irene Sto. Domingo and her family were shocked to
find that the lot no longer had the stone marker which they placed on the tomb.
When she asked what happened to the remains of her husband, she was told to loo
k for them in the bodega. Aggrieved, Irene Sto. Domingo filed a claim for damage
s against the City of Manila, the city health officer, and the person in charge
of the cemetery. ISSUE: Whether the City of Manila is liable to Sto. Domingo. HE
LD: Yes. With respect to proprietary functions, a municipal corporation can be h
eld liable to third persons ex contractu or ex delicto. The superior or employer
must answer civilly for the negligence or want of skill of its agent or servant
in the course or line of his employment, by which another, who is free from con
tributory fault is injured. Maintenance of cemeteries is recognized as a municip
al activity of a proprietary character. Hence, under the doctrine of respondeat
superior, petitioner City of Manila is liable for the tortious act committed by
its agents who failed to verify and check the duration of the contract of lease.
The contention of the petitionercity that the lease is covered by Administrativ
e Order No. 5, series of 1975 for five (5) years only beginning from June 6, 197
1 is not meritorious for the said administrative order covers new leases. When s
ubject lot was certified on January 25, 1978 as ready for exhumation, the lease
contract for fifty (50) years was still in full force and effect. The City of Ma
nila is ordered to give Sto. Domingo the right to use a burial lot in the North
Cemetery corresponding to the unexpired term of the fully paid lease sued upon,
to search for the remains of the late Vivencio Domingo, and to bury the same in
a substitute lot to be chosen by the Sto. Domingos. Moreover, moral and exemplar
y damages are awarded. Calalas v. CA and Jujeurche Sunga and Salva Digests by Sh
eryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 16
Eliza Jujeurche Salva was a college freshman majoring in Physical Education at t
he Siliman University in Dumaguete City. One morning, Sunga rode a jeep owned an
d operated by Calalas, but, since it was already full, she was given by the cond
uctor an “extension seat,” a wooden stool at the back of the door at the rear end of
the vehicle. Along the route, the jeepney stopped to let a passenger off. As sh
e was seated at the rear of the vehicle, Sunga gave way to the outgoing passenge
r. Just as she was doing so, an Isuzu truck driven by Verena and owned by Salva
bumped the left rear portion of the jeepney. As a result, Sunga was injured. Bec
ause of her injury, she decided not to pursue her Physical Education major as, i
n her words, her “left leg has a defect already.” A complaint for damages was filed
by Calalas against Salva and Verena on the ground of quasi-delict – this was decid
ed in favor of Calalas [this is not the case we’re studying]. Sunga subsequently f
iled a complaint for damages against Calalas, alleging breach of contract of car
riage. Calalas filed a third-party complaint against against Salva [this is the
case we’re studying]. The RTC absolved Calalas in the breach of contract case and
held Salva liable as third party defendant. Its ruling was based on the ruling i
n the quasi-delict case. The CA reversed and held that the Sunga’s cause of action
was based on breach of contract and not quasi-delict. ISSUE: Whether Calalas is
guilty of violating the contract of carriage. HELD: Calalas is guilty. The RTC
was wrong in deciding the breach of contract [BOC] case on the basis of the quas
i-delict [QD] case. Firstly, Sunga was not a party to the QD case and cannot be
bound by its ruling. Secondly, the issues or causes of action in both cases are
different. The QD case is premised on the negligence of the tortfeasor. The BOC
case is premised upon the negligence of the carrier in the performance of the co
ntractual obligation. Sunga’s complaint was based on BOC. It does not matter that
a third person’s act was the proximate cause of the injury. The doctrine of proxim
ate cause is applicable only to QD. In BOC, it is sufficient to show that there
is a contractual relation between the parties and the common carrier failed to t
ransmit the passenger safely. Articles 1733, 1755, and 1756 provide that a commo
n carrier must exercise extraordinary diligence and that in case of death or inj
ury to passengers, the presumption is that the carrier acted negligently. In thi
s case, it is clear that the presumption of negligence has not been overcome. Wh
en the jeep stopped to unload, its rear was protruding around two meters into th
e highway. Also, it was overloaded, hence the employment of the extension seat.
There is no fortuitous event because the dangers could have been foreseen and av
oided. * moral damages awarded by the CA were deleted because they are generally
not available in cases of BOC of carriage. The exceptions are death of the pass
enger and bad faith of fraud of the carrier. Pestano v. Sumayang Sumayang and Ro
magos were riding a motorcycle along a highway in Cebu. As they were about to tu
rn left at a junction, they were hit by a passenger bus driven by Pestano and ow
ned by Metro Cebu Autobus Corp. The bus had tried to overtake them, but it hit t
hem instead. Both Sumayang and Romagos died in the accident. Criminal charges we
re instituted against Pestano. The heirs of Sumayang also filed a civil action f
or damages against Pestano (as driver of the bus), Metro Cebu (as owner of the b
us), and the insurer of Metro Cebu. The lower court and the CA found Pestano and
Metro Cebu guilty of negligence. Pestano was negligent in trying to overtake th
e victim’s motorcycle at the junction, while Metro Cebu was negligent in allowing
the bus to ply its route despite its defective speedometer. ISSUE: Whether Pesta
no and Metro Cebu are guilty of negligence. HELD: Yes. The vehicular collision w
as caused by Pestano’s negligence when he attempted to overtake the motorcycle. As
a professional driver operating a public transport bus, he should have anticipa
ted that overtaking at a junction was a perilous maneuver, and he should have th
us exercised extreme caution. Digests by Sheryl, Cayo, Rosa Lecture Notes and No
tes from Jona Bautista’s Reviewer 17
Metro Cebu is also guilty of negligence. Under Articles 2180 and 2176 of the Civ
il Code, owners and managers are responsible for damages caused by their employe
es. When an injury is caused by the negligence of a servant or an employee, the
master or employer is presumed to be negligent either in the selection or in the
supervision of that employee. This presumption may be overcome only by satisfac
torily showing that the employer exercised the care and the diligence of a good
father of a family in the selection and the supervision of its employee. In this
case, Metro Cebu showed laxity in the operation of its business and in the supe
rvision of its employees when it allowed Pestano to ply his route with a defecti
ve speedometer. It was remiss in the supervision of its employees and the proper
care of its vehicles. It had thus failed to conduct its business with the dilig
ence required by law. c. Violation of traffic rules Art. 2184. In motor vehicle
mishaps, the owner is solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of the due diligence, prevented the misfo
rtune. It is disputably presumed that a driver was negligent, if he had been fou
nd guilty or reckless driving or violating traffic regulations at least twice wi
thin the next preceding two months.
If the owner was not in the motor vehicle, the provisions of Article 2180 are ap
plicable. (n)
Art. 2185. Unless there is proof to the contrary, it is presumed that a person d
riving a motor vehicle has been negligent if at the time of the mishap, he was v
iolating any traffic regulation. The driver is disputably presumed negligent if:
1. 2. 3.
he had been found guilty of reckless driving at least twice within the next prec
eding two months; he had been found guilty of violating traffic regulations at l
east twice within the next preceding two months; or at the time of the mishap, h
e was violating any traffic regulation.
Manuel v. CA There was a drizzle at around 4 pm when the Scout car, driven by re
spondent Fernando Abcede, which was negotiating the zigzag road in Camarines Nor
te, was hit on its left side by a bus. The bus was owned by petitioner Superline
s Transportation, Co., Inc. and was driven by petitioner Emiliano Manuel. Due to
the impact, the Scout car was thrown backwards against a protective railing. We
re it not for the railing, the Scout car would have fallen into a deep ravine. A
ll its ten occupants, which included four children, were injured, seven of the v
ictims sustained serious physical injuries. Emiliano Manuel, the driver of the b
us, was prosecuted for multiple physical injuries through reckless imprudence. A
s he could later on not be found, an action for quasi-delict was filed against t
he Bus Co. and its insurer, and was ordered to pay P49, 954 in damages. On appea
l they contended that it was actually Abcede who was at fault, being only 19 yrs
old and having no driver’s license. Proof of this according to them was a woman p
assenger heard saying ‘. Iyan na nga ba ang sinasabi ko, napakalakas ang loob,’ whe
n the passengers alighted from the Scout car. Likewise, petitioners questioned t
he accuracy of the pictures and sketches submitted by private respondents as evi
dence that the Superlines bus encroached on the lane of the Scout car. According
to them, the sketch made by the police investigator showing flue skid marks of
the bus, is inadmissible as evidence because it was prepared the day after the i
ncident and the alleged "tell-tale" skid marks and other details had already bee
n obliterated by the heavy downpour which lasted for at least an hour after the
accident ISSUE: Whether the Bus Company is liable. HELD: Yes. There is strong pr
esumption of regularity of functions of the policemen. Granting however that the
placement of skidmarks were inaccurate, nonetheless, the finding of the Court o
f Appeals that the collision took place within the lane of the Scout car was sup
ported by other conclusive evidence. "Indeed, a trail of broken glass which was
scattered along the car s side of the road, whereas the bus lane was entirely cl
ear of debris.”
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Furthermore, the fact that the Scout car was found after the impact at rest agai
nst the guard railing shows that it must have been hit and thrown backwards by t
he bus. Finally, the evidence with respect to the issue that Fernando Abcede, Jr
. who was not duly licensed, was the one driving the Scout car at the time of th
e accident, could not simply exempt petitioners liability because they were the
parties at fault for encroaching on the Scout car s lane. d. Dangerous Weapons
and Substances Art. 2188. There is prima facie presumption of negligence on the
part of the defendant if the death or injury results from his possession of dang
erous weapons or substances, such as firearms and poison, except when the posses
sion or use thereof is indispensable in his occupation or business. RA6969 Toxic
Substances and Hazardous and Nuclear Wastes Control Act of 1990 Defendant is di
sputably presumed negligent if death or injury results from his possession of da
ngerous weapons or substances. The defendant may invoke the defense that possess
ion or use of such dangerous weapons or substances is indispensable in his occup
ation or business. Smith Bell Shipping v. Borja Smith Bell requested Customs for
inspection on its vessel M/T King Family which was due to arrive containing 750
metric tons of alkyl benzene and methyl methacrylate monomer. Catalino Borja, C
ustoms Inspector was then on board the vessel to perform his duties. At around n
oon, while M/T King Family was unloading chemicals unto 2 barges owned by respon
dent ITTC, a sudden explosion occurred setting the vessels afire. Upon hearing t
he explosion, Borja who was at that time inside the cabin preparing reports, wen
t outside to check what had happened, and another explosion was heard, seeing th
e fire and fearing his life, jumped overboard to save himself. However, the wate
r was likewise on fire due mainly to the spilled chemicals. Despite the tremendo
us heat, he swam his way for 1 hour until he was rescued by the people living in
the squatters’ area and sent to San Juan De Dios Hospital. After weeks of intensi
ve care at the hospital, he was diagnosed as permanently disabled due to the inc
ident. He made demands against Smith Bell and ITTC for the damages caused by the
explosion. However, both denied liabilities and attributed to each other neglig
ence. Trial court ruled in favor of Borja and dismissed all counterclaims and su
ch of Smith Bell to ITTC. Contrary to the claim of petitioner that no physical e
vidence was shown to prove that the explosion had originated from its vessel, CA
held Smith Bell liable following the findings of the investigation conducted by
the Special Board of Marine Inquiry. ISSUE: Whether Smith Bell whose cargo on b
oard contained dangerous chemicals is liable. HELD: Yes. Smith Bell cannot shift
the blame to ITTC, as it stated that all the explosions erupted from outside it
s vessel and not aboard. Negligence is conduct that creates undue risk of harm t
o another. It is the failure to observe that degree of care, precaution and vigi
lance that the circumstances justly demand, whereby that other person suffers in
jury. Petitioner’s vessel was carrying chemical cargo -- alkyl benzene and methyl
methacrylate monomer. While knowing that their vessel was carrying dangerous inf
lammable chemicals, its officers and crew failed to take all the necessary preca
utions to prevent an accident. Petitioner was, therefore, negligent. As a result
of the fire and the explosion during the unloading of the chemicals from petiti
oner’s vessel, Respondent Borja suffered burns that will permanently disable him H
ence, the owner or the person in possession and control of a vessel and the vess
el are liable for all natural and proximate damage caused to persons and propert
y by reason of negligence in its management or navigation. Problem: Due to recen
t bank robberies in the metropolis, a bank issued a circular to all its personne
l, including security guards (contracted out through a security agency), to tigh
ten security. X, a security guard at the front door of the bank, takes this to h
eart and has his shotgun ready. A, a customer of the bank, arrives at the front
door and opens her bag to take out a gun for the purpose of surrendering it to t
he guard. The guard, upon seeing Digests by Sheryl, Cayo, Rosa Lecture Notes and
Notes from Jona Bautista’s Reviewer 19
the gun, instinctively shoots at A. A dies. Is there a presumption of negligence
on the part of (a)the guard? (b) the bank)? (c) the security agency? Answer: Th
e guard is presumed negligent. But under what doctrine? If you answered under Ar
ticle 2188 (possession of dangerous weapons), you are wrong. The guard cannot be
presumed negligent merely because he possessed a gun because his possession of
it was indispensable to his occupation as a security guard. This is one of the d
efenses that may be invoked by the defendant against the presumption of negligen
ce under Article 2188. Rather, the guard is presumed negligent under the princip
le of res ipsa loquitur. The security agency is presumed negligent under the doc
trine of respondeat superior. The bank is not presumed negligent, since there is
no employer-employee relationship between it and the guard. In order to attribu
te negligence to the bank, such must be established by proof. 5. Defenses When t
he defendant is presumed negligent, he may invoke the following defenses: a. b.
c. d. e. f. g. h. contributory negligence assumption of risk last clear chance p
rescription fortuitous events diligence mistake and waiver others
a. Contributory negligence Art. 2179. When the plaintiff s own negligence was th
e immediate and proximate cause of his injury, he cannot recover damages. But if
his negligence was only contributory, the immediate and proximate cause of the
injury being the defendant s lack of due care, the plaintiff may recover damages
, but the courts shall mitigate the damages to be awarded. 2179 talks of two cas
es: a. b. The defendant can show that the immediate and proximate cause of the i
njury was the negligence of the plaintiff himself. In this case, the defendant i
s not liable at all. The defendant can also show that although the proximate cau
se of the injury was the defendant’s lack of due care, the plaintiff also contribu
ted to the injury with his own negligence. In case of contributory negligence on
the part of the plaintiff, the defendant is still liable, but his liability may
be mitigated by the court.
Atty Abaño: There was a case where the victim was a child below 9 years old. The d
efendant wanted his liability mitigated on the ground that the victim had contri
buted with his own negligence. The court held that a child below 9 years old is
incapable of contributory negligence. Therefore, the damages cannot be mitigated
. CASES: Rakes v. Atlantic Gulf (not included in recitation but discussed in cla
ss by Atty. Abaño) Rakes was a laborer employed by Atlantic. While transporting ir
on rails from a barge to the company’s yard using a railroad hand car, Rakes broke
his leg when the hand car toppled over and the rails fell on him. It appears th
at the hand car fell due to a sagging portion of the track that gave with the we
ight of the rails. Atlantic knew of the weak state of the rail but did nothing t
o repair it. When Rakes filed an action for damages, Atlantic’s defense was that R
akes’ injuries were caused by his own negligence in walking alongside the car, ins
tead of in front or behind it, as the laborers were told to do. ISSUES: 1. 2. HE
LD: Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Rev
iewer 20 Whether Rakes was negligent. Whether Atlantic is liable to Rakes.
1. 2.
Rakes was negligent. He disobeyed the orders of his superiors when he walked alo
ngside the car instead of in front or behind it. Atlantic is liable to Rakes. Th
e negligence of Rakes will not totally bar him from recovering anything from Atl
antic, although the liability of the latter will be mitigated as a result of Rak
es’ contributory negligence. This is because although Rakes contributed with his o
wn negligence, the primary cause of the accident was still the weak rails which
Atlantic refused to repair. Distinction must be made between the accident and th
e injury, between the event itself, without which there could have been no accid
ent, and those acts of the victim not entering into it, independent of it, but c
ontributing to his own proper hurt. Where he contributes to the principal occurr
ence as one of its determining factors, he cannot recover. Where, in conjunction
with the occurrence, he contributes only to his own injury, he may recover the
amount that the defendant responsible for the event should pay for such injury,
less a sum deemed equivalent for his own imprudence.
Phoenix v. IAC Dionisio was driving home from a cocktails and dinner meeting wit
h his boss. He was proceeding down a street when his headlights [allegedly] sudd
enly failed. He switched them to bright but it was too late for him to avoid a d
ump truck looming 2 ½ meters away from his car. He crashed into the dump truck, wh
ich was parked on the right side of the street in a manner as to stick out and p
artly block oncoming traffic. The truck had no lights, reflectors, etc. Dionisio
, however, admitted to having had a shot or two of liquor. The dump truck was ow
ned by Phoenix but it was driven home by an employee, Carbonel, because the latt
er had an early morning job. Dionisio suffered some physical injuries including
some permanent facial scars, a “nervous breakdown” and loss of two gold bridge dentu
res, thereby impairing his million-dollar smile. The trial court found that the
sole cause of the accident was Carbonel’s negligence and rendered judgment in favo
r of Dionisio. The CA affirmed but slightly reduced damages. ISSUE: Whether the
there was contributory negligence on Dionisio’s part. HELD: There was contributory
negligence and the award of damages should be reduced by 20%. Dionisio’s claim th
at his headlights suddenly failed was not believed by the SC. The more plausible
explanation was that he had no curfew pass and so, along that stretch of road,
which, incidentally, had a police station on it, he switched off his lights and
sped to avoid detection. This is corroborated by the report of the police office
r who found him and brought him to Makati Medical Center. The officer reported t
hat Dionisio had no curfew pass on his person and that when he appeared on the s
cene moments after the collision [he was manning the nearby police station] peop
le who witnessed the accident told him that Dionisio was driving fast and withou
t headlights. This testimony was an exception to the hearsay rule for being exci
ted utterances of the bystanders. However, there is no doubt that the reckless p
arking of the truck was the indispensable and efficient cause of the accident. D
ionisio s negligence, although later in point of time than the truck driver s ne
gligence and therefore closer to the accident, was not an efficient intervening
or independent cause – it was merely a foreseeable consequence of the risk created
by the negligent manner in which the truck driver had parked the dump truck. Di
onisio s negligence was not of an independent and overpowering nature as to cut,
as it were, the chain of causation in fact between the improper parking of the
dump truck and the accident, nor to sever the juris vinculum of liability. * The
re was no evidence to prove that Dionisio was so heavily under the influence of
liquor as to constitute his driving a motor vehicle per se an act of reckless im
prudence. LBC Air Cargo v. CA Rogelio Monterola was riding his motorcycle along
a dusty highway. At about the same time, a cargo van owned by LBC Air Cargo driv
en by Jaime Tano Jr. was coming from the opposite direction, on the way to the a
irport. On board the van were Fernando Yu, manager of LBC, and his son. When Tan
o was approaching the vicinity of the Digests by Sheryl, Cayo, Rosa Lecture Note
s and Notes from Jona Bautista’s Reviewer 21
airport road entrance on his left, he saw two vehicles racing against each other
from the opposite direction. Tano stopped the van and waited for the two racing
vehicles to pass. The racing vehicles produced a cloud of dust that made visibi
lity extremely bad. However, instead of waiting for the dust to settle, Tano sta
rted to make a sharp turn towards the airport road. Suddenly, the motorcycle dri
ving by Monterola emerged from the cloud of dust and smashed head-on against the
LBC van. Monterola died. The heirs of Monterola filed a case for homicide throu
gh reckless imprudence against Tano and a civil case against against Tano, Yu, a
nd LBC Air Cargo. ISSUE: Whether LBC, Tano, and Yu are liable to the heirs of Mo
nterola. HELD: Tano and LBC are liable – Tano for his negligence as driver of the
van, and LBC for its presumptive negligence as employer of Tano. Yu is not liabl
e, there being no employer-employee relationship between him and Tano. The proxi
mate cause of the accident was the negligence of Tano who, despite extremely poo
r visibility, hastily executed a left turn without first waiting for the dust to
settle. It was this negligent act of Tano, which had placed the LBC van directl
y on the path of the motorcycle coming from the opposite direction, that almost
instantaneously caused the collision to occur. Simple prudence required him not
to attempt to cross the other lane until after it would have been safe from and
clear of any oncoming vehicle. Petitioners poorly invoke the doctrine of "last c
lear chance" (also referred to, at times, as "supervening negligence" or as "dis
covered peril"). The doctrine, in essence, is to the effect that where both part
ies are negligent, but the negligent act of one is appreciably later in time tha
n that of the other, or when it is impossible to determine whose fault or neglig
ence should be attributed to the incident, the one who had the last clear opport
unity to avoid the impending harm and failed to do so is chargeable with the con
sequences thereof. In this case, the victim was traveling along the lane where h
e was rightly supposed to be. The incident occurred in an instant. No appreciabl
e time had elapsed, from the moment Tano swerved to his left to the actual impac
t, that could have afforded the victim a last clear opportunity to avoid the col
lision. Therefore, the doctrine is not applicable. It is true, however, that the
deceased was not all that free from negligence in evidently speeding too closel
y behind the vehicle he was following. There was contributory negligence on the
victim s part that could warrant a mitigation of petitioners liability for dama
ges. Hence, the damages due the heirs of Monterola should be reduced by 20%. b.
Assumption of Risk Art. 1174. Except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the nature of the obligat
ion requires the assumption of risk, no person shall be responsible for those ev
ents which could not be foreseen, or which, though foreseen, were inevitable. As
sumption of risk involves an action to which one consents, and the injury suffer
ed is due to a risk involved in that action. Example: Engaging in contact sports
– In this case, there is an assumption of risk, but there are still rules which m
ust be followed in order to minimize the risk. The defense of assumption of risk
by the plaintiff cannot be invoked if the defendant was guilty of violating the
se rules. CASES: Afiada v. Hisole Loreto Afialda was employed by the Hisole spou
ses as caretaker of their carabaos. While tending the carabaos, Loreto was gored
by one of them and later died as a consequence of his injuries. This action for
damages was brought by Loreto’s elder sister, Margarita, who depended on him for
support. She seeks to hold the Hisole spouses liable under Article 1905 [now Art
. 2183] of the old Civil Code, which reads: The possessor of an animal, or the o
ne who uses the same, is liable for any damages it may cause, even if such anima
l should escape from him or stray away. This liability shall cease only in case
the damage should arise from force majeure or from the fault of the person who m
ay have suffered it. The lower court ruled that article 1905 [2183] does not app
ly where damage is caused to the caretaker.
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ISSUE: Whether Article 1905 [2183] makes the owner of the animal liable where th
e injured party is the caretaker. HELD: Article 1905 [2183] does not apply. The
statute names the possessor or user of the animal as the person liable for “any da
mages it may cause,” and this is for the obvious reason that the possessor or user
has the custody and control of the animal and is therefore the one in a positio
n to prevent it from causing damage. In the present case, the animal was in the
custody and under the control of the caretaker, who was paid for his work as suc
h. Obviously, it was the caretaker’s business to try to prevent the animal from ca
using injury or damage to anyone, including himself. And being injured by the an
imal under those circumstances was one of the risks of the occupation which he h
ad voluntarily assumed and for which he must take the consequences. Manresa, cit
ing the Spanish Supreme Court says that such an accident should come under the l
abor laws. However, Afialda brought the action only under the Civil Code. *Atty.
Abaño – In light of recent labor legislation, such as the Workmen’s Compensation Act,
this ruling would probably have been different had it been decided today. Under
current laws, the employer has the duty to adapt the necessary safety measures
to protect his employees. Co v. CA Co entrusted his Nissan pick-up to the repair
shop for repairs and supply of parts. The car was carnapped while it was being
road-tested by an employee of the repair shop. Co filed a suit for damages again
st the repair shop, based on its negligence. The repair shop denied liability on
the ground that the car was lost due to a fortuitous event – carnapping. ISSUE: W
hether a repair shop can be held liable for the loss of a customer’s vehicle while
the same is in its custody for a repair job. HELD: Yes, the repair shop is liab
le. Pursuant to Articles 1174 and 1262 of the Civil Code, liability attaches eve
n if the loss was due to a fortuitous event if the nature of the obligation requ
ires the assumption of risk. Carnapping is a normal business risk for those enga
ged in the repair of motor vehicles. For just as the owner is exposed to that ri
sk, so is the repair shop, since the car was entrusted to it. That is why repair
shops are required to first register with the DTI and to secure and insurance p
olicy for the shop covering the property entrusted by its customer for repair, s
ervice, and maintenance as a pre-requisite for such accreditation/registration.
Violation of this statutory duty constitutes negligence per se. c. Last Clear Ch
ance Statement of the Principle: A person who has the last clear chance or oppor
tunity of avoiding an accident, notwithstanding the negligent acts of his oppone
nt or that of a third person imputed to the opponent is considered in law solely
responsible for the consequences of the accident. [Therefore, in this case, the
re is no mitigation of the liability of the defendant even if there was contribu
tory negligence on the part of the plaintiff] The negligence of the plaintiff do
es not preclude recovery for the negligence of the defendant where it appears th
at the defendant, by exercising reasonable care and prudence, might have avoided
injurious consequences to the plaintiff, notwithstanding the plaintiff’s negligen
ce. Even though a person’s own acts may have placed him in a position of peril, an
d an injury results, the injured person is entitled to recovery. Elements: 1. 2.
3. 4. CASES: Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Ba
utista’s Reviewer 23 prior negligence on the part of the plaintiff defendant is aw
are of the plaintiff defendant had the last clear chance/opportunity to avoid th
e peril by taking the necessary precaution, but failed to do so accident occurs
because of the negligence of the defendant.
Bustamante v. CA A collision occurred between a cargo truck and a passenger bus.
The cargo truck and passenger bus were approaching each other, coming from the
opposite sides of the highway. The bus driver claimed that from 30 meters away,
he could see that the front tires of the truck were wriggling, and that the truc
k was rapidly headed towards his lane. He thought that the truck driver was a jo
kester, so despite the circumstances, he downshifted to increase his speed on th
e ascending road in order to overtake the vehicle in front of him. At this preci
se moment, the cargo truck and the passenger bus sideswiped each other. Several
passengers of the bus were thrown out and five people died as a result of the in
juries they sustained. The heirs of the victims filed an action for damages agai
nst the drivers and owners of the truck and bus. The CA held that the truck driv
er and owner were not liable to the heirs because the driver of the bus had the
last clear chance to avoid the accident but failed to do so. Hence, only the bus
driver and owner are liable. ISSUE: Whether the doctrine of last clear chance i
s applicable. HELD: No, the doctrine of last clear chance is not applicable. The
doctrine of last clear chance is applicable only in a suit between the owners a
nd drivers of the colliding vehicles. It does not apply where a passenger demand
s responsibility from the carrier to enforce its contractual obligations. In thi
s case, the action is not between the owners and drivers of the colliding vehicl
es but is one brought by the heirs of the deceased passengers against both owner
s and drivers of the colliding vehicles. Therefore, the doctrine is not applicab
le. The truck driver and owner should be solidarily liable with the bus driver a
nd owner, since the truck driver was found to be negligent as well. McKee v. IAC
Koh was driving his car when two kids suddenly crossed his path. He swerved to
the opposite lane to avoid the two kids and collided head-on with a truck. Koh a
nd two of his pasengers died, while three others were seriously injured. One of
the survivors, McKee, filed a civil action for quasi-delict against the truck’s ow
ners. Despite evidence showing that the driver of the truck was driving over the
speed limit and failed to step on the brakes even if he had enough time to do s
o as he saw Koh swerving in his direction, the IAC held that Koh’s negligence was
the proximate cause of the accident. It dismissed McKee’s complaint for damages. I
SSUE: Whether the driver and owner of the truck are liable to McKee. HELD: Yes.
Under the “emergency rule,” one who suddenly finds himself in a place of danger and
is required to act without time to consider the best means that may be adopted t
o avoid the impending danger is not guilty of negligence. In this case, any reas
onable and ordinary prudent man would have tried to avoid running over the two b
oys by swerving away. Hence, Koh cannot be deemed negligent. And assuming that K
oh was negligent, the doctrine of last clear chance provides that the contributo
ry negligence of the party injured will not defeat his claim for damages if it i
s shown that the defendant might, by the exercise of reasonable care and prudenc
e, have avoided the negligence of said injured party. In this case, it was prove
n by the testimony of an uninterested party that the driver of the truck had the
last clear chance to avoid the mishap if only he stepped on the truck’s brakes as
he had time to do so. Since he failed to do so, he is considered by the law as
solely responsible for the damage caused.
Canlas v. CA The Canlas spouses agreed to sell two parcels of land to Mañosca for
which the latter issued two postdated checks. The spouses turned over the certif
icates of title to Mañosca. However, the checks issued by Mañosca turned out to be i
nsufficiently funded. Mañosca managed to mortgage the two parcels to Atty. Magno w
ith the help of two impostors who introduced themselves as the spouses Canlas. H
e again mortgaged the properties to the Asian Savings Bank with the aid of the t
wo impostors. When Mañosca defaulted on his loan, the bank foreclosed the mortgage
. The real Canlas spouses then informed the bank that the property had been mort
gaged without their consent and filed an action for the annulment of the mortgag
e contract. The CA held that the Canlas spouses were not entitled to relief sinc
e they were negligent and must bear the loss. It also held that the bank exercis
ed due diligence in approving the loan and mortgage applied for by Mañosca. ISSUE:
Whether the bank was guilty of negligence. HELD: Yes, the bank was negligent. T
herefore, it must bear the loss resulting from the fraudulent acts of Mañosca. Dig
ests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 2
4
The degree of diligence required of banks is more than that of a good father of
a family, in keeping with their responsibility to exercise the necessary care an
d prudence in dealing with registered or titled property. The business of a bank
is affected with public interest, holding in trust the money of the depositors,
which bank deposits the bank should guard against loss due to negligence or bad
faith. In this case, the bank did not observe the requisite diligence in ascert
aining or verifying the real identity of the couple who introduced themselves as
the spouses Canlas. Not even a single identification card was exhibited by the
said impostors to show their true identity; and yet, the bank acted on their rep
resentations simply on the basis of the residence certificates bearing signature
s which tended to match the signatures affixed on a previous deed of mortgage to
a certain Atty. Magno, covering the same parcels of land in question. Under the
doctrine of last clear chance, which is applicable here, the respondent bank mu
st suffer the resulting loss. In essence, the doctrine of last clear chance is t
o the effect that where both parties are negligent but the negligent act of one
is appreciably later in point of time than that of the other, or where it is imp
ossible to determine whose fault or negligence brought about the occurrence of t
he incident, the one who had the last clear opportunity to avoid the impending h
arm but failed to do so, is chargeable with the consequences arising therefrom.
Assuming that Canlas was negligent in giving Mañosca the opportunity to perpetrate
the fraud, by entrusting to latter the certificates of title to the parcels of
land, it cannot be denied that the bank had the last clear chance to prevent the
fraud, by the simple expedient of faithfully complying with the requirements fo
r banks to ascertain the identity of the persons transacting with them. For not
observing the degree of diligence required of banking institutions, whose busine
ss is impressed with public interest, Asian Savings Bank has to bear the loss su
ed upon. d. Prescription Art. 1146. The following actions must be instituted wit
hin four years: (1) Upon an injury to the rights of the plaintiff; (2) Upon a qu
asi-delict; However, when the action arises from or out of any act, activity, or
conduct of any public officer involving the exercise of powers or authority ari
sing from Martial Law including the arrest, detention and/or trial of the plaint
iff, the same must be brought within one (1) year. The four-year prescriptive pe
riod is reckoned from the date when the tortious act was committed. But, accordi
ng to the DISCOVERY RULE: if the injury is discovered after the four-year period
, the reckoning point is the date of discovery and not the date of commission of
the act. Problem: X worked in an asbestos factory. Ten years after his repeated
exposure to asbestos, he shows symptoms of asbestosis. Can he still file an act
ion for damages against the employer? Answer: Yes. The prescriptive period begin
s to run from the discovery of the tortious act and not from its occurrence. Con
sumer Act of the Philippines The consumer may sue not only the manufacturer but
also the importer and seller for defective product, design, packaging, and lack
of information. The prescriptive periods for bringing the action are: If the def
ect is apparent: 4 years from purchase If the defect is hidden: 2 years from the
purchase OR discovery of the hidden defect Prescription v. Laches Prescription
pertains to the extinction of the right to file an action after the lapse of a d
efinite period. Laches, on the other hand, is a relative term. It means the inac
tion of someone who has a right; it is the failure to exercise this right. CASES
: United Airlines v. Uy [not assigned but discussed by Atty. Abaño] Digests by She
ryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 25
On a flight to the UK, Uy was required by UA to check in his briefcase. He refus
ed because the other passengers were not required to do so. He was treated rudel
y by the staff and crew of UA. Finally, he checked in the briefcase. When he rea
ched his destination, the briefcase was lost. At this point, Uy had two causes o
f action. He could have filed an action for damages under the Civil Code (for th
e rude treatment that he got from the staff) and another action under the Warsaw
Convention which provides for compensation for lost baggage. The prescriptive p
eriod of the action under the Warsaw Convention is 2 years. Instead of filing a
court action, however, Uy filed a complaint with the UA office. UA did not act o
n Uy’s complaint and sat on it for 2 years. Uy eventually filed the two civil acti
ons against UA. ISSUE: Whether the cause of action under the Warsaw Convention h
ad already prescribed. HELD: No, the action had not yet prescribed. The cause of
action under the Warsaw Convention had not yet prescribed even if it was filed
beyond the two-year prescriptive period, since the delay was due to the fault of
UA. Courts will set aside technicalities if a strict adherence to them would re
sult in injustice. Capuno v. Elordi * A civil action based on a quasi-delict mus
t be instituted within 4 years. * An action based on a quasi-delict is governed
by Art. 1150of the CC as to the question when the prescription period of 4 years
shall begin to run—that is from the day the action may be brought—from the day the
quasi-delict occurred or was committed. Allied Banking v. CA Joselito Yujuico wa
s a ranking officer of and a member of the family which controlled General Banki
ng and Trust Corporation (Genbank). In 1976, he obtained a 500k loan from said b
ank. In 1977, the Monetary Board of the Central Bank issued a resolution forbidd
ing Genbank from doing business in the Philippines. Later that same year, a reso
lution was issued ordering the liquidation of Genbank. Again, in the same year,
the liquidator and Allied Bank entered into an agreement whereby Allied Bank acq
uired all the assets and assumed all the liabilities of Genbank, including the r
eceivable due from Yujuico. Upon Yujuico’s failure to pay the loan at maturity, Al
lied Bank filed, in 1979, a complaint for collection against him. In a separate
case, in 1986, a ruling of the CA that the liquidation of Genbank was made in ba
d faith and should be annulled became final and executory. In 1987, Yujuico file
d a third party complaint to implead the Central Bank and the liquidator in the
case. Yujuico alleged that by reason of the tortuous interference by the Central
Bank with the affairs of Genbank, he was prevented from performing his obligati
on under the loan. The RTC denied the motion to admit the third-party complaint.
The CA annulled the RTC’s order and ordered the admission of the third-party comp
laint. ISSUE: Whether the third-party complaint should be admitted. HELD: It sho
uld not be admitted. Though the third-party complaint is procedurally allowable,
it is barred by prescription. A third-party complaint is a procedural device wh
ereby a “third-party” who is neither a party nor privy to the act or deed complained
of by the plaintiff, may be brought into the case with leave of court, by the d
efendant, who acts as third-party plaintiff to enforce against such third-party
defendant a right for contribution, indemnity, subrogation or any other relief,
in respect of the plaintiffs claim. In this case, the third-party complaint is “in
respect of “Allied Bank’s claim and therefore procedurally sound in itself. However
, since the claim is based on tortuous interference, which is a quasi-delict, th
e complaint should have been filed within four years from the time the cause of
action accrued [1981, or four years after the 1977 order of liquidation]. Contra
ry to Yujuico’s claim that the pprescriptive period should be counted from the CA’s
decision annulling the liquidation, it is an established rule that it is from th
e date of the act or omission violative of the right of a party when the cause o
f action arises and it is from this date that the prescriptive period must be re
ckoned. Delos Reyes v. CA Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes
from Jona Bautista’s Reviewer 26
Spouses Genaro and Evarista delos Reyes owned a parcel of land measuring 13,405
square meters. Evarista sold to spouses Catalina and Eulalio Pena 10,000 square
meters of the property. On June 4, 1943, the Penas were able to secure a TCT cov
ering not only the 10,000 square meters sold to them but also the remaining 3,40
5 square meters left unsold. The Penas then sold the whole property to the spous
es de Guzman. The de Guzmans sold it again. Eventually, the land was acquired by
Rodolfo and Zenaida Caina spouses. On July 17, 1963, a TCT over the entire prop
erty was issued in favor of the Cainas. On October 3, 1978, the heirs of Evarist
a delos Reyes filed an action against the Cainas for reconveyance of the 3,405 s
quare meters, claiming that this portion was invalidly included by the Pena Spou
ses in the titling of the 10,000 sqaure meters that they had purchased from Evar
ista. The case was dismissed by the trial court on the ground of laches. ISSUE:
Whether the action is barred by laches. HELD: Yes, the action is barred. Petitio
ners argue that their cause of action still subsists because it accrued either i
n September 1962 when Evarista delos Reyes died, or on 17 July 1963 when the TCT
was issued to Rodolfo Caiña and his sister Zenaida Caiña. This is incorrect. A caus
e of action, being an act or omission of one party in violation of the right of
another, arises at the moment such right is violated. In this case, petitioners
cause of action accrued on 4 June 1943 when the Pena spouses caused the registr
ation in their name of the entire 13,405 square meters instead of the 10,000 squ
are meters that they actually bought from Evarista delos Reyes. For it was on th
is date that the right of ownership of Evarista over the remaining 3,405 square
meters was transgressed, and from that very moment sprung the right of the owner
, and hence all her successors in interest, to file a suit for reconveyance of t
he property wrongfully taken from them. Reivindicatory actions may be brought by
the owner within 30 years after he has been deprived of his property. Under Art
. 1141 of the Civil Code, real actions over immovables prescribe after 30 years.
