Obli - Cases.codal Provisions

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ALLy CrlsosLomo urlbe

ulvlna Cracla MaLlenzo Maramba
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C8LIGA1ICNS

A IN GLNLkAL

1 ueflnlLlon ArL 1136

4rt 115 Ao obllqotloo ls o jotlJlcol oecesslty to qlve to Jo ot oot to Jo (o)

2 klnds of CbllgaLlon as Lo 8asls and LnforceablllLy ArLs 14231430 ArLs 11391133

4rt 142l Obllqotloos ote clvll ot oototol clvll obllqotloos qlve o tlqbt of octloo to compel tbelt
petfotmooce Nototol obllqotloos oot beloq boseJ oo posltlve low bot oo epolty ooJ oototol low Jo oot
qtoot o tlqbt of octloo to eofotce tbelt petfotmooce bot oftet voloototy folflllmeot by tbe obllqot tbey
ootbotlze tbe teteotloo of wbot bos beeo JellveteJ ot teoJeteJ by teosoo tbeteof 5ome oototol
obllqotloos ote set fottb lo tbe followloq ottlcles
4rt 1424 wbeo o tlqbt to soe opoo o clvll obllqotloo bos lopseJ by extloctlve ptesctlptloo tbe obllqot wbo
voloototlly petfotms tbe coottoct coooot tecovet wbot be bos JellveteJ ot tbe voloe of tbe setvlce be bos
teoJeteJ
4rt 1425 wbeo wltboot tbe koowleJqe ot oqolost tbe wlll of tbe Jebtot o tbltJ petsoo poys o Jebt wblcb
tbe obllqot ls oot leqolly boooJ to poy becoose tbe octloo tbeteoo bos ptesctlbeJ bot tbe Jebtot lotet
voloototlly telmbotses tbe tbltJ petsoo tbe obllqot coooot tecovet wbot be bos polJ
4rt 142 wbeo o mloot betweeo elqbteeo ooJ tweotyooe yeots of oqe wbo bos eoteteJ loto o coottoct
wltboot tbe cooseot of tbe poteot ot qootJloo oftet tbe oooolmeot of tbe coottoct voloototlly tetotos tbe
wbole tbloq ot ptlce tecelveJ ootwltbstooJloq tbe foct tbe be bos oot beeo beoeflteJ tbeteby tbete ls oo
tlqbt to JemooJ tbe tbloq ot ptlce tbos tetotoeJ
4rt 1427 wbeo o mloot betweeo elqbteeo ooJ tweotyooe yeots of oqe wbo bos eoteteJ loto o coottoct
wltboot tbe cooseot of tbe poteot ot qootJloo voloototlly poys o som of mooey ot Jellvets o fooqlble tbloq
lo folflllmeot of tbe obllqotloo tbete sboll be oo tlqbt to tecovet tbe some ftom tbe obllqee wbo bos speot
ot coosomeJ lt lo qooJ foltb (1160A)
4rt 1428 wbeo oftet oo octloo to eofotce o clvll obllqotloo bos folleJ tbe JefeoJoot voloototlly petfotms
tbe obllqotloo be coooot JemooJ tbe tetoto of wbot be bos JellveteJ ot tbe poymeot of tbe voloe of tbe
setvlce be bos teoJeteJ
4rt 1429 wbeo o testote ot lotestote belt voloototlly poys o Jebt of tbe JeceJeot exceeJloq tbe voloe of
tbe ptopetty wblcb be tecelveJ by wlll ot by tbe low of lotestocy ftom tbe estote of tbe JeceoseJ tbe
poymeot ls vollJ ooJ coooot be tescloJeJ by tbe poyet

4rt 14l0 wbeo o wlll ls JecloteJ volJ becoose lt bos oot beeo execoteJ lo occotJooce wltb tbe fotmolltles
tepolteJ by low bot ooe of tbe lotestote belts oftet tbe settlemeot of tbe Jebts of tbe JeceoseJ poys o
leqocy lo compllooce wltb o cloose lo tbe Jefectlve wlll tbe poymeot ls effectlve ooJ lttevocoble

4rt 11l9 Actloos ptesctlbe by tbe mete lopse of tlme flxeJ by low (1961)

4rt 1140 Actloos to tecovet movobles sboll ptesctlbe elqbt yeots ftom tbe tlme tbe possessloo tbeteof ls
lost ooless tbe possessot bos ocpolteJ tbe owoetsblp by ptesctlptloo fot o less petloJ occotJloq to Attlcles
11J2 ooJ wltboot ptejoJlce to tbe ptovlsloos of Attlcles 559 1505 ooJ 11JJ (1962o)

Art 1141 8eal acLlons over lmmovables prescrlbe afLer LhlrLy years
1hls provlslon ls wlLhouL pre[udlce Lo whaL ls esLabllshed for Lhe acqulslLlon of ownershlp and oLher real
rlghLs by prescrlpLlon (1963)

4rt 1142 A mottqoqe octloo ptesctlbes oftet teo yeots (1964o)

4rt 114l 1be followloq tlqbts omooq otbets speclfleJ elsewbete lo tbls coJe ote oot extloqolsbeJ by
ptesctlptloo
1 1o JemooJ o tlqbt of woy teqoloteJ lo Attlcle 649
2 1o btloq oo octloo to obote o pobllc ot ptlvote oolsooce (o)
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4rt 1144 1be followloq octloos most be btooqbt wltblo teo yeots ftom tbe tlme tbe tlqbt of octloo
occtoes
1 Dpoo o wtltteo coottoct
2 Dpoo oo obllqotloo cteoteJ by low
J Dpoo o joJqmeot (o)

4rt 1145 1be followloq octloos most be commeoceJ wltblo slx yeots
1 Dpoo oo otol coottoct
2 Dpoo o pooslcoottoct (o)

4rt 114 1be followloq octloos most be lostltoteJ wltblo foot yeots
1 Dpoo oo lojoty to tbe tlqbts of tbe plolotlff
2 Dpoo o pooslJellct

nowevet wbeo tbe octloo otlses ftom ot oot of ooy oct octlvlty ot cooJoct of ooy pobllc offlcet lovolvloq
tbe exetclse of powets ot ootbotlty otlsloq ftom Mottlol low locloJloq tbe ottest Jeteotloo ooJ/ot ttlol of
tbe plolotlff tbe some most be btooqbt wltblo ooe (1) yeot (As omeoJeJ by lu No 1755 uec 24 1980)

4rt 1147 1be followloq octloos most be flleJ wltblo ooe yeot
1 ot fotclble eotty ooJ Jetoloet
2 ot Jefomotloo (o)

4rt 1148 1be llmltotloos of octloo meotlooeJ lo Attlcles 1140 to 1142 ooJ 1144 to 1147 ote wltboot
ptejoJlce to tbose speclfleJ lo otbet potts of tbls coJe lo tbe coJe of commetce ooJ lo speclol lows (o)

4rt 1149 All otbet octloos wbose petloJs ote oot flxeJ lo tbls coJe ot lo otbet lows most be btooqbt
wltblo flve yeots ftom tbe tlme tbe tlqbt of octloo occtoes (o)

4rt 1150 1be tlme fot ptesctlptloo fot oll kloJs of octloos wbeo tbete ls oo speclol ptovlsloo wblcb
otJolos otbetwlse sboll be coooteJ ftom tbe Joy tbey moy be btooqbt (1969)

4rt 1151 1be tlme fot tbe ptesctlptloo of octloos wblcb bove fot tbelt object tbe eofotcemeot of
obllqotloos to poy ptloclpol wltb lotetest ot oooolty toos ftom tbe lost poymeot of tbe oooolty ot of tbe
lotetest (1970o)

4rt 1152 1be petloJ fot ptesctlptloo of octloos to JemooJ tbe folflllmeot of obllqotloo JecloteJ by o
joJqmeot commeoces ftom tbe tlme tbe joJqmeot become flool (1971)

4rt 115l 1be petloJ fot ptesctlptloo of octloos to JemooJ occoootloq toos ftom tbe Joy tbe petsoos wbo
sboolJ teoJet tbe some ceose lo tbelt fooctloos

1be petloJ fot tbe octloo otlsloq ftom tbe tesolt of tbe occoootloq toos ftom tbe Jote wbeo solJ tesolt wos
tecoqolzeJ by oqteemeot of tbe lotetesteJ pottles (1972)

4rt 1154 1be petloJ Jotloq wblcb tbe obllqee wos pteveoteJ by o fottoltoos eveot ftom eofotcloq bls
tlqbt ls oot teckooeJ oqolost blm (o)

4rt 1155 1be ptesctlptloo of octloos ls lotettopteJ wbeo tbey ote flleJ befote tbe coott wbeo tbete ls o
wtltteo exttojoJlclol JemooJ by tbe cteJltots ooJ wbeo tbete ls ooy wtltteo ockoowleJqmeot of tbe Jebt
by tbe Jebtot (197Jo)

Gk No L47362 December 19 1940
IUAN I VILLAkkCLL vs 8LkNAkDINC LS1kADA

NA1UkL

eLlLlon Lo revlew Lhe declslon of Lhe Cll

IAC1S

Cn May 9 1912 Alexander l Callao moLher of !uan l vlllarroel obLalned from Lhe spouses Marlano LsLrada and
Severlna debL of 1000 payable afLer seven years Ale[andra passed away leavlng vlllaroel as sole helr 1he
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spouses Marlano LsLrada and Severlna also passed away leavlng 8ernardlno LsLrada as sole helr Cn AugusL 9
1930 vlllaroel gave a documenL Lo LsLrada ln whlch he declared ln owlng Lhe amounL of 1000 wlLh an lnLeresL
of 12 percenL per year 1hls acLlon Lurns on Lhe collecLlon of Lhls amounL 1he CourL of llrsL lnsLance of Lagoon
ln as lnLerposed Lhls acLlon and declded for vlllaroel Lo pay Lhe amounL demanded of 1000 wlLh lLs legal
lnLeresLs of 12percenL from AugusL 9 1930 Lo lLs compleLe paymenL vlllaroel appealed

