12. CHAN, JR. v. IGLESIA NI CRISTO, INC. (G.R. No. 160283, Oct.

14, 2005)
TOPIC: PARTIES; NATURE OF LIABILITY OF JOINT TORTFEASORS

FACTS:

Petitioner John Kam Biak Y. Chan, Jr. is the owner of Aringay Shell Gasoline Station near Iglesia ni Cristo. The gasoline station supposedly needed additional
sewerage and septic tanks for its washrooms, thus, petitioner procured the services of Dioscoro “Ely” Yoro, an alleged construction contractor in the locality.
They executed a Memorandum of Agreement and commenced the diggings. The members of the church informed the petitioner that the digging traversed and
penetrated a portion of the land belonging to former and that the foundation of the chapel was affected as a tunnel was dug directly under it. A complaint was
filed against petitioner and petitioner’s engineer Teofilo Oller before the RTC of La Union. Both of them filed an Answer with Third-Party Complaint impleading
Yoro as defendant.

RTC held that the diggings were not intended for construction of septic tanks but were made to construct tunnels to find hidden treasure and adjudging both
petitioner and Yoro solidarily liable to pay the church, while Oller is absolved from any liability. Petitioner appealed before the CA while Writ of Execution was
issued against Yoro as he failed to pay the docket fees within the reglementary period to appeal. The CA affirmed the decision of RTC.

Petitioner instituted the case before the SC averring that no liability should attach to him by laying the blame solely on Yoro, relying heavily in paragraph 4 of
their MOA which states that “Any damage within or outside the property of the FIRST PARTY (petitioner) incurred during the digging shall be borne by the
SECOND PARTY (Yoro)”.

ISSUE:

WON the petitioner should be held solidarily liable with Yoro despite the provisions of their MOA.

RULING:

YES. The Court held that it is vital to underscore the findings of the trial court and the Court of Appeals as to what was the real intention of the petitioner and
Yoro in undertaking the excavations. The findings of the trial court and the Court of Appeals on this point are in complete unison. Petitioner and Yoro were in
quest for hidden treasure26 and, undoubtedly, they were partners in this endeavor.

The Court of Appeals, in its Decision, held in part: “The basis of their solidarity is not the Memorandum of Agreement but the fact that they have become joint
tortfeasors. There is solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity.”

All the requisites of a quasi-delict are attendant in the instant case.

For the damage caused to respondent, petitioner and Yoro are jointly liable as they are joint tortfeasors. Verily, the responsibility of two or more persons who
are liable for a quasi-delict is solidary.
The heavy reliance of petitioner in paragraph 4 of the MOA cited earlier cannot steer him clear of any liability.

As a general rule, joint tortfeasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the
commission of a tort, or who approve of it after it is done, if done for their benefit. 29

Indubitably, petitioner and Yoro cooperated in committing the tort. They even had provisions in their MOA as to how they would divide the treasure if any is
found within or outside petitioner’s property line. Thus, the MOA, instead of exculpating petitioner from liability, is the very noose that insures that he be so
declared as liable.

The Court AFFIRMED the decision of the CA.

TOPIC: DISTINCTIONS (TORTS & QUASI-DELICTS)

19. CANGCO v. MANILA RAILROAD CO. (G.R. No. L-12191, October 14, 1918)

FACTS:

Jose Cangco, an employee of Manila Railroad Co., was taking his daily train ride to the company’s office in Manila. As the train slowed down, Cangco stepped off
but one or both his feet slipped on a sack of watermelons on the station’s platform. His body rolled from the platform and was drawn under the moving car,
where his right arm was crushed. The accident occurred between 7 and 8 pm, and since the station was dimly lit by a single light, objects on the platform were
difficult to see.

Cangco then instituted a case to recover damages in the CFI of Manila, founding his action on the negligence of Manila Railroad’s employees in placing the sacks
on the platform. The CFI held that although negligence was attributable to the defendant by reason of the fact that the sacks of melons were so placed as to
obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to use due caution in alighting from the coach and was therefore
precluded form recovering.

ISSUE:

WON the company is liable for damages.

RULING:

YES. It can not be doubted that the employees of the railroad company were guilty of negligence in piling the sacks on the platform. It is important to note that
the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered
arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance.
The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to provide safe means of entering and leaving
its trains. That duty, being contractual, was direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable
to defendant's servants.

The Court held that the conduct of Cangco in undertaking to alight while the train was yet slightly under way was not characterized by imprudence and that
therefore he was not guilty of contributory negligence. The decision of the CFI is REVERSED.

NOTES:

On the distinction between culpa contractual and culpa aquiliana (ex-contractual):

In his commentary on Art. 1903 of the old Civil Code, Manresa says that the liability arising from extra-contractual culpa is always based on a voluntary
act or omission which causes damage not through willful intent, but through mere negligence or inattention. Therefore, an act or omission may be voluntary but
not willful, that is, with intent to harm.