Thus, even if we apply the 30-year prescriptive period in accordance with the a
bove legal provisions, petitioners right to recover has already been effectivel
y foreclosed by the lapse of time, having been initiated only after 36 years fro
m the accrual of their cause of action. Be that as it may, even these laws may n
ot apply to this case in the light of the Property Registration Decree. Under th
is law, the Cainas, as fourth transferees of the property, were not required to
go beyond what appeared in the transfer certificate of title in the name of thei
r transferor. They were innocent purchasers for value having acquired the proper
ty in due course and in good faith under a clean title. The only remedy of an ow
ner who was fraudulently deprived of his land, which was subsequently sold to an
innocent purchaser for value, is to file an action for damages against the pers
on who perpetrated the fraud within four (4) years after the discovery of the de
ception. Unfortunately in this case we may never know why Evarista delos Reyes c
hose not to go after the Pena spouses to recover what could be rightfully hers,
the reason having apparently been long interred with her. e. Fortuitous Events A
ccording to Atty. Abaño, the requisites of a fortuitous event, as a defense, are:
1. 2.
CASES:
The event must be unforeseen, or if foreseen, inevitable; There must be no concu
rrent negligence on the part of the offended party.
*If an accident is caused by a tire blowout, there is a presumption that there w
as negligence.
NAPOCOR v. CA In the early morning hours of October 27, 1978, at the height of t
yphoon "Kading", a massive flood covered the towns near Angat Dam, particularly
the town of Norzagaray, causing several deaths and the loss and destruction of h
ouses, farms, plants, working animals and other properties of the people residin
g near the Angat River. The victims of the flood, private respondents herein, bl
amed the sudden rush of water to the reckless and imprudent opening of all the t
hree (3) floodgates of the Angat Dam spillway, without prior warning to the peop
le living near or within the vicinity of the dam. Among the defenses of NAPOCOR
were: it observed the necessary diligence, it gave written warnings of the openi
ng of the floodgates, there was no causal relationship between the damage and th
e acts or omissions, there Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes
from Jona Bautista’s Reviewer 27
was assumption of risk on the part of the victims, and the damages were caused b
y fortuitous event and hence, damnum absque injuria, and respondents have no cau
se of action. The RTC and CA awarded damages in favor of the victims. ISSUE: Whe
ther NAPOCOR is entitled to the defense of fortuitous event. HELD: NAPOCOR is li
able, the defense of fortuitous event does not apply. NAPOCOR cannot escape liab
ility by invoking force majeure. Acts of God or force majeure, by definition, ar
e extraordinary events not foreseeable or avoidable, events that could not be fo
reseen, or which, though foreseen, are inevitable. It is therefore not enough th
at the event could not have been foreseen or anticipated, as is commonly believe
d, but it must be one impossible to foresee or to avoid. As a general rule, no p
erson shall be responsible for those events which could not be foreseen or which
though foreseen, were inevitable. However, the principle embodied in the act of
God doctrine strictly requires that the act must be occasioned solely by the vi
olence of nature. Human intervention is to be excluded from creating or entering
into the cause of the mischief. When the effect is found to be in part the resu
lt of the participation of man, whether due to his active intervention or neglec
t or failure to act, the whole occurrence is then humanized and removed from the
rules applicable to the acts of God. In the case at bar, although the typhoon "
Kading" was an act of God, petitioners can not escape liability because their ne
gligence was the proximate cause of the loss and damage – (1) They had sufficient
warning of the typhoon and they should have taken action by decreasing the water
level in anticipation of the coming rain; (2) The release of the water was not
gradual; the lower court found that the opening of the spillways was sudden and
abrupt; (3) The spillways were opened in the wee hours of the morning and withou
t sufficient warning to the townsfolk; (4) Though written warnings were dispatch
ed, they were given to ordinary town employees and policemen, and not to respons
ible city officers who could have relayed the warning to everyone concerned. Cle
arly, the requirement that the fortuitous event not be humanized is absent in th
is case. PAL v. CA Pantejo, then City Fiscal of Surigao City, disembarked from a
PAL flight in Cebu. Due to typhoon Osang, flight was cancelled. PAL gave out P1
00 & P200 to passengers for their expenses during their stay in Cebu. Pantejo re
fused the money. Instead, he asked that he be billeted in a hotel at PAL’s expense
. PAL refused. Pantejo stayed with fellow passengers whom he promised to pay whe
n they reach Surigao. Later on, he learned that co-passengers were reimbursed by
PAL for their expenses. PAL offered him P300 when he threatened to sue on the g
round of undue discrimination. ISSUE: Whether PAL is liable for damages for its
failure to provide hotel accommodations for Pantejo and to reimburse him for his
expenses incurred by reason of the cancellation of his connecting flight due to
force majeure. HELD: Pal is liable. A contract to transport passengers is quite
different in kind and degree from any other contractual relation, and this is b
ecause of the relation which an air carrier sustains with the public. Its busine
ss is mainly with the travelling public. It invites people to avail of the comfo
rts and advantages it offers. The contract of air carriage, therefore, generates
a relation attended with a public duty. Neglect or malfeasance of the carrier s
employees naturally could give ground for an action for damages. Assuming argue
ndo that the airline passengers have no vested right to this amenities in case a
flight is cancelled due to force majeure, what makes petitioner liable for dama
ges in this particular case and under the facts obtaining herein is its blatant
refusal to accord the so-called amenities equally to all its stranded passengers
who were bound for Surigao City. No compelling or justifying reason was advance
d for such discriminatory and prejudicial conduct. More importantly, it has been
sufficiently established that it is petitioner s standard company policy, whene
ver a flight has been cancelled, to extend to its hapless passengers cash assist
ance or to provide them accommodations in hotels with which it has existing tie-
ups.
Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewe
r
28
Petitioner acted in bad faith in disregarding its duties as a common carrier to
its passengers and in discriminating against herein respondent Pantejo. It was e
ven oblivious to the fact that this respondent was exposed to humiliation and em
barrassment especially because of his government position and social prominence,
which altogether necessarily subjected him to ridicule, shame and anguish Cipri
ano v. CA * Violation of a statutory duty is negligence per se. * The existence
of a contract between the parties does not bar a finding of negligence under the
principles of quasi-delict. - failure to comply with a statutory duty to secure
insurance coverage constitutes negligence. Yobido v. CA Spouses Tumboy & their
minor children boarded a Yobido Liner bus. While in Agusan del Sur, the left fro
nt tire of the bus exploded. The bus fell into a ravine around three (3) feet fr
om the road & struck a tree. The incident resulted in the death of 28-year-old T
ito Tumboy, & physical injuries to other passengers. A complaint for breach of c
ontract of carriage, damages & attorney s fees was filed by Leny & her children
against Alberta Yobido, the owner of the bus, & Cresencio Yobido, its driver.The
Yobidos raised the affirmative defense of caso fortuito. The Tumboys asserted t
hat violation of the contract of carriage between them & the Yobidos was brought
about by the driver s failure to exercise the diligence required of the carrier
in transporting passengers safely to their place of destination. According to L
eny Tumboy, the winding road it traversed was not cemented & was wet due to the
rain. The bus which was full of passengers had cargoes on top. Since it was "run
ning fast," she cautioned the driver to slow down but he merely stared at her th
rough the mirror The Yobidos contend the accident was due to a fortuitous event.
The conductor testified that bus was not full, that the bus was running at a sp
eed of "60-50" & was going slow because of the zigzag road. He affirmed that the
left front tire that exploded was a "brand new tire" w/c he mounted on the bus
5 days before the incident. ISSUE: Whether the tire blowout was a fortuitous eve
nt that would exempt the Yobidos from liability. HELD: The tire blowout was NOT
a fortuitous event. Therefore, the Yobidos are liable. As a rule, when a passeng
er boards a common carrier, he takes the risks incidental to the mode of travel
he has taken. After all, a carrier is not an insurer of the safety of its passen
gers & is not bound absolutely & at all events to carry them safely & without in
jury. However, when a passenger is injured or dies, while traveling, the law pre
sumes that the common carrier is negligent. In culpa contractual, once a passeng
er dies or is injured, the carrier is presumed to have been at fault or to have
acted negligently. This disputable presumption may only be overcome by evidence
that the carrier had observed extraordinary diligence as prescribed by Articles
1733, 10 1755 & 1756 of the Civil Code or that the death or injury of the passen
ger was due to a fortuitous event. Consequently, the court need not make an expr
ess finding of fault or negligence on the part of the carrier to hold it respons
ible for damages sought by the passenger. Under the circumstances of this case,
the explosion of the new tire may not be considered a fortuitous event. There ar
e human factors involved in the situation. The fact that the tire was new did no
t imply that it was entirely free from manufacturing defects or that it was prop
erly mounted on the vehicle. Neither may the fact that the tire bought & used in
the vehicle is of a brand name noted for quality, resulting in the conclusion t
hat it could not explode within five days use. Be that as it may, it is settled
that an accident caused either by defects in the automobile or through the negl
igence of its driver is not a caso fortuito that would exempt the carrier from l
iability for damages. Moreover, a common carrier may not be absolved from liabil
ity in case of force majeure or fortuitous event alone. The common carrier must
still prove that it was not negligent in causing the death or injury resulting f
rom an accident. JAL v.CA Respondents in this case are passengers of JAL from Sn
Fo and LA bound for Mla. As an incentive for traveling w/ JAL, the flights made
an overnight stopover in Japan at the airlines’ expense. Digests by Sheryl, Cayo,
Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 29
The passengers were billeted in Hotel Nikko Narita for the night. The ff day, th
ey learned that Mt. Pinatubo erupted and all flights to Mla were cancelled indef
initely because NAIA was closed. JAL rebooked their flights for the 16th of June
(2 days after scheduled flight). JAL paid for their unexpected overnight stay.
Unfortunately their flight on the 16th was also cancelled. However, JAL informed
them that it (JAL) would no longer shoulder their expenses. Respondents stayed
in Japan until the 22nd and they were forced to pay meals & accommodations from
their personal funds. A month later, the respondents filed an action for damages
against JAL. ISSUE: Whether JAL was obligated to shoulder respondent’s expenses d
uring the unexpected stay brought about by the eruption of Pinatubo. HELD: No. C
ommon carriers are NOT absolutely responsible for all injuries or damages even i
f the same were caused by a fortuitous event. To rule otherwise would render the
defense of force majeure as an exception from any liability, illusory and ineff
ective. When a party is unable to fulfill his obligation because of force majeur
e, the general rule is that he cannot be held liable for damages for non-perform
ance. Airline passengers must take such risks incident to traveling. Adverse wea
ther conditions/ extreme climate changes are some of the perils involved in air
travel, the consequences of which the passenger must assume/ expect. After all,
common carriers are NOT the insurer of all risks. If the fortuitous event was ac
companied by neglect and malfeasance by the carrier’s employees, an action for dam
ages against the carrier is permissible. BUT that is not the situation in this c
ase. f. diligence Art. 2180 (last par.) The responsibility treated of in this ar
ticle shall cease when the persons herein mentioned prove that they observed all
the diligence of a good father of a family to prevent damage.
Smith v. Cadwallader Steamer Helen C belonging to Cadwallader Co. under the comm
and of Capt Lasa, in the course of its maneuvers to moor at Smith’s wharf, struck
the wharf, partially demolishing it and throwing the timber piled thereon into t
he water. Smith filed an action for damages against Cadwallader for the demoliti
on of the wharf and loss of timber. Cadwallader alleged that the demolition of t
he wharf was due 1. to the excessive weight of the timber piled upon it by Smith
to be loaded on Helen C 2. bad condition of piles supporting the wharf ISSUE: W
hether Cadwallader is liable. HELD: Cadwallader is NOT liable. The wharf was ove
rloaded. This could have contributed to the wharf’s collapse. Captain Lasa was a d
uly licensed captain, authorized to navigate and direct a vessel of any tonnage
and Cadwallader contracted his services because of his reputation as a captain.
The presumption of liability has been overcome by the exercise of care and dilig
ence of a good father of a family in selecting Capt. Lasa. Cadwallader is theref
ore not liable, having exercised due diligence. Ong v. Metropolitan Water Domina
dor Ong went to the recreational swimming pools of Metro H2O District with his 2
brothers. They stayed in the smaller (&shallower) pool. His 2 bros. decided to
go to the bigger pool, and he decided to buy a Coke. Later, someone noticed him
swimming under water for a long time. The lifeguards and medical personnel tried
to revive him, but it was too late. The cause of his death was asphyxia by subm
ersion in water. The parents of Ong filed an action for damages against MWD. Dig
ests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 3
0
ISSUE: Whether the death of Ong can be attributed to the negligence of MWD and/o
r its employees so as to entitle the Ongs to recover damages. HELD: MWD was NOT
negligent. The operator of the swimming pools will not be held liable as it exer
cised due diligence in the selection of and supervision over its employees and t
hat it had observed the diligence required by law—in that it has taken all necessa
ry precautions to avoid danger to the lives of its patrons/ prevent accident w/c
may cause their death. The person claiming damages has the burden of proving th
at the damage is causedby the fault/ negligence of the person from whom the dama
ge is claimed, or of one of his employees. The Ongs are contending that MWD had
the last clear chance to save the boy’s life. The Court held that the last clear c
hance doctrine can never apply where the party charged is required to act instan
taneously, and if the injury cannot be avoided by the application of all means a
t hand after the peril is/ should have been discovered. Fabre v. CA As common ca
rriers, the Fabres were bound to exercise “extraordinary diligence” for the safe tra
nsportation of the passengers to their destination. This duty is of care is NOT
excused by proof that they exercised the diligence of a good father of the famil
y in the selection and supervision of their employee. PBCom v. CA As elucidated
in Simex International (Manila), Inc. In the case of banks, however, the degree
of diligence required is more than that of a good father of a family. Considerin
g the fiduciary nature of their relationship with their depositors, banks are du
ty bound to treat the accounts of their clients with the highest degree of care.
g. Mistake and Waiver Art. 1331. In order that mistake may invalidate consent,
it should refer to the substance of the thing which is the object of the contrac
t, or to those conditions which have principally moved one or both parties to en
ter into the contract. Spouses Theis v. CA Calson’s Development owned three lots i
n Tagaytay – Parcels Nos. 1, 2, and 3. Adjacent to parcel no. 3 was parcel no. 4,
which was not owned by Calson’s. Calson’s built a house on Parcel No. 3. In a subseq
uent survey, parcel no. 3, where the house was built, was erroneously indicated
to be covered by the title to parcel no. 1. Parcel nos. 2 and 3 were mistakenly
surveyed to be located where parcel no. 4 was located. See diagram below: Actual
2 4 According to 1 the Survey/ What3 Calson’s believed 1 Unaware of this mistake b
y which Calson’s appeared to be the owner of parcel no. 4, Calson’s sold what it tho
ught was parcel nos. 2 and 3 (but what was actually parcel no. 4) to the Theis s
pouses. Upon execution of the deed of sale, Calson’s delivered the certificates of
title to parcel nos. 2 and 3 to the spouses. The spouses then went to Germany.
About three years later, they returned to Tagaytay to plan the construction of t
heir house. It was then that they discovered that parcel no. 4, which was sold t
o them, was owned by someone else, and that what was actually sold to them were
parcel nos. 2 and 3. The real parcel no. 3, however, could not have been sold to
them since a house had already been built thereon by Calson’s even before the exe
cution of the contract, and its construction cost far exceeded the price paid by
the spouses for the two parcels of land. The spouses insisted that they wanted
parcel no. 4, but this was impossible, since Calson’s did not own it. Calson’s offer
ed them the real parcel nos. 1 and 2 instead since these were really what it int
ended to sell to the spouses. The spouses refused and insisted that they wanted
parcel nos. 2 and 3 since the TCTs to these lots were the ones that had been iss
ued in their name. Calson’s then offered to return double the amount already paid
by the spouses. The spouses still refused. Calson’s filed an action to annul the c
ontract of sale.
ISSUE: Whether the contract of sale can be annulled. HELD: Yes, the contract can
be annulled on the ground of mistake. Article 1390 of the Civil Code provides t
hat contracts where the consent is vitiated by mistake are annullable. In order
that mistake may invalidate consent, it should refer to the substance of the thi
ng which is the object of the contract, or to those conditions which have princi
pally moved one or both parties to enter into the contract. The concept of error
includes: (1) ignorance, which is the absence of knowledge with respect to a th
ing; and (2) mistake, which is a wrong conception about said thing, or a belief
in the existence of some fact, circumstance, or event, which in reality does not
exist. In both cases, there is a lack of full and correct knowledge about the t
hing. Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s R
eviewer 31
2&3
In this case, Calson’s committed an error of the second type. This mistake invalid
ated its consent, and as such, annulment of the deed of sale is proper. The erro
r was an honest mistake, and the good faith of Calson’s is evident in the fact tha
t when the mistake was discovered, it immediately offered two other vacant lots
to the spouses or to reimburse them with twice the amount paid. Petitioners’ insis
tence in claiming parcel no. 3 on which stands a house whose value exceeds the p
rice paid by them is unreasonable. This would constitute unjust enrichment. More
over, when the witness for the spouses testified, he stated that what was pointe
d out to the spouses was a vacant lot. Therefore, they could not have intended t
o purchase the lot on which a house was already built. Gatchalian v. Delim Reyna
lda Gatchalian boarded respondent s "Thames" mini-bus. While the bus was running
along the highway "a snapping sound" was suddenly heard at one part of the bus.
The bus driver dismissed it as a normal occurrence. Shortly thereafter, the veh
icle bumped a cement flower pot on the side of the road, went off the road, turn
ed turtle and fell into a ditch. Several passengers, including Gatchalian, were
injured. They were promptly taken to the hospital for treatment. While injured p
assengers were confined, Mrs. Adela Delim, visited them and paid for their hospi
talization and medical expenses. She also gave Gatchalian P12.00 with which to p
ay her transportation expense in going home from the hospital. Mrs. Delim also a
sked the injured passengers to sign an already prepared Joint Affidavit which st
ated “That we are no longer interested to file a complaint, criminal or civil agai
nst the said driver and owner of the said Thames, because it was an accident and
the said driver and owner of the said Thames have gone to the extent of helping
us to be treated upon our injuries.” Notwithstanding the document, Gatchalian fil
ed an action extra contractu to recover compensatory and moral damages. (inferio
rity complex, lost beauty and employment opportunities) Delims averred that the
vehicular mishap was due to force majeure, and that Gatchalian had already been
paid and had waived any right to institute any action against them. ISSUE: Wheth
er the Delims are liable to Gatchalian, notwithstanding her waiver. HELD: Yes. T
he Delims are liable. The waiver executed by Gatchalian was not a valid waiver.
A waiver, to be valid and effective, must in the first place be couched in clear
and unequivocal terms which leave no doubt as to the intention of a person to g
ive up a right or benefit which legally pertains to him. A waiver may not casual
ly be attributed to a person when the terms thereof do not explicitly and clearl
y evidence an intent to abandon a right vested in such person. Because what is i
nvolved here is the liability of a common carrier for injuries sustained by pass
engers in respect of whose safety a common carrier must exercise extraordinary d
iligence, we must construe any such purported waiver most strictly against the c
ommon carrier. For a waiver to be valid and effective, it must not be contrary t
o law, morals, public policy or good customs. We believe this purported waiver i
s offensive to public policy because it dilutes the degree of care required of c
ommon carriers. In case of death or injuries to passengers, a statutory presumpt
ion arises that the common carrier was at fault or had acted negligently unless
it proves that it [had] observed extraordinary diligence as prescribed in Articl
es 1733 and 1755. h. Others Damnum Absque Injuria (damage without injury): There
is damage but no liability because the person who caused the injury was exercis
ing a legal right. Simon v. David The dismissal by the office of the fiscal of t
he complaint for estafa filed by the plaintiffs insufficient to warrant a judgme
nt for damages in defendant s favor, in the absence of competent evidence that i
n filing the complaint, plaintiff had acted in bad faith, knowing that the charg
e was groundless. Proline Sports v. CA
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By virtue of its merger with A.G. Spalding Bros., Inc., QUESTOR became the owner
of the trademark "Spalding" appearing in sporting goods, implements and apparat
uses. PRO LINE is the exclusive distributor of "Spalding" sports products in the
Philippines. UNIVERSAL, on the other hand, is engaged in the sale and manufactu
re of sporting goods while co-respondent Monico Sehwani is impleaded in his capa
city as president of the corporation. 16 years ago(1981), Edwin Dy Buncio, Gener
al Manager of PRO LINE, sent a letter-complaint to the NBI regarding the alleged
manufacture of fake "Spalding" balls by UNIVERSAL. The NBI conducted a search (
by virtue of a warrant) on the premises of Universal. Basketballs and volleyball
s marked "Spalding" were seized and confiscated by the NBI. UNIVERSAL’S factory wa
s sealed and padlocked as the materials & machineries were too heavy to be remov
ed from the premises and brought under the actual physical custody of the court.
Upon motion of UNIVERSAL, Judge ordered the lifting of the seal and padlock on
the machineries. The petners filed a petn for certiorari in the CA. Also, the pe
tners filed a criminal complaint for unfair competition against Sehwani. The com
plaint was dropped but an info was later filed by the Ministry of Justice. The c
ase against Sehwani did not propser b/c they were unable to prove that Sehwani s
old the fake Spalding products (-- the selling being an essential element of the
crime). UNIVERSAL and Sehwani filed a civil case for damages (malicious prosecu
tion) charging that PRO LINE and QUESTOR maliciously and without legal basis com
mitted acts to their damage and prejudice. ISSUE: Whether Proline and Questor ar
e liable for damages. HELD: PROLINE & QUESTOR NOT liable for damages. There was
no malicious prosecution. The elements of malicious prosecution are: (1) absence
of probable cause (2) legal malice on the part of the defendant. The filing of
the crim case was based on probable cause: that a corporation other than the cer
tified owner of the trademark is engaged in the unauthorized manufacture of prod
ucts bearing the same TM engenders a reasonable belief that a crim offense for u
nfair competition is being committed. A resort to judicial processes is NOT per
se evidence of ill will upon which a claim for damages may be based; Malice is a
n inexcusable intent to injure, oppress, vex, annoy or humiliate. Proline and Qu
estor, in filing the action, were merely exercising their legal rights. Hence, t
hey are not liable for damages. Amonoy v. Gutierrez * Well-settled is the maxim
that damage resulting from the legitimate exercise of a person’s right is a loss w
ithout injury—damnum absque injuria—for which the law gives no remedy. * Even if the
acts of a party may have been legally justified at the outset, their continuati
on after the issuance of the TRO amounted to an insidious abuse of his right—his a
cts constituted not only an abuse of a right, but an invalid exercise of a right
that had been suspended. * The exercise of a right ends when the right disappea
rs when it is abused, especially to the prejudice of others. Mariscal v. CA Bell
a Catalan filed an action for annulment of her marriage with Rogelio Mariscal on
the ground that it was void ab initio for having been solemnized w/o a valid ma
rriage license and for being bigamous. She also sought to recover $32T and damag
es. Rogelio Mariscal also filed for annulment claiming that he was forced to mar
ry her at gunpoint. He also asked for damages. Catalan moved for the dismissal o
f the case filed by Mariscal on the ground of litis pendentia. The case was dism
issed by the CA. Mariscal contends that the case should not have been dismissed
because its resolution would NOT constitute res judicata. ISSUE: Whether the dis
missal of the case filed by Mariscal was correctly dismissed. HELD: Yes, the cas
e was correctly dismissed on the ground of litis pendentia. Digests by Sheryl, C
ayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 33
In litis pendnetia what is essential is the identity and similarity of the issue
s under consideration. In his effort to have the case resolved in a different ve
nue, petitioner has resorted to nit-picking and in the process has lost track of
the real issue besetting the 2 axns. A counterclaim partakes of the nature of a
complaint and/or a cause of axn against the plaintiff in a case. To interpose a
cause of action in a counterclaim and again invoke it in a complaint against th
e same person or party would be splitting a cause of action not sanctioned by th
e Rules. Spouses Lim v. Uni Tan Uni-Tan filed a complaint in the MTC against the
Lims for unlawful detainer. The MTC ruled in favor of Unit-Tan and ordered the
Lims to vacate the premises and pay a sum as rental until vacation. On appeal, t
he RTC reversed the MTC ruling and dismissed the complaint against the Lims. Sin
ce properties of the Lims had already been sold on execution during the proceedi
ng before the lower court, the RTC, upon motion, ordered that the items not sold
at the execution sale should be returned to them. The Lims apparently wanted an
award of damages because of the sale of their property. The RTC denied the clai
m on the ground that the Lims failed to file a supersedeas bond to stay the exec
ution of the judgment. Lims contend that the RTC erred in not awarding them dama
ges since they were prejudiced by the ejectment suit. ISSUE: Whether the Lims ar
e entitled to damages. HELD: No, they are not entitled to damages. Neither the U
ni-Tan nor the sheriff may be faulted for the items sold on execution, because t
he Lim spouses had failed to file a supersedeas bond to stay the execution of th
e MTC judgment. The immediate execution of a judgment favorable to the plaintiff
is mandated, and the court’s duty to order it is practically ministerial. There i
s no basis for petitioners’ claim for damages because respondent was in the lawful
exercise of its right at the time of the execution sale. Spouses Lim should hav
e paid the bond, so that execution will be stayed. Those who exercise their righ
ts properly do no legal injury. If damages result from their exercise of their l
egal rights, it is damnum absque injuria—a loss without injury, for which the law
gives no remedy. IV. VICARIOUS/PRIMARY/SOLIDARY LIABILITY 1. Vicarious Liability
Article 2180. The obligation imposed by Article 2176 is demandable not only for
one’s own acts or omissions, but also for those of persons for whom one is respon
sible. The father and, in case of his death or incapacity, the mother, are respo
nsible for the damages caused by the minor children who live in their company. G
uardians are liable for damages caused by the minors or incapacitated persons wh
o are under their authority and live in their company. The owners and managers o
f an establishment or enterprise are likewise responsible for damages caused by
their employees in the service of the branches in which the latter are employed
or on the occasion of their functions. Employers shall be liable for the damages
caused by their employees and household helpers acting within the scope of thei
r assigned tasks, even though the former are not engaged in any business or indu
stry. The State is responsible in like manner when it acts through a special age
nt; but not when the damage has been caused by the official to whom the task don
e properly pertains, in which case what is provided in Article 2176 shall be app
licable. Lastly, teachers or heads of establishments of arts and trades shall be
liable for damages caused by their pupils and students or apprentices, so long
as they remain in their custody. The responsibility treated of in this article s
hall cease when the persons herein mentioned prove that they observed all the di
ligence of a good father of a family to prevent damage.
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Article 2181. Whoever pays for the damage caused by his dependents or employees
may recover from the latter what he had paid or delivered in satisfaction of the
claim. Article 2182. If the minor or insane person causing damage has no parent
s or guardians, the minor or insane person shall be answerable with his own prop
erty in an action against him where a guardian ad litem shall be appointed.
Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewe
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PERSON VICARIOUSLY LIABLE Father/Mother Guardian Owner and manager of establishm
ent
NEGLIGENT PERSON Minor child (below 21 years old) Minor ward or incapacitated pe
rson Employee
REQUISITE CONDITION Living with parents Under the custody of the guardian this m
eans that there must be a court appointment In the service of the branches or on
the occasion of their functions (whether or not acting within the scope of thei
r assigned tasks) It is necessary to prove that there is an employer-employee re
lationship Acting within the scope of assigned tasks Definite order to do some t
ask, foreign to his usual functions Student or apprentice must be in their custo
dy Teacher-in-charge is liable if the school is an academic institution; Head of
school is liable if the school is an institution of arts and trades
Employers even though not engaged in business or industry State Teachers Heads o
f Schools
Employees and household helpers Special agent Student or apprentice
a. parents and guardians RA 6809 amended Article 234 of the Family Code. As amen
ded by RA 6809, Article 234 now reads as follows: Art. 234. Emancipation takes p
lace by the attainment of majority. Unless otherwise provided, majority commence
s at the age of eighteen years. Effects of emancipation: Terminates parental aut
hority over the person and property of the child, who shall then be qualified an
d responsible for all acts of civil life, EXCEPT: 1. 2. Contracting marriage sha
ll require parental consent until the age of 21. Parents and guardians are still
responsible for their children and wards below 21 years of age mentioned in the
second and third paragraphs of Article 2180 of the Civil Code.
Cuadra v. Monfort Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were cl
assmates in Grade 6. They were assigned to weed the grass in the school premises
. Monfort found a plastic headband and jokingly said aloud that she had found an
earthworm. To frighten Cuadra, Monfort tossed the headband at her. The headband
hit Cuadra in the eye. Cuadra rubbed the injured eye and treated it with some p
owder. The eye swelled the next day, and Cuadra was taken to the doctor. She und
erwent surgical operation, but eventually, she lost sight in her right eye. Cuad
ra’s parents filed a civil suit against Monfort’s father for damages. ISSUE: Whether
Monfort’s father is liable for damages. HELD: No. Article 2176 provides for liabi
lity in case of fault or negligence. When the act or omission is that of one per
son for whom another is responsible, the latter becomes himself liable under Art
icle 2180. The basis of this vicarious liability is also fault or negligence, wh
ich is presumed from that which accompanied the causative act or omission. The p
resumption is merely prima facie and may therefore be rebutted. In this case, th
ere is nothing from which it may be inferred that Monfort’s father could have prev
ented the damage by the observance of due care, or that he was in any way remiss
in the exercise of his parental authority in failing to foresee such damage, or
the act which caused it. On the contrary, his child was at school, where it was
his duty to send her, and where she was, as he had the right to expect her to b
e, under the care and supervision of the teacher. And as far as the act which ca
used the injury was concerned, it was an innocent prank not unusual among childr
en at play and which no parent, however careful, would have any special reason t
o anticipate, much Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jo
na Bautista’s Reviewer 36
less guard against. Nor did it reveal any mischievous propensity, or indeed any
trait in the child’s character which would reflect unfavorably on her upbringing a
nd for which the blame could be attributed to her parents. Dissenting opinion, B
arredo, J: Monfort’s father should be liable. There was no evidence that he had pr
operly advised his daughter to behave properly and not to play dangerous jokes o
n classmates and playmates. Elcano v. Hill Reginald Hill was a minor, married, a
nd living with and dependent on his father Marvin. He killed Agapito Elcano, for
which he was criminally prosecuted. He was acquitted on the ground of lack of i
ntent to kill, coupled with mistake. The parents of Elcano filed an action for d
amages against Reginald and Marvin Hill. Defendants moved to dismiss on the grou
nds of res judicata and lack of cause of action against Marvin Hill. They claim
that Marvin Hill was relieved as guardian of Reginald through emancipation by ma
rriage. Hence, the Elcanos could not claim damages against Marvin Hill. ISSUE: W
hether Marvin Hill is liable for damages. HELD: Yes. While it is true that paren
tal authority is terminated upon emancipation of the child, and under Article 39
7 of the Civil Code, emancipation takes place by the marriage of a minor child,
it also clear that pursuant to Article 399, emancipation by marriage of the mino
r is not really full or absolute. The minor emancipated by marriage can sue and
be sued in court only with the assistance of his father, mother, or guardian. Un
der Article 2180, the father, and in case of his death or incapacity, the mother
, are responsible for the damages caused by the minor children who live in their
company. In this case, Reginald, although married, was living with his father a
nd getting subsistence from him at the time of the occurrence in question. The r
eason behind the joint and solidary liability of parents with their offending ch
ild under Article 2180 is that it is the obligation of the parent to supervise t
heir minor children in order to prevent them from causing damage to third person
s. On the other hand, the clear implication of Article 399, in providing that a
minor emancipated by marriage may not sue or be sued without the assistance of t
he parents is that such emancipation does not carry with it freedom to enter int
o transactions or do any act that can give rise to judicial litigation. Surely,
the killing of a person invites judicial action. Hence, Article 2180 applies to
Marvin Hill. However, since Reginald is now of age, as a matter of equity, Marvi
n Hill’s liability has become merely subsidiary to that of his son. b. Owners and
Managers of Enterprises Heirs of Delos Santos v. CA The M/V Mindoro owned by Com
pania Maritima was bound for New Washington, Aklan. In the wee hours of the morn
ing, the vessel met typhoon “Welming” on the Sibuyan Sea, Aklan. The vessel sank, as
a result of which, many of the passengers drowned. In a decision of the Board o
f Marine Inquiry, it was found that the captain and some members of the crew wer
e negligent in operating the vessel. The Board imposed upon them a penalty of su
spension and/or revocation of their license. However, the decision could not be
executed against the captain who perished with the vessel. The heirs of the pass
engers and some of the survivors filed an action for damages against Compania Ma
ritima. The RTC and CA absolved Compania from liability. The CA found that that
although there was concurring negligence on the part of the captain, Compania ca
nnot be held liable based on the principle of limited liability of the shipowner
or ship agent under Article 587 of the Code of Commerce. ISSUE: Whether Compani
a Maritima is liable for damages. HELD: Yes. There is no dispute as to the findi
ng of the captain’s negligence. The controversy centers on the negligence of Compa
nia Maritimia and the application of Article 587 of the Code of Commerce. Articl
e 587 provides: Art. 587. The ship agent shall also be civilly liable for indemn
ities in favor of third persons which may arise from the conduct of the captain
in the care of goods which he loaded on the vessel, but he may exempt himself th
erefrom by abandoning the vessel with all her equipments and the freight it may
have earned during the voyage. Digests by Sheryl, Cayo, Rosa Lecture Notes and N
otes from Jona Bautista’s Reviewer 37
Under this provision, a shipowner or agent has the right of abandonment, and his
liability is confined to that which he has a right to abandon – the vessel with a
ll her equipments and the freight it may have earned during the voyage. However,
this article applies only where the fault or negligence is committed solely by
the captain. In cases where the shipowner is likewise to be blamed, Article 587
does not apply. The situation will instead be covered by the provisions of the C
ivil Code on Common Carriers. Common carriers are tasked to observe extraordinar
y diligence in the vigilance over the goods and for the safety of its passengers
. Whenever death or injury to a passenger occurs, common carriers are presumed t
o have been at fault or to have acted negligently unless they prove that they ob
served extraordinary diligence. In this case, Compania Maritima itself was negli
gent, as shown by the following: 1. The captain knew of the typhoon beforehand,
so it can be presumed that Maritima also knew about the typhoon advisories. In s
pite of the typhoon advisories, it allowed the ship to depart from Manila. In so
doing, Maritima displayed lack of foresight and minimum concern for the safety
of its passengers, taking into account the surrounding circumstances. The CA hel
d that the captain was negligent in overloading the ship. However, Maritima shar
ed in this negligence. A closer supervision by Maritima could have prevented the
overloading of the ship. Moreover, Maritima allowed the ship to leave Manila la
ter than its schedule. If it had made the ship leave earlier, the encounter with
the typhoon could have been avoided. While the ship was seaworthy and had lifes
aving equipment, Maritima failed to show evidence that it had installed a radar
which could have allowed the vessel to navigate safely for shelter during a stor
m.
2.
3.
Since the foregoing shows the lack of extraordinary diligence and the negligence
of Maritima, it is liable for damages. St. Francis High School v. CA Ferdinand
Castillo was a freshman at St. Francis High School. He asked his parents for per
mission to go to a picnic at a beach organized by his teachers. His parents allo
wed him only to bring food to the picnic and to go straight home after. However,
he went and stayed at the picnic. While the students and teachers were in the w
ater, one of the female teachers appeared to be drowning. Ferdinand came to her
rescue, but in the process, he himself drowned. His parents filed an action for
damages against the teachers, the school, and the owners of the school. ISSUE: W
hether St. Francis High School and the teachers are liable for damages. HELD: No
. They are not liable because they were not guilty of any negligence. St. Franci
s is not liable. Under Article 2180, before an employer may be held liable for t
he negligence of his employee, the act or omission which caused damage or prejud
ice must have occurred while an employee was in the performance of his assigned
tasks. In this case, the teachers were not in the actual performance of their as
signed tasks. The incident happened not within school premises, not on a school
day, and while the teachers and students were holding a purely private affair. T
he picnic had not permit from the school principal; it was neither a school-sanc
tioned activity nor an extra-curricular activity. Mere knowledge by the principa
l of the picnic does not show consent to the holding of the same. Therefore, Art
icle 2180 is not applicable. To apply it would make employers liable for acts or
omissions of employees even if such were not committed by the employees in the
performance of their duties. The teachers are not liable either. They did their
best and exercised the diligence of a good father of a family to prevent any unt
oward incident or damages to the students who joined the picnic. In fact, the cl
ass adviser invited two male teachers who were PE instructors and scout masters
with knowledge of First Aid and swimming. Both these teachers did all that was h
umanly possible to save the child by administering first aid upon him. Dissentin
g opinion, Padilla, J.: The school and the teachers are liable. Though the teach
ers did exert every effort to resuscitate the child, there was negligence on the
ir part because they failed to exercise diligent supervision over the children B
EFORE the incident took place. They did not test the waters to see the possible
dangers of swimming in the beach. Moreover, the male teachers who were supposed
to act as lifeguards were nowhere within the vicinity of the beach at the time t
he incident happened. They might even have been having a drinking spree as testi
fied by one of the witnesses. The school is liable for the negligence of the tea
chers under Article 2180. The excursion had the stamp of authority of the school
by reason of the participation of several teachers. The principal not only knew
of the Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s
Reviewer 38
excursion but was even invited to attend. Having knowledge of the activity, he s
hould have taken appropriate measures to ensure the safety of the students. His
silence must be construed as implied consent to the activity. As administrative
head of the school, the principal acted as agent of the school. Article 2180 par
agraphs 1 and 5 are applicable in this situation. No proof was presented by the
owners of the school that they exercised the care and diligence of a good father
of a family in the selection and/or supervision of the employees causing the in
jury or damage. Hence, they should be accountable for the death of the student.
c. Employers Franco v. IAC Yulo was driving a Franco Bus when he swerved to the
opposite lane to avoid colliding with a parked truck. The Franco Bus took the la
ne of an incoming Isuzu Mini Bus driven by Lugue. The two vehicles collided, res
ulting in the deaths of both drivers and two passengers of the Mini Bus. The own
er of the Isuzu Mini Bus, the wife of one of the passengers who died, and the wi
fe of the driver of the Mini Bus filed an action for damages against Mr. and Mrs
. Franco, owners of the Franco Transportation Company. The spouses set up the de
fense that they exercised the diligence of a good father of a family in selectin
g and supervising their employees, including the deceased driver. The RTC held t
hat this defense of due diligence could not be invoked by the spouses since the
case was one for criminal negligence punishable under Article 102 and 103 of the
Revised Penal Code and not from Article 2180 of the Civil Code. It held the spo
uses liable for damages to the plaintiffs. The CA agreed with the lower court. I
SSUES: 1. 2. Whether the action for damages was predicated upon crime or quasi d
elict and whether the defense of due diligence can be invoked by the spouses. Wh
ether the spouses are liable for damages.