ISSUL

WCn vlllaroel should pay Lhe amounL desplLe Lhe prescrlpLlon of Lhe orlglnal debL

nLLD

1he presenL acLlon ls noL based on Lhe orlglnal obllgaLlon conLracLed by Lhe moLher vlllaroel whlch has prescrlbed
buL on LhaL whlch he conLracLed on AugusL9 1930 when assumlng Lhe fulflllmenL of LhaL obllgaLlon 8elng Lhe sole
helr of Lhe lndebLed one wlLh rlghL her lnherlLance LhaL debL whlch was conLracLed by hls moLher legally
alLhough no longer effecLlve by prescrlpLlon now ls neverLheless a moral obllgaLlon 1haL conslderaLlon ls
sufflclenL Lo creaLe and Lo make hls obllgaLlon volunLarlly conLracLed effecLlve AugusL of 1930 1he rule ln whlch a
new promlse Lo pay a prescrlbed debL musL be done only by Lhe same person or anoLher who ls legally auLhorlzed
by her ls noL appllcable Lo Lhe presenL case because vlllaroel volunLarlly wanLed Lo assume Lhls obllgaLlon

ulsposlLlon

1he appealed senLence ls conflrmed wlLh cosLs Lo Lhe apellanL

Gk No L13667 Apr|| 29 1960
kIMI1IVC ANSA L1C L1 AL vs 1nL 8CAkD CI DIkLC1CkS CI 1nL NA1ICNAL DLVLLCMLN1 CCMAN L1
AL

NA1UkL

IAC1S

Cn !uly 23 1936 rlmlLlvo Ansay eL al flled agalnsL appellees ln Lhe CourL of llrsL lnsLance of Manlla a complalnL
praylng for a 20 ChrlsLmas bonus for Lhe years 1934 and 1933 1he courL o poo dlsmlss Lhe complalnL based on
Lhe followlng conslderaLlons

1 conslderlng LhaL Lhe acLlon ln brlef ls one Lo compel respondenLs Lo declare a ChrlsLmas bonus for
peLlLloners workers ln Lhe naLlonal uevelopmenL Company
2 conslderlng LhaL Lhe CourL does noL see how peLlLloners may have a cause of acLlon Lo secure such bonus
because
a A bonus ls an acL of llberallLy and Lhe courL Lakes lL LhaL lL ls noL wlLhln lLs [udlclal powers Lo
command respondenLs Lo be llberal
b eLlLloners admlL LhaL respondenLs are noL under legal duLy Lo glve such bonus buL LhaL Lhey had only
ask LhaL such bonus be glven Lo Lhem because lL ls a moral obllgaLlon of respondenLs Lo glve LhaL buL
as Lhls CourL undersLands lL has no power Lo compel a parLy Lo comply wlLh a moral obllgaLlon (ArL
142 new Clvll Code)

ln vlLW WPL8LCl dlsmlssed no pronouncemenL as Lo cosLs

lssue

WheLher or noL a clalm may be enforced based on moral grounds

AppellanLs conLend LhaL Lhere exlsLs a cause of acLlon ln Lhelr complalnL because Lhelr clalm resLs onmoral grounds
or whaL ln brlef ls deflned by law as anaLural obllgaLlon PLLu1 nA1u8AL C8LlCA1lCnS LLLMLn1
ClvCLun1A8? luLllLLMLn1 WPLn 8L1Ln1lCn CAn 8LC8uL8Lu r An elemenL of naLural obllgaLlon before
lLcan be cognlzable by Lhe courL ls volunLary fulflllmenLby Lhe obllgor 8eLenLlon can be ordered only afLerLhere
has been volunLary performance2 lu 8CnuS nC1 uLMAnuA8LL AnuLnlC8CLA8LL LxCL1lCn r A bonus ls
noL ademandable and enforceable obllgaLlon excepL when lLls made a parL of Lhe wage or salary
compensaLlon(hlllpplne LducaLlon Co vs Cl8 and Lhe unlon of hlllpplne LducaLlon Co Lmployees (nLu) 92
hll 38148 Cff Caz 3278) Pence Lhe granL Lhereof does noLgenerally consLlLuLe a naLural obllgaLlon on Lhe parL
of Lhe company Slnce appellanLs admlL LhaL appellees are noL underlegal obllgaLlon Lo glve such clalmed bonus
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LhaL LhegranL arlses only from a moral obllgaLlon or Lhe naLuralobllgaLlon LhaL Lhey dlscussed ln Lhelr brlef Lhls
CourLfeels lL urgenL Lo reproduce aL Lhls polnL Lhe deflnlLlonand meanlng of naLural obllgaLlon ArLlcle 1423 of Lhe
new Clvll Code classlfles obllgaLlonslnLo clvll or naLural Clvll obllgaLlons are a rlghL of acLlon Lo compel Lhelr
performance naLuralobllgaLlons noL belng based on poslLlve law buL onequlLy and naLural law do noL granL a
rlghL of acLlon Loenforce Lhelr performance buL afLer volunLaryfulflllmenL by Lhe obllgor Lhey auLhorlze Lhe
reLenLlonof whaL has been dellvered or rendered by reasonLhereof lL ls Lhus readlly seen LhaL an elemenL of
naLuralobllgaLlon before lL can be cognlzable by Lhe courL lsvolunLary fulflllmenL by Lhe obllgor CerLalnly
reLenLloncan be ordered buL only afLer Lhere has been volunLaryperformance 8uL here Lhere has been no
volunLaryperformance ln facL Lhe courL cannoL order Lheperformance AL Lhls polnL we would llke Lo relLeraLe
whaL we sald lnLhe case of hlllpplne LducaLlon Co vs Cl8 and Lhe unlon of hlllpplne LducaLlon Co Lmployees
(nuL) (92hll 381 48 Cff Caz 3278) rlrom Lhe legal polnL of vlew a bonus ls noL ademandable and enforceable
obllgaLlon lL ls so when lLls made a parL of Lhe wage or salary compensaLlonAnd whlle lL ls Lrue LhaL Lhe
subsequenL case of P LPeacock vs naLlonal Labor unlon eL al 93 hll 33330 Cff Caz 4233 we sLaLed LhaL
Lven lf a bonus ls noL demandable for noL formlng parLof Lhe wage salary or compensaLlon of an employeeLhe
same may neverLheless be granLed on equlLableconslderaLlon as when lL was glven ln Lhe pasL LhoughwlLhheld ln
succeedlng Lwo years from low salarledemployees due Lo salary lncreases sLlll Lhe facLs ln sald Peacock case are
noL Lhe same as lnLhe lnsLanL one and hence Lhe rullng applled ln saldcase cannoL be consldered ln Lhe presenL
acLlonremlses consldered Lhe order appealed from ls herebyafflrmed wlLhouL pronouncemenL as Lo cosLs

Cn !uly 23 1936 appellanLs flled agalnsL appellees ln Lhe CourL of llrsL lnsLance of Manlla a complalnL praylng for
a 20 ChrlsLmas bonus for Lhe years 1934 and 1933 1he courL o poo on appellees moLlon Lo dlsmlss lssued Lhe
followlng order

Conslderlng Lhe moLlon Lo dlsmlss flled on 13 AugusL 1936 seL for Lhls mornlng conslderlng LhaL aL Lhe hearlng
Lhereof only respondenLs appeared Lhru counsel and Lhere was no appearance for Lhe plalnLlffs alLhough Lhe
courL walLed for someLlme for Lhem conslderlng however LhaL peLlLloners have submlLLed an opposlLlon whlch
Lhe courL wlll conslder LogeLher wlLh Lhe argumenLs presenLed by respondenLs and Lhe LxhlblLs marked and
presenLed namely LxhlblLs 1 Lo 3 aL Lhe hearlng of Lhe moLlon Lo dlsmlss conslderlng LhaL Lhe acLlon ln brlef ls
one Lo compel respondenLs Lo declare a ChrlsLmas bonus for peLlLloners workers ln Lhe naLlonal uevelopmenL
Company conslderlng LhaL Lhe CourL does noL see how peLlLloners may have a cause of acLlon Lo secure such
bonus because
(o) A bonus ls an acL of llberallLy and Lhe courL Lakes lL LhaL lL ls noL wlLhln lLs [udlclal powers Lo command
respondenLs Lo be llberal
(b) eLlLloners admlL LhaL respondenLs are noL under legal duLy Lo glve such bonus buL LhaL Lhey had only ask LhaL
such bonus be glven Lo Lhem because lL ls a moral obllgaLlon of respondenLs Lo glve LhaL buL as Lhls CourL
undersLands lL has no power Lo compel a parLy Lo comply wlLh a moral obllgaLlon (ArL 142 new Clvll Code)

ln vlLW WPL8LCl dlsmlssed no pronouncemenL as Lo cosLs
A moLlon for reconslderaLlon of Lhe aforequoLed order was denled Pence Lhls appeal
AppellanLs conLend LhaL Lhere exlsLs a cause of acLlon ln Lhelr complalnL because Lhelr clalm resLs on moral
grounds or whaL ln brlef ls deflned by law as a naLural obllgaLlon

Slnce appellanLs admlL LhaL appellees are noL under legal obllgaLlon Lo glve such clalmed bonus LhaL Lhe granL
arlses only from a moral obllgaLlon or Lhe naLural obllgaLlon LhaL Lhey dlscussed ln Lhelr brlef Lhls CourL feels lL
urgenL Lo reproduce aL Lhls polnL Lhe deflnlLlon and meanlng of naLural obllgaLlon

ArLlcle 1423 of Lhe new Clvll Code classlfles obllgaLlons lnLo clvll or naLural Clvll obllgaLlons are a rlghL of acLlon Lo
compel Lhelr performance naLural obllgaLlons noL belng based on poslLlve law buL on equlLy and naLural law do
noL granL a rlghL of acLlon Lo enforce Lhelr performance buL afLer volunLary fulflllmenL by Lhe obllgor Lhey
auLhorlze Lhe reLenLlon of whaL has been dellvered or rendered by reason Lhereof

lL ls Lhus readlly seen LhaL an elemenL of naLural obllgaLlon before lL can be cognlzable by Lhe courL ls volunLary
fulflllmenL by Lhe obllgor CerLalnly reLenLlon can be ordered buL only afLer Lhere has been volunLary performance
8uL here Lhere has been no volunLary performance ln facL Lhe courL cannoL order Lhe performance

AL Lhls polnL we would llke Lo relLeraLe whaL we sald ln Lhe case of hlllpplne LducaLlon Co vs Cl8 and Lhe unlon
of hlllpplne LducaLlon Co Lmployees (nuL) (92 hll 381 48 Cff Caz 3278)
x x x x x x x x x
lrom Lhe legal polnL of vlew a bonus ls noL a demandable and enforceable obllgaLlon lL ls so when lL ls made a parL
of Lhe wage or salary compensaLlon
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And whlle lL ls Lrue LhaL Lhe subsequenL case of P L Peacock vs naLlonal Labor unlon eL al 93 hll 333 30 Cff
Caz 4233 we sLaLed LhaL