Culpa aquiliana can be further distinguished from culpa contractual in the following ways:
a. Source. Extra-contractual obligations have their source in those mutual duties which civilized society imposes upon its members, the breach of which
give rise to an obligation to indemnify the injured party. As such, in cases of culpa aquiliana it is the wrongful or negligent act or omission that creates
the vinculum juris, whereas in contractual relations the vinculum exists independently of the breach.
b. Burden of proof. In culpa aquiliana, where the plaintiff’s cause of action depends on a negligent act or omission, the burden of proof rests upon the
plaintiff to prove the negligence. On the other hand, since an obligation already exists in culpa contractual, mere proof of the contract and of its
nonperformance are sufficient prima facie for a recovery.
c. Defense of employer for negligence of employee. The presumption of negligence in Art. 1903 is rebuttable, and the employer is relieved of liability
upon proof that he has exercised due diligence in the selection and supervision of employees. However, the same does not apply in culpa contractual.

The Court also describes the fields of contractual and non-contractual obligations as “concentric”. That is to say, the fact that a person is bound to another by
contract does not relieve him from extra-contractual liability to the latter.

SPS. GUANIO v. MAKATI SHANGRI-LA HOTEL AND RESORT, INC. (G.R. No. 190601, Feb. 7, 2011)

FACTS:

Spouses Luigi Guanio and Anna Hernandez-Guanio booked at the Shangri-la Hotel Makati for their wedding reception. Prior to the event, they scheduled a food
tasting and forged their contract. During the reception, petitioners claim that there were poor services like delay in the service of meals and there were extra
charges not stipulated in the contract. Petitioners sent a letter-complaint to the respondent hotel and received an apologetic reply from its Executive Assistant
Manager. They nevertheless filed a complaint for breach of contract and damages before the RTC of Makati City. In its Answer, the respondent claimed that the
delay was occasioned by the sudden increase of guests as stated in the Banquet Event Order (BEO).
RTC rendered judgment in favor of petitioners relying heavily on the apologetic reply of the respondent which admits that the services were unacceptable and
definitely not up to their standards. The CA reversed the decision holding that the proximate cause of petitioners’ injury was an unexpected increase in their
guests.

ISSUE:

WON the doctrine of proximate cause is applicable in this case.

RULING:

NO. The Court finds that since petitioners’ complaint arose from a contract, the doctrine of proximate cause finds no application to it:

The doctrine of proximate cause is applicable only in actions for quasi-delicts, not in actions involving breach of contract. x x x The doctrine is a device for
imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is
a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate
the relation thus created.

What applies in the present case is Article 1170 of the Civil Code.

In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The
law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual
undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have
been lost or suffered xxx The effect of every infraction is to create a new duty, that is, to make RECOMPENSE to the one who has been injured by the failure of
another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence x x x or of the attendance
of fortuitous event, to excuse him from his ensuing liability.

The Court holds the respondent liable averring that they could have managed the “situation” better, it being held in high esteem in the hotel and service
industry and given its vast experience, it is safe to presume that this is not its first encounter with booked events exceeding the guaranteed cover.

AIR FRANCE v. RAFAEL CARRASCOSO and the CA (G.R. No. L-21438, Sep. 28, 1966)

FACTS:

Air France, through its authorized agent, Philippine Air Lines, Inc. issued to Carrascoso a "first class" round trip airplane ticket from Manila to Rome. From Manila
to Bangkok, Carrascoso travelled in "first class", but at Bangkok, the Manager of the petitioner airline forced Carrascoso to vacate the "first class" seat that he
was occupying because there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat, the
Carrascoso, as was to be expected, refused, and told the Manager that his seat would be taken over his dead body; a commotion ensued. When many of the
Filipino passengers got nervous, they came all across to Carrascoso and pacified him to give his seat to the white man.

The CFI of Manila held petitioner liable. The CA likewise affirmed the decision.

ISSUE:

Whether there is a breach of contract of carriage between Air France and Carrascoso that would hold the former liable for damages.

RULING:

YES. A contract to transport passengers is quite different in kind and degree from any other contractual relation. 43 And this, because of the relation which an air-
carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts 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.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any
rule or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier.

Although the relation of passenger and carrier is "contractual both in origin and nature" nevertheless "the act that breaks the contract may be also a tort".

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have said, is placed upon his wrongful expulsion.
This is a violation of public duty by the petitioner air carrier — a case of quasi-delict. Damages are proper.

The judgment of the CA is affirmed.