HELD: The action is predicated upon quasi delict, not upon crime. Hence, the def
ense of due diligence can be invoked by the defendants. However, in this case, t
he spouses were not able to prove such due diligence. Therefore, they are liable
for damages under Article 2180 of the Civil Code. 1. Distinction should be made
between the subsidiary liability of the employer under the RPC and the employer’s
primary liability under the Civil Code, which is quasi-delictual or tortious in
character. The first type of liability is governed by Articles 102 and 103 of t
he RPC, which provide that employers have subsidiary civil liability in default
of their employees who commit felonies in the discharge of their duties. The sec
ond kind is governed by Articles 2176, 2177, and 2180 of the Civil Code on the v
icarious liability of employers for those damages caused by their employees acti
ng within the scope of their assigned tasks. In this second kind, the employer’s l
iability ceases upon proof that he observed all the diligence of a good father o
f a family to prevent damage. Under Article 103 of the RPC, the liability of the
employer is subsidiary to the liability of the employee. Before the employer’s su
bsidiary liability may be proceeded against, it is imperative that there should
be a criminal action where the employee’s criminal negligence are proved. Without
such criminal action being instituted, the employer’s liability cannot be predicat
ed under Article 103. In this case, there was no criminal action instituted beca
use the driver who should stand as accused died in the accident. Therefore, ther
e is no basis for the employer’s subsidiary liability, without the employee’s primar
y liability. It follows that the liability being sued upon is based not on crime
, but on culpa aquiliana, where the defense of the exercise of the diligence of
a good father of a family may be raised by the employer. The employers are liabl
e since they failed to prove that they exercised the diligence of a good father
of a family in selecting and/or supervising the driver. They admitted that the o
nly kind of supervision given to the drivers referred to the running time betwee
n the terminal points of the line. They only had two inspectors whose duties wer
e only ticket inspections. There is no evidence that they were really safety ins
pectors.
2.
Go v. IAC Floverto Jazmin was a US citizen, residing in the Philippines at 34 Ma
ravilla St. Mangatarem, Pangasinan. He regularly received checks from the US gov
ernment through the Mangatarem post office, which he encashed at the Prudential
Bank branch in Pampanga. In January 1975, he failed to receive one of the checks
on time, prompting him to inquire from the post offices. The result of his inqu
iries were unsatisfactory, so he wrote the US Civil Service Commission, complain
ing about the delay in receiving his check. He received a substitute check which
he encashed. Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Ba
utista’s Reviewer 39
Meanwhile, in April 1975, Agustin Go, in his capacity as branch manager of Solid
bank (which later became Consolidated Bank) in Baguio City, allowed a person nam
ed Floverto Jazmin to open a savings account by depositing two US treasury check
s for $1810 and $913.40 both payable to the order of Floverto Jasmin of Maranill
a St. Mangatarem, Pangasinan. The depositor indicated in his information sheet t
hat he was Floverto Jazmin with home address at Maravilla St., Mangatarem, Panga
sinan. The checks were sent to the drawee bank for clearance. Solidbank did not
receive any word from the drawee bank after three weeks, so it allowed the depos
itor to withdraw the amount indicated in the checks. More than a year later, the
checks were returned to Solidbank with the notation that the amounts were alter
ed. Go reported the matter to the Philippine Constabulary in Baguio. The real Ja
zmin was required to appear before the PC headquarters in Benguet for investigat
ion regarding the complain filed by Go against him for estafa. Eventually the in
vestigators found that the person who made the deposit and withdrawal was an imp
ostor. Jazmin filed a complaint against Go and Consolidated Bank for moral and e
xemplary damages, alleging that he suffered humiliation, embarrassment, and grea
t inconvenience as a result of the negligence of Go. ISSUE: Whether Go and Conso
lidated are liable to Jazmin for damages. HELD: Yes, they are liable for nominal
damages. Go’s negligence was the root of all the inconvenience and embarrassment
experienced by Jazmin. Go’s negligence in fact led to the swindling of his employe
r Consolidated. Had Go exercised the diligence expected of him as a bank officer
and employee, he would have noticed the glaring disparity between the payee’s nam
e and address on the treasury checks involved and the name and address of the de
positor appearing in the bank records. Therefore, the bank, through its employee
s, was grossly negligence in handling the business transaction involved. This wa
s the start of the consequent involvement of Jazmin, as his name was illegally u
sed in the illicit transaction. As Go’s negligent was the root cause of the compla
ined inconvenience, humiliation, and embarrassment, Go is liable to Jazmin for d
amages. Consolidated is co-equally liable with Go for damages under the fifth pa
ragraph of Article 2180 of the Civil Code, since it not only failed to show that
it exercised due diligence to prevent damage but that it was not negligent in t
he selection and supervision of its employees. Castilex Industrial Corp. v. Vasq
uez Jr. At around 2 am, Romeo Vasquez was driving a motorcycle around Fuente Osm
ena Rotunda. Benjamin Abad, manager of Castilex, was driving a pickup owned by C
astilex. Instead of going around the Rotunda, he made a short cut against the fl
ow of traffic. In the process, he collided with the motorcycle driven by Vasquez
. He rushed Vasquez to the hospital, but the latter died later. A criminal case
was filed against Abad, but it was dismissed for failure to prosecute. The paren
ts of Vasquez filed an action for damages against Abad and Castilex. ISSUE: Whet
her Castilex is liable for damages. HELD: No, Castilex is not liable for damages
. While Castilex presumes the negligence of Abad, it claims that it is not vicar
iously liable for the injuries and subsequent death caused by Abad. Under the fi
fth paragraph of Article 2180, an employer is liable for the torts committed by
employees within the scope of his assigned tasks, whether or not the employer is
engaged in any business or industry. To make the employer liable under the fift
h paragraph, the plaintiff must: 1. 2. establish an employer-employee relationsh
ip; and show that the employee was acting within the scope of his assigned task
when the tort complained of was committed.
It is not incumbent upon the employer to prove that the employee was NOT acting
within the scope of his duties. It is the obligation of the plaintiff to prove t
his averment. Once the plaintiff has shown these, the presumption of negligence
of the employer arises, and the employer may interpose the defense of the due di
ligence in the selection and supervision of the employee. In this case, it is un
disputed that Abad was a production manager of Castilex. The testimonies of the
witnesses, including Abad, show that he did some overtime work at the office. Th
ereafter, he went to Goldie’s Restaurant in Fuente Osmena, which is known to be a
place where prostitutes, pimps, and drug addicts liked to hang out. At the Diges
ts by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 40
restaurant, Abad had some snacks and chatted with friends. It was when he left t
he restaurant that the incident happened. Parenthetically, there was a woman wit
h him in the car who shouted “Daddy, Daddy!” but there was no way that the woman cou
ld have been his daughter because he was only 29 years old. Clearly, Abad was en
gaged in affairs of his own or was carrying out a personal purpose not in line w
ith his duties at the time he figured in the accident. It was around 2 am, way b
eyond normal working hours. Abad’s working day had ended, and his overtime work ha
d already been completed. His being at a pimp-prosti-druggie haven had no relati
on to the business of Castilex or to his duties as a manager. Rather, Abad was m
erely using his service vehicle for personal purposes, which was merely a fringe
benefit or perk attached to his position. Since Abad was not acting within the
scope of the functions entrusted to him when the accident happened, Casitlex had
not duty to show that it exercised the diligence of a good father of a family i
n providing Abad with a service vehicle. It has not vicarious liability for the
consequences of the negligence of Abad in driving its vehicle. Atty. Abaño – If the
use of the vehicle inures to the benefit of the company, the employer may be hel
d liable vicariously. Victory Liner v. Heirs of Malecdan Andres Malecdan was a 7
5 year-old farmer. While he was crossing a highway, a Dalin Liner bus stopped to
allow him and his carabao to pass. However, as Andres was crossing, a Victory L
iner Bus, driven by Joson, bypassed the Dalin bus and hit Andres and the carabao
he was riding. Andres was thrown off the carabao, while the beast toppled over.
The Victory Liner bus sped past the old man, while the Dalin bus proceeded to i
ts destination without helping him. Andres was brought to the hospital, where he
died a few hours later. The carabao also died. A criminal complaint for reckles
s imprudence resulting in homicide and damage to property was filed against Joso
n. Subsequently, the heirs of Malecdan brought a suit for damages against Joson
and Victory Liner. The RTC held that Joson was negligent in driving the bus, whi
le Victory Liner was guilty of negligence in the selection and supervision of Jo
son. Victory Liner appealed. ISSUE: Whether Victory Liner is liable to the heirs
of Malecdan. HELD: Yes. Under Article 2180, the responsibility of employers for
the negligence of their employees in the performance of their duties is primary
and, therefore, the injured party may recover from the employers directly, rega
rdless of the solvency of their employees. Employers may be relieved of responsi
bility for the negligent acts of their employees acting within the scope of thei
r assigned task only if they can show that they observed all the diligence of a
good father of a family to prevent damage. They have the burden of proving that
they exercised such diligence in the selection and supervision of the employee.
In the selection of prospective employees, employers are required to examine the
m as to their qualifications, experience and service records. With respect to th
e supervision of employees, employers must formulate standard operating procedur
es, monitor their implementation and impose disciplinary measures for breaches t
hereof. These facts must be shown by concrete proof, including documentary evide
nce. In this case, Victory liner presented the results of Joson’s written examinat
ion, actual driving tests, x-ray examination, psychological examination, NBI cle
arance, physical examination, hematology examination, urinalysis, student driver
training, shop training, birth certificate, high school diploma, and reports fr
om the General Maintenance Manager and the Personnel Manager showing that he had
passed all the tests and training sessions and was ready to work as a professio
nal driver. However, Victory Liner did not present proof that Joson had nine yea
rs of driving experience. There is also no record that Joson ever attended the s
eminars on driving safety given by the company to its drivers at least twice a y
ear. Victory Liner also failed to establish the speed of its buses during its da
ily trips or to submit in evidence the trip tickets, speed meters, and reports o
f filed inspectors. The finding of the trial court that the Victory Liner bus wa
s running at a very fast speed when it overtook the Dalin bus and hit the deceas
ed was not disputed. For these reasons, Victory Liner should be considered as ne
gligent in the supervision of Joson. d. State General Rule: The State cannot be
sued without its consent Exceptions: 1. 2. 3. When the state is performing a pro
prietary function When the state enters into a contract with a private person Un
der Article 2180 – when it acts through a special agent 41
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Fontanilla v. Maliaman A pick-up owned by the National Irrigation Administration
driven officially by Hugo Garcia, an employee of the NIA as its regular driver,
bumped a bicycle ridden by Francisco Fontanilla and Restituto Deligo. As a resu
lt, Fontanilla and Deligo were injured and brought to the hospital. Fontanilla d
ied. The parents of Fontanilla filed an action for damages against the NIA in co
nnection with the death of their son. ISSUE: Whether the NIA is liable for damag
es. HELD: Yes, the NIA is liable. The liability of the State has two aspects, na
mely: 1. 2. its public or governmental aspects where it is liable for the tortio
us acts of special agents only; and its private or business aspects (as when it
engages in private enterprises) where it becomes liable as an ordinary employer.
Under paragraph 6 of Article 2180, the State assumes liability for acts done thr
ough special agents. The state’s agent, if a public official, must not only be spe
cially commissioned to do a particular task, but such task must be foreign to sa
id official’s usual governmental functions. If the state’s agent is not a public off
icial, and is commissioned to perform non-governmental functions, then the state
assumes the role of an ordinary employer and will be held liable as such for it
s agent’s tort. When the government commissions a private individual for a special
government task, it is acting through a special agent within the meaning of the
provision. When the state is performing governmental functions, it is immune fr
om tort liability. When the state performs a service which might as well be prov
ided by a private corporation, and when it collects revenues therefrom, the stat
e is performing a proprietary function. It is in this instance where there may b
e liability for the torts of agents within the scope of their employment. The NI
A is an agency of the government exercising proprietary functions. Therefore, it
may be liable for damages caused by accidents resulting from the tortious acts
of its employees. It assumes responsibility as an ordinary employer and as such,
it becomes answerable for damages, if it fails to prove that it observed due di
ligence in the selection and supervision of its employees. In this case, the vic
tim was thrown 50 meters away from the point of impact. The pick-up suffered sub
stantial damage, but the people on board did not even bother to stop to find out
what they had bumped. There are thus strong indications that the driver Garcia
was driving at a high speed. Evidently, there was negligence in the supervision
of the driver for the reason that they were traveling at a high speed within cit
y limits and yet the supervisor of the group failed to caution and make the driv
er observe the proper speed limit. The negligence is further aggravated by their
desire to reach their destination without even checking whether or not the vehi
cle suffered damage from the object it bumped, thus showing imprudence on the pa
rt both of the driver and the supervisor of the group. Even if the employer can
prove the diligence in the selection and supervision of the employee, if he rati
fies the wrongful acts or takes no step to avert further damage, the employer is
still liable. e. Teachers/heads of establishments Amadora v. CA Alfredo Amadora
was a student of the Colegio de San Jose Recoletos. While in the auditorium, he
was shot to death by his classmate Pablito Daffon. Daffon was convicted of homi
cide through reckless imprudence. The parents of Amadora filed an action for dam
ages under Article 2180 of the Civil Code against Colegio de San Recoletos, its
rector, the high school principal, the dean of boys, and the physics teacher, to
gether with Daffon and two other students, through their parents. The complaint
against the students was later dropped. Amadora’s parents contend that their son w
as in school to finish his physics experiment; hence, he was then under the cust
ody of the school. The school, on the other hand, claims that Amadora had gone t
o school only for the purpose of submitting his physics report and that he was n
o longer in their custody because the semester had already ended. ISSUE: Whether
private respondents are liable to Amadora’s parents. HELD: No.
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42
Article 2180 should apply to all schools, academic as well as non-academic. Wher
e the school is academic rather than technical or vocational in nature, responsi
bility for the tort committed by the student will attach to the teacher in charg
e of such student, following the first part of the provision. This is the genera
l rule. In the case of establishments of arts and trades, it is the head thereof
, and only he, who shall be held liable as an exception to the general rule. The
student is deemed in the custody of the school authorities as long as he is und
er the control and influence of the school and within its premises, whether the
semester has not yet begun or has already ended. During all these occasions, it
is the teacher-in-charge who must answer for his students torts. He is the one
designated by the dean, principal, or other administrative superior to exercise
supervision over the pupils in the specific classes or sections to which they ar
e assigned. It should be noted that the liability imposed by this article is sup
posed to fall directly on the teacher or the head of the school of arts and trad
es and not on the school itself. If at all, the school, whatever its nature, may
be held to answer for the acts of its teachers or even of the head thereof unde
r the general principle of respondeat superior, but then it may exculpate itself
from liability by proof that it had exercised the diligence of a bonus paterfam
ilias. Such defense is, of course, also available to the teacher or the head of
the school of arts and trades directly held to answer for the tort committed by
the student. As long as the defendant can show that he had taken the necessary p
recautions to prevent the injury complained of, he can exonerate himself from th
e liability imposed by Article 2180. It should also be noted that the teacher is
held answerable by the law for the act of the student under him regardless of t
he student s age. In this case, the rector, the high school principal and the de
an of boys cannot be held liable because none of them was the teacher-in-charge
as previously defined. Each of them was exercising only a general authority over
the student body and not the direct control and influence exerted by the teache
r placed in charge of particular classes or sections and thus immediately involv
ed in its discipline. The evidence of the parties does not disclose who the teac
her-in-charge of the offending student was. The mere fact that Alfredo Amadora h
ad gone to school that day in connection with his physics report did not necessa
rily make the physics teacher, respondent Celestino Dicon, the teacher-in charge
of Alfredo s killer. At any rate, assuming that he was the teacher-in-charge, t
here is no showing that Dicon was negligent in enforcing discipline upon Daffon
or that he had waived observance of the rules and regulations of the school or c
ondoned their nonobservance. His absence when the tragedy happened cannot be con
sidered against him because he was not supposed or required to report to school
on that day. And while it is true that the offending student was still in the cu
stody of the teacher-in-charge even if the latter was physically absent when the
tort was committed, it has not been established that it was caused by his laxne
ss in enforcing discipline upon the student. On the contrary, the private respon
dents have proved that they had exercised due diligence, through the enforcement
of the school regulations, in maintaining that discipline. The Colegio de San J
oseRecoletos cannot be held directly liable under the article because only the t
eacher or the head of the school of arts and trades is made responsible for the
damage caused by the student or apprentice. Salvosa v. IAC The Baguio Colleges F
oundation was an academic institution and also an institution of arts and trade.
It had an ROTC Unit. Jimmy Abon, the appointed armorer of the ROTC unit was a c
ommerce student of the BCF. Abon shot Napoleon Castro, a student of the Universi
ty of Baguio in the parking lot of BCF with an unlicensed firearm taken from the
armory of the ROTC Unity of the BCF. Castro died, and Abon was prosecuted for a
nd convicted of homicide. The heirs of Castro sued for damages, impleading Abon,
the ROTC Commandant, the officers of BCF, the Dean of BCF and BCF itself. The R
TC found them all solidarily liable for damages. Salvosa, President of BCF, and
BCF appealed. ISSUE: Whether Salvosa and BCF are liable for damages. HELD: No. C
onsidering that the shooting happened after classes, at around 8 pm, Abon cannot
be considered to have been "at attendance in the school," or in the custody of
BCF, when he shot Napoleon Castro. Therefore, Salvosa and BCF cannot be held sol
idarily liable with Abon for damages under Article 2180. Besides, the record sho
ws that before the shooting incident, Roberto B. Ungos ROTC Unit Commandant, AFP
, had instructed Abon "not to leave the office and [to keep the armory] well gua
rded." Apart from negating a finding that Jimmy B. Abon was under the custody of
the school when he committed the act for which the petitioners are sought to be
held liable, this circumstance shows that Abon was supposed to be working in th
e armory with definite instructions from his superior, the ROTC Commandant, when
he shot Napoleon Castro. PSBA v. CA Carlitos Bautista was a third year commerce
student at PSBA. He was stabbed to death inside the school premised by elements
from outside the school. Bautista’s parents filed an action for damages against P
SBA and Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s
Reviewer 43
its corporate officers on the ground that they were guilty of negligence, reckle
ssness, and lack of security precautions, means and methods before, during and a
fter the attack on the victim. Defendants sought to have the suit dismissed, all
eging that since they are presumable sued under Article 2180 of the Civil Code,
the complaint states no cause of action against them, as jurisprudence on the su
bject is to the affect that academic institutions such as PSBA are beyond the am
bit of that rule. ISSUE: Whether the parents of Bautista have a cause of action
against PSBA under Article 2180 of the Civil Code. HELD: No, but they may have a
cause of action based on breach of contract. Article 2180, in conjunction with
Article 2176, establishes the rule of in loco parentis. It provides that damage
should have been caused or inflicted by pupils or students of the educational in
stitution sought to be held liable for the acts of its pupils or students while
in its custody. However, this situation does not exist in this case, since the a
ssailants of Bautista were not students of the PSBA for whose acts the school co
uld be made liable. This does not necessarily mean the PSBA is exempt from liabi
lity. When an academic institution accepts students for enrollment, there is est
ablished a contract between them, resulting in bilateral obligations which both
parties are bound to comply with. One of these obligations is that the school mu
st ensure that adequate steps are taken to maintain peace and order within the c
ampus premises and to prevent the breakdown thereof. To avoid liability, the sch
ool must prove that the breach of this contractual obligation to the students wa
s not due to its negligence. Since there has been no trial on the merits, the RT
C is ordered to continue proceedings to determine whether PSBA was guilty of the
contractual breach. 2.Primary Liability a. Possessors/Users of Animals Art. 218
3. The possessor of an animal or whoever may make use of the same is responsible
for the damage which it may cause, although it may escape or be lost. This resp
onsibility shall cease only in case the damage should come from force majeure or
from the fault of the person who has suffered damage. Damage caused by: an anim
al Person primarily liable: a. the possessor of an animal; or b. whoever may mak
e use of the same Defenses: a. that the damage was caused by force majeure b. th
at the damage was caused through the fault of the person who suffered damage Ves
til v. IAC Three year-old Theness Tan Uy was bitten by a dog named “Andoy” while she
was playing with a child of the Vestils in the house of the late Vicente Mirand
a, father of Purita Vestil. Theness was rushed to the hospital where she was tre
ated for multiple lacerated wounds on the forehead and was given an anti-rabies
shot. She was discharged after nine days but was re-admitted a week later. She d
ied the following day, due to bronchopneumonia. Seven months later, the Uys sued
the Vestils for damages, alleging that the Vestils were liable to them as the p
ossessors of Andoy. The Vestils denied liability, claiming that the dog belonged
to the deceased Vicente Miranda. Purita Vestil insisted that she was not liable
since she was not the owner of the house or of the dog, as his estate had not y
et been partitioned. ISSUE: Whether the Vestils are liable for damages. HELD: Ye
s, the Vestils are liable for damages. Ownership of the house or of the dog is i
mmaterial in this case. What must be determined is the possession of the dog, si
nce Article 2183 holds liable the possessor of the animal that causes damage. In
this case, Purita Vestil and her husband were the possessors of the house at th
e time when the incident happened. Meanwhile, the dog stayed in the house and ev
en remained there after the death of Vicente Miranda, up to the time when it bit
Theness. Hence, the Vestils are deemed in possession of the dog and are liable
for the damages that it caused. The Vestils raised the defense that, assuming th
at they were in possession of the dog, they were still not liable because there
was no causal connection between the broncho-pneumonia that caused the death of
Theness and Digests by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Baut
ista’s Reviewer 44
the dog bite. Moreover, they argued that the dog was tame and was provoked by Th
eness into biting. The court rejected these defenses. It held that the broncho-p
neumonia suffered by Theness was a complication of rabies. The Vestil’s contention
that they could not be expected to exercise remote control of the dog was also
found unacceptable. Article 2183 holds the possessor liable even if the animal s
hould escape or be lost and so be removed from his control. It does not matter e
ither that the dog was tame and was merely provoked by the child into biting her
. The law does not speak only of vicious animals but covers even tame ones as lo
ng as they cause injury. As for the alleged provocation, Theness was only three
years old at that time and cannot be faulted for whatever she might have done to
the animal. b. Owners of Motor Vehicles Art. 2184. In motor vehicle mishaps, th
e owner is solidarily liable with his driver, if the former, who was in the vehi
cle, could have, by the use of the due diligence, prevented the misfortune. It i
s disputably presumed that a driver was negligent, if he had been found guilty o
f reckless driving or violating traffic regulations at least twice within the ne
xt preceding two months.
If the owner was not in the motor vehicle, the provisions of Article 2180 are ap
plicable. Damage caused by: driver of a motor vehicle Person solidarily liable:
owner of the motor vehicle Requisites of solidary liability of the owner: 1. 2.
owner is in the vehicle at the time of the mishap the owner could have prevented
the misfortune by the use of due diligence
Disputable presumption of negligence of driver: If driver had been found guilty
of reckless driving or violating traffic regulations at least twice within the n
ext preceding two months. Manlangit v. Urgel Reynato Manlangit owned a passenger
jeepney. While he was on board the jeepney with some other passengers, the driv
er of the jeepney, Edgardo Castillo, occupied the wrong line while passing a bli
nd curve. At the curve, they suddenly saw a parked truck. By then, it was too la
te to avoid collision with the truck. The jeepney swerved to the right. Manlangi
t and Castillo managed to jump off the jeepney before it plunged into a river. T
he passengers were not as lucky. They sustained injuries and were brought to the
nearest hospital for treatment. A criminal complaint for serious physical injur
ies through reckless imprudence was filed with the sala of Judge Urgel against b
oth the driver Castillo and the owner Manlangit. The judge issued a warrant for
the arrest of both. Manlangit filed a motion to drop him from the criminal compl
aint and to quash the warrant. The judge ruled favorably and dropped him from th
e complaint. Manlangit then filed this administrative complaint against Judge Ur
gel for gross ignorance of the law in issuing a warrant for his arrest. ISSUE: W
hether Judge Urgel is guilty of gross ignorance of the law in issuing a warrant
for the arrest of the owner of the jeepney. HELD: Yes. It is a basic postulate i
n criminal law that the criminal act of one person cannot be charged to another
without a showing that the other participated directly or constructively in the
act or that the act was done in furtherance of a common design or purpose for wh
ich the parties were united in intention. In cases of employeremployee relations
, an employer is not criminally liable for the criminal acts of his employee or
agent unless he, in some way, participates in, counsels or abets his employee’s ac
ts or omissions. In such case, the employer himself becomes a participant to the
criminal act of his employee. His liability under the circumstances is direct a
nd criminal. However, under Article 102, in relation to Article 103 of the RPC,
the employer liability for the criminal negligence of his employee is subsidiary
in nature and is limited only to civil indemnity. Thus, an employer is party to
a criminal case for the criminal negligence of his employee only by reason of h
is subsidiary civil liability under the law. In this case, nowhere is it shown t
hat Manlangit abetted or even approved the negligent and reckless manner in whic
h the driver maneuvered the vehicle on that blind curve. Moreover, it does not a
ppear that the driver continuously pursued a reckless and thoughtless control of
the wheel throughout the journey, without any admonition or reproof on the part
of Manlangit. It is evident that the driver’s decision to go on the wrong lane wh
ile approaching a blind curve was a split second judgment which left neither Man
langit nor the other passengers time to react to the perilous maneuver. Digests
by Sheryl, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 45
c. Manufacturers and Processors Art. 2187. Manufacturers and processors of foods
tuffs, drinks, toilet articles and similar goods shall be liable for death or in
juries caused by any noxious or harmful substances used, although no contractual
relation exists between them and the consumers. RA 7394: The Consumer Act of th
e Philippines The manufacturer, importer, and seller can be held liable for actu
al injury or damage incurred Prescriptive period is 2 years. Problem: A father b
uys ice cream for his children from a supermarket. The kids eat ice cream. The i
ce cream has shards of glass. One of the children swallows the glass and wounds
his throat. How can the father prove liability? Answer: Present the following ev
idence: a. Testimonial – the father, the kids, the doctor Documentary – doctor’s bills
, x-ray, receipt from the store (the receipt is the best evidence of the sale; n
eed to prove the purchase and connect the seller to the injury) Real – the shard o
f glass taken from the throat of the child, the container of the ice cream
b.
c.
d. Municipal Corporations Art. 2189. Provinces, cities and municipalities shall
be liable for damages for the death of, or injuries suffered by, any person by r
eason of the defective condition of roads, streets, bridges, public buildings, a
nd other public works under their control or supervision. Damage caused by: defe
ctive condition of roads, streets, bridges, public buildings, and other public w
orks Primarily liable: Provinces, cities, municipalities Condition: the road, st
reet, bridge, public building, or other public work must be under the control or
supervision of the province, city, or municipality in question Defense: Due dil
igence Note: Municipal corporations are liable only for damages for the death of
or injuries suffered by persons and not for damage to property. Guilatco v. Cit
y of Dagupan Florentina Guilatco was about to board a tricycle at a sidewalk loc
ated at Perez Blvd. (a national road) when she accidentally fell into an open ma
nhole. Her right leg was fractured, resulting in her hospitalization and continu
ing difficulty in locomotion. Because of her accident, Guilatco was unable to go
to work, thereby losing her income. She also lost weight, and she is now no lon
ger her former jovial self since she is unable to perform her religious, social,
and other activities. She filed an action for damages against the City of Dagup
an. The City of Dagupan denied liability on the ground that the manhole was loca
ted on a national road, which was not under the control or supervision of the Ci
ty of Dagupan. ISSUE: Whether the City of Dagupan is liable to Guilatco. HELD: Y
es, the City of Dagupan is liable. For Article 2189 to apply, it is not necessar
y for the defective road or street to belong to the province, city or municipali
ty. The article only requires that either control or supervision is exercised ov
er the defective road or street. In this case, this control or supervision is pr
ovided for in the charter of Dagupan and is exercised through the City Engineer,
whose duties include the care and custody of the public system of waterworks an
d sewers. The charter of Dagupan provides that the laying out, construction, and
improvement of streets, avenues, and alleys and sidewalks and the regulation of
the use thereof may be legislated by the Municipal Board. Thus, the charter cle
arly indicates that the city indeed has supervision and control over the sidewal
k where the open drainage hole is located. Digests by Sheryl, Cayo, Rosa Lecture
Notes and Notes from Jona Bautista’s Reviewer 46
The express provision in the charter holding the city not liable for damages or
injuries sustained by persons or property due to the failure of any city officer
to enforce the provisions of the charter cannot be used to exempt the city. The
charter only lays down the general rules regulating the liability of the city.
On the other hand, Article 2189 applies in particular to the liability arising f
rom defective streets, public buildings, and other public works. e. Building Pro
prietors Art. 2190. The proprietor of a building or structure is responsible for
the damages resulting from its total or partial collapse, if it should be due t
o the lack of necessary repairs.
Art. 2191. Proprietors shall also be responsible for damages caused: (ESTE) (1)
By the explosion of machinery which has not been taken care of with due diligenc
e, and the inflammation of explosive substances which have not been kept in a sa
fe and adequate place; (2) By excessive smoke, which may be harmful to persons o
r property;
(3) By the falling of trees situated at or near highways or lanes, if not caused
by force majeure;
(4) By emanations from tubes, canals, sewers or deposits of infectious matter, c
onstructed without precautions suitable to the place. Art. 2193. The head of a f
amily that lives in a building or a part thereof, is responsible for damages cau
sed by things thrown or falling from the same. Gotesco v. Chatto Gloria Chatto a
nd her 15 year-old daughter Lina went to see the movie “Mother Dear” at Superama I t
heater owned by the Gotesco Investment Corporation. Hardly ten minutes after the
two entered the theater, the ceiling of its balcony collapsed. The theater was
plunged into darkness and pandemonium ensued. Gloria and Lina were able to crawl
under the fallen ceiling and out of the theater. They were later confined and t
reated for the injuries that they suffered. Due to continuing pain in the neck,
headache, and dizziness, Gloria Chatto went to Illinois, USA for further treatme
nt. She stayed in the US for about 3 months during which she had to go to the ho
spital 5 or 6 times. Gloria and Lina Chatto filed an action for damages against
Gotesco. Gotesco denied liability on the ground that the collapse of the ceiling
of its theater was due to force majeure. ISSUE: Whether Gotesco is liable for d
amages. HELD: Yes. Having interposed force majeure as a defense, Gotesco had the
burden to prove that the collapse was indeed caused by force majeure. However,
Gotesco’s claim that the collapse of the ceiling was due to force majeure is not f
ounded on facts. Its witness, Jesus Lim Ong, who was supposedly the architect of
the building, admitted that he could not give any reason why the ceiling collap
sed. That Mr. Ong could not offer any explanation does not imply force majeure.
Force majeure is an inevitable accident produced by any physical cause which is
irresistible, such as lightning, tempest, perils of the sea, inundation, or eart
hquake. Gotesco could have easily discovered the cause of the collapse if indeed
it were due to force majeure. It appears that the real reason why Mr. Ong could
not explain the reason for the collapse is that either he did not actually cond
uct the investigation or that he is incompetent. On the other hand, the trial co
urt found that the collapse was due to construction defects. There was no eviden
ce offered to overturn this finding. The building was constructed barely 4 years
prior to the accident. It was not shown that any of the causes denominated as f
orce majeure obtained immediately before or at the time of the collapse of the c
eiling. Such defects could have been easily discovered had Gotesco exercised due
diligence and care in keeping and maintaining the premises. It is settled that
the owner or proprietor of a place of public amusement impliedly warrants that t
he premises, appliances, and amusement devices are safe for the purpose for whic
h they are designed. Where a patron of a theater or other place of public amusem
ent is injured, and the thing that caused the injury is wholly and exclusively u
nder the control and management of the defendant, and the accident is such as in
the ordinary course of events would not have happened if proper care had been e
xercised, its occurrence raises a presumption or Digests by Sheryl, Cayo, Rosa L
ecture Notes and Notes from Jona Bautista’s Reviewer 47
permits of an inference of negligence on the part of the defendant. That presump
tion or inference was not overcome by Gotesco. And even assuming that the collap
se was due to force majeure, Gotesco still cannot escape liability since the tri
al court found that it was grossly negligent. f. Engineers/Architects/Contractor
s Art. 2192. If damage referred to in the two preceding articles should be the r
esult of any defect in the construction mentioned in Article 1723, the third per
son suffering damages may proceed only against the engineer or architect or cont
ractor in accordance with said article, within the period therein fixed. Art. 17
23. The engineer or architect who drew up the plans and specifications for a bui
lding is liable for damages if within fifteen years from the completion of the s
tructure, the same should collapse by reason of a defect in those plans and spec
ifications, or due to the defects in the ground. The contractor is likewise resp
onsible for the damages if the edifice falls, within the same period, on account
of defects in the construction or the use of materials of inferior quality furn
ished by him, or due to any violation of the terms of the contract. If the engin
eer or architect supervises the construction, he shall be solidarily liable with
the contractor.
Acceptance of the building, after completion, does not imply waiver of any of th
e cause of action by reason of any defect mentioned in the preceding paragraph.
The action must be brought within ten years following the collapse of the buildi
ng. OWNER/PROPRIETOR TIME OF COLLAPSE CAUSE OF COLLAPSE Anytime Lack of necessar
y repairs ARCHITECT/ENGINEE R Within 15 years after completion Defects in the pl
ans/specifications Defects in the ground 10 years CONTRACTOR Within 15 years aft
er completion Inferior materials furnished by him Violation of the contract 10 y
ears
PRESCRIPTIVE PERIOD Nakpil & Sons v. CA
4 years
The Philippine Bar Association (PBA) decided to construct an office building in
Intramuros. For the plans, specifications and design, PBA contracted the service
s of the Juan Nakpil & Sons and Juan F. Nakpil (NAKPILS). For the construction o
f the building, PBA contracted the services of United Construction Company on an
administration basis. The building was completed in 1966. In 1968, an unusually
strong earthquake hit Manila, and the building sustained major damage. The fron
t columns of the building buckled, causing the building to tilt forward dangerou
sly. As a temporary measure, the building was shored up by United. The PBA filed
an action against United and its President and General Manager Juan Carlos, cla
iming that the collapse of the building was caused by defects in construction. U
nited, in turn, filed a third-party complaint against the Nakpils, alleging that
the collapse of the building was due to the defects in the architects’ plans, spe
cifications, and design. ISSUE: Whether United or the Nakpils or both are liable
for damages to the PBA. HELD: Both the Nakpils and United are liable for the da
mage. While the damage sustained by the PBA building was caused directly by the
earthquake, they were also caused by the defects in the plans and specifications
prepared by the Nakpils and United’s deviation from said plans and specifications
and its failure to observe the requisite workmanship in the construction of the
building. Such wanton negligence of both United and the Nakpils in effecting th
e plans, designs, specifications, and construction of the PBA building is equiva
lent to bad faith in the performance of their respective tasks. Digests by Shery
l, Cayo, Rosa Lecture Notes and Notes from Jona Bautista’s Reviewer 48
United argues that it is the legal duty of the PBA to provide full-time and acti
ve supervision in the construction of the building. This claim has no legal or c
ontractual basis. The ordinary practice is for the owner of a building to avail
himself of the services of architects and engineers whose training and expertise
make them more qualified to provide effective supervision of the construction.
EPG Construction v. CA EPG Construction and the University of the Philippines en
tered into a contract for the construction of the UP Law Library Building. The a
greement contained a guarantee whereby EPG undertook to repair any defective wor
k at is own cost and expenses for a period of 1 year from the date of substantia
l completion and acceptance of the work by UP. On Jan. 13, 1983, the building wa
s formally turned over by EPG to UP, which issued a certification of acceptance
indicating that the building was completed without any defects whatsoever. In Ju
ly 1983, UP complained to EPG that 6 air-conditioning units were not working pro
perly. EPG agreed to shoulder the expenses for the repair in the amount of 38K.
However, the repair was never undertaken. After demands made by UP for EPG to re
pair the units were unanswered, UP contracted with another company, which repair
ed the defects for 190K. UP then demanded reimbursement of the 190K plus damages
from EPG. EPG denied liability and argued that UP was estopped from invoking th
e guarantee provision because it issued the certificate of acceptance. ISSUE: Wh
ether EPG is liable to UP. HELD: Yes, EPG is liable to UP. There is no merit in
the argument that UP waived its right to invoke the guarantee by issuing the cer
tification of acceptance. All UP certified to was that the building was in good
condition at the time it was turned over. It did not thereby relieve the petitio
ner of liability for any defect that might arise of be discovered later during t
he oneyear period of the guarantee. Moreover, acceptance of the work by the empl
oyer generally relieves the contractor of liability except if the defect is hidd
en or if the employer expressly reserves his rights against the contractor by re
ason of the defect. In this case, the defects complained against were hidden and
there was an express reservation by UP of its right to hold the contractor liab
le for the defects during a period of one year. Therefore, mere acceptance of th
e work by UP did not relieve EPG of liability. EPG’s contention that the defects w
ere caused by force majeure as a result of the frequent brownouts in Metro Manil
a is not meritorious. The recurrent power cut-offs cannot be classified as a for
tuitous event. The real cause of the problem was poor workmanship. Therefore, EP
G is liable to UP. However, the lower court erred in holding Emmanuel de Guzman,
its President, solidarily liable with EPG. De Guzman cannot be held solidarily
liable since he acted on behalf of EPG within the scope of his authority and wit
hout any malice or bad faith. g. Solidary Liability Art. 2194. The responsibilit
y of two or more persons who are liable for quasi-delict is solidary.