Lven lf a bonus ls noL demandable for noL formlng parL of Lhe wage salary or compensaLlon of an employee Lhe
same may neverLheless be granLed on equlLable conslderaLlon as when lL was glven ln Lhe pasL Lhough wlLhheld
ln succeedlng Lwo years from low salarled employees due Lo salary lncreases
sLlll Lhe facLs ln sald Peacock case are noL Lhe same as ln Lhe lnsLanL one and hence Lhe rullng applled ln sald case
cannoL be consldered ln Lhe presenL acLlon

remlses consldered Lhe order appealed from ls hereby afflrmed wlLhouL pronouncemenL as Lo cosLs
8eoqzoo loJlllo Mootemoyot 8ootlsto Aoqelo lobtoJot coocepcloo oJeoclo 8otteto ooJ Cotlettez uovlJ II
concur

8epubllc of Lhe hlllpplnes
SUkLML CCUk1
Manlla
ll8S1 ulvlSlCn
Gk No L48889 May 11 1989
DLVLLCMLN1 8ANk CI 1nL nILIINLS (D8) peLlLloner
vs
1nL nCNCkA8LL MIDAIN1AC L ADIL Iudge of the Second 8ranch of the Court of I|rst Instance of I|o||o and
SCUSLS A1kICIC CCNILSCk and ICVI1A VILLAIULk1L respondenLs

GANCACC
1he lssue posed ln Lhls peLlLlon for revlew on cerLlorarl ls Lhe valldlLy of a promlssory noLe whlch was execuLed ln
conslderaLlon of a prevlous promlssory noLe Lhe enforcemenL of whlch had been barred by prescrlpLlon
Cn lebruary 10 1940 spouses aLrlclo Confesor and !ovlLa vlllafuerLe obLalned an agrlculLural loan from Lhe
AgrlculLural and lndusLrlal 8ank (Al8) now Lhe uevelopmenL of Lhe hlllpplnes (u8) ln Lhe sum of 200000
hlllpplne Currency as evldenced by a promlssory noLe of sald daLe whereby Lhey bound Lhemselves [olnLly and
severally Lo pay Lhe accounL ln Len (10) equal yearly amorLlzaLlons As Lhe obllgaLlon remalned ouLsLandlng and
unpald even afLer Lhe lapse of Lhe aforesald Lenyear perlod Confesor who was by Lhen a member of Lhe Congress
of Lhe hlllpplnes execuLed a second promlssory noLe on Aprll 11 1961 expressly acknowledglng sald loan and
promlslng Lo pay Lhe same on or before !une 13 1961 1he new promlssory noLe reads as follows
l hereby promlse Lo pay Lhe amounL covered by my promlssory noLe on or before !une 13 1961 upon my fallure
Lo do so l hereby agree Lo Lhe foreclosure of my morLgage lL ls undersLood LhaL lf l can secure a cerLlflcaLe of
lndebLedness from Lhe governmenL of my back pay l wlll be allowed Lo pay Lhe amounL ouL of lL
Sald spouses noL havlng pald Lhe obllgaLlon on Lhe speclfled daLe Lhe u8 flled a complalnL daLed SepLember 11
1970 ln Lhe ClLy CourL of llollo ClLy agalnsL Lhe spouses for Lhe paymenL of Lhe loan
AfLer Lrlal on Lhe merlLs a declslon was rendered by Lhe lnferlor courL on uecember 27 1976 Lhe dlsposlLlve parL
of whlch reads as follows
WPL8LlC8L premlses consldered Lhls CourL renders [udgmenL orderlng Lhe defendanLs aLrlclo Confesor and
!ovlLa vlllafuerLe Confesor Lo pay Lhe plalnLlff uevelopmenL 8ank of Lhe hlllpplnes [olnLly and severally (a) Lhe
sum of 376096 plus addlLlonal dally lnLeresL of l04 from SepLember 17 1970 Lhe daLe ComplalnL was flled
unLll sald amounL ls pald (b) Lhe sum of 37600 equlvalenL Lo Len (10) of Lhe LoLal clalm by way of aLLorneys
fees and lncldenLal expenses plus lnLeresL aL Lhe legal raLe as of SepLember 171970 unLll fully pald and (c) Lhe
cosLs of Lhe sulL
uefendanLsspouses appealed Lherefrom Lo Lhe CourL of llrsL lnsLance of llollo whereln ln due course a declslon
was rendered on Aprll 28 1978 reverslng Lhe appealed declslon and dlsmlsslng Lhe complalnL and counLerclalm
wlLh cosLs agalnsL Lhe plalnLlff
A moLlon for reconslderaLlon of sald declslon flled by plalnLlff was denled ln an order of AugusL 10 1978 Pence
Lhls peLlLlon whereln peLlLloner alleges LhaL Lhe declslon of respondenL [udge ls conLrary Lo law and runs counLer
Lo declslons of Lhls CourL when respondenL [udge (a) refused Lo recognlze Lhe law LhaL Lhe rlghL Lo prescrlpLlon
may be renounced or walved and (b) LhaL ln slgnlng Lhe second promlssory noLe respondenL aLrlclo Confesor can
blnd Lhe con[ugal parLnershlp or oLherwlse sald respondenL became llable ln hls personal capaclLy 1he peLlLlon ls
lmpressed wlLh merlL 1he rlghL Lo prescrlpLlon may be walved or renounced ArLlcle 1112 of Clvll Code provldes
ArL 1112 ersons wlLh capaclLy Lo allenaLe properLy may renounce prescrlpLlon already obLalned buL noL Lhe
rlghL Lo prescrlbe ln Lhe fuLure
rescrlpLlon ls deemed Lo have been LaclLly renounced when Lhe renunclaLlon resulLs from acLs whlch lmply Lhe
abandonmenL of Lhe rlghL acqulred
1here ls no doubL LhaL prescrlpLlon has seL ln as Lo Lhe flrsL promlssory noLe of lebruary 10 1940 Powever when
respondenL Confesor execuLed Lhe second promlssory noLe on Aprll 11 1961 whereby he promlsed Lo pay Lhe
amounL covered by Lhe prevlous promlssory noLe on or before !une 13 1961 and upon fallure Lo do so agreed Lo
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Lhe foreclosure of Lhe morLgage sald respondenL Lhereby effecLlvely and expressly renounced and walved hls rlghL
Lo Lhe prescrlpLlon of Lhe acLlon coverlng Lhe flrsL promlssory noLe
1hls CourL had ruled ln a slmllar case LhaL
when a debL ls already barred by prescrlpLlon lL cannoL be enforced by Lhe credlLor 8uL a new conLracL
recognlzlng and assumlng Lhe prescrlbed debL would be valld and enforceable
1

1hus lL has been held
Where Lherefore a parLy acknowledges Lhe correcLness of a debL and promlses Lo pay lL afLer Lhe same has
prescrlbed and wlLh full knowledge of Lhe prescrlpLlon he Lhereby walves Lhe beneflL of prescrlpLlon
2

1hls ls noL a mere case of acknowledgmenL of a debL LhaL has prescrlbed buL a new promlse Lo pay Lhe debL 1he
conslderaLlon of Lhe new promlssory noLe ls Lhe preexlsLlng obllgaLlon under Lhe flrsL promlssory noLe 1he
sLaLuLory llmlLaLlon bars Lhe remedy buL does noL dlscharge Lhe debL
A new express promlse Lo pay a debL barred wlll Lake Lhe case from Lhe operaLlon of Lhe sLaLuLe of llmlLaLlons as
Lhls proceeds upon Lhe ground LhaL as a sLaLuLory llmlLaLlon merely bars Lhe remedy and does noL dlscharge Lhe
debL Lhere ls someLhlng more Lhan a mere moral obllgaLlon Lo supporL a promlse Lo wlL a preexlsLlng debL
whlch ls a sufflclenL conslderaLlon for Lhe new Lhe new promlse upon Lhls sufflclenL conslderaLlon consLlLuLes ln
facL a new cause of acLlon
3

lL ls Lhls new promlse elLher made ln express Lerms or deduced from an acknowledgemenL as a legal
lmpllcaLlon whlch ls Lo be regarded as reanlmaLlng Lhe old promlse or as lmparLlng vlLallLy Lo Lhe remedy (whlch
by lapse of Llme had become exLlncL) and Lhus enabllng Lhe credlLor Lo recover upon hls orlglnal conLracL
4

Powever Lhe courL o poo held LhaL ln slgnlng Lhe promlssory noLe alone respondenL Confesor cannoL Lhereby
blnd hls wlfe respondenL !ovlLa vlllafuerLe clLlng ArLlcle 166 of Lhe new Clvll Code whlch provldes
ArL 166 unless Lhe wlfe has been declared a ooo compos meotls or a spend LhrlfL or ls under clvll lnLerdlcLlon or ls
conflned ln a leprosarlum Lhe husband cannoL allenaLe or encumber any real properLy of Lhe con[ugal parLnershlp
wlLhouL Lhe wlfes consenL lf she ay compel her Lo refuses unreasonably Lo glve her consenL Lhe courL m granL
Lhe same
We dlsagree under ArLlcle 163 of Lhe Clvll Code Lhe husband ls Lhe admlnlsLraLor of Lhe con[ugal parLnershlp As
such admlnlsLraLor all debLs and obllgaLlons conLracLed by Lhe husband for Lhe beneflL of Lhe con[ugal parLnershlp
are chargeable Lo Lhe con[ugal parLnershlp
no doubL ln Lhls case respondenL Confesor slgned Lhe second

promlssory noLe for Lhe beneflL of Lhe con[ugal parLnershlp Pence Lhe con[ugal parLnershlp ls llable for Lhls
obllgaLlon
WPL8LlC8L Lhe declslon sub[ecL of Lhe peLlLlon ls reversed and seL aslde and anoLher declslon ls hereby rendered
relnsLaLlng Lhe declslon of Lhe ClLy CourL of llollo ClLy of uecember 27 1976 wlLhouL pronouncemenL as Lo cosLs ln
Lhls lnsLance 1hls declslon ls lmmedlaLely execuLory and no moLlon for exLenslon of Llme Lo flle moLlon for
reconslderaLlon shall be granLed
SC C8uL8Lu
Notvoso ooJ ctoz II coocot
CtloApoloo I took oo pott

Iootnotes
1 vlllaroel vs LsLrada 71 hll 140
2 1auch vs Condram 20 Labor Ann 136 clLed on page 7 vol 4 1olenLlnos new Clvll Code of Lhe hlllpplnes
3 !ohnsons vs Lvaslons 30 Am uec 669
4 MaLLlngly vs 8oyd 20 Pow (uS) 128 13 Led 843 SL !ohn vs Carrow 4 orL (Ala) 223 29 Am uec 280
Amerlcan !urlsprudence vol 34 page 233 (SLaLuLe of LlmlLaLlons)
3 ArLlcle 161(l) Clvll Code