ORIENT FREIGHT INTERNATIONAL, INC. v. KEIHIN-EVERETT FORWARDING CO., INC. (G.R. No. 191937, Aug. 9, 2017)

FACTS:

Keihin-Everett filed a complaint, in its complaint Keihin-Everett alleged that Orient Freights “Misrepresentation, Malice, Negligence and Fraud” caused the
termination of it’s In- House Brokerage Service Agreement with Matsushita. The contract was terminated because Matsushita lost confidence at Keihin-Everett’s
handling of the incident. The incident was because of stolen truck filled with shipment video monitors and CCTV system owned by Matsushita and the missing 10
pallets of shipment’s 218 cartons, worth US $34,226.14 that arrived in Japan but Orient Freight claimed that the incident simply involved the breakdown and
towing of the truck. Orient Freight also failed to properly investigate in this incident when they being directed to do so Keihin-Everett demanded P 2.5 million as
indemnity for lost income, but Orient Freight refuse to pay. The Regional Trial Court Rendered its decision in favor of Keihin-Everett. It found that Orient Freight
was “Negligent in failing to investigate properly the incident and make a factual report to Keihin and Matsushita” despite having enough time to properly
investigate the incident. The Court of Appeals ruled that the oral and documentary evidence has established both the damage suffered by Keihin-Everett and
Orient Freight’s fault or negligence.

ISSUE:

Whether or not Orient Freight was negligent for failing to disclose the facts surrounding the hijacking incident.

RULING:

Negligence may either result in culpa aquiliana or culpa contractual.[46] Culpa aquiliana is the "the wrongful or negligent act or omission which creates a vinculum
juris and gives rise to an obligation between two persons not formally bound by any other obligation," [47] and is governed by Article 2176 of the Civil Code.

Negligence in culpa contractual, on the other hand, is "the fault or negligence incident in the performance of an obligation which already-existed, and which
increases the liability from such already existing obligation."[48] This is governed by Articles 1170 to 1174 of the Civil Code.

Actions based on contractual negligence and actions based on quasi-delicts differ in terms of conditions, defenses, and proof. They generally cannot co-exist.
[50]
Once a breach of contract is proved, the defendant is presumed negligent and must prove not being at fault. In a quasi-delict, however, the complaining party
has the burden of proving the other party's negligence.

Both the Regional Trial Court and Court of Appeals erred in finding petitioner's negligence of its obligation to report to be an action based on a quasi-delict
Petitioner's negligence did not create the vinculum juris or legal relationship with the respondent, which would have otherwise given rise to a quasi-delict.
Petitioner's duty to respondent existed prior to its negligent act. When respondent contacted petitioner regarding the news report and asked it to investigate
the incident, petitioner's obligation was created. Thereafter, petitioner was alleged to have performed its obligation negligently, causing damage to respondent.
The doctrine "the act that breaks the contract may also be a tort," on which the lower courts relied, is inapplicable here. Petitioner's negligence, arising as it does
from its performance of its obligation to respondent, is dependent on this obligation. Neither do the facts show that Article 21 of the Civil Code applies, there
being no finding that petitioner's act was a conscious one to cause harm, or be of such a degree as to approximate fraud or bad faith:

To be sure, there was inaction on the part of the defendant which caused damage to the plaintiff, but there is nothing to show that the defendant intended to
conceal the truth or to avoid liability. When the facts became apparent to defendant, the latter readily apologized to Keihin and Matsushita for their mistake. [76]
Consequently, Articles 1170, 1172, and 1173 of the Civil Code on negligence in the performance of an obligation should apply.

FABRE v. CA, et al. (G.R. No. 111127, July 26, 1996)

FACTS:
Petitioner Fabre and his wife were the owners of 1982 model Mazda minibus. They were using the said vehicle as a school bus service for children in Manila.
They hired Cabil as their driver. On November 2, 1982, private respondent Word for the World Christian Fellowship (WWCF) arranged with petitioners for the
transportation of members of young adult ministry from Manila to La Union and back. While travelling, they met an accident. The bus hit a fence and a coconut
tree that caused passengers to be injured including respondent Antonio. The WWCF and Antonio then filed a criminal complaint against the driver, the trial court
decided in favor of respondents. All evidence presented showed the negligence of the defendants ultimately resulted to the accident. The Court of Appeals
affirmed the decision of the Trial Court. Hence this petition.

ISSUE:

Whether or not the petitioners are liable for the injuries suffered by the respondents based on culpa contractual and/or culpa aquiliana.

RULING:
The Court ruled that damages should be awarded based on the theory that petitioners are liable for breach of contract of carriage or culpa contractual or on the
theory of quasi delict or culpa aquiliana holding that the relation of passenger and carrier is “contractual both in origin and nature,” nevertheless “the act that
breaks the contract may be also a tort. In both sources of obligation, the existence of negligence of petitioners must be determined. In this case, Cabil drove his
bus negligently, while his employer, the Fabres, who owned the bus, failed to exercise the diligence of a good father of the family in the selection and
supervision of their employee is fully supported by the evidence on record. Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the
presumption that his employers, the Fabres, were themselves negligent in the selection and supervision of their employee. Thus, the finding of the Court that
petitioners are liable under Arts. 2176 and 2180 for quasi delict fully justify that they are guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759
of the Civil Code.