Vicarious v. Solidary Liability The party vicariously liable can get reimburseme
nt for 100% of what he paid from the party who caused damage. The party solidari
ly liable can be reimbursed only for that portion pertaining to the other party
liable. Cruz v. NLRC [not assigned but discussed] In labor recruitment cases, if
the OCW suffers damage, both the foreign employer and the local recruiter are s
olidarily liable. Singapore Airlines v. CA Sancho Rayos was an OCW who had a con
tract with Arabian American Oil Company (ARAMCO). As part of ARAMCO’s policy, its
employees returning to Saudi from Manila were allowed to claim reimbursement for
amounts paid for excess baggage up to 50Kg as long as supported by receipt. Ray
os took a Singapore Airlines (SLA) flight to Saudi with a 50Kg excess baggage fo
r which he paid about 4K. ARAMCO reimbursed the amount upon presentation of the
excess baggage ticket. Later, Rayos learned that he was being investigated by AR
AMCO for fraudulent claims. He asked his wife in Manila to obtain a written conf
irmation from SLA the he paid an excess baggage of 50Kg. SLA’s manager notified th
e wife of its inability to issue the certification because the records showed th
at only 3Kg were entered and charged Digests by Sheryl, Cayo, Rosa Lecture Notes
and Notes from Jona Bautista’s Reviewer 49
as excess baggage. SLA issued the certification four months later, after the wif
e threatened it with a lawsuit. When the year ended, Rayos’ contract with ARAMCO w
as not renewed. Convinced that SLA was responsible for the non-renewal of the co
ntract, the spouses Rayos filed an action for damages against SLA. SLA filed a t
hird-party complaint against its handling agent PAL, claiming that the tampering
was committed not by SLA but by PAL. PAL denied any participation in the tamper
ing and attributed it to the SLA personnel. The lower court held SLA liable to t
he spouses for damages and ordered PAL as third party defendant to pay SLA whate
ver it will pay the Rayos spouses. ISSUE: Whether SLA is entitled to reimburseme
nt from PAL. HELD: SLA is entitled to reimbursement from PAL, but only to the ex
tent of one-half (½) of the amount that it paid to the Rayos spouses. PAL cannot b
e held solely liable for the satisfaction of the entire judgment. While the prox
imate cause of the nonrenewal of Rayos’ employment contract was the tampering of h
is excess baggage ticket by PAL’s personnel, the immediate cause of such non-renew
al was SLA’s delayed transmittal of the certification needed by Rayos to prove his
innocence to his employer. Thus, the non-renewal of Rayos’ employment contract wa
s the natural and probable consequence of the separate tortious acts of SLA and
PAL. Under Article 2176, Rayos is entitled to compensation for such damages. Ina
smuch as the responsibility of two or more persons, or tort-feasors, liable for
a quasi-delict is joint and several and the sharing as between such solidary deb
tors is pro-rata, it is but logical, fair, and equitable to require PAL to contr
ibute to the amount awarded to the Rayos spouses already paid by SIA, instead of
totally indemnifying the latter. De Guzman v. NLRC De Guzman was the general ma
nager of the Manila Office of Affiliated Machineries Agency Ltd. (AMAL) and amon
g the respondents in a complaint for illegal dismissal and non-payment of statut
ory benefits filed by former employees of AMAL. The employees filed the complain
t following AMAL’s refusal to pay their monetary claims after AMAL decided to ceas
e its operations in 1986. De Guzman was impleaded for allegedly selling part of
AMAL’s assets and applying the proceeds to satisfy his own claims against the comp
any. He also formed a new company named Susarco and engaged in the same line of
business with the former clients of AMAL. ISSUE: Whether De Guzman is liable for
damages to the employees. HELD: Yes, De Guzman is liable for damages to the emp
loyees arising from his bad faith. However, he is not solidarily liable for the
claims for the claims of the employees against AMAL. De Guzman is not solidarily
liable with AMAL for the employees’ claims. As mere managerial employee, De Guzma
n had no participation in the decision to cease operations and to terminate the
services of the employees, which was the exclusive responsibility of AMAL alone.
Nevertheless, for having acted in bad faith by appropriating the assets of AMAL
to satisfy his own claims to the prejudice of the employees’ pending claims, De G
uzman is directly liable for moral and exemplary damages based on Articles 19, 2
1, 2219 (10) and 2229 of the Civil Code. GSIS v. CA The National Food Authority
(NFA) was the owner of a Chevrolet truck which was insured against liabilities f
or death or and injuries to third parties with the GSIS. The truck which was dri
ven by Corbeta collided with a Toyota Tamaraw owned by Uy, killing 5 and injurin
g 10 persons, who were all passengers of the Tamaraw. Uy filed a case for quasi-
delict, damages, and attorney’s fees against NFA and Corbeta. An injured passenger
filed an action for damages against Uy and his insurer Mabuhay Insurance and Gu
aranty Co (MIGC). Uy filed a cross-claim against MIGC and a third-party complain
t against Corbeta and NFA. The other injured passengers filed an action against
the following: NFA and Corbeta for damages due to quasidelict; GSIS as insurer o
f the truck; Uy for breach of contract of carriage; and MIGC as insurer of the T
oyota Tamaraw. At the trial, it was found that the proximate cause of the collis
ion was the negligence of Corbeta. The findings of the trial court stated that t
he truck was speeding and was in the wrong lane at the time of the collision. Th
e trial court dismissed the complaint against Uy. It ordered MIGC, Corbeta, NFA,
and GSIS to jointly and severally pay damages to the victims of the collision.
ISSUE: Whether GSIS is solidarily liable with NFA. Digests by Sheryl, Cayo, Rosa
Lecture Notes and Notes from Jona Bautista’s Reviewer 50
HELD: GSIS is directly liable to the victims but only up to the extent of what i
s provided in the contract of insurance with NFA. It is NOT solidarily liable wi
th NFA. It is now established that the injured or the heirs of a deceased victim
of a vehicular accident may sue directly the insurer of the vehicle. However, t
he third party liability of the insurer is only up to the extent of the insuranc
e policy and those required by law. While it is true that where the insurance co
ntract provides for indemnity against liability to third persons, and such third
persons can directly sue the insurer, the direct liability of the insurer under
indemnity contracts against third party liability does not mean that the insure
r can be held liable in solidum with the insured and/or the other parties found
at fault. This because the liability of the insurer is based on contract; that o
f the insured carrier or vehicle owner is based on tort. The liability of GSIS b
ased on the insurance contract is direct, but not solidary with that of the NFA.
The latter’s liability is based separately on Article 2180 of the Civil Code. In
this case, the Compulsory Motor Vehicle Liability Insurance coverage provided th
at the maximum indemnity for death was 12K per victim. Hence, the heirs of the v
ictims who dies in the incident could proceed against GSIS for the indemnity of
12K for each dead victim, and against NFA and Corbeta for any other damages or e
xpenses claimed; or against NFA and Corbeta to pay them all their claims in full
. The other injured victims may also claim their medical expenses from any of th
e following: GSIS, NFA, or Corbeta. As to damages exceeding that allowed under t
he insurance, they may proceed only against NFA or Corbeta.
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V. Special Torts (Human Relations)
1. Abuse of Right Art. 19. Every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give everyone his due, and o
bserve honesty and good faith. Velayo v. Shell Co. Shell was one of the creditor
s of CALI. CALI became insolvent and called all of its creditors, including Shel
l, to a meeting. CALI told the creditors that it was broke but that it had an ai
rplane in the US, which it was planning to sell to PAL so that it could raise mo
re money to pay its debts. On the same day, acting upon the knowledge of (1) the
insolvency of CALI, and (2) the existence of the plane, Shell assigned its cred
it to Shell USA. Shell USA then sued CALI in a California court and attached the
plane as security. Thus, the plane was placed beyond the reach of CALI and the
other creditors. The assignee in insolvency of CALI filed an action against Shel
l for damages for taking advantage of the information that it acquired to the pr
ejudice of CALI and the other creditors. ISSUE: Whether Shell is liable for dama
ges. HELD: Shell is liable for damages. Shell took advantage of its knowledge th
at insolvency proceedings were to be instituted by CALI if the creditors did not
come to an understanding as to the distribution of the insolvent’s assets among t
hem. Believing that it was improbable for the creditors to arrive at such an und
erstanding, it schemed and effected the transfer of credit to its sister corpora
tion in the US, thereby disposing of CALI’s plane and depriving CALI of the opport
unity to recover it. It is liable for damages under Article 19 of the Civil Code
, which provides that any person must, in the exercise of his rights and in the
performances of his duties, act with justice, give everyone his due and observe
honesty and good faith. This is implemented by Article 21 which prescribes that
any person who wilfully causes loss or injury to another in a manner that is con
trary to morals, good customs or public policy shall compensate the latter for t
he damage. De Guzman v. NLRC The employees of AMAL filed a case against AMAL for
illegal dismissal and non-payment of benefits. AMAL refused to pay and later on
ceased operations. The employees impleaded De Guzman, the general manager of AM
AL, in the case because he sold part of AMAL’s assets and applied the proceeds of
the sale to satisfy his own claims against the company. ISSUE: Whether De Guzman
is liable for damages to the employees. HELD: Yes, De Guzman is liable for dama
ges to the employees arising from his bad faith. However, he is not solidarily l
iable for the claims of the employees against AMAL. (His liability to the employ
ees is personal and not as agent of AMAL). De Guzman is not solidarily liable wi
th AMAL for the employees’ claims. As mere managerial employee, De Guzman had no p
articipation in the decision to cease operations and to terminate the services o
f the employees, which was the exclusive responsibility of AMAL alone. Neverthel
ess, for having acted in bad faith by appropriating the assets of AMAL to satisf
y his own claims to the prejudice of the employees’ pending claims, De Guzman is d
irectly liable for moral and exemplary damages based on Articles 19, 21, 2219 (1
0) and 2229 of the Civil Code. UE v. Jader Jader was a student at the UE College
of Law. In the first sem of his last year, he failed to take the regular final
exam in Practice Court for which he was given an incomplete grade. He enrolled f
or the second sem. Before graduation, he took an exam to make up the incomplete
grade. He was then
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included in the list of candidates for graduation and actually participated in t
he graduation ceremonies, receiving a pretend-diploma, taking pictures, and even
throwing a graduation bash. After graduation, he started preparing for the bar.
However, in May, his professor in Practice Court submitted his failing grade of
5. Thus, he dropped his review classes and did not take the bar exam. He then s
ued UE for damages alleging that he suffered moral shock, mental anguish, seriou
s anxiety, besmirched reputation, wounded feelings and sleepless nights when he
was not able to take the bar examinations arising from the latter s negligence.
ISSUE: Whether UE is liable for damages. HELD: Yes, UE is liable for damages. UE
, in belatedly informing Jader of the result of the removal examination, particu
larly at a time when he had already commenced preparing for the bar exams, canno
t be said to have acted in good faith. UE ought to have known that time was of t
he essence in the performance of its obligation to inform Jader of his grade. It
cannot feign ignorance that Jader will not prepare himself for the bar exams si
nce that is precisely the immediate concern after a law student graduates. UE ca
nnot just give out its student s grades at any time because a student has to com
ply with certain deadlines set by the Supreme Court on the submission of require
ments for taking the bar. UE s liability arose from its failure to promptly info
rm Jader of the result of an examination and in misleading the latter into belie
ving that he had satisfied all requirements for the course. However, while UE wa
s guilty of negligence and thus liable to Jader for the latter s actual damages,
Jader should not be awarded moral damages. If he was indeed humiliated by his f
ailure to take the bar, he brought this upon himself by not verifying if he had
satisfied all the requirements including his school records, before preparing hi
mself for the bar examination. Hence, UE is liable for actual damages and attorn
ey’s fees but not moral damages. Class Notes: Filinvest v. CA Plaintiff purchased
a truck on installment. He failed to pay amortization. The financing company wan
ted to take the truck and had one of its personnel impersonate the sheriff in or
der to seize the truck. Plaintiff filed a re-delivery bond to get back the truck
, but by then, it had already been cannibalized. HELD: Financing company is liab
le for damages under Article 19. It had the right to seize the car by virtue of
a writ of replevin, but it acted in bad faith when it had its representative imp
ersonate the sheriff and when it cannibalized the truck. Sea Commercial v. CA Co
mpany appointed an exclusive dealer of its product in the province. One of the o
bligations of the dealer was to promote the product, for which it spent money. W
hen the product was already popular, the Company discontinued the dealership and
sold the product on its own. HELD: Company is liable for damages to dealer unde
r Article 19. While it had the right to discontinue the dealership under the ter
ms of the contract, it did not act in good faith when it allowed the dealer to i
nvest in promotion expenses only to terminate the dealership later on so that it
could then benefit from the dealer’s investment. Sir’s example: Two society matrons
– one owned a bank and the other mortgaged her property to the bank. The matrons
had a cat fight. The debtor-matron then failed to pay her debt to the bank. The
bank-owner matron told the bank to publish a ½ page notice of foreclosure in the s
ociety pages of a newspaper of general circulation. Liable for damages?
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A: Bank-owner matron is liable for damages to debtor-matron under Article 19. Th
ough the bank had the right to foreclose the mortgage and the obligation to publ
ish a notice of foreclosure, it should not have been done in this manner (not in
the society pages). This constitutes abuse of right. 2. Contrary to Law and Mor
als Art. 20. Every person who, contrary to law, wilfully or negligently causes d
amage to another, shall indemnify the latter for the same.
Art. 21. Any person who wilfully causes loss or injury to another in a manner th
at is contrary to morals, good customs or public policy shall compensate the lat
ter for the damage. Article 20 – “contrary to law” Even if the particular provision of
law does not expressly provide for indemnification in case of violation, so lon
g as there is a violation of law and damage resulting therefrom, there is liabil
ity for damages under Article 20. Hermosisima v. CA Soledad Cagigas, was going o
ut with Francisco Hermosisima, who was almost ten (10) years younger than she. T
hey were regarded as engaged, although he had made no promise of marriage to her
. Soledad got pregnant. When she told Francisco that she was in the family way,
he promised to marry her. Their child, Chris Hermosisima, was born later. Howeve
r, just a month after the birth of Chris, Francisco married another woman. Hence
, Soledad commenced an action for recognition of Chris as natural child of Franc
isco, support, and moral damages for his breach of promise to marry her. ISSUE:
Whether moral damages are recoverable for breach of promise to marry. HELD: No.
Moral damages are not recoverable for breach of promise to marry. Breach of prom
ise to marry is not actionable. No other action lends itself more readily to abu
se by designing women and unscrupulous men. The CA awarded moral damages to Sole
dad on the ground that she was seduced by Francisco. The SC held that Francisco
was not morally guilty of seduction. He was approximately 10 years younger than
Soledad, who was a highly enlightened former high school teacher and a life insu
rance agent. Moreover, the CFI found that, Soledad "surrendered herself" to Fran
cisco because, "overwhelmed by her love" for him, she "wanted to bind" him "by h
aving a fruit of their engagement even before they had the benefit of clergy.” In
other words, pinikot siya, therefore, an award of moral damages is not in order.
Wassmer v. Velez A couple was engaged to be married. The bride-to-be undertook
all the preparations for the wedding. Just a few days before the wedding, the gr
oom-to-be sent her a telegram that he was backing out. Bride-to-be (that never w
as) filed an action for damages against the flaker. HELD: Breach of promise to m
arry, in itself, is not actionable. But if the bridegroom allows the bride to go
through the preparations only to walk out at the last minute, such as in this c
ase, it is actionable. Sir’s example: This is even worse than Wassmer v. Velez. On
the day of the wedding, the groom was late. Feeling impatient as well as excite
d to live her dream of walking down the aisle, the bride
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proceeded to walk down the aisle even if the groom was not yet there. She waited
for him at the altar and waited, and waited, and waited, but the groom never sh
owed up. Liable for damages? A: Yes. Though breach of promise to marry is genera
lly not actionable in itself, it is the act of letting the bride-that-never-was
go through all that humiliation that can give rise to liability for damages. Sho
okat v. CA Employer who dismisses an employee without just cause is liable for d
amages. Under the Labor Code, the prescriptive period is 3 years. So after 3 yea
rs, the case can still be filed against the employer under the Civil Code, since
the prescriptive period is 4 years. Medel v. CA Servando Franco and Leticia Med
el obtained several loans from Veronica Gonzales, worth a total of 500K and exec
uted a promissory note payable in one month with interest at 5.5% per month plus
2% service charge per annum from the date of the document. The note also contai
ned an acceleration and penalty clause, which provided that should they fail to
pay any amortization when due, all other installments together with all interest
accrued shall immediately be due and payable, with penalty interest of 1% per m
onth, and the further sum of 25% as attorney’s fees. On maturity of the loan, they
failed to pay. Veronica Gonzales filed a complaint for collection of the full a
mount of the loan including interests and other charges. The debtors question th
e validity of the interest rate (5.5% per month) stipulated. ISSUE: Whether the
interest rate stipulated is valid. HELD: The stipulated interest is void. The st
ipulated interest cannot be considered usurious because CB Circular 905 has expr
essly removed interest ceilings, making the “Usury Law” non-existent. [Sir says that
technically, the Usury Law is not non-existent since there has been no repeal b
y the legislature. It is merely inoperative, since the CB has suspended interest
ceilings.] However, the rate of interest at 5.5% per month or 66% per annum is
excessive, iniquitous, unconscionable, and exorbitant. It is contrary to morals,
if not against the law, and as such, is void. The courts shall reduce equitably
liquidated damages, whether intended as an indemnity or a penalty if they are i
niquitous or unconscionable. Consequently, under the circumstances, interest at
12% per annum, and an additional 1% a month penalty charge as liquidated damages
may be more reasonable. Silvestre v. Ramos Silvestre Pascual borrowed 150K from
Rodrigo Ramos at the interest rate of 7% (P10,500) per month. As security, he e
xecuted a deed of sale with right to repurchase over his house and lot. Ramos ga
ve Pascual a year to repurchase the property by settling the loan with interest.
When, after one year, Pascual failed to pay the principal, Ramos filed an actio
n to consolidate ownership over the property. The trial court found that the Pas
cuals had made payments in the total sum of 344K, and that with interest at 7% p
er annum, the Pascuals had overpaid the loan by P141,500. The trial court dismis
sed the petition to consolidate ownership and awarded the Pascuals P141,500 as o
verpayment on the loan and interests. Ramos moved for reconsideration, alleging
that the trial court erred in using the rate of 7% per annum instead of 7% per m
onth as stipulated in the agreement of the parties. Thus, the Pascuals had not o
verpaid interest, but even had a balance of P643K in interest. The trial court a
cknowledged that it had inadvertently declared the interest rate to be 7% per an
num instead of 7% per month. However, since the rate was too burdensome and oner
ous, it reduced it to 5% per month and ordered the Pascuals to pay the principal
plus interest at 5% per month. The Pascuals now question the legality of the in
terest rate of 5% per month on the ground that it is exorbitant, unconscionable,
unreasonable, usurious, and inequitable, citing Medel v. CA. ISSUE: Whether the
interest rate is valid.
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HELD: Yes, the interest rate is valid. The ruling in Medel v. CA is not applicab
le to this case. In Medel v. CA, in addition to the interest, the debtors were a
lso required to pay service charge of 2% per annum, a penalty charge of 1% per m
onth, and attorney’s fee of 25%. Thus, taken in conjunction with the stipulated se
rvice charge and penalty, the interest rate of 5.5% in the Medel case was found
to be excessive, iniquitous, unconscionable, exorbitant and hence, contrary to m
orals, thereby making such stipulation null and void. In this case, however, the
re is no other stipulation for the payment of an extra amount except interest on
the principal of the loan. Considering this variance in the factual circumstanc
es of the Medel case and this one, the court is not prepared to apply the former
, lest it be construed that interest rates agreed upon by the parties in a loan
transaction can be struck down anytime by the court. The interest rate of 7% per
month was voluntarily agreed upon by Ramos and the Pascuals. There is no showin
g that the Pascuals were victims of fraud when they entered into the agreement w
ith Ramos. Neither is there a showing that in their contractual relations with R
amos, the Pascuals were at a disadvantage on account of their moral dependence,
ignorance, mental weakness, tender age or other handicap, which would entitle th
em to the vigilant protection of the courts as mandated by Article 24 of the Civ
il Code.
Sir’s example: A five-year loan agreement had the following terms: Year 1 2 3 4 5
Interest rate 3%/month 4%/month 5%/month 6%/month 7%/month
By the end of the five years, the balance of the P8M loan had ballooned to P17M
with all the accumulated interest. Creditor filed an action to foreclose the mor
tgage. If you were the lawyer for the debtor, how would you approach the case? A
: File an action for injunction of the foreclosure proceedings. Then, file for a
nnulment of the loan agreement based on the nullity of the interest on the groun
d that the rates are iniquitous and unconscionable. Which interest rate is uncon
scionable – the 7% only? 6% and 7%? A: You can argue that all of the interest rate
s (3,4,5,6,7%) when taken as a whole are unconscionable. (Comment from the SecTr
ans nerd: I don’t think this is a valid argument. When the interest rate is void f
or being iniquitous and unconscionable or for any other reason, the loan agreeme
nt itself is not void and should not be annulled. Only the interest is annulled,
and it is just as if there were no interest charged, or it can be reduced accor
ding to terms that are just, in the discretion of the court. But this is not Sec
Trans, so of course, we follow what Sir said.)
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3. Unjust Enrichment Art. 22. Every person who through an act or performance by
another, or any other means, acquires or comes into possession of something at t
he expense of the latter without just or legal ground, shall return the same to
him.
Art. 23. Even when an act or event causing damage to another s property was not
due to the fault or negligence of the defendant, the latter shall be liable for
indemnity if through the act or event he was benefited. Elements of Unjust Enric
hment: 1. 2. 3. There must be enrichment on the part of the defendant. There is
a concomitant injury to the plaintiff. There is no just cause or legal ground fo
r the enrichment.
Pecson v. CA Pecson owned a commercial lot on which he built a four-door two-sto
rey apartment building. For failure to pay realty taxes amounting to 12K, the lo
t was sold at public auction by the City Treasurer to Nepomuceno. Nepomuceno in
turn sold the property to the spouses Nuguid. Pecson filed a case questioning th
e validity of the auction sale. The trial court dismissed the complaint but held
that the sale did not include the apartment building. The Nuguid spouses filed
a motion for delivery of possession of the lot and the apartment building, citin
g Article 546 of the Civil Code (rules on builder in good faith). The spouses of
fered to pay the cost of construction spent by Pecson in 1965 as indemnity under
Art. 448 and 546 of the Civil Code. ISSUE: How much indemnity should be paid by
the Nuguid spouses to Pecson? HELD: The Nuguid spouses should pay the current m
arket value of the apartment bulding on the lot. For this purpose, the parties s
hould be allowed to present evidence on the current market value. The objective
of Article 546 of the Civil Code is to administer justice between the parties in
volved. It was formulated in trying to adjust the rights of the owner and posses
sor in good faith of a piece of land, to administer complete justice to both of
them in such a way as neither one nor the other may enrich himself of that which
does not belong to him. Guided by this precept, it is therefore the current mar
ket value of the improvements which should be made the basis of reimbursement. A
contrary ruling would unjustly enrich the Nuguid spouses who would otherwise be
allowed to acquire a highly valued income-yielding four-unit apartment building
for a measly amount.
Security Bank v. CA Ysmael Ferrer was contracted by SBTC and Rosito Manhit to co
nstruct the building of SBTC in Davao
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for 1.76M. The contract provided that Ferrer would finish construction in 200 wo
rking days. Ferrer was able to complete the construction within that period, but
he was compelled by a drastic increase in the cost of construction materials to
incur expenses of about 300K on top of the original cost. SBTC refused to pay a
nd denied ever authorizing payment of any amount beyond the original contract pr
ice. It also invoked Article IX of the building contract, which states that in c
ase of supervening increase in prices of construction materials and/or labor, th
e owner (SBTC) shall equitably make the appropriate adjustment on mutual agreeme
nt of both parties. Since there was no such mutual agreement, there was no oblig
ation on its part to pay above the original contract price. Ferrer then filed a
complaint for breach of contract with damages against SBTC. ISSUE: Whether SBTC
is liable for the additional amount. HELD: Yes, SBTC is liable. Article 22 of th
e Civil Code embodies the maxim, Nemo ex alterius incommodo debet lecupletari (n
o man ought to be made rich out of another’s injury). In this case, Ferrer incurre
d additional expenses in constructing SBTC’s building. SBTC derived benefits when
Ferrer completed the construction even at an increased cost. Hence, to allow SBT
C to acquire the constructed building at a price far below its actual constructi
on cost would undoubtedly constitute unjust enrichment for the bank, to the prej
udice of Ferrer. Such unjust enrichment is not allowed by law.
Valarao v. CA Spouses Valarao entered into an agreement with Arellano for the sa
le to the latter of a parcel of land for 3.225M pesos. The agreement, entitled a
“Deed of Conditional Sale” provided that should Arellano fail to pay three (3) succ
essive monthly installments or any one year-end lump sum payment within the peri
od stipulated, the sale shall be considered automatically rescinded without the
necessity of judicial action and all payments made by the vendee shall be forfei
ted in favor of the vendors by way of rental for the use and occupancy of the pr
operty and as liquidated damages. After Arellano had already paid around P2M, sh
e failed to pay the installments for the months of October and November. In Dece
mber, however, she attempted to pay the installments due from October to Decembe
r but the Valaraos’ maid – to whom the installments had been habitually paid – refused
to accept the tender, allegedly on her employers’ instructions. Because of the re
fusal to accept payment, Arellano consigned the money in court. On the same date
, the Valaraos sent Arellano a letter notifying her that they were enforcing the
automatic rescission stipulation in the contract and that they were forfeiting
the P2M in installments already made. ISSUE: Whether the contract can be rescind
ed and the payments already made forfeited. HELD: The contract cannot be rescind
ed and even if it could, the payments cannot be forfeited because the refusal of
payment was unjustified. Under the Maceda Law, Arellano had a grace period of t
hree months from December within which to pay the unpaid installments. Thus, the
spouses Valarao did not have the right to rescind the contract yet. And even if
the contract could be rescinded, the automatic forfeiture clause could not be e
nforced because it would be inequitable to allow the forfeiture of the amount of
more than P2M already paid by Arellano, a sum which constitutes two-thirds of t
he total consideration. Because she made a tender of payment which was unjustifi
ably refused, the Valaraos cannot enforce the automatic forfeiture clause of the
contract. To rule in favor of the Valaraos would result in patent injustice and
unjust enrichment. The SC is not merely a court of law, but also a court of jus
tice.
EPG Construction v. Vigilar
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The ministry of Public Works and Highways forged individual contracts with petit
ioners EPG Construction et al (CONTRACTORS) for the construction of 145 housing
units. Under the contracts, the scope of construction and funding therefor cover
ed only around 2/3 of each housing unit. After the contractors performed their w
ork on 2/3 of the units, DPWH Undersecretary Canlas requested that they perform
additional constructions to complete the units and gave his verbal assurance tha
t additional funds would be available and forthcoming. The contractors performed
the additional constructions and completed the units. They were paid the contra
ct price, representing 2/3 of the work actually done, leaving an unpaid balance
of about 6M for the additional constructions for the completion of the existing
housing units. DPWH Secretary Vigilar denied the money claims for the additional
amount. ISSUE: Whether the contractors have a right to be compensated for the a
dditional constructions done. HELD: Yes, they should be compensated. The Adminis
trative Code provides that the existence of appropriations and availability of f
unds as certified to and verified by the proper accounting officials are conditi
ons sine qua non for the execution of government contracts. In this case, the ad
ditional work was pursued through a verbal request of DPWH Undersecretary Canlas
despite the absence of the corresponding supplemental contracts and appropriate
funding. Because of this, DPWH Secretary Vigilar claims that the implied contra
cts are null and void, and are not binding on the government. While it is true t
hat the implied contracts covering the additional constructions are void, the Co
urt, in the interest of substantial justice, upholds the right of the contractor
s to be compensated for the additional construction, applying the principle of q
uantum meruit. The peculiar circumstances in this case necessitate the allowance
of the contractors’ money claims. They believed in good faith and in the interest
of the government and the public in general that appropriations to cover the ad
ditional constructions and completion of the project would be available and fort
hcoming. The construction of the housing units had already been completed by the
contractors and the subject housing units had been, since their completion, und
er the control and disposition of the government pursuant to its public works ho
using project. It would thus be the apex of injustice and highly inequitable to
defeat the contractors’ right to be duly compensated for actual work performed and
services rendered, where both the government and the public have, for years, re
ceived and accepted benefits from said housing project and reaped the fruits of
the contractors’ honest toil and labor.
Sir’s examples: A has crops planted on top of a slope. Below the slope, B’s cattle g
razed. During a flood, the portion where B’s cattle grazed was submerged in water.
The cattle went up the slope in order to avoid getting drowned. Unfortunately,
the cattle trampled and destroyed A’s crops. Does B have to compensate A for the d
amage? A: Yes. B was enriched – his cattle were saved. On the other hand, A suffer
ed a loss – his crops got trampled. It would thus constitute unjust enrichment if
B did not pay A.
You sell a house for P2M, payable in ten equal monthly installments. Four months
later, inflation has
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turned the house into a P10M property. ground of unjust enrichment?
Can you refuse to convey the house to the buyer on the
A: No. Sir did not explain exactly why not, but I think it’s because there was no
real loss on your part if a supervening increase in the value of the property ha
ppens due to inflation, so the second element is not present.
You owe someone P100K. Ten years lapse without payment. Therefore, the loan has
prescribed. Not knowing this, you pay. When you find out that you no longer had
a legal obligation to pay, you ask for the P100K back on the ground of unjust en
richment. Can you have your cake and eat it too? A: No. There’s still a natural/mo
ral obligation to pay. You cannot invoke unjust enrichment.
Pinatubo eruption. There was an immediate need to dredge a flooded area. The gov
ernment was able to contract a company to perform the service on short notice. T
he COA then disallowed payment because there was no public bidding, and the othe
r formalities for government projects were not followed. Can the government refu
se to pay? A: No. The government must pay the contractor. It would constitute un
just enrichment if it is not paid just because the requirements of public biddin
g, etc. were not followed, given the emergency situation at the time.
4. Judicial Vigilance Art. 24. In all contractual, property or other relations,
when one of the parties is at a disadvantage on account of his moral dependence,
ignorance, indigence, mental weakness, tender age or other handicap, the courts
must be vigilant for his protection.
Examples when the courts exercised judicial vigilance:
PLDT v. PLDT Union PLDT hired a blind man to show the world its political correc
tness. After two years, PLDT terminated him on the ground that he was blind. HEL
D: He was illegally dismissed. The court exercised judicial vigilance here in pr
otecting the rights of the handicapped, under Article 24.
Deaf-mute was accused of murder. The court appointed counsel de oficio who happe
ned to be a very old guy who did not object even once and did not cross-examine
the witnesses for the prosecution. Naturally, the deaf-mute was convicted.
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HELD: The case was remanded to the trial court for new trial. The court ordered
the trial court to appoint better counsel de oficio.
5. Thoughtless Extravagance Art. 25. Thoughtless extravagance in expenses for pl
easure or display during a period of acute public want or emergency may be stopp
ed by order of the courts at the instance of any government or private charitabl
e institution. 6. Disrespect for Person Art. 26. Every person shall respect the
dignity, personality, privacy and peace of mind of his neighbors and other perso
ns. The following and similar acts, though they may not constitute a criminal of
fense, shall produce a cause of action for damages, prevention and other relief:
(1) Prying into the privacy of another s residence: (2) Meddling with or distur
bing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly sta
tion in life, place of birth, physical defect, or other personal condition. This
includes sexual harassment.
Concepcion v. CA The Nicolas spouses were lessees in an apartment owned by Flore
nce Concepcion. Florence also contributed capital to the business that the Nicol
as spouses were engaged in. One day, Florence’s brother-in-law, Rodrigo, accused M
r. Nicolas in front of his children and friends of having an affair with Florenc
e. As a result of the incident, Mr. Nicolas felt extreme embarrassment and shame
to the extent that he could no longer face his neighbors. Florence also ceased
to do business with him by not contributing capital anymore so much so that the
business venture of the Nicolas spouses declined as they could no longer cope wi
th their commitments to their clients and customers. To make matters worse, Mrs.
Nicolas started to doubt Mr. Nicolas’s fidelity, resulting in frequent bickerings
and quarrels during which Mrs. Nicolas even expressed her desire to leave her h
usband. Consequently, Mr. Nicolas was forced to write Rodrigo demanding public a
pology and payment of damages. Rodrigo pointedly ignored the demand, for which r
eason the Nicolas spouses filed a civil suit against him for damages. ISSUE: Whe
ther Rodrigo Concepcion is liable for damages. HELD: Yes. Under Article 26, the
rights of persons are amply protected, and damages are provided for violations o
f a person s dignity, personality, privacy and peace of mind. The violations men
tioned in Article 26 are not exclusive but are merely examples and do not preclu
de other similar or analogous
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acts. Damages therefore are allowable for actions against a person s dignity, su
ch as profane, insulting, humiliating, scandalous or abusive language. Marquez v
. Desierto Lourdes Marquez was the branch manager of PCIB Julia Vargas. She rece
ived an order from Ombudsman Aniano Desierto to produce several bank documents f
or purposes of inspection in camera relative to various accounts maintained at t
he bank. Marquez asked Desierto for an extension to produce the checks in questi
on, since they were payable to cash or bearer and could not be easily identified
. Desierto issued an order requiring the production of the documents and threate
ned to cite Marquez in indirect contempt and for obstruction of justice. Marquez
filed an action for declaratory relief to clarify how she could comply with the
order without violating the Secrecy of Bank Deposits Act. While this action was
pending, Marquez was charged with indirect contempt.
ISSUE: Whether Marquez may be cited for indirect contempt for her failure to pro
duce the documents requested by the Ombudsman. Whether the order of the Ombudsma
n to have an in camera inspection of the questioned account is allowed as an exc
eption to the law on secrecy of bank deposits.
HELD: Marquez may not be cited for indirect contempt for her failure to produce
the documents. The order of the Ombudsman to inspect the questioned account is n
ot allowed as an exception to the law on secrecy of bank deposits.
The exceptions to the law on secrecy of bank deposits are: 1. Where the deposito
r consents in writing; Impeachment cases; 3. By court order in bribery or dereli
ction of duty cases against public officials; 4. Deposit is subject of litigatio
n; 5. Sec. 8, R.A. No.3019, in cases of unexplained wealth.
2.
Thus, before an in camera inspection may be allowed, there must be a pending cas
e before a court of competent jurisdiction. Further, the account must be clearly
identified, the inspection limited to the subject matter of the pending case be
fore the court of competent jurisdiction. The bank personnel and the account hol
der must be notified to be present during the inspection, and such inspection ma
y cover only the account identified in the pending case.
In this case, there is yet no pending litigation before any court of competent a
uthority. What is existing is an investigation by the Office of the Ombudsman. I
n short, what the office of the ombudsman would wish to do is to fish for additi
onal evidence. There was no pending case in court which would warrant the openin
g of the bank account for inspection.
Zone of privacy is recognized and protected in our laws. The Civil Code provides
that “every person shall respect the dignity, personality, privacy and peace of m
ind of his neighbors and other persons” and punishes as actionable torts several a
cts for meddling and prying into the privacy of another. It also holds a public
officer or employee or any private individual liable for damages for any violati
on of the rights and liberties of another person, and recognizes the privacy of
letters and other private communications. The Revised Penal Code makes a crime t
he violation of secrets by an officer,
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revelation of trade and industrial secrets, and trespass to dwelling. Invasion o
f privacy is an offense in special laws like the Anti-Wiretapping Law, the Secre
cy of Bank Deposits Act, and the Intellectual Property Code.
7. Dereliction of Duty
Art. 27. Any person suffering material or moral loss because a public servant or
employee refuses or neglects, without just cause, to perform his official duty
may file an action for damages and other relief against he latter, without preju
dice to any disciplinary administrative action that may be taken. Javellana v. T
ayo Mayor Tayo, the Vice Mayor two councilors, and the secretary of Buenavista,
Iloilo were always absent from the sessions of the council. Thus, the remaining
council members elected among themselves a temporary presiding officer and a sec
retary to take notes. They then proceeded with the matters to be taken up by the
council. When the minutes of all their proceedings were presented to Mayor Tayo
for action, the mayor refused to act upon them, or particularly to approve or d
isapprove the resolution they had been working on and which they, as a council,
had approved. According to the mayor, the sessions were null and void. Mayor Tay
o even refused to affix his signature to their payrolls covering the per diems o
wing to them alleging that the proceedings were illegal due to his absence. Tria
l Court: Sessions perfectly valid and legal. Moral damages awarded pursuant to a
rt. 27 of the NCC to Exequiel Golez who had testified and proved that he had suf
fered as a consequence of the refusal of Mayor Tayo to perform his official duty
. Of course, the hard-headed mayor still refuses to back down. Hence, this appea
l. ISSUE: Whether Exequiel Golez is entitled to moral damages. HELD: Yes. The aw
ard of moral damages is proper under Art. 27 of the NCC considering that accordi
ng to the trial court, Golez was able to prove that he suffered as a consequence
of the mayor’s refusal to perform his official duty, notwithstanding the action t
aken by the provincial fiscal and the provincial board upholding the validity of
the sessions in question. 8. Unfair Competition Art. 28. Unfair competition in
agricultural, commercial or industrial enterprises or in labor through the use o
f force, intimidation, deceit, machination or any other unjust, oppressive or hi
ghhanded method shall give rise to a right of action by the person who thereby s
uffers damage. Note that this is different from unfair competition under the Rev
ised Penal Code, which is a criminal offense. Habana v. Robles Habana was the au
thor and copyright owner of a college textbook entitled “College English for Today
.” He discovered that another textbook written by Robles was strikingly similar to
his own with regard to the content, scheme of presentation, illustrations, and
examples. Several pages of Robles’ book directly plagiarized his own book. Habana
sued Robles for copyright infringement, unfair competition, and damages. ISSUE:
Whether Robles is liable for damages.
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HELD: Yes. Robles is guilty of copyright infringement. Infringement of copyright
consists in doing by any person, without the consent of the owner of the copyin
g, of anything, the sole right to do which is conferred by statute on said owner
. Said infringement is in fact a trespass on a private domain owned by the owner
of the copyright. With regard to books and other literary works, the purpose of
copywriting is to give protection to the intellectual product of an author. In
such a case, copying alone is not what is prohibited – the copying must produce an
injurious effect. In this case, even if Habana’s book, or even a large portion of
it, was not copied by Robles, if so much is taken that the value of the origina
l work is substantially diminished, then Robles is indeed guilty of infringement
. With regard to the injurious effect, the least Robles could have done was to a
cknowledge Habana’s book as the source of the contested portions of her own book.
To allow another to copy the book without appropriate acknowledgment is injury e
nough, hence the requisite of injurious effect is complied with.
Sir’s examples: A owns a hospital named St. Peter’s located in a small town. B owns
another hospital in the same town. B puts up a funeral parlor across the street
from St. Peter’s Hospital and names it St. Peter’s Funeral Parlor. Is this unfair co
mpetition under Article 28? A: Yes. This is an unjust, oppressive, and highhande
d method of competing with A.
The ad for a product claims that “Our product is number one.” Does this constitute u
nfair competition? A: No.
The ad for a product claims that “Our product is the only good product.” Does this c
onstitute unfair competition? A: Yes.