3 LlemenLs of obllgaLlons
a AcLlve sub[ecL one who has Lhe rlghL and power Lo demand Lhe presLaLlon (obllge or credlLor)
b asslve sub[ecL one who ls bound Lo perform Lhe presLaLlon (obllgor or debLor)
c Cb[ecL or presLaLlon
d vlnculum [urls [urldlcal Lle Lhe efflclenL cause LhaL blnds Lhe Lwo sub[ecLs by reason of whlch Lhe
debLor ls bound ln favor of Lhe credlLor Lo perform Lhe presLaLlon

A Sources of CbllgaLlon ArL 1137
ArL 1137 CbllgaLlons arlse from
(1) Law
(2) ConLracLs
(3) CuaslconLracLs
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(4) AcLs or omlsslons punlshed by law and
(3) CuasldellcLs

1 Law ArL 1138
ArL 1138 CbllgaLlons derlved from law are noL presumed Cnly Lhose expressly deLermlned ln Lhls
Code or ln speclal laws are demandable and shall be regulaLed by Lhe precepLs of Lhe law whlch
esLabllshes Lhem and as Lo whaL has noL been foreseen by Lhe provlslons of Lhls 8ook
2 ConLracLs ArLs 1139 1303
ArL 1139 CbllgaLlons arlslng from conLracLs have Lhe force of law beLween Lhe conLracLlng parLles
and should be complled wlLh ln good falLh

ArL 1303 A conLracL ls a meeLlng of mlnds beLween Lwo persons whereby one blnds hlmself wlLh
respecL Lo Lhe oLher Lo glve someLhlng or Lo render some servlce (1234a)

3 Cuasl conLracLs ArLs 1160 21422173
ArL 1160 CbllgaLlons derlved from quaslconLracLs shall be sub[ecL Lo Lhe provlslons of ChapLer 1 1lLle xvll of Lhls
8ook
ArL 2142 CerLaln lawful volunLary and unllaLeral acLs glve rlse Lo Lhe [urldlcal relaLlon of quaslconLracL Lo Lhe end
LhaL no one shall be un[usLly enrlched or beneflLed aL Lhe expense of anoLher (n)
ArL 2143 1he provlslons for quaslconLracLs ln Lhls ChapLer do noL exclude oLher quaslconLracLs whlch may come
wlLhln Lhe purvlew of Lhe precedlng arLlcle
SLC1lCn 1 Neqotlotom Cestlo

ArL 2144 Whoever volunLarlly Lakes charge of Lhe agency or managemenL of Lhe buslness or properLy of anoLher
wlLhouL any power from Lhe laLLer ls obllged Lo conLlnue Lhe same unLll Lhe LermlnaLlon of Lhe affalr and lLs
lncldenLs or Lo requlre Lhe person concerned Lo subsLlLuLe hlm lf Lhe owner ls ln a poslLlon Lo do so 1hls [urldlcal
relaLlon does noL arlse ln elLher of Lhese lnsLances
(1) When Lhe properLy or buslness ls noL neglecLed or abandoned
(2) lf ln facL Lhe manager has been LaclLly auLhorlzed by Lhe owner
ln Lhe flrsL case Lhe provlslons of ArLlcles 1317 1403 no 1 and 1404 regardlng unauLhorlzed conLracLs shall
govern
ln Lhe second case Lhe rules on agency ln 1lLle x of Lhls 8ook shall be appllcable (1888a)
ArL 2143 1he offlclous manager shall perform hls duLles wlLh all Lhe dlllgence of a good faLher of a famlly and pay
Lhe damages whlch Lhrough hls faulL or negllgence may be suffered by Lhe owner of Lhe properLy or buslness
under managemenL
1he courLs may however lncrease or moderaLe Lhe lndemnlLy accordlng Lo Lhe clrcumsLances of each case
(1889a)
ArL 2146 lf Lhe offlclous manager delegaLes Lo anoLher person all or some of hls duLles he shall be llable for Lhe
acLs of Lhe delegaLe wlLhouL pre[udlce Lo Lhe dlrecL obllgaLlon of Lhe laLLer Loward Lhe owner of Lhe buslness
1he responslblllLy of Lwo or more offlclous managers shall be solldary unless Lhe managemenL was assumed Lo
save Lhe Lhlng or buslness from lmmlnenL danger (1890a)
ArL 2147 1he offlclous manager shall be llable for any forLulLous evenL
(1) lf he underLakes rlsky operaLlons whlch Lhe owner was noL accusLomed Lo embark upon
(2) lf he has preferred hls own lnLeresL Lo LhaL of Lhe owner
(3) lf he falls Lo reLurn Lhe properLy or buslness afLer demand by Lhe owner
(4) lf he assumed Lhe managemenL ln bad falLh (1891a)
ArL 2148 LxcepL when Lhe managemenL was assumed Lo save properLy or buslness from lmmlnenL danger Lhe
offlclous manager shall be llable for forLulLous evenLs
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(1) lf he ls manlfesLly unflL Lo carry on Lhe managemenL
(2) lf by hls lnLervenLlon he prevenLed a more compeLenL person from Laklng up Lhe managemenL (n)
ArL 2149 1he raLlflcaLlon of Lhe managemenL by Lhe owner of Lhe buslness produces Lhe effecLs of an express
agency even lf Lhe buslness may noL have been successful (1892a)
ArL 2130 AlLhough Lhe offlclous managemenL may noL have been expressly raLlfled Lhe owner of Lhe properLy or
buslness who en[oys Lhe advanLages of Lhe same shall be llable for obllgaLlons lncurred ln hls lnLeresL and shall
relmburse Lhe offlclous manager for Lhe necessary and useful expenses and for Lhe damages whlch Lhe laLLer may
have suffered ln Lhe performance of hls duLles
1he same obllgaLlon shall be lncumbenL upon hlm when Lhe managemenL had for lLs purpose Lhe prevenLlon of an
lmmlnenL and manlfesL loss alLhough no beneflL may have been derlved (1893)
ArL 2131 Lven Lhough Lhe owner dld noL derlve any beneflL and Lhere has been no lmmlnenL and manlfesL danger
Lo Lhe properLy or buslness Lhe owner ls llable as under Lhe flrsL paragraph of Lhe precedlng arLlcle provlded
(1) 1he offlclous manager has acLed ln good falLh and
(2) 1he properLy or buslness ls lnLacL ready Lo be reLurned Lo Lhe owner (n)
ArL 2132 1he offlclous manager ls personally llable for conLracLs whlch he has enLered lnLo wlLh Lhlrd persons
even Lhough he acLed ln Lhe name of Lhe owner and Lhere shall be no rlghL of acLlon beLween Lhe owner and Lhlrd
persons 1hese provlslons shall noL apply
(1) lf Lhe owner has expressly or LaclLly raLlfled Lhe managemenL or
(2) When Lhe conLracL refers Lo Lhlngs perLalnlng Lo Lhe owner of Lhe buslness (n)
ArL 2133 1he managemenL ls exLlngulshed
(1) When Lhe owner repudlaLes lL or puLs an end LhereLo
(2) When Lhe offlclous manager wlLhdraws from Lhe managemenL sub[ecL Lo Lhe provlslons of ArLlcle
2144
(3) 8y Lhe deaLh clvll lnLerdlcLlon lnsanlLy or lnsolvency of Lhe owner or Lhe offlclous manager (n)

SLC1lCn 2 5olotlo loJebltl

ArL 2134 lf someLhlng ls recelved when Lhere ls no rlghL Lo demand lL and lL was unduly dellvered Lhrough
mlsLake Lhe obllgaLlon Lo reLurn lL arlses (1893)
ArL 2133 aymenL by reason of a mlsLake ln Lhe consLrucLlon or appllcaLlon of a doubLful or dlfflculL quesLlon of
law may come wlLhln Lhe scope of Lhe precedlng arLlcle (n)
ArL 2136 lf Lhe payer was ln doubL wheLher Lhe debL was due he may recover lf he proves LhaL lL was noL due (n)
ArL 2137 1he responslblllLy of Lwo or more payees when Lhere has been paymenL of whaL ls noL due ls solldary
(n)
ArL 2138 When Lhe properLy dellvered or money pald belongs Lo a Lhlrd person Lhe payee shall comply wlLh Lhe
provlslons of arLlcle 1984 (n)
ArL 2139 Whoever ln bad falLh accepLs an undue paymenL shall pay legal lnLeresL lf a sum of money ls lnvolved
or shall be llable for frulLs recelved or whlch should have been recelved lf Lhe Lhlng produces frulLs
Pe shall furLhermore be answerable for any loss or lmpalrmenL of Lhe Lhlng from any cause and for damages Lo
Lhe person who dellvered Lhe Lhlng unLll lL ls recovered (1896a)
ArL 2160 Pe who ln good falLh accepLs an undue paymenL of a Lhlng cerLaln and deLermlnaLe shall only be
responslble for Lhe lmpalrmenL or loss of Lhe same or lLs accessorles and accesslons lnsofar as he has Lhereby been
beneflLed lf he has allenaLed lL he shall reLurn Lhe prlce or asslgn Lhe acLlon Lo collecL Lhe sum (1897)
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ArL 2161 As regards Lhe relmbursemenL for lmprovemenLs and expenses lncurred by hlm who unduly recelved
Lhe Lhlng Lhe provlslons of 1lLle v of 8ook ll shall govern (1898)
ArL 2162 Pe shall be exempL from Lhe obllgaLlon Lo resLore who bellevlng ln good falLh LhaL Lhe paymenL was
belng made of a leglLlmaLe and subslsLlng clalm desLroyed Lhe documenL or allowed Lhe acLlon Lo prescrlbe or
gave up Lhe pledges or cancelled Lhe guaranLles for hls rlghL Pe who pald unduly may proceed only agalnsL Lhe
Lrue debLor or Lhe guaranLors wlLh regard Lo whom Lhe acLlon ls sLlll effecLlve (1899)
ArL 2163 lL ls presumed LhaL Lhere was a mlsLake ln Lhe paymenL lf someLhlng whlch had never been due or had
already been pald was dellvered buL he from whom Lhe reLurn ls clalmed may prove LhaL Lhe dellvery was made
ouL of llberallLy or for any oLher [usL cause
SLC1lCn 3 CLher CuaslConLracLs