9. Violation of Civil/Political Rights Art. 32. Any public officer or employee,
or any private individual, who directly or indirectly obstructs, defeats, violat
es or in any manner impedes or impairs any of the following rights and liberties
of another person shall be liable to the latter for damages: (1) Freedom of rel
igion; (2) Freedom of speech;
(3) Freedom to write for the press or to maintain a periodical publication;
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(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without due process of law;
(7) The right to a just compensation when private property is taken for public u
se;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one s person, house, papers, and effects against u
nreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not
contrary to law;
(13) The right to take part in a peaceable assembly to petition the government f
or redress of grievances;
(14) The right to be free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and counsel, to be informed
of the nature and cause of the accusation against him, to have a speedy and pub
lic trial, to meet the witnesses face to face, and to have compulsory process to
secure the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness against one s self, or from be
ing forced to confess guilt, or from being induced by a promise of immunity or r
eward to make such confession, except when the person confessing becomes a State
witness;
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(18) Freedom from excessive fines, or cruel and unusual punishment, unless the s
ame is imposed or inflicted in accordance with a statute which has not been judi
cially declared unconstitutional; and
(19) Freedom of access to the courts. In any of the cases referred to in this ar
ticle, whether or not the defendant s act or omission constitutes a criminal off
ense, the aggrieved party has a right to commence an entirely separate and disti
nct civil action for damages, and for other relief. Such civil action shall proc
eed independently of any criminal prosecution (if the latter be instituted), and
mat be proved by a preponderance of evidence. The indemnity shall include moral
damages. Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable from a judge unless his ac
t or omission constitutes a violation of the Penal Code or other penal statute.
If you will notice, the rights enumerated in Article 32 are the same as the righ
ts protected under Article III of the Constitution in the Bill of Rights. Is Art
icle 32 a surplussage then? A: No. The Constitution protects citizens from viola
tions of their civil rights by the State. Article 32 covers violations committed
even by private individuals. Moreover, Article 32 covers not only direct violat
ions of civil rights, but also INDIRECT violations. For example, under Article 3
2, even a witness for the application of a search warrant who lies in his testim
ony may be liable for damages to the aggrieved party.
MHP Garments v. CA MHP had the exclusive franchise to sell and distribute offici
al Boy Scout uniforms and supplies. Acting upon information that private respond
ents were selling Boy Scout items without authority, MHP sent one of its employe
es, together with three members of the Philippine Constabulary, to the store of
private respondents. The employee and the members of the PC seized the merchandi
se in the store without any warrant. The items were then turned over to MHP. Whe
n private respondents demanded the return of the goods, not all items were retur
ned, while the others were of inferior quality. Private respondents filed an act
ion for damages against MHP. MHP denies liability on the ground that it was the
PC that conducted the raid, and its participation was only to report the alleged
illegal activity of private respondents. ISSUE: Whether MHP is liable for damag
es. HELD: Yes. It is not the actor alone (i.e. the one directly responsible) who
must answer for damages under Article 32. The person indirectly responsible mus
t also answer for the damages or injury caused to the aggrieved party. Article 3
2 of the Civil Code makes the persons who are directly, as well as indirectly, r
esponsible for the transgression as joint tortfeasors. In this case, MHP was ind
irectly involved in transgressing the right of private respondents against unrea
sonable search and seizure. It instigated the raid, which was even conducted wit
h the active participation of one of the employees of MHP. It received for safek
eeping the goods unreasonably seized and refused to surrender them upon demand.
It failed to report the unlawful peddling of the goods to the Boy Scouts of the
Philippines so that the latter could have properly applied for a warrant.
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Obra v. CA Obra, the Regional Director of the Bureau of Mines and Geo-Sciences (
BMGS), received from Jeanette Grybos a letter on behalf of the Gillies heirs com
plaining that the spouses Brett had been conducting illegal mining activities in
a mining area belonging to the Gillies family. Obra requested the assistance of
Brig. Gen. Dumpit in apprehending a truck allegedly used by the spouses Brett i
n illegal mining. Obra also issued to Dumpit a BMGS certification stating that t
he spouses Brett had no mining permit. Four days later, the elements of the mili
tary seized a truck belonging to the Spouses Brett as it was entering the contes
ted mining area. The truck was impounded. The spouses filed a complaint for dama
ges against Obra and Dumpit. ISSUE: Whether Obra and Dumpit are liable for damag
es. HELD: Yes. The constitutional rights of the spouses to due process and to se
curity against unreasonable searches and seizure were violated. Article 32 of th
e Civil Code makes liable any public officer who is directly or indirectly respo
nsible for violation of the constitutional right. The language of Article 32 mak
es both the actor (the one directly responsible) and the person indirectly respo
nsible liable for damages. Thus, Dumpit could not claim that he had no knowledge
of the acts of his subordinates who seized the truck. Neither can he evade resp
onsibility for his acts by claiming that he merely performed a ministerial duty
in ordering the implementation of Obra’s request. Otherwise, liability under Artic
le 32 could easily be avoided by the mere plea that the officer concerned was on
ly carrying out a ministerial duty.
VI. Interference in Contractual Relation
Art. 1314. Any third person who induces another to violate his contract shall be
liable for damages to the other contracting party. Elements of Interference in
Contractual Relation: 1. 2. 3. 4. Valid contract; Outsider knows of the existenc
e of the contract; The third party induces one party to breach his obligation un
der the contract; Damage.
Is malice an element of interference in contractual relation? A: There are varia
nces in opinion. Some cases say that it is not, while other cases say that it is
(So Ping Bun v. CA). So if you’re the lawyer for the plaintiff, you should try to
prove it anyway just to be sure. What are the defenses available to the defenda
nt? business competition & the purpose is (i) furtherance of the business; & (ii
) lawful means are used. Note that there is no intent to cause damage. (So Ping
Bun v. CA) (2) honest advice made (i) in good faith and (ii) in performance of h
is duty as adviser (3) innocence of breaching party (Sir doesn’t agree); element o
f inducement lacking – Cite Daywalt – that the third party cannot be more liable tha
n the party on whose behalf he intermeddles.
(1)
Gilchrist v. Cuddy
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Cuddy was the owner of the rights to the film “Zigomar.” He entered into an agreemen
t with C.S. Gilchrist whereby Gilchrist would rent the film from Cuddy and scree
n it for a week for P125. Gilchrist paid the money in advance. However, a few da
ys before the screening date agreed upon, Cuddy sent the money back, saying that
he had made other arrangements with his film. It turns out that Cuddy entered i
nto another agreement with Espejo and Zaldarriaga (the partners) for the rental
of the film for the same week agreed upon with Gilchrist, for the price of P350.
ISSUE: Whether the partners are liable to Gilchrist for damages for interfering
with the contract between Gilchrist and Cuddy. HELD: Yes. The only motive for t
he interference by the partners in the Gilchrist-Cuddy contract was a desire to
make profit by exhibiting the film in their theater; there was no malice involve
d. However, this fact does not relieve them of the legal liability for interferi
ng with that contract and causing its breach. In the US case Angle v. Railway Co
., the US Supreme Court held the third party liable for damages even if his only
motive for interference was to make a profit. Neither is it necessary for the t
ortfeasor to know the identity of the person to whom he causes damages. Article
1902 [of the old Civil Code] provides that a person who, by act or omission, cau
ses damage to another when there is fault or negligence, shall be obliged to rep
air the damage so done. It is clear that this article does not require prior kno
wledge of the identity of the person to whom the tortfeasor causes damage in ord
er for him to be liable for damages. Daywalt v. La Corporacion de los Padres Agu
stinos Recoletos In 1902, Teodorica Endencia executed a contract whereby she obl
igated herself to convey to Geo W. Daywalt a 452-hectare parcel of land for P4,0
00. They agreed that a deed 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 prop
erty measured 1,248 hectares instead of 452 hectares, as she initially believed.
Because of this, she became reluctant to transfer the whole tract to Daywalt, c
laiming 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. T
he SC ordered Endencia to convey the entire tract to Daywalt. Meanwhile, the La
Corporacion de los Padres Agustinos Recoletos (Recoletos), was a religious corpo
ration, which owned an estate immediately adjacent to the property sold by Enden
cia to Daywalt. It also happened that Fr. Sanz, the representative of the Recole
tos, exerted some influence and ascendancy over Endencia, who was a woman of lit
tle force and easily subject to the influence of other people. Father Sanz knew
of the existence of the contracts with Daywalt and discouraged her from conveyin
g the entire tract. 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 Recoletos was for the huge
sum of P500,000 [in the year 1919], since he claims that because of the interfe
rence of the Recoletos, he failed to consummate a contract with another person f
or 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 in
terferes in a contract between other parties cannot become more extensively liab
le in damages for the nonperformance of the contract than the party in whose beh
alf he intermeddles. Hence, in order to determine the liability of the Recoletos
, there is first a need to consider the liability of Endencia to Daywalt. The da
mages claimed by Daywalt from Endencia cannot be recovered from her, first, beca
use these are special damages which were not within the contemplation of the par
ties when the contract was made, and secondly, these damages
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are too remote to be the subject of recovery. Since Endencia is not liable for d
amages to Daywalt, neither can the Recoletos be held liable. As already suggeste
d, by advising Endencia not to perform the contract, the Recoletos could in no e
vent render itself more extensively liable than the principal in the contract. R
oble v. Arbasa (July 31, 2001) New doctrine when it comes to the sale of land: W
hether the consideration for the sale of real property was in price per unit or
a lump-sum sale, if the actual size exceeds the size contracted upon, the buyer
must pay the value of the excess. Rubio v. CA The Rubio spouses owned shares of
stock in Hacienda Benito Inc. (HBI), which they sold to Robert O. Phillips and S
ons Inc. (ROPSI) for P5.5M. An initial payment of P1.2M was paid by ROPSI to the
Rubios, leaving an unpaid balance of about P4.25M. The contract provided that t
he spouses had a right to rescind the sale in case ROPSI failed to pay the balan
ce. Robert O. Phillips (the person) and his wife signed as guarantors for the am
ount of the balance. In the meantime, Robert O. Phillips, in behalf of his wife
and of ROPSI, entered into negotiations for the sale of these same shares of sto
ck to Alfonso Yuchengco. When he found out about the negotiations, Miguel Rubio
wrote a letter reminding ROPSI and Yuchengco that the shares were subject to the
payment of the unpaid balance, and that he still had the right to rescind the s
ale in case of non-payment. Rubio expressed no objections to the sale, provided
that the obligations in their favor were satisfied. ROPSI wrote back, telling Ru
bio that the only obstacle to the consummation of the sale of the HBI shares to
Yuchengco was the letter that Rubio sent. ROPSI warned that unless the letter wa
s withdrawn, they would seek redress elsewhere. Rubio was also informed that Yuc
hengco had given the ultimatum that if the letter was not withdrawn, the transac
tion with ROPSI would be cancelled. [Yuchengco wanted the letter withdrawn becau
se he did not want to purchase the shares of stock if they would later be involv
ed in a collection suit]. Rubio refused to withdraw the letter and instead threa
tened to file an action for collection in case the balance of the purchase price
was not paid when due. ROPSI, however, beat them to court and filed a case agai
nst the Rubios for unlawful interference in the transaction between ROPSI and Yu
chengco. ISSUE: Whether the Rubios are liable for interfering in the transaction
between ROPSI and Yuchengco. HELD: No, the Rubios are not liable for interferin
g in the transaction between ROPSI and Yuchengco. There is no reason why Rubio s
hould be accused of unlawful interference in maintaining his stand that he still
had the option to rescind the contract between him and ROPSI and in stating the
existence of his vendor’s lien over the shares of stock. Rubio never pretended th
at he still had full control of the shares of stock sold to ROPSI. In fact, he a
dmitted that the shares were already transferred to ROPSI and that he did not ha
ve a recorded lien therein. He merely made of record his right to rescind under
the original contract of sale. The details pertaining to the earlier transaction
governing the sale of the shares of stock between Rubio and ROPSI were in fact
known to Yuchengco. Moreover, Rubio was only interested in recovering the P4.25M
balance owing to him. He expressed his intention to withdraw the letter, provid
ed his interests would be protected. Obviously, he felt that the payment of his
P4.25M was not secured under the terms of payment proposed by Yuchengco. Thus, h
e had the right to refuse to withdraw the letter. There was nothing illegal or i
nofficious about the letter or the refusal to withdraw it. So Ping Bun v. CA Tek
Hua Trading entered into agreements with DCCSI for the lease of several propert
ies which Tek Hua used to store its textiles. The successor of Tek Hua Trading,
Tek Hua Enterprises, allowed So Ping Bun, the grandson of the managing partner o
f Tek Hua Trading, to use the premises to store his
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own textiles. Later, Manual Tiong, one of the members of Tek Hua Enterprising Co
rp., asked So Ping Bun to vacate the warehouse within 14 days since Tiong needed
it for his textile business. So Ping Bun refused to vacate. Instead, So Ping Bu
n entered into lease contracts with DCCSI over the same premises. Tek Hua Enterp
rises and Manuel Tiong filed an action to nullify the contracts of lease between
So Ping Bun and DCCSI and also claimed damages against So Ping Bun for unlawful
interference in the lease contracts between DCCSI and Tek Hua Enterprises. ISSU
E: Whether So Ping Bun is liable for damages. HELD: No, So Ping Bun is not liabl
e. The elements of tort interference are: (1) existence of a valid contract; (2)
knowledge on the part of the third person of the existence of the contract; and
(3) interference of the third person is without legal justification or excuse.
In this case, Trendsetter Marketing asked DCCSI to execute lease contracts in it
s favor, and as a result, it was able to deprive Tek Hua Enterprises of its prop
erty right. Clearly, the three elements of tort interference are present since S
o Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the
expense of Tek Hua Enterprises. However, So Ping Bun still cannot be held liable
for damages. Though he took interest in the property of Tek Hua and benefited f
rom it, nothing on record imputes deliberate wrongful motives or malice on him.
The business desire is there to make some gain to the detriment of the contracti
ng parties. Lack of malice, however, precludes damages. Sir’s examples: A was a re
al estate agent. She offered to sell a condo unit to X and X agreed to purchase.
Subsequently, B, another real estate agent, also offered a condo unit to X. Bec
ause of B’s offer, X did not proceed with the purchase of the first unit offered b
y A and bought the one offered by B instead. Is B liable for interference in the
contract to sell between A and X? A: No. There is no indication that X was only
planning to buy one unit, such that if he bought from B, he would automatically
not buy from A anymore. Also, it was in furtherance of business and the means u
sed were lawful. Same situation as above, but B criticized the condo unit that A
was selling, is B liable? A: Yes. Under contractual interference and also unfai
r competition. This time, the means used were unjust and unfair. A entered into
a contract with B. A did not graduate high school. C, a lawyer, advised A not to
comply with the contract. B filed an action for damages against A. What defense
can A invoke? A: A can claim the defense that he was just following his lawyer’s
advice, so he is not liable. Does this mean that C is also not liable for interf
erence in contractual relations under the principle that the interferor cannot b
e more liable than the party in whose behalf he interferes? A: Probably not, sin
ce the lawyer is supposed to know the law. However, he can set up the defense th
at he gave the advice in good faith.
VII. CIVIL LIABILITY ARISING FROM CRIME
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1. Remedies a. Civil Action with Criminal Action RULES OF COURT RULE 111 - PROSE
CUTION OF CIVIL ACTION
Section 1. Institution of criminal and civil actions. – (a) When a criminal action
is instituted, the civil action for the recovery of civil liability arising fro
m the offense charged shall be deemed instituted with the criminal action unless
the offended party waives the civil action, reserves the right to institute it
separately or institutes the civil action prior to the criminal action.
The reservation of the right to institute separately the civil action shall be m
ade before the prosecution starts presenting its evidence and under circumstance
s affording the offended party a reasonable opportunity to make such reservation
.
When the offended party seeks to enforce civil liability against the accused by
way of moral, nominal, temperate, or exemplary damages without specifying the am
ount thereof in the complaint or information, the filing fees therefore shall co
nstitute a first lien on the judgment awarding such damages.
Where the amount of damages, other than actual, is specified in the complaint or
information, the corresponding filing fees shall be paid by the offended party
upon the filing thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be required fo
r actual damages.
No counterclaim, cross-claim or third-party complaint may be filed by the accuse
d in the criminal case, but any cause of action which could have been the subjec
t thereof may be litigated in a separate civil action.
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed
to include the corresponding civil action. No reservation to file such civil act
ion separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended part
y shall pay in full the filing fees based on the amount of the check involved, w
hich shall be considered as the actual damages claimed. Where the complaint or i
nformation also seeks to recover liquidated, moral, nominal, temperate or exempl
ary damages, the offended party shall pay additional filing fees based on the am
ounts alleged therein. If the amounts are not so alleged but any of these damage
s are subsequently awarded by the court, the filing fees based on the amount awa
rded shall constitute a first lien on the judgment.
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Where the civil action has been filed separately and trial thereof has not yet c
ommenced, it may be consolidated with the criminal action upon application with
the court trying the latter case. If the application is granted, the trial of bo
th actions shall proceed in accordance with section 2 of this Rule governing con
solidation of the civil and criminal actions. Clarification of this rule: This r
ule on civil actions instituted with the criminal action has been amended severa
l times, hence the conflicting jurisprudence. Under the 2000 Revised Rules of Cr
iminal Procedure, the civil liability arising from crime is deemed instituted an
d not merely “impliedly” instituted with the institution of the criminal action, unl
ess:
1. 2. 3.
the offended party waives the civil action, reserves the right to institute it s
eparately, or institutes the civil action prior to the criminal action.
But take note that the civil action that is deemed instituted with the criminal
action is only the one for the recovery of the civil liability arising from the
offense charged, and no other civil action. All decisions to the contrary are no
longer controlling. What are the independent civil actions? A: The independent
civil actions are those under Articles 32, 33, 34, and 2176. These are NOT deeme
d instituted with the criminal action or considered as waived even if there is n
o reservation. The need for reservation applies only to the civil liability aris
ing from the offense charged. Can an employer be held civilly liable for quasi d
elict in a criminal action for reckless imprudence filed against his employee? A
: No. Quasi delict under Article 2176 is not deemed instituted with the criminal
action. If at all, the only civil liability of the employer in the criminal act
ion would be his subsidiary liability under the Revised Penal Code. What is the
difference between “separate civil action” under Section 2 of Rule 111 of the Rules
of Court and an “independent civil action”? A: The independent civil actions are tho
se under Articles 32, 33, 34, and 2176 of the Civil Code. These are not deemed i
nstituted with the criminal action even if there is no reservation made by the p
laintiff. The separate civil action under Section 2 of Rule 111 refers to an act
ion to recover civil liability arising from the crime. This is deemed instituted
with the criminal action, unless the offended party waives it, makes a reservat
ion, or institutes it prior to the institution of the criminal action. Note that
this should refer to the civil liability arising from the offense, and not to a
ny other civil action which may be connected to the offense but does not necessa
rily arise from the crime (ex: civil case for legal separation in connection wit
h a case for bigamy). Manuel v. Alfeche A criminal information for libel was fil
ed against Felipe Celino, Danny Fajardo, Lemuel Fernandez, and John Paul Tia, wh
o were all members of the staff of a regional newspaper known as “Panay News,” for m
aliciously publishing a story that a certain Delia Manuel was the “Shabu Queen” in W
estern Visayas. The information also stated that, as a direct consequence of the
said article, Delia Manuel suffered actual, moral, and exemplary damages in the
amount of P10M. The trial court convicted the first three accused and acquitted
the fourth. However, it dismissed the claim for civil indemnity by way of moral
damages for lack of jurisdiction on the ground that Manuel did not pay the fili
ng fees therefor.
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Manuel filed this action for certiorari in the Supreme Court, questioning the va
lidity of the dismissal of her claim for damages. Meanwhile, the three defendant
s appealed their conviction to the CA. ISSUE: Whether Manuel is entitled to the
civil indemnity by way of moral damages. HELD: No. Since the case is already pen
ding appeal with the CA, Manuel should have filed her petition also in the CA. T
his is because the award of moral and exemplary damages by the trial court is in
extricably linked to and necessarily dependent upon the factual finding and basi
s therefor – the existence of the crime of libel. There would thus be a possibilit
y that the CA would reverse the trial court and acquit the accused. In such even
t, the appellate court’s action could collide with an SC ruling awarding damages i
n favor of Manuel. Such a situation would lead to absurdity and confusion and mu
st be avoided. Manuel claims that Article 33 of the Civil Code allows an indepen
dent civil action for damages in cases of defamation, fraud, and physical injuri
es to be instituted separately and independently from the criminal. She then con
cludes that the civil aspect of the case is not dependent on the criminal, but r
ather, may proceed independently thereof, and that therefore, the review of the
civil aspect by the SC may take place simultaneously with and separately from th
e review of the criminal aspect by the CA. This reasoning is misplaced. Sec. 1 o
f Rule 111 of the Rules of Court provides that the civil action for recovery of
civil liability is impliedly instituted with the criminal action unless the offe
nded party waives the civil action, reserves his right to institute it separatel
y, or institutes the civil action prior to the criminal action. In the present c
ase, the civil action had been actually (not just impliedly) instituted with the
criminal prosecution, as shown by the fact that Manuel took an active part in t
he prosecution of the criminal case. Thus, there can no longer be any independen
t civil action to speak of, as the civil aspect had previously been included in
the criminal. Manuel, by attempting to have recourse to the SC while the crimina
l aspect is still pending with the CA, was effectively trying to split a single
cause of action, which cannot be allowed. [This seems to be an application of th
e old rule.] Bañez v. Valdevilla Bañez was the sales operations manager of Oro Marke
ting in its branch in Iligan City. In 1993, the company “indefinitely suspended” Bañez
. Bañez filed a complaint for illegal dismissal with the NLRC. The labor arbiter f
ound that he was illegally dismissed and ordered the payment of separation pay i
n lieu of reinstatement, backwages, and attorney’s fees. The decision was appealed
to the NLRC but was dismissed for being filed out of time. The company elevated
the petition to the SC on certiorari. It was dismissed on technical grounds, an
d the SC pointed out that even if all the procedural requirements were met, it w
ould still have been dismissed for failure to show grave abuse of discretion on
the part of the NLRC. Subsequently, Oro Marketing filed a complaint for damages
against Bañez in the RTC of Misamis Oriental. Oro Marketing claimed damages for lo
st profits and earnings due to the abandonment or neglect by Bañez of his duties a
s sales manager because he was preoccupied with his unauthorized installment sal
e scheme. It also claimed damages for the value of its property and supplies whi
ch Bañez used in conducting his own business. Bañez moved to dismiss on the ground t
hat the action for damages, having arisen from an employer-employee relationship
, was under the exclusive original jurisdiction of the NLRC and is barred by rea
son of the final judgment in the labor case. ISSUE: Whether the RTC has jurisdic
tion over the complaint filed by Oro Marketing. HELD: No, the RTC has no jurisdi
ction. Article 217 of the Labor Code provides that Labor Arbiters shall have ori
ginal and exclusive jurisdiction to hear and decide all claims for damages arisi
ng from employer-employee relations. This article
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applies not only to claims for damages filed by employees but also to those file
d by an employer for actual damages against its dismissed employee, where the ba
sis for the claim arises from or is necessarily connected with the fact of termi
nation, and should be entered as a counterclaim in the illegal dismissal case. I
n this case, the claim of Oro Marketing against Bañez for actual damages arose fro
m a prior employer-employee relationship. Oro Marketing would not have taken iss
ue with Bañez’s doing business of his own had the latter not been concurrently its e
mployee. Second, to allow the RTC to proceed with the action for damages would b
e to open anew the factual issue of whether Bañez’s installment sale scheme resulted
in business losses and the dissipation of Oro’s property. This issue had been dul
y raised and ruled upon in the illegal dismissal case. The Labor Arbiter found t
hat no business losses may be attributed to Bañez, and it was in fact his installm
ent plan which had brought more sales to the company. This should be differentia
ted from those labor cases where the employer-employee relationship is merely in
cidental and the cause of action proceeds from a different source of obligation.
Thus, the jurisdiction of regular courts was upheld where the damages claimed w
ere based on tort, malicious prosecution, or breach of contract. The remedy of O
ro is not the filing of a separate action for damages but properly perfecting an
appeal from the Labor Arbiter’s decision. Having lost the right to appeal on the
ground of untimeliness, the decision in the labor case stands as a final judgmen
t on the merits, and the instant action for damages cannot take the place of suc
h lost appeal. DMPI Employees Credit Cooperative (DMP-ECCI) v. Velez An informat
ion for estafa was filed against Carmen Mandawe for alleged failure to account t
o Eriberta Villegas the amount of about P600K. Villegas entrusted this amount to
Mandawe, an employee of DMPI-ECCI, for deposit with the teller of DMPI-ECCI. Su
bsequently, Villegas filed with the RTC a complaint against Mandawe and DMPI-ECC
I for a sum of money and damages with preliminary attachment arising out of the
same transaction. DMP-ECCI filed a motion to dismiss on the grounds that there w
as already a pending criminal case arising from the same facts, and that the com
plaint failed to contain a certification against forum shopping. The trial court
dismissed the case, but later, upon motion for reconsideration of Villegas, it
reversed itself and recalled the dismissal of the case. ISSUE: Whether the civil
case can proceed independently of the criminal case for estafa. HELD: Yes, the
civil case can proceed independently of the criminal case for estafa. Under Rule
111, Section 1 of the Revised Rules of Criminal Procedure, which became effecti
ve on December 1, 2000, the civil action for the recovery of civil liability ari
sing from the offense charged shall be deemed instituted with the criminal actio
n unless the offended party waives the civil action, reserves the right to insti
tute it separately, or institutes the civil action prior to the criminal action.
Section 2 of the same rule provides that after the criminal action has been com
menced, the separate civil action arising therefrom cannot be instituted until f
inal judgment has been entered in the criminal action. However, only the civil l
iability arising from the offense charged is deemed instituted with the criminal
action unless the offended party waives the civil action, reserves his right to
institute it separately, or institutes the civil action prior to the criminal a
ction. There is nor more need for a reservation of the right to file the indepen
dent civil actions under Articles 32, 33, 34, and 2176 of the Civil Code. The re
servation refers only to the civil action for the recovery of the civil liabilit
y arising from the offense charged [under Article 100 of the RPC]. This does not
include recovery of civil liability under Articles 32, 33, 34, and 2176 of the
Civil Code arising from the same act or omission which may be prosecuted separat
ely even without a reservation. Thus, the civil case instituted by Villegas, an
independent civil action for damages on account of the fraud committed against h
im under Article 33 of the Civil Code, may proceed independently even if there w
as no reservation as to its filing. [This is the application of the present rule
.]
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b. Separate Civil Action Sec. 2. When separate civil action is suspended. – After
the criminal action has been commenced, the separate civil action arising theref
rom cannot be instituted until final judgment has been entered in the criminal a
ction.
If the criminal action is filed after the said civil action has already been ins
tituted, the latter shall be suspended in whatever state it may be found before
judgment on the merits. The suspension shall last until final judgment is render
ed in the criminal action. Nevertheless, before judgment on the merits rendered
in the civil action, the same may, upon motion of the offended party, be consoli
dated with the criminal action in the court trying the criminal action. In case
of consolidation, the evidence already adduced in the civil action shall be deem
ed automatically reproduced in the criminal action without prejudice to the righ
t of the prosecution to cross-examine the witness presented by the offended part
y in the criminal case and of the parties to present additional evidence. The co
nsolidated criminal and civil actions shall be tried and decided jointly.
During the pendency of the criminal action, the running period of prescription o
f the civil action which cannot be instituted separately or whose proceeding has
been suspended shall be tolled.
The extinction of the penal action does not carry with it extinction of the civi
l action. However, the civil action based on delict shall be deemed extinguished
if there is a finding in a final judgment in the criminal action that the act o
r omission from which the civil liability may arise did not exist.
CIVIL CODE
Art. 33. In cases of defamation, fraud, and physical injuries a civil action for
damages, entirely separate and distinct from the criminal action, may be brough
t by the injured party. Such civil action shall proceed independently of the cri
minal prosecution, and shall require only a preponderance of evidence. Summary o
f this Rule:
1.
This rule contemplates a situation where the offended party files a separate civ
il action to recover civil liability arising from the offense. This is a departu
re from the general rule in Section 1 that the civil action is deemed instituted
with the criminal action. If the criminal action has bee commenced, and the off
ended party makes a reservation to separately file the civil action arising ther
efrom, he cannot institute the civil action until final judgment has been render
ed in the criminal action. If the separate civil action has already been institu
ted prior to the filing of the criminal action, upon filing of the criminal acti
on, the civil action shall be suspended in whatever stage it may be found until
final judgment is rendered in the criminal action.
2.
3.
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4.
In case the criminal action is instituted after the civil action, the two action
s may, upon motion of the offended party, be consolidated before judgment on the
merits is rendered in the civil action. It will be tried and decided jointly by
the court trying the criminal action. The only civil action that is deemed susp
ended is the civil action arising from the offense charged and not other civil a
ctions that may be related to but do not arise from the offense. A civil action
may not be suspended under Rule 111 where the action is not to enforce civil lia
bility from the crime charged. As a general rule, there can only be consolidatio
n of the criminal and civil actions if the civil action is for recovery of the c
ivil liability arising from the offense. However, under certain exceptional circ
umstances, there can still be consolidation of the criminal and civil actions ev
en if the civil action is not for the recovery of civil liability arising from t
he offense (ex: civil action based on contract). The requisites for consolidatio
n in these cases are: a. b. c. d. e. the actions arise from the same act, event,
or transaction; they involve the same or like issues; they depend largely or su
bstantially on the same evidence the court must have jurisdiction over the cases
to be consolidated; and a joint trial will not give one party an undue advantag
e or prejudice the substantial rights of any of the parties.
5.
6.
7.
The period of prescription of the civil action arising from a crime that has not
been reserved or that was filed ahead of the criminal action and was subsequent
ly suspended shall not run while the criminal action is pending.
Cojuangco v. CA A blind item was published in a magazine implying that Gretchen
Oppen-Cojuangco was prostituting herself to speed up the approval of a loan from
the government. The spouses Cojuangco filed a civil action for Damages based on
Libel against the owner, publisher, general manager and editor of the magazine
and writer of the article. Subsequently, the Fiscal filed with the same court a
criminal case for libel against the defendants. The spouses filed motions to con
solidate the civil and criminal cases, alleging that the evidence to be presente
d in both would be the same and that Article 360 of the RPC provides that in lib
el, the civil action shall be filed in the same court where the criminal action
is filed and vice-versa, provided however, that the court where the criminal act
ion or civil action for damages is filed shall acquire jurisdiction to the exclu
sion of other courts. Respondents opposed the motions to consolidate. They claim
ed that the spouses, having filed a separate civil action, have no legal standin
g to intervene in the criminal case. ISSUE: Whether the civil and criminal actio
ns may be consolidated for joint trial. HELD: Yes, they may be consolidated. An
independent civil action for the recovery of civil liability, authorized under A
rticles 32, 33, 34, and 2176 of the Civil Code may be consolidated with the crim
inal case, subject to the condition that no final judgment has been rendered in
the criminal case. Section 1, Rule 31 of the Rules of Court authorizes consolida
tion of actions involving common questions of law or fact pending before the cou
rt. The purpose or object of consolidation is to avoid multiplicity of suits, gu
ard against oppression or abuse, prevent delay, clear congested dockets, simplif
y the work of the trial court, and save unnecessary costs. In this case, the civ
il and criminal cases involve common or identical questions of fact and law, and
they would even have the same witnesses. Moreover, Article 360 of the RPC provi
des that the
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criminal case for libel and the civil action for damages arising therefrom must
be filed in the same court. Therefore, it is only proper that the two cases be c
onsolidated. Sarmiento Jr. v. CA Limpin and Apostol executed a trust receipt ove
r their merchandise in favor of a bank to secure the payment of a letter of cred
it worth 495K obtained by the two from the bank. Under the trust receipt, Limpin
and Apostol undertook to hold the goods in trust for the bank, with authority t
o sell the same, the proceeds to be turned over to the bank and applied to their
obligation. The due date of the trust receipt came, but Limpin and Apostol fail
ed to pay. A complaint was filed by the bank against them for Violation of the T
rust Receipt Law. Limpin was convicted. The bank then filed a civil action to co
llect the 495K from Limpin and Sarmiento. Limpin now claims that the civil actio
n is barred because it was not expressly reserved in the criminal action earlier
filed against him. ISSUE: Whether the civil action is barred. HELD: No, the civ
il action is not barred. The provisions of the Rules of Criminal Procedure show
that the offended party is required to make a reservation of his right to instit
ute a separate civil action. Jurisprudence instructs that such reservation need
not be express but may be implied. It may be inferred not only from the acts of
the offended party but also from acts other than those of the latter. For exampl
e, the SC has held in the Bernales case that the failure of the court to make an
y pronouncement in its decision concerning the civil liability of the accused mu
st be due to the fact that the criminal action did not involve at all any claim
for civil indemnity. This indicates an implied reservation of the right to insti
tute a separate civil action. In the present case, nothing in the records show t
hat the bank ever attempted to enforce its right to recover civil liability duri
ng the prosecution of the criminal action. Hence, it is deemed to have made the
implied reservation. Moreover, the complaint of the bank against Limpin and Sarm
iento was based on the failure of the latter to comply with their obligation as
spelled out in the Trust Receipt executed by them. This breach of obligation is
separate and distinct from any criminal liability for “misuse and/or misappropriat
ion of goods or proceeds realized from the sale of goods, documents or instrumen
ts released under trust receipts,” punishable under Section 13 of the Trust Receip
ts Law in relation to Article 315(1)(b) of the RPC. Being based on an obligation
ex contractu and not ex delicto, the civil action may proceed independently of
the criminal proceedings instituted against petitioners regardless of the result
of the latter. c. Independent Civil Action Art. 30. When a separate civil actio
n is brought to demand civil liability arising from a criminal offense, and no c
riminal proceedings are instituted during the pendency of the civil case, a prep
onderance of evidence shall likewise be sufficient to prove the act complained o
f. Art. 31. When the civil action is based on an obligation not arising from the
act or omission complained of as a felony, such civil action may proceed indepe
ndently of the criminal proceedings and regardless of the result of the latter.
Rules of Court Section 3. When civil action may proceeded independently. — In the
cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Phil
ippines, the independent civil action may be brought by the offended party. It s
hall proceed independently of the criminal action and shall require only a prepo
nderance of evidence. In no case, however, may the offended party recover damage
s twice for the same act or omission charged in the criminal action. Andamo v. I
AC
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Emmanuel and Natividad Andamo owned a parcel of land adjacent to that of the Mis
sionaries of Our Lady of La Sallette. Within the land of Our Lady, waterpaths an
d an artificial lake were constructed, allegedly inundating and eroding the Anda
mos’ land. This caused a young man to drown, damaged the Andamos’ crops and fences,
and endangered their lives. The Andamos instituted a criminal action against the
officers and directors of Our Lady for destruction by means of inundation under
Art. 324 of the RPC. Subsequently, they filed a civil case for damages against
the respondents. Upon motion of respondents, the civil case was dismissed for la
ck of jurisdiction, since the criminal case instituted ahead of the civil case w
as still unresolved. This was based on the provision of the Rules of Court which
provides that criminal and civil actions arising from the same offense may be i
nstituted separately, but after the criminal action has been commenced, the civi
l action cannot be instituted until final judgment has been rendered in the crim
inal action. ISSUE: Whether the civil action should have been dismissed. HELD: N
o. The civil action should not have been dismissed since it was based, not on cr
ime, but on quasi-delict under Article 2176 of the Civil Code. In quasi-delicts,
the civil action is entirely independent of the criminal case according to Arti
cles 33 and 2177 of the Civil Code. To subordinate the civil action contemplated
in the said articles to the result of the criminal prosecution – whether it be co
nviction or acquittal – would render meaningless the independent character of the
civil action and clear injunction in Article 31, that this action may proceed in
dependently of the criminal proceedings and regardless of the result of the latt
er, subject only to the rule against double recovery. Cancio v. Isip Cancio file
d 3 counts of violation of BP22 against Isip, who had issued 3 bad checks. The c
ase was dismissed. Subsequently, 3 cases for estafa were filed. The case was dis
missed again. Cancio then filed a civil case for collection of sum of money to r
ecover the value of the 3 checks from Isip. Isip moved to dismiss on the ground
that the action is barred by res judicata and that Cancio was guilty of forum sh
opping. ISSUES: 3. 4. Whether the civil action for collection is barred by res j
udicata. Whether there was forum shopping.
HELD: No to both. An act or omission causing damage to another may give rise to
two separate civil liabilities: 3. 4. ex delicto under Art. 100 of the RPC; and
independent civil liabilities such as: c. d. those not arising from an act or om
ission complained of as a felony, such as culpa contractual, violations of Artic
les 31, 32, and 34 of the Civil Code, and culpa aquiliana under Article 2176 of
the Civil Code; where the injured party is granted a right to file an action ind
ependent and distinct from the criminal action (ex: Art. 33 of the Civil Code)
Either may be enforced against the offender, but the offended party cannot recov
er damages twice for the same act or omission or under both causes. Under the Ru
les on Criminal Procedure, civil liability ex delicto is deemed instituted with
the criminal action, but the offended party may file the separate civil action b
efore the prosecution starts to present evidence. However, the independent civil
actions may be filed separately and prosecuted independently even without any r
eservation in the criminal action.
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78
In this case, the basis of the complaint is culpa contractual. It is an independ
ent civil action which is based on Isip’s breach of a contractual obligation. This
may proceed independently of the criminal proceedings, regardless of the result
of the latter. There is no res judicata because there is no identity of causes
of action. 2. Effects a. acquittal/dismissal
Civil Code, Art. 29. When the accused in a criminal prosecution is acquitted on
the ground that his guilt has not been proved beyond reasonable doubt, a civil a
ction for damages for the same act or omission may be instituted. Such action re
quires only a preponderance of evidence. Upon motion of the defendant, the court
may require the plaintiff to file a bond to answer for damages in case the comp
laint should be found to be malicious.
If in a criminal case the judgment of acquittal is based upon reasonable doubt,
the court shall so declare. In the absence of any declaration to that effect, it
may be inferred from the text of the decision whether or not the acquittal is d
ue to that ground.
Rules of Court
Rule 111 [2-b]. The extinction of the penal action does not carry with it extinc
tion of the civil action. However, the civil action based on delict shall be dee
med extinguished if there is a finding in a final judgment in the criminal actio
n that the act or omission from which the civil liability may arise did not exis
t.