ArL 2164 When wlLhouL Lhe knowledge of Lhe person obllged Lo glve supporL lL ls glven by a sLranger Lhe laLLer
shall have a rlghL Lo clalm Lhe same from Lhe former unless lL appears LhaL he gave lL ouL of pleLy and wlLhouL
lnLenLlon of belng repald
ArL 2163 When funeral expenses are borne by a Lhlrd person wlLhouL Lhe knowledge of Lhose relaLlves who were
obllged Lo glve supporL Lo Lhe deceased sald relaLlves shall relmburse Lhe Lhlrd person should Lhe laLLer clalm
relmbursemenL (1894a)
ArL 2166 When Lhe person obllged Lo supporL an orphan or an lnsane or oLher lndlgenL person un[usLly refuses Lo
glve supporL Lo Lhe laLLer any Lhlrd person may furnlsh supporL Lo Lhe needy lndlvldual wlLh rlghL of
relmbursemenL from Lhe person obllged Lo glve supporL 1he provlslons of Lhls arLlcle apply when Lhe faLher or
moLher of a chlld under elghLeen years of age un[usLly refuses Lo supporL hlm
ArL 2167 When Lhrough an accldenL or oLher cause a person ls ln[ured or becomes serlously lll and he ls LreaLed
or helped whlle he ls noL ln a condlLlon Lo glve consenL Lo a conLracL he shall be llable Lo pay for Lhe servlces of Lhe
physlclan or oLher person aldlng hlm unless Lhe servlce has been rendered ouL of pure generoslLy
ArL 2168 When durlng a flre flood sLorm or oLher calamlLy properLy ls saved from desLrucLlon by anoLher
person wlLhouL Lhe knowledge of Lhe owner Lhe laLLer ls bound Lo pay Lhe former [usL compensaLlon
ArL 2169 When Lhe governmenL upon Lhe fallure of any person Lo comply wlLh healLh or safeLy regulaLlons
concernlng properLy underLakes Lo do Lhe necessary work even over hls ob[ecLlon he shall be llable Lo pay Lhe
expenses
ArL 2170 When by accldenL or oLher forLulLous evenL movables separaLely perLalnlng Lo Lwo or more persons are
commlngled or confused Lhe rules on coownershlp shall be appllcable
ArL 2171 1he rlghLs and obllgaLlons of Lhe flnder of losL personal properLy shall be governed by ArLlcles 719 and
720
ArL 2172 1he rlghL of every possessor ln good falLh Lo relmbursemenL for necessary and useful expenses ls
governed by ArLlcle 346
ArL 2173 When a Lhlrd person wlLhouL Lhe knowledge of Lhe debLor pays Lhe debL Lhe rlghLs of Lhe former are
governed by ArLlcles 1236 and 1237
ArL 2174 When ln a small communlLy a naLlonallLy of Lhe lnhablLanLs of age declde upon a measure for proLecLlon
agalnsL lawlessness flre flood sLorm or oLher calamlLy any one who ob[ecLs Lo Lhe plan and refuses Lo conLrlbuLe
Lo Lhe expenses buL ls beneflLed by Lhe pro[ecL as execuLed shall be llable Lo pay hls share of sald expenses
ArL 2173 Any person who ls consLralned Lo pay Lhe Laxes of anoLher shall be enLlLled Lo relmbursemenL from Lhe
laLLer

Su8LML CCu81
Manlla

SLCCnu ulvlSlCn
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C8 no L23749 Aprll 29 1977

lAuS1lnC C8uZ plalnLlffappellanL
vs
! M 1uASCn CCMAn? lnC and C8LCC8lC A8AnL1A lnC defendanLsappellees

8A88LuC !

Appeal from Lhe order daLed AugusL 13 1964 of Lhe CourL of llrsL lnsLance of Cuezon ClLy ln Clvll Case no C7731
lausLlno Cruz vs !M 1uason Co lnc and Cregorlo AraneLa lnc dlsmlsslng Lhe complalnL of appellanL Cruz for
Lhe recovery of lmprovemenLs he has made on appellees land and Lo compel appellees Lo convey Lo hlm 3000
square meLers of land on Lhree grounds (1) fallure of Lhe complalnL Lo sLaLe a cause of acLlon (2) Lhe cause of
acLlon of plalnLlff ls unenforceable under Lhe SLaLuLe of lrauds and (3) Lhe acLlon of Lhe plalnLlff has already
prescrlbed

AcLually a perusal of plalnLlffappellanLs complalnL below shows LhaL he alleged Lwo separaLe causes of acLlon
namely (1) LhaL upon requesL of Lhe ueudors (Lhe famlly of 1elesforo ueudor who lald clalm on Lhe land ln
quesLlon on Lhe sLrengLh of an lnformaclon posesorla ) plalnLlff made permanenL lmprovemenLs valued aL
3040000 on sald land havlng an area of more or less 20 qulnones and for whlch he also lncurred expenses ln Lhe
amounL of 778174 and slnce defendanLsappellees are belng beneflLed by sald lmprovemenLs he ls enLlLled Lo
relmbursemenL from Lhem of sald amounLs and (2) LhaL ln 1932 defendanLs avalled of plalnLlffs servlces as an
lnLermedlary wlLh Lhe ueudors Lo work for Lhe amlcable seLLlemenL of Clvll Case no C133 Lhen pendlng also ln
Lhe CourL of llrsL lnsLance of Cuezon ClLy and lnvolvlng 30 qulnones of land of Whlch Lhe 20 qulnones
aforemenLloned form parL and noLwlLhsLandlng hls havlng performed hls servlces as ln facL a compromlse
agreemenL enLered lnLo on March 16 1963 beLween Lhe ueudors and Lhe defendanLs was approved by Lhe courL
Lhe laLLer have refused Lo convey Lo hlm Lhe 3000 square meLers of land occupled by hlm (a parL of Lhe 20
qulnones above) whlch sald defendanLs had promlsed Lo do wlLhln Len years from and afLer daLe of slgnlng of Lhe
compromlse agreemenL as conslderaLlon for hls servlces

WlLhln Lhe erlod allowed by Lhe rules Lhe defendanLs flled separaLe moLlons Lo dlsmlss alleglng Lhree ldenLlcal
grounds (1) As regards LhaL lmprovemenLs made by plalnLlff LhaL Lhe complalnL sLaLes no cause of acLlon Lhe
agreemenL regardlng Lhe same havlng been made by plalnLlff wlLh Lhe ueudors and noL wlLh Lhe defendanLs
hence Lhe Lheory of plalnLlff based on ArLlcle 2142 of Lhe Code on un[usL enrlchmenL ls unLenable and (2) anenL
Lhe alleged agreemenL abouL plalnLlffs servlces as lnLermedlary ln conslderaLlon of whlch defendanLs promlsed Lo
convey Lo hlm 3000 square meLers of land LhaL Lhe same ls unenforceable under Lhe SLaLuLe of lrauds Lhere
belng noLhlng ln wrlLlng abouL lL and ln any evenL (3) LhaL Lhe acLlon of plalnLlff Lo compel such conveyance has
already prescrlbed

lalnLlff opposed Lhe moLlon lnslsLlng LhaL ArLlcle 2142 of Lhe appllcable Lo hls case LhaL Lhe SLaLuLe of lrauds
cannoL be lnvoked by defendanLs noL only because ArLlcle 1403 of Lhe Clvll Code refers only Lo sale of real
properLy or of an lnLeresL Lhereln and noL Lo promlses Lo convey real properLy llke Lhe one supposedly promlsed
by defendanLs Lo hlm buL also because he Lhe plalnLlff has already performed hls parL of Lhe agreemenL hence
Lhe agreemenL has already been parLly execuLed and noL merely execuLory wlLhln Lhe conLemplaLlon of Lhe
SLaLuLe and LhaL hls acLlon has noL prescrlbed for Lhe reason LhaL defendanLs had Len years Lo comply and only
afLer Lhe sald Len years dld hls cause of acLlon accrue LhaL ls Len years afLer March 16 1963 Lhe daLe of Lhe
approval of Lhe compromlse agreemenL and hls complalnL was flled on !anuary 24 1964

8ullng on Lhe moLlon Lo dlsmlss Lhe Lrlal courL lssued Lhe hereln lmpugned order of AugusL 13 1964

ln Lhe moLlon daLed !anuary 31 1964 defendanL Cregorlo AraneLa lnc prayed LhaL Lhe complalnL agalnsL lL be
dlsmlssed on Lhe ground LhaL (1) Lhe clalm on whlch Lhe acLlon ls founded ls unenforceable under Lhe provlslon of
Lhe SLaLuLe of lrauds and (2) Lhe plalnLlffs acLlon lf any has already prescrlbed ln Lhe oLher moLlon of lebruary
11 1964 defendanL ! M 1uason Co lnc soughL Lhe dlsmlssal of Lhe plalnLlffs complalnL on Lhe ground LhaL lL
sLaLes no cause of acLlon and on Lhe ldenLlcal grounds sLaLed ln Lhe moLlon Lo dlsmlss of defendanL Cregorlo
AraneLa lnc 1he sald moLlons are duly opposed by Lhe plalnLlff

lrom Lhe allegaLlons of Lhe complalnL lL appears LhaL by vlrLue of an agreemenL arrlved aL ln 1948 by Lhe plalnLlff
and Lhe ueudors Lhe former asslsLed Lhe laLLer ln clearlng lmprovlng subdlvldlng and selllng Lhe large LracL of
land conslsLlng of 30 qulnones covered by Lhe lnformaclon posesorla ln Lhe name of Lhe laLe 1elesforo ueudor and
lncurred expenses whlch are valued approxlmaLely aL 3840000 and 778174 respecLlvely and for Lhe reasons
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LhaL sald lmprovemenLs are belng used and en[oyed by Lhe defendanLs Lhe plalnLlff ls seeklng Lhe relmbursemenL
for Lhe servlces and expenses sLaLed above from Lhe defendanLs

uefendanL ! M 1uason Co lnc clalmed LhaL lnsofar as Lhe plalnLlffs clalm for Lhe relmbursemenL of Lhe
amounLs of 3840000 and 778174 ls concerned lL ls noL a prlvy Lo Lhe plalnLlffs agreemenL Lo asslsL Lhe
ueudors n lmprovlng Lhe 30 qulnones Cn Lhe oLher hand Lhe plalnLlff counLered LhaL by holdlng and uLlllzlng Lhe
lmprovemenLs lnLroduced by hlm Lhe defendanLs are un[usLly enrlchlng and beneflLlng aL Lhe expense of Lhe
plalnLlff and LhaL sald lmprovemenLs consLlLuLe a llen or charge of Lhe properLy lLself