Rule 120 [2]. Contents of the judgment. – If the judgment is of conviction, it sha
ll state (1) the legal qualification of the offense constituted by the acts comm
itted by the accused and the aggravating or mitigating circumstances which atten
ded its commission; (2) the participation of the accused in the offense, whether
as principal, accomplice, or accessory after the fact; (3) the penalty imposed
upon the accused; and (4) the civil liability or damages caused by his wrongful
act or omission to be recovered from the accused by the offended party, if there
is any, unless the enforcement of the civil liability by a separate civil actio
n has been reserved or waived.
In case the judgment is of acquittal, it shall state whether the evidence of the
prosecution absolutely failed to prove the guilt of the accused or merely faile
d to prove his guilt beyond reasonable doubt. In either case, the judgment shall
determine if the act or omission from which the civil liability might arise did
not exist. Padilla v. Court of Appeals Padilla et al were charged with grave co
ercion in the CFI after forcibly opening and demolishing the market stalls and c
arting away the merchandise of complainants. The CFI convicted them. The judgmen
t was appealed to the CA on the ground that it was not supported by the evidence
. The CA modified the CFI’s judgment and acquitted Padilla et al on the ground of
reasonable doubt. They were, however, ordered to solidarily pay the complainants
P9,600 as actual damages. An MR was filed, contending that their acquittal as t
o criminal liability results in the extinction of their civil liability.
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ISSUE: Whether the CA erred in requiring Padilla et al to pay civil indemnity af
ter acquitting them from the criminal charge. HELD: The CA was correct. Padilla
et al were acquitted because of reasonable doubt and not because they did not co
mmit the acts stated in the charge against them. There is no dispute over the fo
rcible opening of the market stall, its demolition with axes and other instrumen
ts, and the carting away of the merchandise. The petitioners were acquitted beca
use these acts were denominated coercion when they properly constituted some oth
er offense such as threat or malicious mischief. They could not, however, be con
victed under the latter offenses because the information did not charge them wit
h the same. In this case, where the criminal liability was extinguished, the civ
il liability arising from the crime was also extinguished. However, the same act
or omission gave rise to two kinds of civil liabilities: one arising from crime
and the other arising from quasi-delict, subject to the rule on double recovery
. It is on the latter that the award of damages was based. The only time that ac
quittal will result in extinction of both kinds of civil liability is where the
ruling was that the act complained of did not exist. Despite Article 29 of the C
ivil Code, which provides for the institution of a civil action in case of acqui
ttal, there is no more need to institute a civil action in this case because all
of the facts necessary to award damages were before the court. To require an ac
tion to be filed anew would be to clog the dockets unnecessarily. Heirs of Guari
ng v. CA A Philippine Rabbit bus collided with a car, killing the driver of the
car. An action for damages based on quasi-delict was filed by the heirs of Guari
ng against Philippine Rabbit. The RTC found the driver of the bus at fault and a
warded damages. On appeal, the CA set aside the RTC decision on the strength of
a decision rendered by another RTC in a criminal case for reckless imprudence re
sulting in homicide acquitting the bus driver, based on reasonable doubt. The ap
pellate court held that since the basis of petitioners’ action was the alleged neg
ligence of the bus driver, the latter’s acquittal in the criminal case rendered th
e civil case based on quasi-delict untenable. ISSUE: Whether the acquittal of th
e driver in the criminal case bars a civil action based on quasidelict. HELD: No
. Acquittal of the accused, even if based on a finding that he is not guilty, do
es not carry with it the extinction of the civil liability based on quasi-delict
. Even if damages are sought on the basis of crime and not quasi-delict, the acq
uittal was based not on a finding that he was not guilty but only on reasonable
doubt. The judgment of acquittal extinguishes the liability of the accused for d
amages only when it includes a declaration that the facts from which the civil l
iability might arise did not exist. Sapiera v. CA Sapiera bought merchandise fro
m Sua and paid for them using two checks issued by Arturo de Guzman and signed a
t the back by Sapiera. The checks were dishonored. Sapiera was charged with four
counts of estafa and De Guzman was charged with two violations of BP22. The RTC
acquitted Sapiera of all the charges of estafa but did not rule on whether she
could be held civilly liable for the checks she indorsed to Ramon Sua. De Guzman
was convicted. Sua appealed on the civil aspect and prayed that the court order
Sapiera to pay the aggregate value of the checks indorsed by her plus interest,
etc. The CA denied the appeal but, on MR, held that Sapiera was liable for P335
K minus P125k that De Guzman had already paid. ISSUE: Whether Sapiera’s acquittal
extinguished her liability for damages. HELD: No, Sapiera could still be and was
properly held liable for damages.
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The judgment of acquittal extinguishes the liability of the accused for damages
only when it includes a declaration that the fact from which the civil liability
might arise did not exist. Thus, the civil liability is not extinguished by acq
uittal where: (a) the acquittal is based on reasonable doubt; (b) where the cour
t expressly declares that the liability of the accused is not criminal but only
civil in nature; and, (c) where the civil liability is not derived from or based
on the criminal act of which the accused is acquitted. In this case, Sapiera’s ac
quittal was due to the fact that conspiracy was not proved before the trial cour
t. However, despite the absence of conspiracy, she did sign the backs of the che
cks and became an indorser thereon and obliged herself to pay the amount of the
checks to the holder. b. extinction of civil liability Rule 111 [2-b]. The extin
ction of the penal action does not carry with it extinction of the civil action.
However, the civil action based on delict shall be deemed extinguished if there
is a finding in a final judgment in the criminal action that the act or omissio
n from which the civil liability may arise did not exist. Bunag v. CA Conrado Bu
nag and Zenaida Cirilo were former sweethearts. Allegedly, Bunag forcibly abduct
ed Cirilo, brought her to a motel and deflowered her against her will. He then b
rought her to his grandmother’s house where they lived together for 21 days. Bunag
promised to marry her, but suddenly disappeared. A criminal action for forcible
abduction was filed against Bunag, but this was dismissed by the fiscal at the
preliminary investigation stage. Cirilo then filed a civil action for damages ag
ainst Bunag on account of the forcible abduction. The trial court awarded Cirilo
damages. Bunag claims that the dismissal of the criminal action for abduction s
hould have extinguished his civil liability. ISSUE: Whether the dismissal of the
criminal case result in the extinction of the civil liability. HELD: No. Extinc
tion of the penal action does not carry with it the extinction of civil liabilit
y unless the extinction proceeds from a declaration in a final judgment that the
fact from which the civil might arise did not exist. In this case, the dismissa
l of the complaint for forcible abduction with rape was by mere resolution of th
e fiscal at the preliminary investigation stage. There was no declaration in a f
inal judgment that the fact from which the civil case might arise did not exist.
Consequently, the dismissal did not in any way affect the right Cirilo to insti
tute a civil action arising from the offense because such preliminary dismissal
of the penal action did not carry with it the extinction of the civil action. 3.
Prejudicial Question Art. 36. Pre-judicial questions which must be decided befo
re any criminal prosecution may be instituted or may proceed, shall be governed
by rules of court which the Supreme Court shall promulgate and which shall not b
e in conflict with the provisions of this Code. Rules of Court – Rule 111 Sec. 6.
Suspension by reason of prejudicial question. – A petition for suspension of the c
riminal action based upon the pendency of a prejudicial question in a civil acti
on may be filed in the office of the prosecutor or the court conducting the prel
iminary investigation. When the criminal action has been filed in court for tria
l, the petition to suspend shall be filed in the same criminal action at any tim
e before the prosecution rests. Sec. 7. Elements of prejudicial question. – The el
ements of a prejudicial questions are: (a) the previously instituted civil actio
n involves an issue similar or intimately related to the issue raised in the sub
sequent criminal action, and (b) the resolution of such issue determines whether
or not the criminal action may proceed What is a prejudicial question?
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A prejudicial question is one based on a fact separate and distinct from the cri
me but is so intimately connected with it that it determines the guilt or innoce
nce of the accused. Elements:
1. 2.
the previously instituted civil action involves an issue similar or intimately r
elated to the issue raised in the subsequent criminal action, and the resolution
of such issue determines whether or not the criminal action may proceed.
Take note that the new rule is that the civil action must have been previously i
nstituted in order to constitute a prejudicial question (Torres v. Garchitorena)
. Apa v. Judge Fernandez An information for violation of the Anti-Squatting Law
was filed against Apa, et al. It alleged that the accused built residential hous
es on Rosita Tigol’s land and against her will. Apa, et al moved for the suspensio
n of the arraignment on the ground that there was a prejudicial question pending
resolution in another case being tried in another branch the same court, where
Apa, et al seek a declaration of the nullity of Rosita’s title to the lot in quest
ion and the partition of the lot in question among them and Rosita Tigol as heir
s of Filomeno and Rita Taghoy. The case had been filed three years before the sq
uatting complaint was filed. ISSUE: Whether the question of ownership over the l
ot, which was pending in a civil case, is a prejudicial question justifying susp
ension of the proceedings in the criminal case. HELD: Yes, it is a prejudicial q
uestion. A prejudicial question is a question which is based on a fact distinct
and separate from the crime but so intimately connected with it that its resolut
ion is determinative of the guilt or innocence of the accused. To justify suspen
sion of the criminal action, it must appear not only that the civil case involve
s facts intimately related to those upon which the criminal prosecution is based
but also that the decision of the issue or issues raised in the civil case woul
d be decisive of the guilt or innocence of the accused. The elements of a prejud
icial question are: (a) the civil action involves an issue similar or intimately
related to the issue raised in the criminal action; and (b) the resolution of s
uch issue determines whether or not the criminal action may proceed. Since the i
nformation states that Apa, et al occupied the lot without the consent of the ow
ner, it must first be determined who the owner is. In fact, subsequent to the fi
ling of the information, the TCT of the lot in question was cancelled and the pa
rties were held to be co-owners of the lot, which they inherited from their pare
nts. Surely, if Apa, et al are co-owners of the lot in question, they cannot be
found guilty of squatting because they are as much entitled to the use and occup
ation of the land as are Rosita Tigol and her family. Beltran v. People Husband
filed a petition for nullity of marriage on the ground of psychological incapaci
ty against wife. In her answer, Wife alleged that it was Husband who abandoned t
he conjugal home and lived with another woman. Wife subsequently filed a crimina
l complaint for concubinage against Husband and his paramour. The information wa
s filed against them. Husband, in order to forestall the issuance of a warrant f
or his arrest, filed a motion to defer proceedings on the ground that there was
a pending civil case for the declaration of nullity of his marriage, and this co
nstituted a prejudicial question to the determination of the criminal case. ISSU
E: Whether the pendency of the petition for declaration of nullity or marriage b
ased on psychological incapacity is a prejudicial question to the criminal case
for concubinage.
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HELD: No. For a civil case to be considered prejudicial to a criminal action, it
must appear not only that the said civil case involves the same facts upon whic
h the criminal prosecution would be based, but also that in the resolution of th
e issue or issues raised in the aforesaid civil action, the guilt or innocence o
f the accused would necessarily be determined. According to the Family Code and
the case of Domingo v. CA, it is only for purposes of remarriage that a final ju
dgment declaring a prior marriage void is the only acceptable proof of the nulli
ty of such first marriage. In other cases, other evidence of the nullity of the
marriage may be presented. Thus, in a case for concubinage, the accused need not
present a final judgment declaring his marriage void, for he can adduce other e
vidence. Thus, he need not wait for final judgment in the case for declaration o
f nullity. With regard to petitioner’s argument that he could be acquitted of the
charge of concubinage should his remarriage be declared void, suffice it to stat
e that even a subsequent pronouncement that his marriage is void from the beginn
ing is not a defense. Parties to the marriage should not be permitted to judge f
or themselves the nullity of their marriage. A marriage is presumed valid until
declared void by the courts, and he who cohabits with a woman not his wife befor
e judicial declaration of nullity of the marriage assumes the risk of being pros
ecuted for concubinage. Marbella-Bobis v. Bobis There are three marriages involv
ed here: (1) Isagani Bobis & Maria Dulce Javier (2) Isagani Bobis and Imelda Mar
bella (3) Isagani Bobis and Julia Sally Hernandez Upon Imelda Marbella-Bobis’s com
plaint, an information for bigamy was filed against Isagani. Sometime thereafter
, Isagani initiated a civil action for the judicial declaration of absolute null
ity of his first marriage on the ground that it was celebrated without a marriag
e license. Isagani then filed a motion to suspend the proceedings in the crimina
l case for bigamy invoking the pending civil case for nullity of the first marri
age as a prejudicial question to the criminal case. ISSUE: Whether the subsequen
t filing of a civil action for declaration of nullity of a previous marriage con
stitutes a prejudicial question to a criminal case for bigamy. HELD: No. In the
case at bar, Isagani s clear intent is to obtain a judicial declaration of nulli
ty of his first marriage and thereafter to invoke that very same judgment to pre
vent his prosecution for bigamy. He cannot have his cake and eat it too. Otherwi
se, all that an adventurous bigamist has to do is to disregard Article 40 of the
Family Code, contract a subsequent marriage and escape a bigamy charge by simpl
y claiming that the first marriage is void and that the subsequent marriage is e
qually void for lack of a prior judicial declaration of nullity of the first. He
re, Isagani was for all legal intents and purposes regarded as a married man at
the time he contracted his second marriage with petitioner. Against this legal b
ackdrop, any decision in the civil action for nullity would not erase the fact t
hat Isagani entered into a second marriage during the subsistence of a first mar
riage. Thus, a decision in the civil case is not essential to the determination
of the criminal charge. It is, therefore, not a prejudicial question. Isagani ca
nnot be permitted to use his own malfeasance to defeat the criminal action again
st him. [Also, take note that in this case, the criminal case was instituted pri
or to the civil case. Hence, no prejudicial question under the new rules which r
equire that the civil action be previously instituted.] When is an action for de
claration of nullity of marriage prejudicial to a criminal case for bigamy? The
only instance I can think of is: Husband marries Wife1. Then, Wife2 forces him a
t gunpoint to marry her. Husband files an action to annul the marriage to Wife2
on the ground of vitiated consent. Then Wife1 institutes a criminal action for b
igamy against Husband. In this case, the criminal action should be suspended pen
ding the determination of the validity of the marriage to Wife2. This is because
if the trial court finds that the consent of the Husband was indeed vitiated, t
hen that means
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that he also did not willfully commit bigamy. Thus, the civil action is determin
ative of the guilt or innocence of the husband. Torres v. Garchitorena Susana Re
alty, Inc. owned parcels of land located at Cavite. These were adjacent to the s
ea and over time portions thereof were submerged by sea water. Mayor Torres caus
ed the leveling and reclamation of the submerged portion of SRI’s property for the
relocation of squatters. SRI filed with the Ombudsman a criminal complaint agai
nst Torres for violation of the Anti-Graft & Corrupt Practices Act. Ombudsman ch
arged Torres & Alvarez. Subsequently, the Republic of the Philippines filed with
the RTC a complaint against SRI for reversion of the property back to the State
. The Republic alleged that said property had been ascertained by the DENR to be
part of Manila Bay. Torres and Alvarez filed a motion with the Sandiganbayan fo
r the suspension of the proceedings in the criminal case on the ground of the ex
istence of a prejudicial question in the civil case filed by the Republic. ISSUE
: Whether there was a prejudicial question. HELD: No. In order to constitute a p
rejudicial question, the civil action must be instituted prior to the institutio
n of the criminal action. In this case, the information was filed with the Sandi
ganbayan ahead of the civil case. Thus, no prejudicial question exists. 4. Subsi
diary Liability
Art. 102. Subsidiary civil liability of innkeepers, tavernkeepers and proprietor
s of establishments. — In default of the persons criminally liable, innkeepers, ta
vernkeepers, and any other persons or corporations shall be civilly liable for c
rimes committed in their establishments, in all cases where a violation of munic
ipal ordinances or some general or special police regulation shall have been com
mitted by them or their employees.
Innkeepers are also subsidiarily liable for the restitution of goods taken by ro
bbery or theft within their houses from guests lodging therein, or for the payme
nt of the value thereof, provided that such guests shall have notified in advanc
e the innkeeper himself, or the person representing him, of the deposit of such
goods within the inn; and shall furthermore have followed the directions which s
uch innkeeper or his representative may have given them with respect to the care
and vigilance over such goods. No liability shall attach in case of robbery wit
h violence against or intimidation of persons unless committed by the innkeeper
s employees.
Art. 103. Subsidiary civil liability of other persons. — The subsidiary liability
established in the next preceding article shall also apply to employers, teacher
s, persons, and corporations engaged in any kind of industry for felonies commit
ted by their servants, pupils, workmen, apprentices, or employees in the dischar
ge of their duties. Requisites of subsidiary civil liability of the employer, te
acher, corporation, etc: (a) the existence of an employer-employee relationship;
(b) that the employer is engaged in some kind of industry; (c) that the employe
e is adjudged guilty of the wrongful act and found to have committed the offense
in the discharge of his duties (not necessarily any offense he commits "while"
in the discharge of such duties); and (d) that said employee is insolvent. a. Co
ncept and Requisites
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Yonaha v. CA and the Heirs of Ouano Ouana, allegedly a driver of Evelyn Yonaha,
was charged with and convicted of Reckless Imprudence Resulting In Homicide – he r
an over and killed Hector Cañete. Ouano pleaded guilty and the trial court sentenc
ed him to imprisonment and to pay the heirs of Cañete a total of P90k in damages.
A writ of execution was issued for the satisfaction of the monetary award but th
e writ was returned unsatisfied after Ouano manifested his inability to pay the
monetary obligation. The heirs of Ouano filed a motion for subsidiary execution
and the trial court, without notice or hearing to Yonaha, ordered the issuance o
f a writ of subsidiary execution. The sheriff went to Yonaha s residence to enfo
rce the writ, and it was then, allegedly for the first time, that Yonaha was inf
ormed of Ouano s conviction. Yonaha filed a motion to stay and to recall the sub
sidiary writ on the ground of denial of due process and on the fact that the emp
loyer’s liability had yet to be established. ISSUE: Whether the finding of the sub
sidiary liability of an employer requires notice and hearing. HELD: Yes, notice
and hearing are required. The judgment of conviction of the employee, of course,
is conclusive upon the employer and the subsidiary liability may be enforced in
the same criminal case, but to afford the employer due process, the court shoul
d hear and decide that liability on the basis of the conditions required therefo
r by law. There is a need for notice and hearing to determine whether the requis
ites for the subsidiary liability of an employer under Art. 103 of the RPC are p
resent. Catacutan v. Heirs of Kadusale Driver hit a tricycle, killing its driver
and passenger. He was convicted of reckless imprudence resulting in double homi
cide with physical injuries and damages to property and was sentenced to impriso
nment & to pay damages. The writ of execution was returned unsatisfied as the dr
iver had nothing to pay off the damages in the decision. A subsidiary writ of ex
ecution was served on his employer. Employer opposed claiming that she was never
a party to the criminal case, and to proceed against her would violate due proc
ess. ISSUE: Whether the employer is subsidiarily liable. HELD: Yes. Even if she
was not able to participate in the criminal action, it cannot be said that the e
mployer was not given due process. She was furnished a copy of the motion for su
bsidiary writ of execution to which she filed her opposition. Thus, she is deeme
d to have been given notice and hearing. b. diligence not a defense Connel Broth
ers Company v. Aduna Aduna, employed as a driver by Ex-Meralco Employees Transpo
rtation Company (EMETCO), while driving the latter’s bus in a negligent manner, bu
mped an Oldsmobile car owned by Connel Brothers Company. The car fell into a can
al and sustained damage. Two passengers sustained physical injuries. Aduna was c
onvicted of damage to property and serious physical injuries thru reckless impru
dence and had served his prison sentence. At the trial of said criminal case, th
e injured parties reserved their right to file the corresponding civil suit for
damages. The civil case was filed and Aduna and EMETCO were adjudged to be liabl
e for damages, despite EMETCO’s allegation of diligence in selection and supervisi
on. ISSUE: Whether EMETCO is solidarily liable. HELD: No, EMETCO is not solidari
ly liable. Its liability is merely subsidiary. Where the act or omission constit
utes an offense, an injured party generally has two options by which to recover
damages: via the offender’s civil liability arising from conviction of a crime or
via the offender’s civil liability arising from quasi-delict.
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If he chooses the criminal avenue, and an employer’s subsidiary liability is sough
t to be enforced, the conviction of the employee is conclusive on the employer a
nd the latter may be made to pay in the event that the former is insolvent. Here
, the guilt of the accused must be proved beyond reasonable doubt and the convic
tion is conclusive on the employer – there is no defense of diligence in selection
and supervision of the employee. If he chooses the civil action, upon a finding
of the employee’s negligence, the employer’s solidary liability attaches unless he
proves diligence in the selection and supervision of the employee concerned. Her
e, negligence may be proved by a preponderance of evidence. In this case, it is
clear that the injured parties based their action on the result of the criminal
case against Aduna or upon his civil liability arising from crime. There was no
evidence presented in the civil case to show Aduna’s negligence; only his convicti
on was alleged. Because the action was based on the result of the criminal case,
EMETCO is only subsidiarily liable. Aduna’s insolvency and the other requisites f
or a finding of subsidiary liability must be satisfied.
PART TWO VII. DAMAGES
1. CONCEPT/KINDS
OF
DAMAGES
Art. 2197. Damages may be: 1. 2. 3. 4. 5. 6. Actual or compensatory; Moral; Nomi
nal; Temperate or moderate; Liquidated; or Exemplary or corrective
What are the kinds of damages and give a brief explanation. Damages may be:
1.
Actual – This is compensation for the pecuniary loss actually suffered and proved
by the plaintiff. Examples: A robber steals a ring. Actual damages = value of th
e ring Someone beats you up. Actual damages = expenses for going to the hospital
, doctor, medicine Contract with supplier of raw materials. Supplier fails to co
mply and because of that, the buyer fails to manufacture his products. Actual da
mages = unrealized profit.
2.
Moral – Moral damages include: a. physical suffering b. mental anguish
86
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c. d. e. f. g. h. i.
fright serious anxiety besmirched reputation wounded feelings moral shock social
humiliation similar injury
Examples: Someone beats you up. Moral damages = pain, physical suffering Someone
kills your wife. Moral damages = moral suffering, which is presumed by law once
a family member dies.
3.
Nominal – Adjudicated in order that a right of the plaintiff, which has been viola
ted or invaded by the defendant, may be vindicated or recognized, and not for th
e purpose of indemnifying the plaintiff for any loss suffered by him. Example: P
olice officers barge into your home without a warrant.
4.
Temperate – More than nominal but less than actual/compensatory. May be recovered
when the court finds that some pecuniary loss has been suffered but its amount c
annot, from the nature of the case, be proved with certainty. Example: Evidence
presented at the trial to show the value of the damage was wrong, but the damage
itself was proven.
5.
Liquidated - agreed upon by the parties to a contract, to be paid in case of bre
ach thereof. Example: Contract for construction which states that in case of del
ay in completion, the contractor must pay 1/10 of 1% of the project cost for eve
ry day of delay.
6.
Exemplary or corrective - imposed, by way of example or correction for the publi
c good, in addition to the moral, temperate, liquidated or compensatory damages.
Example: When offender acted with evident bad faith and malice, such as in crim
es attended by aggravating circumstances.
General Principles of Damages: 1. 2. The amount should be fair and just and comm
ensurate to the damage. Damage and the amount must be proven by competent eviden
ce. “Competent” means that it is admissible. How to prove: Example: You lost jewelry
to robbers. To prove the amount of damages, you must present documentary eviden
ce, such as receipts. But you probably don’t keep the receipts of your jewelry aro
und, so you can also present testimonial evidence of an expert witness, such as
a jewelry appraiser. 3. Only proximate damages, not remote or speculative, can b
e recovered. Examples: If you run over a chicken, you only pay the value of the
chicken, not the eggs that it would have produced.
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Client appealed a case that he lost. His lawyer failed to file appellant’s brief,
so his appeal was dismissed. Client filed for damages against the lawyer, claimi
ng that he would have been awarded P1M by the appellate court had the brief been
filed. SC held that this was too speculative. Client was proceeding from the as
sumption that he would win the case on appeal, when the probability of this happ
ening was not very high since he already lost in the lower court. But the SC ord
ered the lawyer to pay damages for his gross negligence in failing to file the b
rief. So Ping Bun v. CA ISSUE: Whether Tek Hua is entitled to the attorney’s fees
of P200,000. HELD: Tek Hua is entitled to an award of attorney’s fees BUT only in
the amount of P100,000. The trial court and the Court of Appeals were both corre
ct in not awarding actual, moral, and exemplary damages. This is because So Ping
Bun was not motivated by any malicious intent in prevailing upon DCCSI to lease
the warehouse to his enterprise at the expense of Tek Hua. Hence, he cannot be
deemed a malicious interferor. However, this does not mean that So Ping Bun is t
otally exempt from liability. He is still liable for attorney’s fees. The recovery
of attorney’s fees in the concept of actual or compensatory damages, is allowed u
nder the circumstances provided for in Art. 2208 of the Civil Code. One such occ
asion is when the defendant’s act or omission has compelled the plaintiff to litig
ate with third persons or to incur expenses to protect his interest. But it has
been consistently held that the award of considerable damages should have clear
factual and legal bases. In connection with attorney’s fees, the award should be c
ommensurate to the benefits that would have been derived from a favorable judgme
nt. Settled is the rule that fairness of the award of damages by the trial court
calls for appellate review such that the award, if far too excessive, can be re
duced. This ruling applies with equal force on the award of attorney’s fees. In a
long line of cases, it has been said that it is not sound policy to place a pena
lty on the right to litigate. In this case, considering that the lease contract
of Tek Hua ran only on a month-to-month basis, the SC finds the award of P200,00
0 still exorbitant in the light of prevailing jurisprudence. Consequently, the a
ward is reduced to P100,000. 2. General Principle of Recovery PAL v. Miano Miano
took a PAL flight to Germany. When he arrived in Austria, his checked-in luggag
e was missing. He reported the matter to Lufthansa authorities. It was only 11 d
ays later that his baggage was delivered to him. He claimed that due to the dela
y, he was forced to borrow money for clothes, pay $200 for the transportation of
his baggage from Austria to Czechoslovakia, and he lost a camera. Miano later i
nstituted an action for damages before the RTC of Makati. PAL disclaimed any lia
bility on the ground that there was no report of mishandled baggage on flight PR
722, and no tracer telex from its Viena Station. It also claimed that if it is
at all liable, its obligation was limited by the Warsaw Convention rate. ISSUE:
Whether Miano is entitled to damages and attorney’s fees. HELD: No. But he is enti
tled to actual damages of $200 for expense incurred for the transportation of hi
s baggage. In breach of contract of carriage by air, moral damages are awarded o
nly if the defendant acted fraudulently or in bad faith. There was no bad faith
on the part of PAL. In fact, upon complaint, it immediately coordinated with its
central baggage services to trace the bag and found it. Exemplary damages canno
t be awarded either. In case of contracts and quasi contracts, the defendant mus
t
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have acted in a fraudulent, oppressive, reckless, or malevolent manner for exemp
lary damages to be given. These do not characterize PAL’s actions. When moral and
exemplary damages are eliminated, attorney’s fees must be deleted as well. People
v. Paraiso Paraiso and an unknown companion, John Doe, willfully and unlawfully
entered into the house of a neighbor, Lolita Tigley, and robbed certain articles
such as jewelry, a rolex watch, P200 cash, and a telescope, all valued at P180
K. They then hogtied Paraiso’s 4 children, afterwhich they took Tigley to another
room and stabbed her to death. The lower court then held that Paraiso was guilty
beyond reasonable doubt of the special complex crime of robbery with homicide a
ttended by 3 aggravating circumstances: disregard of the respect due the victim
on account of her sex, that the act was committed in the victim’s dwelling without
provocation on the victim’s part, and that the accused took advantage of their su
perior strength. Paraiso was then sentenced to death and ordered to pay actual d
amages (P180K) as well as moral damages (P200K) and exemplary damages ( P100K).
ISSUE: Did the court a quo err in finding Paraiso guilty beyond reasonable doubt
? HELD: No. But the award of damages is modified. Judgment with regard to damage
s was modified by the SC in the following manner:
1.
As regards the civil liability, following current jurisprudence, the amount of P
50K is awarded for the death of the victim Tagley. No other proof is necessary o
ther than the fact of the death of the victim and the accused’s responsibility the
refor. As regards moral damages, such is in order because of the obvious pain, a
nguish, and grief suffered by the victim’s children. However, since the purpose of
such an award is not to enrich the victim’s children but to compensate them for t
he injuries to their feelings, the amount of P200K is reduced to P100 K. As rega
rds exemplary damages, the presence of one or more aggravating circumstances jus
tifies such after proof that the offended party is entitled to moral, temperate,
or compensatory damages. However, in this case the amount of P100 K is reduced
to P50 K as such is already reasonable. As regards actual damages, such can only
be premised upon competent proof and on the best evidence obtainable. In this c
ase, except for the amount of P200 cash, the value of the rest of the stolen art
icles (jewelry, rolex, etc) are not matters of public knowledge and in the absen
ce of receipts or any other competent evidence besides the self-serving valuatio
n of the prosecution, the award of actual damages should be reduced from P200K t
o P200 as this was the only amount which was sufficiently proven by the prosecut
ion witnesses.
2.
3.
4.
Victory Liner v. Malecdan Andres Malecdan was a 75 year-old farmer. While crossi
ng the street, he was hit by a Victory Liner bus, along with the carabao he was
riding. Both Andres and the carabao died. A criminal complaint for reckless impr
udence resulting in homicide and damage to property was filed against Joson. Sub
sequently, the heirs of Malecdan brought a suit for damages against Joson and Vi
ctory Liner. The RTC held that Joson was negligent in driving the bus, while Vic
tory Liner was guilty of negligence in the selection and supervision of Joson. T
he RTC also awarded the following damages: a. P50,000.00 as death indemnity; b.
P88,339.00 for actual damages;
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c. P200,000.00 for moral damages; d. P50,000.00 as exemplary damages; e. Thirty
percent (30%) as attorney’s fees of whatever amount that can be collected by the p
laintiff; and f. The costs of the suit. On appeal, the CA affirmed the RTC and f
ixed the award of attorney’s fees at P50,000. ISSUE: Whether the award of damages
by the RTC and its affirmation by the CA was proper. HELD: Yes, but the amounts
are modified/reduced. Actual Damages: To justify an award of actual damages, the
re should be proof of the actual amount of loss incurred in connection with the
death, wake or burial of the victim. Receipts showing expenses incurred some tim
e after the burial of the victim, such as expenses relating to the 9th day, 40th
day and 1st year death anniversaries, should not be taken into account. In this
case, the trial court awarded P88,339.00 as actual damages. While these were du
ly supported by receipts, these included the amount of P5,900.00, the cost of on
e pig which had been butchered for the 9th day death anniversary of the deceased
. This item cannot be allowed. Therefore, the amount of actual damages is reduce
d to P82,439.00.00. Moral Damages: The award of P200,000.00 for moral damages sh
ould likewise be reduced. The trial court found that the wife and children of th
e deceased underwent “intense moral suffering” as a result of the latter’s death. Unde
r Art. 2206 of the Civil Code, the spouse, legitimate children and illegitimate
descendants and ascendants of the deceased may demand moral damages for mental a
nguish by reason of the death of the deceased. Under the circumstances of this c
ase, an award of P100,000.00 would be in keeping with the purpose of the law in
allowing moral damages. Idemnity: The award of P50,000.00 for indemnity is in ac
cordance with current rulings of the Court. Exemplary Damages: Art. 2231 provide
s that exemplary damages may be recovered in cases involving quasi-delicts if th
e defendant acted with gross negligence. Exemplary damages are imposed not to en
rich one party or impoverish another but to serve as a deterrent against or as a
negative incentive to curb socially deleterious actions. In this case, petition
er’s driver Joson, Jr. was grossly negligent in driving at such a high speed along
the national highway and overtaking another vehicle which had stopped to allow
a pedestrian to cross. Worse, after the accident, Joson, Jr. did not stop the bu
s to help the victim. Under the circumstances, the trial court’s award of P50,000.
00 as exemplary damages is proper. Attorney’s Fees: Private respondents are entitl
ed to attorney’s fees. Under Art. 2008 of the Civil Code, attorney’s fees may be rec
overed when, as in the instant case, exemplary damages are awarded. In the recen
t case of Metro Manila Transit Corporation v. Court of Appeals, an award of P50,
000.00 as attorney’s fees was held to be reasonable. Hence, private respondents ar
e entitled to attorney’s fees in that amount. 3. Actual Damages Art. 2199. Except
as provided by law or by stipulation, one is entitled to an adequate compensatio
n only for such pecuniary loss suffered by him as he has duly proved. Such compe
nsation is referred to as actual or compensatory damages. Art. 2200. Indemnifica
tion for damages shall comprehend not only the value of the loss suffered, but a
lso that of the profits which the obligee failed to obtain.
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Art. 2201. In contracts and quasi-contracts, the damages for which the obligor w
ho acted in good faith is liable shall be those that are the natural and probabl
e consequences of the breach of the obligation, and which the parties have fores
een or could have reasonably foreseen at the time the obligation was constituted
.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be res
ponsible for all damages which may be reasonably attributed to the non-performan
ce of the obligation.
Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all da
mages which are the natural and probable consequences of the act or omission com
plained of. It is not necessary that such damages have been foreseen or could ha
ve reasonably been foreseen by the defendant.
Art. 2203. The party suffering loss or injury must exercise the diligence of a g
ood father of a family to minimize the damages resulting from the act or omissio
n in question.
Art. 2205. Damages may be recovered: (1) For loss or impairment of earning capac
ity in cases of temporary or permanent personal injury; (2) For injury to the pl
aintiff s business standing or commercial credit. Art. 2207. If the plaintiff s
property has been insured, and he has received indemnity from the insurance comp
any for the injury or loss arising out of the wrong or breach of contract compla
ined of, the insurance company shall be subrogated to the rights of the insured
against the wrongdoer or the person who has violated the contract. If the amount
paid by the insurance company does not fully cover the injury or loss, the aggr
ieved party shall be entitled to recover the deficiency from the person causing
the loss or injury. Art. 2209. If the obligation consists in the payment of a su
m of money, and the debtor incurs in delay, the indemnity for damages, there bei
ng no stipulation to the contrary, shall be the payment of the interest agreed u
pon, and in the absence of stipulation, the legal interest, which is six per cen
t per annum. Article 2199 provides the general rule that one is entitled to an a
dequate compensation only for such pecuniary loss suffered by him as he has duly
proved. The exceptions are: 1. 2. provided by law: example is the fixed indemni
ty. If someone is killed, automatically, an indemnity of 50K is awarded. There i
s only a need to prove the fact of death. stipulation: if the parties stipulate
the amount of damages in case of breach of contract, it becomes liquidated damag
es.
Actual damages may be: 1. Under Article 2200 a. value of the loss suffered b. pr
ofits which the obligee failed to obtain (unrealized profit) how to prove this:
documentary evidence Example: X and Y killed A and threw his body into a river,
not knowing that he had P100K in his pocket. X and Y are liable for 100K in actu
al damages because they are liable for all the
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damages attributed to their criminal act, even if they did not know of or contem
plate the loss of the 100K. 2. Under Article 2205 a. loss or impairment of earni
ng capacity due to temporary or permanent injury “permanent injury” does not mean th
at you’re a vegetable but that you cannot do the same job as before because of the
injury how to prove this: present documentary evidence, such as the ITR, payrol
l b. injury to the plaintiff’s business standing or commercial credit how to prove
this: present documentary evidence, such as contracts for future business or co
mparison or earnings before and after the injury. Fixed indemnity – The law provid
es a fixed indemnity in certain cases, such as death, rape, seduction, etc. For
death: 50K. Loss of earning capacity – This presupposes that the person concerned
is dead. How to compute: First step: Determine the life expectancy using the fol
lowing formula: Life expectancy = 2/3 x (80 - age of the deceased at the time of
death) Second step: Compute for earning capacity using the following formula: E
arning capacity = net earnings per year 2 How do you prove the net earnings per
year: a. b. documentary evidence: ITR, payroll Oral testimony on minimum wage (b
ut this is not always admitted) x life expectancy
3. 4.
The net earnings of the deceased is divided by two since the law presumes that h
alf of it goes to his living expenses. But if other evidence is presented to est
ablish the actual personal expenses of the deceased, then this figure may be use
d instead. 5. Interest Rules: a. b. If there is a stipulation as to the rate of
interest, apply the rate unless it is contrary to law, morals, and good customs,
in which case apply the legal rate. If interest is imposed, but no rate is stip
ulated, or there is delay, apply the legal rate (either 6% or 12%) (1) when the
obligation involves the payment of indemnities in the concept of damage, the leg
al rate or interest is 6% computed as follows: (a) from date of demand if the am
ount of indemnities can be established with reasonable certainty; (b) if not, fr
om the date of the judgment of the trial court. (2) When the obligation consists
of a loan or forbearance of money, goods or credits as well as judgment involvi
ng such loan or forbearance, the legal rate of interest shall be 12% per annum c
omputed from default, that is, from judicial or extrajudicial demand.
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(3) In both cases, the legal rate of interest shall be 12% from the finality of
judgment until the judgment is paid. Sample Problem: Andrew was a 40 year-old co
mpany executive earning P400,000 a year. His wife Rose was engaged in the realty
business and was earning P20,000 a month on the average. One day, they were on
the way to a meeting where Rose would buy a land which she intended to resell at
a profit of P200,000 when a speeding truck hit their P500,000 car. The injured
Andrew was brought to the hospital but late died, and Rose was incapacitated for
3 months. Hospital and funeral expenses cost P100,000 and P80,000. Their car wa
s totally wrecked and the P50,000 money Rose was carrying as downpayment for the
land was lost or stolen. Compute for the actual damages. 2. Under Article 2200
a. value of the loss suffered: Hospital expenses Funeral expenses Car Money lost
b. P100K P80K P500K P50K
profits which the obligee failed to obtain (unrealized profit) Expected profit f
rom the sale of land P200K
3.
Under Article 2205 c. loss or impairment of earning capacity due to temporary or
permanent injury Earnings of Rose for 3 months P20K x 3 months = P60K d. injury
to the plaintiff’s business standing or commercial credit: not applicable
4. 5.
Fixed indemnity: 50K for death of Andrew Loss of earning capacity of Andrew: Fir
st Step: Life expectancy = 2/3 x (80-40) = 26.67 years Second Step: Earning capa
city = (400,000/2) x 26.67 years = P5,333,333 Interest: 6%
6.