Cn Lhe lssue LhaL Lhe complalnL lnsofar as lL clalms Lhe relmbursemenL for Lhe servlces rendered and expenses
lncurred by Lhe plalnLlff sLaLes no cause of acLlon Lhe CourL ls of Lhe oplnlon LhaL Lhe same ls wellfounded lL ls
found LhaL Lhe defendanLs are noL parLles Lo Lhe supposed express conLracL enLered lnLo by and beLween Lhe
plalnLlff and Lhe ueudors for Lhe clearlng and lmprovemenL of Lhe 30 qulnones lurLhermore ln order LhaL Lhe
alleged lmprovemenL may be consldered a llen or charge on Lhe properLy Lhe same should have been made ln
good falLh and under Lhe mlsLake as Lo Lhe LlLle 1he CourL can Lake [udlclal noLlce of Lhe facL LhaL Lhe LracL of land
supposedly lmproved by Lhe plalnLlff had been reglsLered way back ln 1914 ln Lhe name of Lhe predecessorsln
lnLeresL of defendanL ! M 1uason Co lnc 1hls facL ls conflrmed ln Lhe declslon rendered by Lhe Supreme CourL
on !uly 31 1936 ln Case C 8 no L3079 enLlLled !M 1uason Co lnc vs Ceronlmo SanLlago eL al Such belng
Lhe case Lhe plalnLlff cannoL clalm good falLh and mlsLake as Lo Lhe LlLle of Lhe land

Cn Lhe lssue of sLaLuLe of fraud Lhe CourL belleves LhaL same ls appllcable Lo Lhe lnsLanL case 1he allegaLlon ln
par 12 of Lhe complalnL sLaLes LhaL Lhe defendanLs promlsed and agreed Lo cede Lransfer and convey unLo Lhe
plalnLlff Lhe 3000 square meLers of land ln conslderaLlon of cerLaln servlces Lo be rendered Lhen lL ls clear LhaL Lhe
alleged agreemenL lnvolves an lnLeresL ln real properLy under Lhe provlslons of See 2(e) of ArLlcle 1403 of Lhe
Clvll Code such agreemenL ls noL enforceable as lL ls noL ln wrlLlng and subscrlbed by Lhe parLy charged

Cn Lhe lssue of sLaLuLe of llmlLaLlons Lhe CourL holds LhaL Lhe plalnLlffs acLlon has prescrlbed lL ls alleged ln par
11 of Lhe complalnL LhaL someLlme ln 1932 Lhe defendanLs approached Lhe plalnLlff Lo prevall upon Lhe ueudors
Lo enLer Lo a compromlse agreemenL ln Clvll Case no C133 and allled cases lurLhermore par 13 and 14 of Lhe
complalnL alleged LhaL Lhe plalnLlff acLed as emlssary of boLh parLles ln conveylng Lhelr respecLlve proposals and
couLerproposals unLll Lhe flnal seLLlemenL was effecLed on March 16 1933 and approved by CourL on Aprll 11
1933 ln Lhe presenL acLlon whlch was lnsLlLuLed on !anuary 24 1964 Lhe plalnLlff ls seeklng Lo enforce Lhe
supposed agreemenL enLered lnLo beLween hlm and Lhe defendanLs ln 1932 whlch was already prescrlbed

WPL8LlC8L Lhe plalnLlffs complalnL ls hereby ordered ulSMlSSLu wlLhouL pronouncemenL as Lo cosLs

SC C8uL8Lu (p 6369 8ec on Appeal)

Cn AugusL 22 1964 plalnLlffs counsel flled a moLlon for reconslderaLlon daLed AugusL 20 1964 as follows

lalnLlff Lhrough underslgned counsel and Lo Lhls Ponorable CourL respecLfully moves Lo reconslder lLs Crder
bearlng daLe of 13 AugusL 1964 on Lhe followlng grounds

1 1PA1 1PL CCMLAln1 S1A1LS A SulllClLn1 CAuSL Cl AC1lCn ACAlnS1 uLlLnuAn1S ln SC lA8 AS
LAln1lllS CLAlM A?MLn1 Cl SL8vlCLS Anu 8LlM8u8SLMLn1 Cl PlS LxLnSLS lS CCnCL8nLu

ll 1PA1 8LCA8ulnC LAln1lllS CLAlM CvL8 1PL 3000 SC MS 1PL SAML PAS nC1 8LSC8l8Lu Anu 1PL
S1A1u1L Cl l8AuuS lS nC1 ALlCA8LL 1PL8L1C

A 8 C u M L n 1

lalnLlffs complalnL conLalns Lwo (2) causes of acLlon Lhe flrsL belng an acLlon for sum of money ln Lhe amounL
of 778174 represenLlng acLual expenses and 3840000 as reasonable compensaLlon for servlces ln lmprovlng
Lhe 30 qulnones now ln Lhe possesslon of defendanLs 1he second cause of acLlon deals wlLh Lhe 3000 sq ms
whlch defendanLs have agreed Lo Lransfer lnLo lalnLlff for servlces rendered ln effecLlng Lhe compromlse beLween
Lhe ueudors and defendanLs

under lLs order of AugusL 3 1964 Lhls Ponorable CourL dlsmlssed Lhe clalm for sum of money on Lhe ground LhaL
Lhe complalnL does noL sLaLe a cause of acLlon agalnsL defendanLs We respecLfully submlL

1 1PA1 1PL CCMLAln1 S1A1LS A SulllClLn1 CAuSL Cl AC1lCn ACAlnS1 uLlLnuAn1S ln SC lA8 AS
LAln1lllS CLAlM lC8 A?MLn1 Cl SL8vlCLS Anu 8LlM8u8SLMLn1 Cl PlS LxLnSLS lS CCnCL8nLu

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Sald Lhls Ponorable CourL (aL p 2 Crder)

C 8 u L 8

xxx xxx xxx

Cn Lhe lssue LhaL Lhe complalnL ln so far as lL clalms Lhe relmbursemenL for Lhe servlces rendered and expenses
lncurred by Lhe plalnLlff sLaLes no cause of acLlon Lhe CourL ls of Lhe oplnlon LhaL Lhe same ls wellfounded lL ls
found LhaL Lhe defendanLs are noL parLles Lo Lhe supposed express conLracL enLered lnLo by and beLween Lhe
plalnLlff and Lhe ueudors for Lhe clearlng and lmprovemenL of Lhe 30 qulnones lurLhermore ln order LhaL Lhe
alleged lmprovemenL may he consldered a llen or charge on Lhe properLy Lhe same should have been made ln
good falLh and under Lhe mlsLake as Lo LlLle 1he CourL can Lake [udlclal noLlce of Lhe facL LhaL Lhe LracL of land
supposedly lmproved by Lhe plalnLlff had been reglsLered way back ln 1914 ln Lhe name of Lhe predecessorsln
lnLeresL of defendanL ! M 1uason Co lnc 1hls facL ls conflrmed ln Lhe declslon rendered by Lhe Supreme CourL
on !uly 31 1936 ln case C 8 no L3079 enLlLled ! M 1uason Co lnc vs Ceronlmo SanLlago eL al Such belng
Lhe case Lhe plalnLlff cannoL clalm good falLh and mlsLake as Lo Lhe LlLle of Lhe land

1he poslLlon of Lhls Ponorable CourL (supra) ls LhaL Lhe complalnL does noL sLaLe a cause of acLlon ln so far as Lhe
clalm for servlces and expenses ls concerned because Lhe conLracL for Lhe lmprovemenL of Lhe properLles was
solely beLween Lhe ueudors and plalnLlff and defendanLs are noL prlvles Lo lL now plalnLlffs Lheory ls LhaL
defendanLs are noneLheless llable slnce Lhey are uLlllzlng and en[oylng Lhe beneflLs of sald lmprovemenLs 1hus
under paragraph 16 of he complalnL lL ls alleged

(16) 1haL Lhe servlces and personal expenses of plalnLlff menLloned ln paragraph 7 hereof were rendered and ln
facL pald by hlm Lo lmprove as Lhey ln facL resulLed ln conslderable lmprovemenL of Lhe 30 qulnones and
defendanLs belng now ln possesslon of and uLlllzlng sald lmprovemenLs should relmburse and pay plalnLlff for such
servlces and expenses

lalnLlffs cause of acLlon ls premlsed lnLer alla on Lhe Lheory of un[usL enrlchmenL under ArLlcle 2142 of Lhe clvll
Code

A81 2142 CerLaln lawful volunLary and unllaLeral acLs glve rlse Lo Lhe [urldlcal relaLlon of quaslconLracL Lo Lhe end
LhaL no one shlll be un[usLly enrlched or beneflLed aL Lhe expense of anoLher

ln llke veln ArLlcle 19 of Lhe same Code en[olns LhaL

A81 19 Lvery person musL ln Lhe exerclse of hls rlghLs and ln Lhe performance of hls duLles acL wlLh [usLlce glve
everyone hls due and observe honesLy and good falLh

We respecLfully draw Lhe aLLenLlon of Lhls Ponorable CourL Lo Lhe facL LhaL A81lCLL 2142 (Su8A) uLALS Wl1P
CuASlCCn18AC1S or slLuaLlons WPL8L 1PL8L lS nC CCn18AC1 8L1WLLn 1PL A81lLS 1C 1PL AC1lCn lurLher
as we can readlly see from Lhe LlLle Lhereof (1lLle xvll) LhaL Lhe Same bears Lhe deslgnaLlon Lx18A CCn18AC1uAL
C8LlCA1lCnS or obllgaLlons whlch do noL arlse from conLracLs Whlle lL ls Lrue LhaL Lhere was no agreemenL
beLween plalnLlff and defendanLs hereln for Lhe lmprovemenL of Lhe 30 qulnones slnce Lhe laLLer are presenLly
en[oylng and uLlllzlng Lhe beneflLs broughL abouL Lhrough plalnLlffs labor and expenses defendanLs should pay
and relmburse hlm Lherefor under Lhe prlnclple LhaL no one may enrlch hlmself aL Lhe expense of anoLher ln Lhls
posLure Lhe complalnL sLaLes a cause of acLlon agalnsL Lhe defendanLs

ll 1PA1 8LCA8ulnC LAln1lllS CLAlM CvL8 1PL 3000 SC MS 1PL SAML PAS nC1 8LSC8l8Lu Anu 1PL
S1A1u1L Cl l8AuuS lS nC1 ALlCA8LL 1PL8L1C

1he SLaLuLe of lrauds ls CLLA8L? lnappllcable Lo Lhls case

AL page 2 of Lhls Ponorable CourLs order daLed 13 AugusL 1964 Lhe CourL ruled as follows

C 8 u L 8

xxx xxx xxx

Cn Lhe lssue of sLaLuLe of fraud Lhe CourL belleves LhaL same ls appllcable Lo Lhe lnsLanL Case 1he allegaLlon ln
par 12 of Lhe complalnL sLaLes LhaL Lhe defendanLs promlsed and agree Lo cede Lransfer and convey unLo Lhe
plalnLlff 3000 square meLers of land ln conslderaLlon of cerLaln servlces Lo be rendered Lhen lL ls clear LhaL Lhe
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alleged agreemenL lnvolves an lnLeresL ln real properLy under Lhe provlslons of Sec 2(e) of ArLlcle 1403 of Lhe Clvll
Code such agreemenL ls noL enforceable as lL ls noL ln wrlLlng and subscrlbed by Lhe parLy charged

1o brlng Lhls lssue ln sharper focus shall reproduce noL only paragraph 12 of Lhe complalnL buL also Lhe oLher
perLlnenL paragraphs Lhereln conLalned aragraph 12 sLaLes Lhus

C C M L A l n 1

xxx xxx xxx

12) 1haL plalnLlff conferred wlLh Lhe aforesald represenLaLlves of defendanLs several Llmes and on Lhese
occaslons Lhe laLLer promlsed and agreed Lo cede Lransfer and convey unLo plalnLlff Lhe 3000 sq ms (now
known as LoLs 168 17 and 18) whlch plalnLlff was Lhen occupylng and conLlnues Lo occupy as of Lhls wrlLlng for
and ln conslderaLlon of Lhe followlng condlLlons

(a) 1haL plalnLlff succeed ln convlnclng Lhe uLuuC8S Lo enLer lnLo a compromlse agreemenL and LhaL such
agreemenL be acLually enLered lnLo by and beLween Lhe uLuuC8S and defendanL companles

(b) 1haL as of daLe of slgnlng Lhe compromlse agreemenL plalnLlff shall be Lhe owner of Lhe 3000 sq ms buL Lhe
documenLs evldenclng hls LlLle over Lhls properLy shall be execuLed and dellvered by defendanLs Lo plalnLlff wlLhln
Len (10) years from and afLer daLe of slgnlng of Lhe compromlse agreemenL

(c) 1haL plalnLlff shall wlLhouL any moneLary expense of hls parL asslsL ln clearlng Lhe 20 qulnones of lLs
occupanLs

13) 1haL ln order Lo effecL a compromlse beLween Lhe parLles plalnLlff noL only as well acLed as emlssary of boLh
parLles ln conveylng Lhelr respecLlve proposals and counLer proposals unLll succeeded ln convlnzlng Lhe uLuuC8S
Lo seLLle wlLh defendanLs amlcably 1hus on March 16 1933 a Compromlse AgreemenL was enLered lnLo by and
beLween Lhe uLuuC8S and Lhe defendanL companles and on Aprll 11 1933 Lhls agreemenL was approved by Lhls
Ponorable CourL

14) 1haL ln order Lo comply wlLh hls oLher obllgaLlons under hls agreemenL wlLh defendanL companles plalnLlff
had Lo confer wlLh Lhe occupanLs of Lhe properLy exposlng hlmself Lo physlcal harm convlnclng sald occupanLs Lo
leave Lhe premlses and Lo refraln from resorLlng Lo physlcal vlolence ln reslsLlng defendanLs demands Lo vacaLe

1haL plalnLlff furLher asslsLed defendanLs employees ln Lhe acLual demollLlon and Lransfer of all Lhe houses wlLhln
Lhe perlmeLer of Lhe 20 qulnones unLll Lhe end of 1933 when sald area was LoLally cleared and Lhe houses
Lransferred Lo anoLher area deslgnaLed by Lhe defendanLs as CapL Cruz 8lock ln Masambong Cuezon ClLy (ars
12 13 and 14 ComplalnL Lmphasls supplled)

lrom Lhe foregolng lL ls clear Lhen Lhe agreemenL beLween Lhe parLles menLloned ln paragraph 12 (supra) of Lhe
complalnL has already been fully LxLCu1Lu Cn CnL A81 namely by Lhe plalnLlff 8egardlng Lhe appllcablllLy of
Lhe sLaLuLe of frauds (ArL 1403 Clvll Code) lL has been unlformly held LhaL Lhe sLaLuLe of frauds lS ALlCA8LL
CnL? 1C LxLCu1C8? CCn18AC1S 8u1 nC1 WPL8L 1PL CCn18AC1 PAS 8LLn A81L? LxLCu1Lu

SAML AC1lCn 1C LnlC8CL 1he sLaLuLe of frauds has been unlformly lnLerpreLed Lo be appllcable Lo execuLory
and noL Lo compleLed or conLracLs erformance of Lhe conLracLs Lakes lL ouL of Lhe operaLlon of Lhe sLaLuLe

1he sLaLuLe of Lhe frauds ls noL appllcable Lo conLracLs whlch are elLher LoLally or parLlally performed on Lhe
Lheory LhaL Lhere ls a wlde fleld for Lhe commlsslon of frauds ln execuLory conLracLs whlch can only be prevenLed
by requlrlng Lhem Lo be ln wrlLlng a facLs whlch ls reduced Lo a mlnlmum ln execuLed conLracLs because Lhe
lnLenLlon of Lhe parLles becomes apparenL buy Lhelr execuLlon and execuLlon ln moLs cases concluded Lhe rlghL
Lhe parLles 1he parLlal performance may be proved by elLher documenLary or oral evldence (AL pp 364363
1olenLlnos Clvll Code of Lhe hlllpplnes vol lv 1962 Ld Lmphasls supplled)

AuLhorlLles ln supporL of Lhe foregolng rule are leglon 1hus Mr !usLlce Moran ln hls CommenLs on Lhe 8ules of
CourL vol lll 1974 Ld aL p 167 sLaLes

2 1PL S1A1u1L Cl l8AuuS lS ALlCA8LL CnL? 1C LxLCu1C8? CCn18AC1S CCn18AC1S WPlCP A8L Ll1PL8
1C1ALL? C8 A81lALL? L8lC8MLu A8L Wl1PCu1 1PL S1A1uL 1he sLaLuLe of frauds ls appllcable only Lo
execuLory conLracLs lL ls nelLher appllcable Lo execuLed conLracLs nor Lo conLracLs parLlally performed 1he reason
ls slmple ln execuLory conLracLs Lhere ls a wlde fleld for fraud because unless Lhey be ln wrlLlng Lhere ls no
palpable evldence of Lhe lnLenLlon of Lhe conLracLlng parLles 1he sLaLuLe has been enacLed Lo prevenL fraud Cn
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Lhe oLher hand Lhe commlsslon of fraud ln execuLed conLracLs ls reduced Lo mlnlmum ln execuLed conLracLs
because (1) Lhe lnLenLlon of Lhe parLles ls made apparenL by Lhe execuLlon and (2) execuLlon concludes ln mosL
cases Lhe rlghLs of Lhe parLles (Lmphasls supplled)

under paragraphs 13 and 14 of Lhe complalnL (supra) one can readlly see LhaL Lhe plalnLlff has fulfllled ALL hls
obllgaLlon under Lhe agreemenL beLween hlm defendanLs concernlng Lhe 3000 sq ms over whlch Lhe laLLer had
agreed Lo execuLe Lhe proper documenLs of Lransfer 1hls facL ls furLher pro[ecLed ln paragraph 13 of Lhe complalnL
where plalnLlff sLaLes

13) 1haL ln or abouL Lhe mlddle of 1963 afLer all Lhe condlLlons sLaLed ln paragraph 12 hereof had been fulfllled
and fully complled wlLh plalnLlff demanded of sald defendanLs LhaL Lhey execuLe Lhe ueed of Conveyance ln hls
favor and dellver Lhe LlLle cerLlflcaLe ln hls name over Lhe 3000 sq ms buL defendanLs falled and refused and
conLlnue Lo fall and refuse Lo heed hls demands (par 13 complalnL Lmphasls supplled)

ln vlew of Lhe foregolng we respecLfully submlL LhaL Lhls Ponorable courL erred ln holdlng LhaL Lhe sLaLuLe of
frauds ls appllcable Lo plalnLlffs clalm over Lhe 3000 sq ms 1here havlng been full performance of Lhe conLracL on
plalnLlffs parL Lhe same Lakes Lhls case ouL of Lhe conLexL of sald sLaLuLe

lalnLlffs Cause of AcLlon had nC1 rescrlbed

WlLh all due respecL Lo Lhls Ponorable courL we also submlL LhaL Lhe CourL commlLLed error ln holdlng LhaL Lhls
acLlon has prescrlbed

C 8 u L 8

xxx xxx xxx

Cn Lhe lssue of Lhe sLaLuLe of llmlLaLlons Lhe CourL holds LhaL Lhe plalnLlffs acLlon has prescrlbed lL ls alleged ln
par lll of Lhe complalnL LhaL someLlme ln 1932 Lhe defendanLs approached Lhe plalnLlff Lo prevall upon Lhe
ueudors Lo enLer lnLo a compromlse agreemenL ln Clvll Case no C133 and allled cases lurLhermore pars 13 and
14 of Lhe complalnL alleged LhaL plalnLlff acLed as emlssary of boLh parLles ln conveylng Lhelr respecLlve proposals
and counLerproposals unLll Lhe flnal seLLlemenL was affecLed on March 16 1933 and approved by Lhe CourL on
Aprll 11 1933 ln Lhe presenL acLln whlch was lnsLlLuLed on !anuary 24 1964 Lhe plalnLlff ls seeklng Lo enforce Lhe
supposed agreemenL enLered lnLo beLween hlm and Lhe defendanLs ln 1932 whlch has already proscrlbed (aL p 3
Crder)

1he presenL acLlon has noL prescrlbed especlally when we conslder carefully Lhe Lerms of Lhe agreemenL beLween
plalnLlff and Lhe defendanLs llrsL we musL draw Lhe aLLenLlon of Lhls Ponorable CourL Lo Lhe facL LhaL Lhls ls an
acLlon Lo compel defendanLs Lo execuLe a ueed of Conveyance over Lhe 3000 sq ms sub[ecL of Lhelr agreemenL
ln paragraph 12 of Lhe complalnL Lhe Lerms and condlLlons of Lhe conLracL beLween Lhe parLles are spelled ouL
aragraph 12 (b) of Lhe complalnL sLaLes

(b) 1haL as of daLe of slgnlng Lhe compromlse agreemenL plalnLlff shall be Lhe owner of Lhe 3000 sq ms buL Lhe
documenLs evldenclng hls LlLle over Lhls properLy shall be execuLed and dellvered by defendanLs Lo plalnLlff wlLhln
Len (10) years from and afLer daLe of slgnlng of Lhe compromlse agreemenL (Lmphasls supplled)