PNOC Shipping v. CA The plaintiff tried to prove actual damages by presenting hi
s general manager who testified as to the value of the property damaged and also
by presenting documentary evidence in the form of brochures quoting the prices
of similar equipment. ISSUE: Whether the actual damages were adequately establis
hed by the evidence presented. HELD: No. To enable an injured party to recover a
ctual or compensatory damages, he is required to prove the actual amount of loss
with reasonable degree of certainty premised upon competent proof on the best e
vidence available. In this case, actual damages were proven through the sole tes
timony of Maria Efigenia’s general manager and certain pieces of documentary evide
nce. The testimony of the general manager as to the valuation of the ship is not
reliable because he is an interested party and because it was not within his
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competence to determine the value of the property. On the other hand, the docume
ntary evidence in the form of brochures are not admissible for being hearsay evi
dence. They do not constitute an exception to the hearsay rule since they are no
t commercial lists. Since the persons who prepared them were not presented in co
urt, they cannot be admitted in evidence. Nominal damages were awarded instead.
[Though, in reality, they should have been called temperate damages – the damage w
as proved, but the amount was not.] Bank of America v. American Realty Corp Bank
of America NT & SA (BANTSA) is an international banking and financing instituti
on licensed to do business in the Philippines, organized under the laws of Calif
ornia. American Realty Corp. (ARC) is a domestic corporation. Bank of America Li
mited (BAIL) is a limited liability company organized under the laws of England.
BANTSA and BAIL extended multi-million dollar loans to three corporate borrower
s, all of which were existing under the laws of Panama and were foreign affiliat
es of ARC. The borrowers defaulted in payment, so they entered into a restructur
ing agreement with BANTSA. As additional security for the restructured loans, AR
C, as third party mortgagor, executed two REMs over its parcels of land in Bulac
an. The corporate borrowers defaulted, prompting BANTSA to file civil actions fo
r collection before foreign courts (England and Hong Kong). ARC was not impleade
d in this civil actions filed before foreign courts. Subsequently, BANTSA filed
before the Office of the Provincial Sheriff of Bulacan an application for extraj
udicial foreclosure of real estate mortgage. The properties were sold at public
auction to ICCS. ARS filed an action for damages against BANTSA for the latter’s a
ct of foreclosing the mortgages despite the pendency of the civil suits before f
oreign courts for the collection of the principal loan. ISSUE: Whether ARS is en
titled to damages. HELD: ARS is entitled to actual or compensatory damages inasm
uch as the act of BANTSA in extrajudicially foreclosing the REM constituted a cl
ear violation of the rights of ARC as third party mortgagor. This is because BAN
TSA, in filing a collection case, had effectively abandoned or waived its right
to foreclose the mortgage constituted by ARC. Actual or compensatory damages are
those recoverable because of pecuniary loss in business, trade, property, profe
ssion, job or occupation, and the same must be proved, otherwise if the proof is
flimsy and non-substantial, no damages will be given. In this case, the valuati
on of the real properties which ARS lost as a result of the foreclosure was made
by the Philippine Appraisal Company in a 23-page report. This was corroborated
by the testimony of another witness presented by ARS. The judge also conducted a
n ocular inspection of the property. Based on these considerations, the SC affir
ms the ruling of the trial court as regards the valuation of the property at P99
M. Petitioner questions the validity of an award of damages higher than that pra
yed for in the complaint. Actual damages higher than that prayed for in the comp
laint may be awarded by the court if it is proved by evidence, and the adverse p
arty was given the opportunity to refute and object to the evidence. In this cas
e, this requirement was satisfied. Hence, the award is justified. a. damnum emer
gens/lucrum cessans Art. 2200. Indemnification for damages shall comprehend not
only the value of the loss suffered, but also that of the profits which the obli
gee failed to obtain. Art. 2201. In contracts and quasi-contracts, the damages f
or which the obligor who acted in good faith is liable shall be those that are t
he natural and probable consequences of the
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breach of the obligation, and which the parties have foreseen or could have reas
onably foreseen at the time the obligation was constituted. In case of fraud, ba
d faith, malice or wanton attitude, the obligor shall be responsible for all dam
ages which may be reasonably attributed to the non-performance of the obligation
. People v. Degoma The Tagbilaran Friendly Bazaar was a victim of robbery on the
evening of April 12, 1988, in the sums of US$300 and P200. During such robbery,
the security guard of the store, Alexander Parilla, was allegedly shot and kill
ed with the use of a firearm by Efren Degoma, who was one of the robbers. The lo
wer court found the accused guilty and also ordered them to jointly and severall
y indemnify the owners of the Tagbilaran Bazaar the sum of P200.00 and the equiv
alent exchange rate prevailing for US$300, indemnify the heirs of Alexander Pari
lla in the sum of P36,000 for his death, P200,000 for moral damages, P87,947.94
for actual expenses, and P5,000 for attorney’s fees for counsel of Parilla. ISSUE:
Whether the award for damages was correct. HELD: The award for actual damages s
hould be reduced. In delict, the defendant is liable for all damages which are t
he natural and probable consequences of the act or omission complained of. To se
ek recovery for actual damages, it is necessary to prove with a reasonable degre
e of certainty, premised upon competent proof and on the best evidence obtainabl
e by the injured party the actual amount of loss. Courts cannot simply assume th
at damages were sustained by the injured party, nor can it rely on speculation o
r guesswork in determining the fact and amount of damages. In this case, the awa
rd of actual damages in the amount of P87,947.94 is not sustained by a review of
the evidence of record. Of the expenses allegedly incurred, the Court can only
give credence to those supported by a receipt and which appear to have been genu
inely incurred in connection with the death, wake, or burial of the victim. The
court cannot take account of receipts showing the following expenses: 1. 2. thos
e incurred before the date of the slaying of the victim; those incurred after a
considerable lapse of time from the burial of the victim which do not have any r
elation to his death, wake, or burial; 3. those incurred for purely aesthetic or
social purposes, such as the lining with marble of the tomb of the victim; 4. t
hose which appear to have been modified to show an increase in the amount of exp
enditure, such as by adding a number to increase the purchase value from tens to
hundreds; 5. those expenditures which could not be reasonably itemized or deter
mined to have been incurred in connection with the death, wake, or burial of the
victim; 6. those which would nonetheless have been incurred, the death, wake or
burial of the victim being merely incidental; 7. and those which were not in fa
ct shouldered by the immediate heirs of the victim, such as plane trips by relat
ives or in-laws. Having these guidelines, the Court puts the gross expenses prov
ed by the immediate heirs of the victim at P10,175.85. The Court off-sets the am
ount of P6,400, representing the alms received by the heirs of the victim agains
t the amount of P10,175.85, leaving the amount of P3,775.85 as the actual amount
of loss sustained by the immediate heirs of the victim. The Court increases the
amount of indemnity for the death of Parilla to P50,000 in line with present ju
risprudence. Asuncion v. Evangelista
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Evangelista in the 70s was the sole proprietor of a piggery. After a decade, he
had it incorporated as Embassy Farms Inc. He was the majority stockholder of the
corporation, with 90% of the shares in his name. He obtained loans from numerou
s banks and owed the millions. He was only able to pay around P200,000 of these
debts. He probably then had no choice but to cede his treasured piggery to a ric
h fellow named Asuncion under a Memorandum of Agreement whereby Asuncion would p
ay the loans of Evangelista and Evangelista would in turn transfer to Asuncion h
is interest in Embassy Farms as well as title to several properties that he had
mortgaged, free from the encumbrance. Asuncion regularly paid Evangelista the am
ounts that he was required to pay under the MOA. When Asuncion demanded that Eva
ngelista transfer title to the shares and to the mortgaged properties, Evangelis
ta refused. Asuncion later found out that some of the mortgaged properties had a
lready been foreclosed. He thereafter filed for rescission of the MOA. The RTC f
ound that it was Asuncion who breached the MOA; hence, it was Evangelista who wa
s entitled to rescission and damages. The trial court declared the MOA rescinded
and ordered Asuncion to pay Evangelista P32M as actual or compensatory damages
arising from the rescission of the MOA. Asuncion was further ordered to pay arou
nd P27M representing earnings of Embassy Farms as additional compensatory damage
s. ISSUE: Whether Asuncion is entitled to rescission and is liable for damages.
HELD: Asuncion is entitled to rescission and is not liable for damages. However,
he is not entitled to damages or to recovery of what he had paid either. Mutual
restitution is impossible. The MOA entered into by Evangelista and Asuncion sho
uld be rescinded. The refusal of Asuncion to pay Evangelista’s overdue loans was j
ustified, considering that Evangelista was the first to refuse to deliver to Asu
ncion the properties and certificates of stock that were the consideration for t
he almost 6 million pesos in debt that Asuncion was to assume and pay. The award
of P32M in damages to Evangelista is totally baseless and must be struck down.
Actual or compensatory damages cannot be presumed but must be duly proved with r
easonable degree of certainty. Neither may the Court allow the grant of damages
corresponding to the value of the land foreclosed by the creditors of Evangelist
a upon the latter’s failure to make his loan payments. Evangelista, in his amended
counterclaim, prayed for the rescission of the MOA. In case of rescission, whil
e damages may be assessed in favor of the prejudiced party, only those kinds of
damages consistent with the remedy of rescission may be granted, keeping in mind
that had the parties opted for specific performance, other kinds of damages wou
ld have been called for which are absolutely distinct from those kinds of damage
s accruing in the case of rescission. In this case, compensatory damages consist
ing of the value of Evangelista’s landholdings would have been proper in case he r
esorted to the remedy of specific performance, not rescission. Since his counter
claim prayed for the rescission of the MOA, it was grave error for the lower cou
rt to have enforced said agreement by ordering Asuncion to pay him the value of
the landholdings. However, Asuncion is not entitled to recover the amount of P3M
that he spent in compliance with his undertaking under the MOA. Mutual restitut
ion is required in rescission, but this presupposes that both parties may be res
tored in their original situation. In this case, an essential part of the consid
eration of the amount of P3M paid by Asuncion was taking over the effective mana
gement of Embassy Farms. Mutual restitution would require Asuncion to restore Ev
angelista on the effective management of said corporation and that Evangelista r
eturn the amount to Asuncion. This has been rendered impossible by the foreclosu
re of the landholdings of Evangelista and the shutdown of the piggery’s operations
. b. disability/commercial credit Art. 2205. Damages may be recovered: (1) For l
oss or impairment of earning capacity in cases of temporary or permanent persona
l injury; (2) For injury to the plaintiff’s business standing or commercial credit
.
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PNB v. CA Lily Pujol opened with PNB an account denominated as “Combo Account”, a co
mbination of Savings Account and Current Account in her business name “Pujol Tradi
ng” under which checks drawn against her checking account could be charged against
her savings account should the funds in her current account be insufficient to
cover the value of her checks. She issued two checks, one to her daughter-in-law
, and another to her daughter, both were dishonored allegedly for insufficiency
of funds. When issued and presented for payment, however, there were sufficient
funds in her savings account. Realizing its mistake as to the 2nd check, PNB sub
sequently accepted and honored it. Lily, however, filed with the RTC a complaint
for moral and exemplary damages against PNB for dishonoring her checks despite
sufficiency of her funds. The trial court rendered a decision ordering PNB to pa
y Lily moral damages of P100,000 and atty’s fees of P20,000. it found that Lily ha
d suffered mental anguish and besmirched reputation as a result of the dishonor
of her checks, and that being a former member of the judiciary who was expected
to be the embodiment of integrity and good behavior, she was subjected to embarr
assment due to the erroneous dishonor of her checks by PNB. (Daughter-in-law con
fronted her and son-in-law would no longer hold her in high esteem.) ISSUE: Whet
her PNB is liable to Lily for moral damages due to the mental anguish, embarrass
ment, besmirched reputation, schwar, schwar, she suffered. HELD: Yes. The award
of moral damages and atty’s fees affirmed. A bank is under obligation to treat the
accounts of its depositors with meticulous care. Responsibility arising from ne
gligence in the performance of every kind of obligation is demandable. While PNB’s
negligence in this case may not have been attended with malice and bad faith, n
evertheless, it caused serious anxiety, embarrassment and humiliation to Lily fo
r which she is entitled to recover reasonable moral damages. In the case of Leop
old Araneta v. Bank of America it was held that it can hardly be possible that a
customer’s check can be wrongfully refused payment without some impeachment of hi
s credit which must in fact be an actual injury, although he cannot, from the na
ture of the case, furnish independent and distinct proof thereof. Damages are no
t intended to enrich the complainant at the expense of the defendant, and there
is no hard and fast rule in the determination of what would be a fair amount of
moral damages since each case must be governed by its own peculiar facts. The ya
rdstick should be that it is not palpably and scandalously excessive. In this ca
se, considering the reputation and social standing of Lily, the award of damages
is reasonable. c. Fixed Indemnity Art. 1764. Damages in cases comprised in this
Section (Common Carriers) shall be awarded in accordance with Title XVIII of th
is Book, concerning Damages. Art. 2206 shall also apply to the death of a passen
ger caused by the breach of contract by a common carrier. Art. 2206. The amount
of damages for death caused by a crime or quasi-delict shall be at least Three t
housand pesos, even though there may have been mitigating circumstances. In addi
tion: (1) The defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the latter; such i
ndemnity shall in every case be assessed and awarded by the court, unless the de
ceased on account of permanent physical disability not caused by the defendant,
had no earning capacity at the time of his death; (2) If the deceased was oblige
d to give support according to the provisions of Art. 291, the recipient who is
not an heir called to the decedent’s inheritance by the law of testate
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or intestate succession, may demand support from the person causing the death, f
or a period not exceeding five years, the exact duration to be fixed by the cour
t; (3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of
the deceased. Fortune Express v. CA Fortune is a bus company operating in Northe
rn Mindanao. One of the Fortune buses figured in an accident with a jeepney wher
e two Maranaos were killed. The Philippine Constabulary heard reports that other
Maranaos were planning to take revenge on Fortune by burning some of its buses.
The operations manager of Fortune assured the constabulary that the necessary p
recautions would be taken to insure the safety of the lives and property of the
passengers. In November 1989, three armed Maranaos, who pretended to be passenge
rs, seized a Fortune bus. They shot the driver in the arm, started pouring gasol
ine in the bus, then ordered other passengers to get off. One Atty. Caorong retu
rned to the but to get something from the overhead rack. When he saw that the Ma
ranaos were pouring gasolinve over the head of the driver, he pleaded with them
to spare his life. While this occurred, the driver surreptitiously escaped throu
gh a window. Shots were heard from inside the bus. The other passengers rushed t
o help the shot Atty. Caorong from the burning bus, but he died later while unde
r surgery. The heirs of Atty. Caorong filed an action for damages against Fortun
e. The lower court found that the ambush was an event that could not be foreseen
and not liability should attach to Fortune. It further claimed that the obligat
ion to provide security guards was not required of common carriers. The CA rever
sed and held Fortune liable. It found that no preventive measures were taken, th
at the event was not unforeseen, as Fortune had been previously warned that ther
e was a possibility that one of its buses would be ambushed, and that frisking s
hould at least have been resorted to as a safety measure. ISSUE: Whether Fortune
is liable to the heirs of Atty. Caorong. HELD: Yes. Due to the negligence of Fo
rtune, the seizure of its bus was made possible. It is thus liable for injuries
suffered by its passengers and for the death of Atty. Caorong. This is not a cas
e of force majeure because Fortune had sufficient warning. Also, Atty. Caorong w
as not guilty of contributory negligence when he went back to the bus. The targe
t of the assailants was the bus and not the passengers. His protracted stay insi
de was due to his desire to save the life of the driver. Thus, his act could not
be considered an act of negligence, let alone recklessness. INDEMNITY FOR DEATH
: Art. 1754 of the Civil Code, relative to Art. 2206 thereof, provides for the p
ayment of indemnity for the death of passengers caused by the breach of contract
of carriage by a common carrier. Initially fixed at P3,000 by Art. 2206, the am
ount has been increased gradually in view of the declining value of the peso. It
is presently fixed at P50,000. The heirs of Atty. Caorong are entitled to this
amount. They are also entitled to actual, moral and exemplary damages and attorn
ey’s fees. They are also entitled to compensation for the loss of earning capacity
in addition to indemnity for death. People v. Balgos Criselle Fuentes, a 6 year
old, went to Balgos’ house to play with her 2 friends, the latter’s nieces. While t
hey were playing, Baldos asked his nieces to go out and buy some snacks. While t
hey were gone, Baldos tried to rape Criselle but could not penetrate the latter’s
vagina as it was too damn small.
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Criselle eventually told her parents about the incident who reported the same to
the police. At trial, the court a quo found Baldos guilty beyond reasonable dou
bt of the crime of statutory rape and was sentenced to death. He was also ordere
d to pay P50K as civil damages. Upon automatic review by the SC, Baldos argued t
hat he was not able to penetrate Criselle’s vagina, hence he should only be held l
iable for acts of lascivousness and not rape. ISSUE: Whether Baldos is guilty of
rape. HELD: Yes. As we all know, the crime of rape is consummated by the mere “to
uching” of the penis and the labia, hence actual penetration is not necessary. Mor
e importantly, as to damages, if the commission of rape is qualified by any of t
he circumstances under Art. 335 RPC for which the penalty of death is imposed, t
he civil liability for the victim shall be fixed at not less than P75K. In this
case, since the rape is qualified by the fact that the victim was less than 7 ye
ars old at the time of the crime, the penalty of death is thus imposed and the c
ivil liability therefore should be increased from P50 K to P75K. Moreover, Art 2
219 CC provides that moral damages may be awarded in cases of rape, seduction, a
bduction, or other lascivious acts. Also, said article provides that the parents
of victims of such crimes may also avail of moral damages. Therefore, in line w
ith current jurisprudence, Criselle is thus also entitled to moral damages in th
e amount of P50 K. d. Loss of Earning Capacity Art. 2206. The amount of damages
for death caused by a crime or quasi-delict shall be at least Three thousand pes
os, even though there may have been mitigating circumstances. In addition: (1) T
he defendant shall be liable for the loss of the earning capacity of the decease
d, and the indemnity shall be paid to the heirs of the latter; such indemnity sh
all in every case be assessed and awarded by the court, unless the deceased on a
ccount of permanent physical disability not caused by the defendant, had no earn
ing capacity at the time of his death; (2) If the deceased was obliged to give s
upport according to the provisions of Art. 291, the recipient who is not an heir
called to the decedent’s inheritance by the law of testate or intestate successio
n, may demand support from the person causing the death, for a period not exceed
ing five years, the exact duration to be fixed by the court; (3) The spouse, leg
itimate and illegitimate descendants and ascendants of the deceased may demand m
oral damages for mental anguish by reason of the death of the deceased. Davila v
. PAL A PAL plane crashed resulting in the death of passengers and crew. Appella
nts here are parents of Davila, who died in the crash. They are appealing the aw
ard of damages by the lower court: (1) For the death of Pedro T. Davila Jr. the
amount of P6,000; (2) For the loss of the earning capacity of the deceased at th
e rate of P12,000 per annum for five years in the amount of P60,000. ISSUE: Whet
her the computation of loss of earning capacity is wrong, thus entitling the par
ents of Davila to a larger amount. HELD: Yes, more than double pa nga dapat eh.
Wanna know why? Read on then…
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The deceased was employed as a manager of a radio station, from which he was ear
ning P8,400 a year, consisting of a monthly salary of P600 and allowance of P100
. As a lawyer and junior partner of his father in the law office, he had an annu
al income of P3,600. From farming, he was getting an average of P3,000. All in a
ll, therefore, the deceased had gross earning of P15,000 a year. According to Ar
ticle 2206 (1) of the Civil Code, “The defendant shall be liable for the loss of t
he earning capacity of the deceased, and the indemnity shall be paid to the heir
s of the latter.” This article, while referring to “damages for death caused by crim
e or quasi-delict,” is expressly made applicable by Article 1764 “to the death of a
passenger caused by the breach of contract by a common carrier.” The deceased, Ped
ro Davila Jr. was single and 30 years of age when he died. At that age, one’s norm
al life expectancy is 33-1/3 years, according to the formula (2/3 x [80 – 30]) ado
pted by this Court in the case of Villa Rey Transit Inc. v. CA on the basis of t
he American Expectancy Table of Mortality or the Actuarial of Combined Experienc
e Table of Mortality. However, although the deceased was in relatively good heal
th, his medical history shows that he had complained of and had been treated for
such ailments as backaches, chest pains, and occasional feelings of tiredness.
It is reasonable to make an allowance for these circumstances and consider, for
purposes of this case, a reduction of his life expectancy to 25 years. In the sa
me case of Villa Rey Transit, this court stated: “…earning capacity, as an element o
f damages to one’s estate for his death by wrongful act is necessarily his net ear
ning capacity or his capacity to acquire money, less the necessary expense for h
is own living.” Stated otherwise, the amount recoverable is not loss of the entire
earnings, but rather the loss of that portion of the earnings which the benefic
iary would have received. In other words, only net earnings, not gross earnings,
are to be considered, that is the total of the earnings less expenses necessary
in the creation of such earnings or income and less living and other incidental
expenses. Considering the fact that the deceased was getting his income from th
ree (3) different sources, namely, from managing a radio station, from law pract
ice, and from farming, the expenses incidental to the generation of such income
were necessarily more than if he had only one source. Together with his living e
xpenses, a deduction of P600 a month, or P7,200 a year seems reasonable, leaving
a net yearly income of P7,800. This amount, multiplied by 25 years, or P195,000
, is the amount which should be awarded to the plaintiffs. People v. Jerez
Jerez went around town looking for a carabao buyer. Reynaldo Ochoa and Joselito
Balbastro expressed interest. Jerez told them that the carabaos were in Barangay
Teddy, so the three took a tricycle to Barangay Tedd to check the condition of
the carabaos. It was the last time, however, that the two were seen alive. When
the latter failed to return the following day, a search was conducted. The bodie
s of Reynaldo and Joselito were later found lifeless, having sustained several m
ortally-inflicted stab wounds in different parts of their bodies. The victims we
re divested of their watches, rayban glasses, and a sum of money amounting to P3
7,000.00. Jerez was convicted of robbery with double homicide. The RTC ordered h
im to pay damages to the heirs of Reynaldo and Joselito, including P100,000 for
loss of earning capacity. The RTC computed loss of earning capacity using the fo
llowing formula: estimated income x life span.
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ISSUE: Whether the RTC used the correct formula in computing loss of earning cap
acity.
HELD: No, the computation of the damages is erroneous.
The formula consistently used by the Supreme Court in determining life expectanc
y is (2/3 x [80 - age of the victim at the time of death]). Thus, the award for
loss of earning capacity for each victim shall be as follows:
Joselito Balbastro
P36,000.00 — gross annual income (P3,000.00 x 12 mos.) Multiply: 30 — life expectanc
y (2/3 x 45 [80 - 35 {age at time of death}]) P1,080,000.00 — total loss of earnin
g capacity
Reynaldo Ochoa
P36,000.00 — gross annual income (P3,000.00 x 12 mos.) Multiply: 21 — life expectanc
y (2/3 x 31 [80 - 49 {age at time of death}]) P756,000.00 — total loss of earning
capacity Rosales v. CA Liza Rosalie was a high school student in UP-IS when she
was ran over by an MMTA bus while crossing Katipunan Road. The driver was found
guilty of reckless imprudence and the employers were found solidarily liable. Th
e parents raised this appeal for an increase of amount of damages awarded to the
m. ISSUE: Whether petitioners are entitled to be compensated for loss of earning
capacity of their minor child, a mere high school student. HELD: Yes. Art. 2206
of the Civil Code provides that in addition to the indemnity for death caused b
y a crime or quasi-delict, the “defendant shall be liable for loss of earning capa
city of the deceased, and the indemnity shall be paid to the heirs of the latter…” C
ompensation of this nature is awarded not for loss of earnings but for loss of c
apacity to earn money. Evidence must be presented that the victim, if not yet em
ployed at the time of death, was reasonably certain to complete training for a s
pecific profession. In this case, the spouses Rosales presented evidence to show
that Liza Rosalie was a good student, promising artist, and obedient child. She
consistently performed well in her studies. A guidance counselor testified and
a faculty member of UP Fine Arts who had been conducting workshops with her ever
y summer testified that she had artist potential. 51 samples of Liza Rosalie’s wat
ercolor, charcoal, and pencil drawings were submitted as exhibits. Considering h
er good academic record, extra-curricular activities, and varied interests, it i
s reasonable to assume that Liza Rosalie would have enjoyed a successful profess
ional career had it not been for her untimely death. Hence, it is proper that co
mpensation for loss of earning capacity should be awarded to her heirs in accord
ance with the formula established for computing net earning capacity in decided
cases:
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Net Earning Capacity = Life Expectancy x Gross Annual Income – Necessary Living Ex
penses Life expectancy is equivalent to 2/3 multiplied by the difference between
80 and the age of the deceased. Since Liza Rosalie was 16 at the time of her de
ath, her life expectancy was 44 more years. Her projected gross annual income, c
omputed based on the minimum wasge for workers in the nonagricultural sector in
effect at the time of her death, then fixed at P37.00 is P14,630.46. Allowing fo
r necessary living expenses of 50% of her projected gross annual income, her tot
al net earning capacity amounts to P321,870.00.
e. Interest Art. 2209. If the obligation consists in the payment of a sum of mon
ey, and the debtor incurs in delay, the indemnity for damages, there being no st
ipulation to the contrary, shall be the payment of the interest agreed upon, and
in the absence of stipulation, the legal interest, which is six per cent per an
num. Art. 2210. Interest may, in the discretion of the court, be allowed upon da
mages awarded for breach of contract. Art. 2211. In crimes and quasi-delicts, in
terest as a part of the damages may, in a proper case, be adjudicated in the dis
cretion of the court. Art. 2212. Interest due shall earn legal interest from the
time it is judicially demanded, although the obligation may be silent upon this
point. Art. 2213. Interest cannot be recovered upon unliquidated claims or dama
ges, except when the demand can be established with reasonably certainty.
Eastern Shipping v. CA Two drums of riboflavin were shipped from Japan for deliv
ery on board the vessel “SS EASTERN COMET” owned by Eastern Shipping Lines. The ship
ment was insured by Mercantile Insurance Company. When the shipment arrived in M
anila, one drum was found to be in bad order. As a result of the alleged fault a
nd negligence of both Eastern Shipping Lines, the Metro Port Service, and the Al
lied Brokerage Corporation, the insurance company had to pay the consignee of th
e shipment around 19K for the damaged carge. The insurance company then filed an
action against the three, claiming that under the marine insurance policy, it b
ecame subrogated to all the rights of action of the consignee against the defend
ants.
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The CA ordered the defendants to jointly and severally pay the insurer 19K with
legal interest at 12% per annum from the date of the filing of the complaint, un
til fully paid. ISSUES: 1. 2. Whether the interest should commence from the date
of the filing of the complaint or from the date of the decision of the trial co
urt. Whether the proper rate of interest is 12% per annum or 6% per annum.
HELD: Interest to be paid is 6% on the amount due, computed from the date of the
decision of the court a quo. A 12% interest, in lieu of 6%, shall be imposed on
such amount upon finality of this decision until the payment thereof. When an o
bligation, regardless of its source (law, contracts, quasi-contracts, delicts, q
uasi-delicts) is breached, the contravenor can be held liable for damages. With
regard to an award or interest in the concept of actual and compensatory damages
, the rate of interest, as well as the accrual thereof, is imposed as follows: 1
. When the obligation is breached, and it consists in the payment of a sum of mo
ney (i.e., a loan or forbearance of money), the interest due should be that whic
h may have been stipulated in writing. Furthermore, the interest due shall itsel
f earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 12% per annum to be computed from de
fault i.e., from judicial or extrajudicial demand under and subject to the provi
sion of Article 1169 of the Civil Code. When an obligation, not constituting a l
oan or forbearance of money, is breached, an interest on the amount of damages a
warded may be imposed at the discretion of the court at the rate of 6% per annum
. No interest, however, shall be adjudged on unliquidated claims or damages exce
pt when or until the demand can be established with reasonable certainty. Accord
ingly, where the demand is established with reasonable certainty, the interest s
hall begin to run from the time the claim is made judicially or extrajudicially
but when such certainty cannot be so reasonably established at the time the dema
nd is made, the interest shall begin to run only from the date the judgment of t
he court is made (at which time the quantification of damages may be deemed to h
ave been reasonably ascertained). The actual base of the computation of legal in
terest shall, in any case, be on the amount finally adjudged. When the judgment
of the court awarding a sum of money becomes final and executory, the rate of le
gal interest, whether the case falls under paragraph 1 or paragraph 2 above shal
l be 12% per annum from such finality until its satisfaction, this interim perio
d being deemed to be by then an equivalent to a forbearance of credit.
2.
3.
Medel v. CA Servando Franco and Leticia Medel obtained several loans from Veroni
ca Gonzales at 6% interest per month. Due to their failure to pay the loans upon
maturity, Franco and Medel consolidated all said loans bringing their indebtedn
ess to a total of P500K, and executed a promissory note to cover said amount wit
h an interest of 5.5% per month plus 2% service charge per annum. Due to Franco
and Medel’s failure to pay upon maturity, a complaint for collection of money was
filed against them by Gonzales. The lower court held that although the usury law
was repealed, the interest charged by Gonzales was unconscionable and was there
fore invalid. The CA however upheld the validity of the aforementioned stipulate
d interest and held that since the usury law was repealed, the lender and borrow
er could agree on any interest that may be charged on the loan. Medel then filed
certiorari with the SC, arguing that the interest charged by Gonzales was iniqu
itous, unconscionable, and exorbitant. ISSUE:Was the interest stipulation in thi
s case valid?
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HELD: No. Although Circular case of 5.5% per law and morals. reduce liquidated u
nconscionable. No. 905 of the Central Bank expressly repealed the usury law, the
interest in this month or 66% per annum is iniquitous or unconscionable, and he
nce contrary to Such a stipulation of interest is void and the courts in such a
case shall equitably damages, whether intended as an indemnity or a penalty, if
they are iniquitous and
In this case, due to the iniquitousness of the stipulated interest, the SC impos
ed the “legal rate of interest for loan or forbearance of money, goods, or credit” w
hich was 12% per annum, plus an additional 1% monthly penalty charge. David v. C
A In a civil case between Jesus David (as plaintiff) and Peña and Afable (as defen
dants), Judge Diaz ordered Afable to pay David P66,500 plus interest from Januar
y 4, 1966, until fully paid. To execute judgment, a public auction of properties
belonging to Peña and Afable were sold at public auction. The Sheriff informed Da
vid that the total amount of the judgment was around P270K, which included a com
putation of simple interest. David claimed that the judgment award should be aro
und P3M because the amount due ought to be based on compounded interest. At the
public auction, David was the highest bidder, having bid around P3M for the auct
ioned properties. However, the Sheriff did not issue the Certificate of Sale bec
ause David did not pay the bid price. The Sheriff contended that the sale was no
t consummated since David had failed to pay around P2.94M of the bid price. The
P2.94M was computed by deducting from the bid price of P3M the judgment award to
which David was entitled in the amount of P270K. According to David, on the oth
er hand, he did not have to pay the P2.94M, since the judgment award should have
been P3M (enough to cover the entire bid price) if interest were compounded ins
tead of just simple. ISSUE: Whether interest should be simple or compounded. HEL
D: Simple interest only. Compounded interest may be charged only when there is s
tipulated or conventional interest which has accrued when demand was judicially
made. In case where no interest had been stipulated by the parties, no accrued c
onventional interest could further earn interest upon judicial demand. In this c
ase, no interest was stipulated by the parties. Therefore, David is not entitled
to compounding interest. Example in class: First Metro Investment Corp case Loa
n agreement with fixed interest at 18%, plus officers of the bank were to be emp
loyed as consultants of the debtor for a fee. Held: Consultation fee is actually
disguised interest. It is unconscionable and should be struck down. 4. Moral Da
mages Art. 2217. Moral damages include physical suffering, mental anguish, frigh
t, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation, mor
al damages may be recovered if they are the proximate result of the defendant s
wrongful act for omission. Art. 2218. In the adjudication of moral damages, the
sentimental value of property, real or personal, may be considered.
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Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing
physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, an
d 35. The parents of the female seduced, abducted, raped, or abused, referred to
in No. 3 of this article, may also recover moral damages. The spouse, descendan
ts, ascendants, and brothers and sisters may bring the action mentioned in No. 9
of this article, in the order named.
Art. 2220. Willful injury to property may be a legal ground for awarding moral d
amages if the court should find that, under the circumstances, such damages are
justly due. The same rule applies to breaches of contract where the defendant ac
ted fraudulently or in bad faith.
Art. 309. Any person who shows disrespect to the dead, or wrongfully interferes
with a funeral shall be liable to the family of the deceased for damages, materi
al and moral.
Francisco v. Ferrer
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The wedding cake was not delivered on the wedding day. They had to eat sans riva
l instead. Moral damages were awarded in favor of the plaintiffs. Another case:
The bride and groom hired someone to cover their wedding on video. But nothing w
as recorded on video kasi wala yatang lamang tape. Moral damages were not awarde
d because there was no bad faith. Just nominal damages. Requisites of award of m
oral damages: 1. 2. 3. One of the grounds under article 2177 (physical suffering
, mental anguish, etc.) must be present. Such must be the proximate effect of th
e tortious act (fraud/bad faith). Testimony of the offended party or other evide
nce to prove the suffering. Ex: Because of shock, plaintiff suffered a heart att
ack. Prove this by presenting medical records.
The wording of Article 2219 says that moral damages “may” be awarded, not “shall.” This
is because in addition to the moral suffering, etc, there must be fraud or bad f
aith on the part of the defendant. Under 2219 (3), moral damages are awarded to
the rape victim and her parents. The law also provides a fixed indemnity, which
is 50K. For qualified rape, it is 75K. This fixed indemnity is different and apa
rt from the moral damages under 2219 (3). Fixed indemnity is given for every cou
nt of rape. So if there are many rapists, the fixed indemnity is multiplied by t
he number of counts. A person who commits a crime is deemed in bad faith. 2219 (
9) – Acts mentioned under Article 309 – this includes scoffing at the corpse, like b
urning the body or chopping it up. Cases when moral suffering is presumed: 1. 2.
3. rape murder homicide
a. Amount of Award Moral damages must be proven, but the amount is determined by
the judge. Plaintiff must prove the legal basis for the award; actual amount is
up to the judge. Factors in determining the amount of moral damages: 1. 2. poli
tical, social, financial standing of offended party and offender mental anguish
Example: Compare the mental anguish of two mothers whose sons died in two differ
ent incidents. One son was shot to death, and he died instantly. The other son w
as partying at Ozone when it burned down. He suffered for several weeks with pai
nful burns before he finally died. The mental suffering of the Ozone victim’s moth
er is greater than that of the mother of the son who was shot to death, since th
e former had to watch as her son had to withstand the agony of the burns. 3. Sen
timental value Example: Two rings – one with a huge stone that you won at a raffle
and another with a tiny stone that was given to you by your one true love. Of c
ourse, the sentimental value of the second ring is greater.
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Lopez v. PANAM Senator Lopez and his family were inadvertently bumped off first
class and had to take coach. They sued for damages. ISSUE: Whether plaintiffs ar
e entitled to all damages sought for. HELD: YES. The relevant portion with regar
d to moral damages is that the Senator and family suffered social humiliation, m
ental anguish, serious anxiety. A lot of schwar schwar on him being a senate pre
sident pro tempore, prestigious sya eklat. According to SC-- It may not be humil
iating to travel as tourist passengers; it is humiliating to be compelled to tra
vel as such, contrary to what is rightfully to be expected from the contractual
undertaking. In conclusion, SC wanted to stress that amount of damages awarded i
n this appeal has been determined by adequately considering the official, politi
cal, social, and financial standing of the offended parties on the one hand, and
the business and financial position of the offender on the other, And further c
onsidering the present rate of exchange and the terms at which the amount of dam
ages awarded would approximately be in US dollars. b. bad faith/fraud/malice Exa
mple in class: Couple was booked for economy tickets. The airline had overbooked
the economy class, so they were asked to sit in the business class section. Thi
s was allegedly against their will. They felt bad because their repapips were in
economy. They filed for damages against the airline. Held: No damages. There wa
s no bad faith here. Zalamea v. CA Passengers filed for damages since they were
bumped off their flight because the airline had overbooked. ISSUE: Whether there
was bad faith in overbooking and thereby entitling petitioners to damages. HELD
: YES. REspondent avers that there is no bad faith where overbooking is a common
accepted practice in the COde of Federal Regulations in the Civil Aeronautic Bo
ard. HOwever, there was no document presented as evidence to that effect. ONly t
he sole statement of TWA s customer service agent was relied upon. Moreover, in
this jurisdiction, jurisprudence states that overbooking amounts to bad faith, e
ntitling passengers to an award of moral damages. Assuming arguendo overbooking
is allowed, TWA is still guilty of bad faith in not informing its passengers bef
orehand that it could breach the contract of carriage even if they had confirmed
tickets, in the event of overbooking. TWA should have incorporated stipulations
in overbooking on the tickets or properly inform its passengers about such poli
cies so that the passengers may be prepared for such an eventuality, or would ha
ve the choice of riding on another airline. Moral damages awarded. Prudential Ba
nk v. CA A check issued by Valenzuela bounced even if she had enough money in he
r account. Later, it was found that the check bounced because the bank had made
a mistake in crediting her deposits to another account. ISSUE: Whether Valenzuel
a is entitled to moral damages. HELD: Yes, Valenzuela is entitled to moral damag
es.
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Prudential claims that Valenzuela is not entitled to moral damages because it ac
ted in good faith and committed an honest mistake. This is untentable. As a busi
ness affected with public interest and because of the nature of its functions, t
he bank is under obligation to treat the accounts of its depositors with meticul
ous care, always having in mind the fiduciary nature of their relationship. Even
if malice or bad faith was not sufficiently proved in this case, the fact remai
ns that the bank committed a serious mistake. The bank’s negligence was the result
of lack of due care and caution required of managers and employees of a firm en
gaged in so sensitive and demanding a business as banking. Accordingly, the awar
d of moral damages was proper. * This is the exception to the general rule that
in breach of contract, moral damages are proper only when there was fraud, malic
e, or bad faith. When the party breaching the contract is a bank, in the exercis
e of its fiduciary capacity, there is no need for bad faith in order for the mor
al damages to be awarded. c. malicious prosecution Elements of Malicious Prosecu
tion: 1. 2. 3. 4. There must be a baseless prosecution The one who filed the cri
minal action must be aware that there was no probable cause There must be a dism
issal of the criminal case at the time of the preliminary investigation (indicat
ing that there was no probable cause) Malice
Lao v. CA Lao was presented as a witness in a case filed by his employer against
Espiritu. The case was filed by the prosecutor but was later dismissed. Espirit
u filed a case for malicious prosecution against Lao. ISSUE: Whether Lao may be
held liable for malicious prosecution. HELD: NO. Lao had a valid defense to the
action for malicious prosecution (Civil Case No. 84-M) because it was his employ
er that was the complainant in the estafa case against Espiritu. Lao was only a
witness, not the prosecutor in the estafa case. Moreover, there was probable cau
se for the charge of estafa against Espiritu, as found and certified by the inve
stigating fiscal himself. Lao was not motivated by malice in making the affidavi
t upon which the fiscal based the filing of the information against Espiritu. He
executed it as an employee, a salesman of the St. Joseph Lumber from whom Espir
itu made his purchases of construction materials and who, therefore, had persona
l knowledge of the transaction. Although the prosecution of Espiritu for estafa
did not prosper, the unsuccessful prosecution may not be labelled as malicious.
[Note in this case that the decision of the CA finding Lao guilty of malicious p
rosecution had already become final and executory. But since Lao was deprived of
due process due to the negligence of the lawyer, which was why he lost the case
, and he had a valid defense against malicious prosecution, the SC allowed the a
ction for annulment of judgment.] Lao v. CA G.R. 109205, 18 April 1997 Deuna poi
nted out to the police a jeepney used in running over Eduardo. The owner could n
ot be found, so the police left word at the residence of the alleged driver that
the jeepney was taken to the police station for safekeeping and to be used in c
onnection with the investigation of the incident. Subsequently, the owner of the
jeepney filed a complaint for carnapping against Deuna. The
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complaint was dismissed by the prosecutor/DOJ for lack of probable cause. Deuna
filed an action for malicious prosecution against the owner. ISSUE: Whether the
defendants are liable for malicious prosecution. HELD: Yes. In this case, there
was malicious intent in the filing of the complaint for carnapping. The elements
of malice and absence of probable cause are present. The owner had already been
told that Deuna, along with some policemen, had taken the vehicle to the police
station after the incident. She cannot validly claim that prior to the filing o
f the complaint for carnapping, she did not know the whereabouts of the vehicle.
That there was no probable cause for the filing of the carnapping charge agains
t and Frank led to the dismissal of the case. The vehicle was taken by policemen
and brought to the station in connection with the frustrated homicide case agai
nst George. There was clearly no intent to gain, which is an essential element o
f the crime of carnapping. d. labor cases Most of the time, moral damages are aw
arded in labor cases as long as bad faith, oppression against labor are proven,
or if the employer acted contrary to law, morals, good customs, etc. Audion Elec
tric v. NLRC Nicolas Madolid had been employed by Audion Electric Company for 13
years when the company terminated his services. Madolid filed a complaint with
the Labor Arbiter, claiming that he was illegally dismissed. He asked for reinst
atement, with full backwages, as well as moral and exemplary damages. The Labor
Arbiter granted his claims. ISSUE: Whether Madolid is entitled to moral and exem
plary damages. HELD: No. The Labor Arbiter was correct in ordering the reinstate
ment with full backwages of Madolid. However, his award of moral and exemplary d
amages must be deleted for being devoid of legal basis. Moral and exemplary dama
ges are recoverable only where the dismissal of an employee was attended by bad
faith or fraud, or constituted an act oppressive to labor, or was done in a mann
er contrary to morals, good customs or public policy. The person claiming moral
damages must prove the existence of bad faith by clear and convincing evidence,
for the law always presumed good faith. It is not enough that one merely suffere
d sleepless nights, mental anguish, serious anxiety as the result of the actuati
ons of the other party. Invariably, such action must be shown to have been willf
ully done in bad faith or with ill motive, and bad faith or ill motive under the
law cannot be presumed but must be established with clear and convincing eviden
ce. In this case, Madolid predicated his claim for such damages on his own alleg
ations of sleepless nights and mental anguish without establishing bad faith, fr
aud, or ill motive as legal basis therefor. Paguio v. PLDT Paguio was appointed
head of PLDT’s garnet exchange. For several years, he criticized the method by whi
ch the management of PLDT made the performance evaluation of its employees. He r
epeatedly complained about the rating system being unfair. After three years, Sa
ntos, his superior, transferred him to another office of the PLDT. His new posit
ion was actually a functionless position, with no office and staff, and without
any opportunity to get any promotion or wage increase. Paguio complained to Feri
do, a VP of PLDT, but the latter affirmed the authority of Santos to reassign em
ployees according to the needs of the company. Ferido also stated in his decisio
n that the transfer was based on Santos’ well-founded conclusion that Paguio was n
ot a team player and could not accept decisions of management already arrived at
, short of insubordination. Enrique Perez, COO of PLDT, affirmed the action take
n by Ferido and explained to Paguio that his transfer was not in the nature of a
disciplinary action that required compliance with the process of “investigation,
confrontation, and evaluation”
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before it can be implemented and that the same was not done in bad faith. As a r
esult, Paguio filed a complaint for illegal demotion and damages against PLDT. I
SSUE: Whether Paguio is entitled to moral and exemplary damages. HELD: Yes. Unde
r Article 21 of the Civil Code, any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs or public policy s
hall compensate the latter for the damage. The illegal transfer of Paguio to a f
unctionless office was clearly an abuse by PLDT of its right to control the stru
cture of its organization. The right to transfer or reassign an employee is deci
dedly an employer’s exclusive right and prerogative. However, such managerial prer
ogative must be exercised without grave abuse of discretion, bearing in mind the
basic elements of justice and fair play. Having the right should not be confuse
d with the manner by which such right is to be exercised. In this case, there is
no clear justification for the transfer of Paguio except that it was done as a
result of his disagreement with his superiors with regard to company policies. P
aguio is entitled to an award of moral and exemplary damages. In determining ent
itlement to moral damages, it suffices to prove that the claimant has suffered a
nxiety, sleepless nights, besmirched reputation and social humiliation by reason
of the act complained of. Exemplary damages, on the other hand, are granted in
addition to moral damages by way of example or correction for the public good. F
urthermore, as Paguio was compelled to litigate and incur expenses to enforce an
d protect his rights, he is entitled to an award of attorney’s fees. The amount of
damages recoverable is, in turn, determined by the business, social and financi
al position of the offended parties and the business and financial position of t
he offender. In this case, an award of P50,000.00 as moral damages, P20,000.00 a
s exemplary damages and attorney’s fees equivalent to 10% of the amount to which p
etitioner is entitled is reasonable. e. Corporation We learned in Corp law that
a corporation is generally not entitled to damages because it is an artificial p
erson and is not capable of feeling pain, moral suffering, etc. However, the cou
rt may award damages if, as a result of the act of the defendant, the corporatio
n suffers damage to its goodwill and reputation. Atty. Abaño does not seem to agre
e with this exception. He says it was in just one old, old case and was never re
peated by the SC. Example: A committed a tortious act against Corp X, causing be
smirched reputation of the Corporation. As a result, the Corp suffered losses. I
s A liable for moral damages to the stockholders of Corp X? No. The corp is sepa
rate and distinct from its stockholders. 5. Nominal Damages Art. 2221. Nominal d
amages are adjudicated in order that a right of the plaintiff, which has been vi
olated or invaded by the defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss suffered by him. Art. 22
22. The court may award nominal damages in every obligation arising from any sou
rce enumerated in 1157, or in every case where any property right has been invad
ed. Art. 2223. The adjudication of nominal damages shall preclude further contes
t upon the right involved and all accessory questions, as between the parties to
the suit, or their respective heirs and assigns.
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PAL v. CA Relevant to the topic of Nominal Damages: As a general rule, an appell
ee who has not appealed (such as Mrs. Padilla in this case) is not entitled to a
ffirmative relief other than the ones granted in the decision of the court below
. However, in this case, there was a 16-year delay in the disposition of this ca
se due to the multiple appeals filed by PAL. Mrs. Padilla herself has already jo
ined her son in the Great Beyond without being able to receive the indemnity she
well deserved. Considering how inflation has depleted the value of the judgment
in her favor, in the interest of justice, PAL is ordered to pay legal rate of i
nterest on the indemnity due her. JAL v. CA On June 13, 1991, Jose Miranda board
ed a JAL flight from San Francisco to Manila. Enrique Agana, Maria Angela Agana,
and Adelia Francisco were also passengers of a JAL flight from LA to Manila. As
an incentive for traveling with JAL, the flights made an overnight stopover in
Japan at the airline’s expense. Upon arrival in Japan on June 14, the passengers w
ere billeted in Hotel Nikko Narita for the night. The following day, they learne
d that Mt. Pinatubo erupted, and all flights to Manila were cancelled indefinite
ly because NAIA was closed. JAL rebooked them on flights due to depart on June 1
6. JAL paid for their unexpected overnight stay. Unfortunately, the June 16 flig
ht was also cancelled. JAL informed the stranded passengers that it would no lon
ger shoulder their expenses. The passengers stayed in Japan until the 22nd and w
ere forced to pay meals and accommodations from their personal funds. The passen
gers filed an action for damages against JAL, claiming that JAL failed to live u
p to its duty to provide care and comfort to its stranded passengers when it ref
used to pay for their hotel and accommodation expenses from June 16 to 21. ISSUE
: Whether JAL is liable for the expenses incurred by its stranded passengers bro
ught about by the unexpected eruption of Mt. Pinatubo. HELD: No. However, JAL is
liable for nominal damages. JAL is not liable for the expenses incurred by the
passengers, since the reason why JAL was prevented from resuming its flight to M
anila was due to the effects of the Mt. Pinatubo eruption, which was a fortuitou
s event. However, JAL is not completely absolved from liability. It must be note
d that the passengers bought tickets from the US with Manila as their final dest
ination. While JAL was no longer required to defray the passengers’ living expense
s during their stay in Japan on account of the fortuitous event, JAL had the dut
y to make the necessary arrangements to transport the passenger on the first ava
ilable connecting flight to Manila. JAL reneged on its obligation to look after
the comfort and convenience of its passengers when it declassified them from “tran
sit passengers” to “new passengers,” as a result of which they were obliged to make th
e necessary arrangements themselves for the next flight to Manila. They were pla
ced on the waiting list from June 20 to June 24. To assure themselves of a seat
on an available flight, they were compelled to stay in the airport the whole day
of June 22, and it was only at 8 pm of that day that they were advised that the
y could be accommodated in said flight, which flew at about 9 am the next day. B
ecause of JAL’s failure to make the necessary arrangements to transport the passen
gers on its first available flight to Manila, an award of P100,000 as nominal da
mages, in favor of each passenger, is in order. BPI Investment v. CA
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Frank Roa obtained a loan at an interest rate of 16.25% per annum from Ayala Inv
estment and Development Corp (AIDC), the predecessor of BPI Investment, for the
construction of a house on his lot in Alabang. The house and lot was mortgaged t
o AIDC to secure the loan. Roa then sold the house and lot to ALS Management and
Development Corp and Antonio Litonjua (private respondents) for P850K. Private
respondents paid 350K in cash and assumed the 500K balance of Roa’s indebtedness w
ith AIDC. AIDC, however, was not willing to extend the old intrest rate to priva
te respondents, so it granted them a new loan for 500K to be applied to Roa’s debt
and secured by the same property, at an interest rate of 20% per annum. The mor
tgage deed stipulated that the payment of the amortizations of the new loan woul
d begin the following month, on May 1, 1981. On August 13, 1982, private respond
ents updated Roa’s arrearages by paying BPI the sum of P190,601.35. This reduced R
oa’s principal balance to P457,204.90, which in turn, was paid off when BPIC appli
ed thereto the proceeds of private respondents’ loan of 500K. Thereafter, on Septe
mber 13, 1982, BPI released to private respondents P7,146.87, purporting to be w
hat was left of their loan after full payment of Roa’s loan. Two years later, BPI
instituted foreclosure proceedings against private respondents on the ground tha
t they failed to pay their mortgage indebtedness. Private respondents filed a ca
se against BPI, alleging that they were not in arrears in their payment. The tri
al court ruled that private respondents were not in arrears. It also found that
they suffered damages when BPI caused their publication in a newspaper of genera
l circulation as defaulting debtors. It thus awarded moral and exemplary damages
. On appeal, the CA found that BPI had no basis in extrajudicially foreclosing t
he mortgage and publishing in newspapers that private respondents were delinquen
t debtors. It affirmed the grant of moral and exemplary damages. ISSUE: Whether
BPI is liable for moral and exemplary damages. HELD: No, but it is liable for no
minal damages. First, private respondents were not in arrears. The loan was perf
ected only on September 13, 1982 since that was the only time when its proceeds
were released by BPI to private respondents. Before that time, they had no oblig
ation to pay the monthly amortizations. Their obligation to pay arose only a mon
th after September 13, and not on May 1, 1982, as stipulated in the mortgage con
tract. Moreover, the total amount released to ALS and Litonjua was less than 500
K (457K applied to Roa’s loan + 7K released on September 13 = about 464K). Thus, t
he balance of about 36K which was not released to them should have been applied
as part of their monthly amortizations. BPI claims that it should not be held li
able for moral and exemplary damages because it did not act maliciously when it
initiated the foreclosure proceedings. It merely exercised its right under the m
ortgage contract because ALS and Litonjua were irregular in their monthly amorti
zation. On the other hand, ALS and Litonjua claim the BPI was guilty of bad fait
h and should be liable for said damages because it insisted on the payment of am
ortization on the loan before it was released. Further, it did not make the corr
esponding deduction in the monthly amortization to conform to the actual amount
of the loan released, and it immediately initiated foreclosure proceedings when
ALS and Litonjua failed to make timely payment. The SC held that BPI cannot be l
iable for moral and exemplary damages. ALS and Litonjua admitted themselves that
they were irregular in their payment of monthly amortizations. Hence, it cannot
be said that BPI acted in bad faith when it instituted foreclosure proceedings.
However, BPI was negligent in relying merely on the entries found in the deed o
f mortgage, without checking and correspondingly adjusting its records on the am
ount actually released to ALS and Litonjua and the date when it was released. Su
ch negligence resulted in damage to ALS and Litonjua, for which an award of nomi
nal damages should be given in recognition of their rights which were violated b
y BPI. For this purpose, the amount of 25K is sufficient. 6. Temperate Damages
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Art. 2224. Temperate or moderate damages, which are more than nominal but less t
han compensatory damages, may be recovered when the court finds that some pecuni
ary loss has been suffered but its amount can not, from the nature of the case,
be proved with certainty. Art. 2225. Temperate damages must be reasonable under
the circumstances. Necessito v. Paras Severina Garces and her one-year old son,
Precillano Necessito, boarded a Philippine Rabbit Bus at Agno, Pangasinan. When
the bus entered a wooden bridge, its front wheels swerved to the right. The driv
er lost control, and the bus fell into a creek where water was breast deep. Seve
rina drowned, while her son Precillano suffered abrasions and a fractured femur.
Two actions for damages and attorney’s fees were filed against the carrier. The C
FI found that the accident was caused by the defective steering knuckle of the b
us, which could not have been known by the carrier. The CFI exonerated the carri
er on the ground of fortuitous event. ISSUE: Whether the carrier is liable for d
amages. HELD: Yes, the carrier is liable for damages. The accident was not due t
o a fortuitous event. The evidence presented shows that the carrier merely condu
cted visual inspections of the steering knuckle every thirty days to see if any
cracks developed. Neither the manufacturer of the bus nor the carrier tested the
steering knuckle to ascertain whether its strength was up to standard, or that
it had not hidden flaws that would impair its strength. This periodic visual ins
pection of the steering knuckle did not measure up to the required legal standar
d of “utmost diligence of very cautions persons” required of common carriers. Theref
ore, the knuckle’s failure can not be considered a fortuitous event that exempts t
he carrier from responsibility. As to the damages: No allowance may be made for
moral damages, since the carrier did not act fraudulently or in bad faith. Neith
er can exemplary damages be awarded, since the carrier has not acted in a wanton
, fraudulent, reckless, oppressive, or malevolent manner. Hence, the court belie
ves that for Precillano Necessito, and indemnity of P5,000 would be adequate for
the abrasions and fracture of the femur, including medical and hospitalization
expenses, there being no evidence that there would be any permanent impairment o
f his faculties or bodily functions, beyond the lack of anatomical symmetry. As
for the death of Severina Garces, who was 33 years old, with seven minor childre
n when she died, her heirs are entitled to indemnity not only for the incidental
losses of property (cash, wrist watch, and merchandise) worth P394 that she car
ried at the time of the accident and for the burial expenses of P490, but also f
or the loss of her earnings (average of P120 a month) and for the deprivation of
her protection, guidance, and company. In the judgment of the court, an award o
f P15,000 would be adequate. The low income of the plaintiffs-appellants makes a
n award for attorney’s fees just and equitable. A fee of P3,500 would be reasonabl
e. Consolidated Plywood Industries Inc. v. CA Consolidated Plywood Industries wa
s in the business of logging and manufacturing timber products in Davao. Willie
and Alfred Kho operated a fleet of hauling trucks. Consolidated entered into a v
erbal agreement with the Khos whereby the Khos undertook to haul the logs of Con
solidated. The parties also agreed that as a pre-condition before the Khos sent
their truck haulers to the jobsite, Consolidated would provide financial assista
nce to the Khos in the amount of 180K cash, to defray the cost of repairs and re
conditioning of the trucks and other expenses necessary for the hauling operatio
ns. The 180K was in the nature of a cash advance obtained by the Khos from Equit
able bank in the aggregate amount of 180K, on the guaranty of Henry Wee, Preside
nt of Consolidated, payable
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by the Khos. The agreement also provided that the hauling services shall continu
e unless and until the loan from Equitable remained unpaid. After the Khos obtai
ned the 180K, they commenced the hauling service for Consolidated. However, afte
r hauling logs for about a year, the Khos, without giving notice to Consolidated
, suddenly and surreptitiously at nighttime, withdrew all its truck haulers from
the jobsite. This was in violation of the agreement, since they had not yet pai
d the 180K loan with Equitable. Because of the sudden and surreptitious abandonm
ent by the Khos of its obligation to haul logs, Consolidated filed an action for
damages. It allegedly suffered the following damages: 1. Aquarius Trading, a Ta
iwan log importer, charged Consolidated P56K representing the cancellation fee t
hat it had to pay for a chartered vessel, LC extension fee and other charges due
to the failure of Consolidated to deliver logs which resulted from the failure
of hauling by the Khos on the due date. Consolidated also failed to realize a pr
ofit of 150K because this sale was cancelled. 2. After the sudden abandonment by
the Khos, Consolidated did not have immediate replacement haulers for a month.
During this period, it could have produced 5,000 cu. m. of logs, representing a
loss of P350K. 3. Because the Khos did not pay the 180K loan with Equitable, Hen
ry Wee was exposed to liability to Equitable as guarantor of the loans. Demands
for payment resulted in unduly annoying and vexing Wee, entitling him to moral d
amages in the amount of P200K. The trial court awarded these claims, along with
attorney’s fees, awards for unpaid overdraft cash vales, and the 56K reimbursement
charges that Consolidated had to pay Aquarius. On appeal, the CA modified the j
udgment and awarded only the 150K unrealized profit in the transaction with Aqua
rius, the 56K reimbursement charges paid to Aquarius, and the amount of the unpa
id overdraft. ISSUE: Whether Consolidated is entitled to the awards for unfulfil
led import of logs, moral damages, and attorney’s fees. HELD: There was no evidenc
e to support the claim for 350K for the unfulfilled import of logs. This claim a
pparently refers to an alleged commitment to a certain Ching Kee Trading of Taiw
an, as distinguished from the claim for actual damages incurred in connection wi
th its transaction with Aquarius. While the commitment to Aquarius Trading was s
ufficiently substantiated by documentary evidence, the alleged commitment of Con
solidated to Ching Kee was not supported by evidence other than the self-serving
statement of Wee. Nor did they present any other evidence which would show that
they had other unfulfilled shipments for which they incurred damages because of
the pull-out of the Khos’ trucks. But even assuming that there was a commitment t
o Ching Kee, the shipment was scheduled some 2 months after the Khos pulled out
their trucks. That would have given them to find other trucks to do the job. Con
solidated insists that if the CA did not consider the 350K damages for unfulfill
ed shipments, it should have been awarded this amount as a form of temperate or
moderate damages. This is incorrect. Temperate or moderate damages may be recove
red when the Court finds that some pecuniary loss has been suffered but its amou
nt cannot, from the nature of the case, be proved with certainty. In this case,
the nature of the contract between the parties is such that damages which the in
nocent party may have incurred can be substantiated by evidence. Hence, it is no
t entitled to 350K as temperate or moderate damages. The court also awarded 50K
as moral damages because the Khos acted in bad faith when they surreptitiously p
ulled out their trucks before the termination of the contract. From Ms. Ng’s Revie
wer: 8) Exemplary Damages
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Art. 2229. EXEMPLARY OR CORRECTIVE DAMAGES are imposed, by way of example or cor
rection for the public good, in addition to the moral, temperate, liquidated or
compensatory damages. Art. 2230. In (1) criminal offenses, exemplary damages as
a part of the civil liability may be imposed when the crime was committed with o
ne or more aggravating circumstances. Such damages are separate and distinct fro
m fines and shall be paid to the offended party. Art. 2231. In (2) quasi-delicts
, exemplary damages may be granted if the defendant acted with gross negligence.
Art. 2232. In (3) contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner. Art. 2233. Exemplary damages cannot be recovered as a matter
of right; the court will decide whether or not they should be adjudicated. DISC
RETIONARY Art. 2234. While the amount of the exemplary damages need not be prove
d, the plaintiff must show that he is entitled to moral, temperate or compensato
ry damages before the court may consider the question of whether or not exemplar
y damages should be awarded. In case liquidated damages have been agreed upon, a
lthough no proof of loss is necessary in order that such liquidated damages may
be recovered, nevertheless, before the court may consider the question of granti
ng exemplary in addition to the liquidated damages, the plaintiff must show that
he would be entitled to moral, temperate or compensatory damages were it not fo
r the stipulation for liquidated damages. Art. 2235. A stipulation whereby exemp
lary damages are renounced in advance shall be null and void. Octot v. Ybañez Dios
dado Octot, a security guard in the Regional Health Office of Cebu, was summaril
y dismissed. Octot was convicted for libel but same was pending appeal. When his
acquittal was obtained, he sought reinstatement. His request was given due cour
se but despite notices to him to fill up the necessary papers to support his new
appointment, he failed to appear but instead filed the instant action for manda
mus praying for reinstatement, payment of back salaries, cost of living allowanc
e, compensatory, exemplary and moral damages. Is Octot entitled to backwages and
damages? HELD: No, sorry Octot! (what a name… :P) In the absence of proof that th
e Regional Director acted in bad faith & with grave abuse of discretion, Octot i
s not entitled to backwages & consequently cannot claim for damages. The officia
ls were not motivated by ill will or personal malice in dismissing Octot but onl
y their desire to comply with mandates of PD 6. If there was any delay in his re
instatement, it was attributed to his own fault & negligence. After his reinstat
ement was authorized by the Office of the President, Officials promptly communic
ated with him, directing him to report to the Regional Office & accomplish the n
ecessary papers for his reinstatement, but he delayed doing so. Where it is clea
r that his separation from the government service had not been shown to be in ba
d faith, an award for moral damage under the circumstance would not be just and
proper. Neither is it among the cases mentioned in Articles 2219 and 2220 of the
Civil Code wherein moral damages may be recovered. An employee who was dismisse
d but whose reinstatement was later ordered is not entitled to moral damages whe
re he refused to report for work despite several calls for said purpose. Exempla
ry damages are NOT generally recoverable in a special civil action for mandamus
UNLESS the defendant patently acted with vindictiveness or wantonness & not in t
he
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exercise of honest judgment. The claim for exemplary damages must presuppose the
existence of the circumstances under Art 2231 & 2232. Exemplary or corrective d
amages are imposed by way of example or correction for the public good, in addit
ion to the moral, temperate, liquidated or compensatory damages. Such damages ar
e required by public policy, for wanton acts must be suppressed. They are an ant
idote so that the poison of wickedness may not run through the body politic. CON
DITIONS FOR AWARD OF EXEMPLARY DAMAGES (1) imposed by way of example or correcti
on only in ADDITION to compensatory, liquidated, moral, & temperate damages (2)
CANNOT be recovered as a matter of right, their determination depending upon the
amt of damages that may be awarded to the claimant (3) Claimant must first esta
blish his right to moral, temperate, liquidated, or compensatory damages (4) Wro
ngful act must be accompanied by bad faith & the award would be allowed only if
the guilty party acted in wanton, fraudulent, reckless, oppressive or malevolent
manner PAL v. CA Pantejo, City Fiscal of Surigao City, boarded a PAL plane in M
anila & disembarked in Cebu where he was supposed to take his connecting flight
to Surigao. However, due to typhoon “Osang”, the flight was cancelled. PAL gave out
cash assistance to its stranded passengers. Pantejo requested that he be billete
d in a hotel at PAL’s expense because he didn’t have cash with him at that time but
PAL refused. Kaya nangutang muna si Fiscal sa isang co-passenger. Later on, he l
earned that PAL reimbursed other passengers. PAL offered to reimburse him but Fi
scal Pantejo sued PAL for discriminating against him. Is PAL in bad faith and th
erefore liable for damages? HELD: Yes, Fiscal wins. Whooopeee! Assuming arguendo
that the airline passengers have no vested right to these amenities in case a f
light is cancelled due to force majeure, what makes PAL liable for damages is it
s blatant refusal to accord the so-called amenities equally to all its stranded
passengers who were bound for Surigao City. No compelling or justifying reason w
as advanced for such discriminatory and prejudicial conduct. The refund of hotel
expenses was surreptitiously and discriminatorily made by PAL since the same wa
s not made known to everyone except thru word of mouth to a handful of passenger
s. PAL acted in bad faith in disregarding its duties as a common carrier to its
passengers & discriminating against Pantejo. Fiscal dude was exposed to humiliat
ion and embarrassment especially because of his governmental position & social p
rominence. Moral, exemplary, and actual damages PLUS interest awarded! xtin ng 3
D
People v. Las Piñas Iñego Las Piñas was charged with the rape of 12 yr old Sarah Joy A
rpon. CA convicted him of rape & was sentenced to suffer the penalty of reclusio
n perpetua & to pay the victim P50T as moral damages & costs. Is Las Piñas guilty
of rape? HELD: YES! Basta guilty sha sa rape.
People v. Catubig: Aggravating circumstances committed before the effectivity of
the Dec 1, 2000 Revised ROC on Crimpro may serve as basis for awarding exemplar
y damages even if not alleged in the info, so long as said circumstances are pro
ven at the trial. The prosecution was able to prove that Las Piñas is the hubby of
the younger sister of the victim’s father & therefore a relative of the family by
affinity within the third civil degree. This circumstance justifies the imposit
ion of exemplary damages in the amt of P25T.
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Las Piñas should further pay the victim P50T as civil indemnity, in addition to mo
ral damages of P50T awarded by the CA. 9) Attorney’s Fee
(1) (2)
as FEES: lawyer-client relationship; belongs to lawyer as DAMAGES: belongs to cl
ient
General Rule: Atty’s fees cannot be recovered. Exception: Granted in instances und
er 2208. There must be a legal basis for the award of atty’s fees. Court must stat
e basis fro award. Otherwise, its null & void. Case of A v. B who are fighting o
ver ownership of land. A’s counsel agrees to represent A for 25% of the value of t
he land. If A wins, can A’s counsel file for an attorney’s lien on the property? No.
Atty’s lien on real property subject of litigation is not allowed. But if the act
ion was principally for damages and A wins, the atty’s fees can constitute a lien
on the money awarded. The lien is allowed only if the subject matter is money, n
ot real property. What if your agreement with your client is that you’ll be paid 1
00K but client is awarded only 50K. Are you entitled to just 50K? No. The contra
ct between you and the client is a separate agreement. Art. 2208. In the absence
of stipulation, attorney s fees and expenses of litigation, other than judicial
costs, cannot be recovered, except: (1) When exemplary damages are awarded; (2)
When the defendant s act or omission has compelled the plaintiff to litigate wi
th third persons or to incur expenses to protect his interest; (3) In criminal c
ases of malicious prosecution against the plaintiff; (4) In case of a clearly un
founded civil action or proceeding against the plaintiff; (5) Where the defendan
t acted in gross and evident bad faith in refusing to satisfy the plaintiff s pl
ainly valid, just and demandable claim; (6) In actions for legal support; (7) In
actions for the recovery of wages of household helpers, laborers and skilled wo
rkers; (8) In actions for indemnity under workmen s compensation and employer s
liability laws; (9) In a separate civil action to recover civil liability arisin
g from a crime; (10) When at least double judicial costs are awarded; (e.g. dock
et fees, TSN expenses; can be sizeable) (11) In any other case where the court d
eems it just and equitable that attorney s fees and expenses of litigation shoul
d be recovered. (e.g. case lasted for several years & handled by same lawyer) In
all cases, the attorney s fees and expenses of litigation must be reasonable.
Algoon v. CA: There can be no atty’s lien on real property subject of litigation.
However, if case was for damages, atty can claim a lien over the award.
xtin ng 3D
Compania Maritima v. CA: Quantum Meruit; reasonable value of services based on t
he ff: (1)time & extent of services (2)novelty & difficulty of questions involve
d (3)importance of subject matter
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(4)skill demanded of case (5)probability of losing other clients coz of acceptan
ce (6)amount involved & benefits by client (7)certainty of compensation (conting
ency) (8)professional standing of lawyer PNB v. Utility Assurance Surety (UTASSC
O) Kangkyo Bank issued a Letter of Credit in favor of Pedro Bartolome Ent to cov
er an export of shipment of logs to Japan. LOC assigned to Lanuza Lumber. Later,
Lanuza Lumber, obtained a P25T loan from PNB. Utility Assurance furnished the s
urety bond. Lanuza Lumber & UTASSCO defaulted. Thus, PNB filed an action to reco
ver the amt of the PN with interest PLUS atty’s fees. UTASSCO claims that its obli
gation under the surety bond was to secure the performance of the T&C of the Let
ter of Credit & had not guaranteed performance of Lanuza’s obligation under its P2
5T loan from PNB. Is UTASSCO liable to pay the obligation & atty’s fees? HELD: YES
. The surety bond was intended to secure the payment of Lanuza Lumber’s loan with
PNB. (1) The surety bond explicitly stated the P25T loan was being secured by th
e bond. (2) While the bond & endorsement referred to the LOC, Lanuza Lumber had
NO obligation under the LOC as it was the beneficiaryassignee of the LOC. Clause
limiting the liability of UTASSCO does not prevent grant of interest & atty’s fee
s. Tagawa vs. Aldanese: creditors suing on a suretyship bond may recover from th
e surety as part of their damages, interest at the legal rate even if the surety
would thereby become liable to pay more than the total amount stipulated in the
bond. The theory is that interest is allowed only by way of damages for delay
upon the part of the sureties in making payment after they should have done. " T
he surety is made to pay interest, not by reason of the contract, but by reason
of its failure to pay when demanded and for having compelled the plaintiff to re
sort to the courts to obtain payment. The NCC permits recovery of attorney s fee
s in eleven cases enumerated in Art 2208, among them where the court deem it ju
st and equitable that attorney s fees and expenses of litigation should be recov
ered or when the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiffs plainly valid, just and demandable claim. This gives th
e courts discretion in apportioning attorney s fees. Ibaan Rural Bank v. CA
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Spouses Reyes mortgaged 3 parcels lf land with Ibaan Rural Bank. The Reyeses sol
d the same to the Tarnate spouses under a DOAS with Assumption of Mortgage. The
Tarnates failed to pay the loan & the bank extra-judicially foreclosed the prope
rties. No notice of the extra-judicial foreclosure was given to the Tarnates. Ta
rnates tried to redeem the properties but the bank & Sheriff refused. The Tarnat
es then filed a complaint to compel the bank to allow their redemption of the fo
reclosed lots. LC ordered redemption of the properties plus payment of atty’s fees
as damages. Was the award of atty’s fees on the basis of the bank’s refusal to allo
w redemption proper? HELD: NO. The award of atty’s fees must be disallowed for lac
k of legal basis. The fact that the Tarnates were compelled to litigate & incur
expenses to protect & enforce their claim does not justify the award of atty’s fee
s. The general rule is that atty’s fees cannot be recovered as part of damages bec
ause of the public policy that no premium should be placed on the right to litig
ate. The award of atty’s fees must be deleted where the award of moral & exemplary
damages are eliminated.
10) Mitigation of Damages Art. 1192. In case BOTH PARTIES HAVE COMMITTED A BREAC
H of the obligation, the liability of the first infractor shall be equitably tem
pered by the courts. If it cannot be determined which of the parties first viola
ted the contract, the same shall be deemed extinguished, and each shall bear his
own damages.
Art. 2203. The party suffering loss or injury must exercise the DILIGENCE OF A G
OOD FATHER OF A FAMILY to minimize the damages resulting from the act or omissio
n in question. Art. 2204. In crimes, the damages to be adjudicated may be respec
tively increased or lessened according to the AGGRAVATING OR MITIGATING CIRCUMST
ANCES.
Art. 2214. In quasi-delicts, the CONTRIBUTORY NEGLIGENCE of the plaintiff shall
reduce the damages that he may recover. Art. 2215. In contracts, quasi-contracts
, and quasi-delicts, the court may EQUITABLY MITIGATE the damages under circumst
ances other than the case referred to in the preceding article, as in the follow
ing instances: (1) That the plaintiff himself has contravened the terms of the c
ontract; (2) That the plaintiff has derived some benefit as a result of the cont
ract; (3) In cases where exemplary damages are to be awarded, that the defendant
acted upon the advice of counsel; (4) That the loss would have resulted in any
event;
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(5) That since the filing of the action, the defendant has done his best to less
en the plaintiff s loss or injury. EXTINGUISHES LIABILITY and EACH BEARS OWN LOS
S: infractor can’t determine who was the first
MITIGATES LIABILITY (1) diligence of a good father of a family (2) mitigating ci
rcumstances (3) contributory negligence on the part of the adverse party (Ex: ca
se in crim1 where the victim in a hacking incident went and submerged his hands
in canal water. Of course, he died of infection or tetanus later on. He was guil
ty of contributory negligence) (4) plaintiff himself has contravened the terms o
f the contract (5) plaintiff has derived some benefit as a result of the contrac
t (6) In cases where exemplary damages are to be awarded, that the defendant act
ed upon the advice of counsel; (7) loss would have resulted in any event;
(8)
since the filing of the action, the defendant has done his best to lessen the pl
aintiff s loss or injury. (Example: if you run over someone, you should bring hi
m to the hospital. Your liability will be mitigated.)
Malaysian Airlines v. CA Malaysina Airline System Bernad recruited Renato Arella
no from PAL for his training & experience and contracted his services as pilot f
or two years. When the plane he was driving landed at Bintulo airport, all the t
ires burst, causing alarm among the passengers but causing no injuries. Arellano
was found negligent by the investigating board in Malaysia & was dismissed by M
alaysian Airlines. RTCPnas held that Arellano’s dismissal from service was imprope
r as he was not negligent & ordered payment of P3M moral damages, P1M exemplary
damages, among others. Was the amount of damages awarded excessive? HELD: YES. T
he inordinate amount granted to Arellano calls for the moderating of the Court,
that justice may be tempered with reason instead of being tainted with what appe
ars here to be a ruthless vindictiveness. The complaint prayed for payment of un
paid salaries from July 1981 to July 1982 which corresponds to the periods of th
e renewed contract. On the basis of his monthly salary of Malaysian $4,025, or P
33,568.50, his total unearned salaries will be P402,822. To this should be added
the amount of P123,098.40 as allowance for the same period of one year at the r
ate of $1,230/mnth plus P80T, representing his expenses in transferring his fami
ly to the Philippines, amounting to an aggregate sum of P605,920.40 in actual da
mages. Moral damages is reduced to P500T and atty’s fees to P25T. All other awards
are disauthorized. Bricktown v. Amor-Tierra Bricktown Development Corporation e
xecuted two Contracts to Sell in favor of Amor-Tierra Development Corp covering
96 residential lots at Multinational Village. Of the total purchase price of P21
M, Amor-Tierra only paid P1.3M. Bricktown sent a notice of cancellation to Amor-
Tierra. AmorTierra demanded a refund OR assign to it an equivalent number of lot
s. Bricktown refused. Amor filed for rescission of the contract. Was the resciss
ion and forfeiture of payment valid? HELD: YES and NO. While Bricktown still act
ed within its legal right to declare the contracts to sell rescinded or cancelle
d, considering the negotiations which made Amor-Tierra believe that they would b
e entering into a new contract, it would be unconscionable to likewise sanction
the forfeiture of payments. The relationship between parties in any contract mus
t always be characterized and punctuated by good faith and fair dealing. Brickto
wn did fall well behind that standard. We
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do not find it equitable, however, to adjudge any interest payment by Bricktown
on the amount to be thus refunded, computed from judicial demand, for, indeed, A
mor-Tierra should not be allowed to totally free itself from its own breach. 12%
interest/annum to commence only from the finality of this decision until such r
efund is effected. International School v. CA Spouses Torralba filed a complaint
for damages against IS for the death of their only son Eric, while in the custo
dy of IS & its officers. RTC awarded damages. IS appealed. The Torralba’s moved fo
r execution of judgment pending appeal on grounds that the appeal is merely dila
tory & filing of a bond is another good reason for execution. RTC granted same.
CA affirmed. Was the execution of judgment pending appeal improper? HELD: YES. R
eason that an appeal is dilatory does NOT justify execution pending appeal, neit
her does the filing of a bond, without anything more, justify the same. IS could
not be faulted for its withdrawal of its supersedeas bond inasmuch as the LC gr
anted the execution pending appeal & rejected its offer of supersedeas bond. xti
n ng 3D The awards for moral & exemplary damages CANNOT be the subject of execut
ion pending appeal. RATIONALE: The execution of any award for moral & exemplary
damages is dependent on the outcome of the main case. Unlike actual damages for
which petitioners may clearly be held liable if they breach a specific contract
& the amts of which are fixed & certain, liabilities with respect to moral & exe
mplary damages as well as the exact amounts remain uncertain & indefinite pendin
g resolution by the IAC & SC. The existence of the factual bases of these types
of damages and their causal relation to the petitioner’s act will have to be deter
mined in the light of errors on appeal. It is possible that the petitioners, aft
er all, while liable for actual damages may not be liable for moral & exemplary
damages. Or in some cases elevated to the SC, the awards may be reduced. IX. PRO
CEDURAL RULES ON DAMAGES - Just look at Sir’s handout. Ok yon. Good Luck!
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