1he compromlse agreemenL beLween defendanLs and Lhe ueudors whlch was conclude Lhrough Lhe efforLs of
plalnLlff was slgned on 16 March 1933 1herefore Lhe defendanLs had Len (10) years slgned on 16 March 1933
1herefore Lhe defendanLs had Len (10) years from sald daLe wlLhln whlch Lo execuLe Lhe deed of conveyance ln
favor of plalnLlff over Lhe 3000 sq ms As long as Lhe 10 years perlod has noL explred plalnLlff had no rlghL Lo
compel defendanLs Lo execuLe Lhe documenL and Lhe laLLer were under no obllgaLlon Lo do so now Lhls 10year
perlod elapsed on March 16 1963 1PLn and CnL? 1PLn does plalnLlffs cause of acLlon plalnLlff on March 17
1963 1hus under paragraph 13 of Lhe complalnL (supra) plalnLlff made demands upon defendanLs for Lhe
execuLlon of Lhe deed ln or abouL Lhe mlddle of 1963

Slnce Lhe conLracL now soughL Lo be enforced was noL reduced Lo wrlLlng plalnLlffs cause of acLlon explres on
March 16 1969 or slx years from March 16 1963 WPLn 1PL CAuSL Cl AC1lCn ACC8uLu (ArL 1143 Clvll Code)

ln Lhls posLure we galn respecLfully submlL LhaL Lhls Ponorable CourL erred ln holdlng LhaL plalnLlffs acLlon has
prescrlbed

8 A ? L 8

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WPL8LlC8L lL ls respecLfully prayed LhaL Ponorable CourL reconslder lLs Crder daLed AugusL 13 1964 and lssue
anoLher order denylng Lhe moLlons Lo dlsmlss of defendanLs C AraneLa lnc and ! M 1uason Co lnc for lack of
merlL (p 7083 8ecord on Appeal)

uefendanLs flled an opposlLlon on Lhe maln ground LhaL Lhe argumenLs adduced by Lhe plalnLlff are merely
relLeraLlons of hls argumenLs conLalned ln hls 8e[olnder Lo 8eply and CpposlLlon whlch have noL only been refuLed
ln hereln defendanLs MoLlon Lo ulsmlss and 8eply buL already passed upon by Lhls Ponorable CourL

Cn SepLember 7 1964 Lhe Lrlal courL denled Lhe moLlon for reconslderaLlons Lhus

AfLer conslderlng Lhe plalnLlffs MoLlon for 8econslderaLlon of AugusL 20 1964 and lL appearlng LhaL Lhe grounds
relled upon ln sald moLlon are mere repeLlLlon of Lhose already resolved and dlscussed by Lhls CourL ln Lhe order of
AugusL 13 1964 Lhe lnsLanL moLlon ls hereby denled and Lhe flndlngs and concluslons arrlved aL by Lhe CourL ln lLs
order of AugusL 13 1964 are hereby relLeraLed and afflrmed

SC C8uL8Lu (age 90 8ec on Appeal)

under daLe of SepLember 24 1964 plalnLlff flled hls record on appeal

ln hls brlef appellanL poses and dlscusses Lhe followlng asslgnmenLs of error

l 1PA1 1PL LCWL8 CCu81 L88Lu ln ulSMlSSlnC 1PL CCMLAln1 Cn 1PL C8Cunu 1PA1 ALLLAn1S CLAlM
CvL8 1PL 3000 SC MS lS ALLLCLuL? unLnlC8CLA8LL unuL8 1PL S1A1u1L Cl l8AuuS

ll 1PA1 1PL CCu81 A CuC lu81PL8 CCMMl11Lu L88C8 ln ulSMlSSlnC ALLLAn1S CCMLAln1 Cn 1PL
C8Cunu 1PA1 PlS CLAlM CvL8 1PL 3000 SC MS lS ALLLCLuL? 8A88Lu 8? 1PL S1A1u1L Cl LlMl1A1lCnS and

lll 1PA1 1PL LCWL8 CCu81 L88Lu ln ulSMlSSlnC 1PL CCMLAln1 lC8 lAlLu8L 1C S1A1L A CAuSL Cl AC1lCn
ln SC lA8 AS ALLLAn1S CLAlM lC8 8LlM8u8SLMLn1 Cl LxLnSLS Anu lC8 SL8vlCLS 8LnuL8Lu ln 1PL
lM8CvLMLn1 Cl 1PL lll1? (30) CulnCnLS lS CCnCL8nLu

We agree wlLh appellanL LhaL Lhe SLaLuLe of lrauds was erroneously applled by Lhe Lrlal courL lL ls elemenLary LhaL
Lhe SLaLuLe refers Lo speclflc klnds of LransacLlons and LhaL lL cannoL apply Lo any LhaL ls noL enumeraLed Lhereln
And Lhe only agreemenLs or conLracLs covered Lhereby are Lhe followlng

(1) 1hose enLered lnLo ln Lhe name of anoLher person by one who has been glven no auLhorlLy or legal
represenLaLlon or who has acLed beyond hls powers

(2) 1hose do noL comply wlLh Lhe SLaLuLe of lrauds as seL forLh ln Lhls number ln Lhe followlng cases an agreemenL
hereafLer made shall be unenforceable by acLlon unless Lhe same or some noLe or memorandum Lhereof be ln
wrlLlng and subscrlbed by Lhe parLy charged or by hls agenL evldence Lherefore of Lhe agreemenL cannoL be
recelved wlLhouL Lhe wrlLlng or a secondary evldence of lLs conLenLs

(a) An agreemenL LhaL by lLs Lerms ls noL Lo be performed wlLhln a year from Lhe maklng Lhereof

(b) A speclal promlse Lo answer for Lhe debL defaulL or mlscarrlage of anoLher

(c) An agreemenL made ln conslderaLlon of marrlage oLher Lhan a muLual promlse Lo marry

(d) An agreemenL for Lhe sale of goods chaLLels or Lhlngs ln acLlon aL a prlce noL less Lhan flve hundred pesos
unless Lhe buyer accepL and recelve parL of such goods and chaLLels or Lhe evldences or some of Lhem of such
Lhlngs ln acLlon or pay aL Lhe Llme some parL of Lhe purchase money buL when a sale ls made by aucLlon and
enLry ls made by Lhe aucLloneer ln hls sales book aL Lhe Llme of Lhe sale of Lhe amounL and klnd of properLy sold
Lerms of sale prlce names of Lhe purchasers and person on whose accounL Lhe sale ls made lL ls a sufflclenL
memorandum

(e) An agreemenL for Lhe leaslng for a longer perlod Lhan one year or for Lhe sale of real properLy or of an lnLeresL
Lhereln

(f) a represenLaLlon as Lo Lhe credlL of a Lhlrd person

(3) 1hose where boLh parLles are lncapable of glvlng consenL Lo a conLracL (ArL 1403 clvll Code)

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ln Lhe lnsLanL case whaL appellanL ls Lrylng Lo enforce ls Lhe dellvery Lo hlm of 3000 square meLers of land whlch
he clalms defendanLs promlsed Lo do ln conslderaLlon of hls servlces as medlaLor or lnLermedlary ln effecLlng a
compromlse of Lhe clvll acLlon Clvll Case no 133 beLween Lhe defendanLs and Lhe ueudors ln no sense may such
alleged conLracL be consldered as belng a sale of real properLy or of any lnLeresL Lhereln lndeed noL all deallngs
lnvolvlng lnLeresL ln real properLy come under Lhe SLaLuLe

Moreover appellanLs complalnL clearly alleges LhaL he has already fulfllled hls parL of Lhe bargalns Lo lnduce Lhe
ueudors Lo amlcably seLLle Lhelr dlfferences wlLh defendanLs as ln facL on March 16 1963 Lhrough hls efforLs a
compromlse agreemenL beLween Lhese parLles was approved by Lhe courL ln oLher words Lhe agreemenL ln
quesLlon has already been parLlally consummaLed and ls no longer merely execuLory And lL ls llkewlse a
fundamenLal prlnclple governlng Lhe appllcaLlon of Lhe SLaLuLe LhaL Lhe conLracL ln dlspuLe should be purely
execuLory on Lhe parL of boLh parLles LhereLo

We cannoL however escape Laklng [udlclal noLlce ln relaLlon Lo Lhe compromlse agreemenL relled upon by
appellanL LhaL ln several cases We have declded We have declared Lhe same resclnded and of no effecL ln ! M
1uason Co lnc vs 8lenvenldo SanvlcLores 4 SC8A 123 Lhe CourL held

lL ls also worLhy of noLe LhaL Lhe compromlse beLween ueudors and 1uason upon whlch SanvlcLores predlcaLes hls
rlghL Lo buy Lhe loL he occuples has been valldly resclnded and seL aslde as recognlzed by Lhls CourL ln lLs declslon
ln C8 no L13768 ueudor vs 1uason promulgaLed on May 30 1961

We repeaLed Lhls observaLlon ln !M 1uason Co lnc vs 1eodoslo Macallndong 6 SC8A 938 1hus vlewed from
whaL would be Lhe ulLlmaLe concluslon of appellanLs case We enLerLaln grave doubLs as Lo wheLher or noL he can
successfully malnLaln hls alleged cause of acLlon agalnsL defendanLs conslderlng LhaL Lhe compromlse agreemenL
LhaL he lnvokes dld noL acLually maLerlallze and defendanLs have noL beneflLed Lherefrom noL Lo menLlon Lhe
undlspuLed facL LhaL as polnLed ouL by appellees appellanLs oLher aLLempL Lo secure Lhe same 3000 square
meLers vla Lhe [udlclal enforcemenL of Lhe compromlse agreemenL ln whlch Lhey were supposed Lo be reserved for
hlm has already been repudlaLed by Lhe courLs (pp 37 8rlef of Appellee Cregorlo AraneLa lnc)

As regards appellanLs Lhlrd asslgnmenL of error We hold LhaL Lhe allegaLlons ln hls complalnL do noL sufflclenLly
AppellanLs rellance on ArLlcle 2142 of Clvll Code ls mlsplaced Sald arLlcle provldes

CerLaln lawful volunLary and unllaLeral acLs glve rlse Lo Lhe [urldlcal relaLlon of quaslconLracL Lo Lhe end LhaL no
one shall be un[usLly enrlched or beneflLed aL Lhe expense of anoLher

lrom Lhe very language of Lhls provlslon lL ls obvlous LhaL a presumed qauaslconLracL cannoL emerge as agalnsL
one parLy when Lhe sub[ecL maLer Lhereof ls already covered by an exlsLlng conLracL wlLh anoLher parLy redlcaLed
on Lhe prlnclple LhaL no one should be allowed Lo un[usLly enrlch hlmself aL Lhe expense of anoLher ArLlcle 2124
creaLes Lhe legal flcLlon of a quaslconLracL preclsely because of Lhe absence of any acLual agreemenL beLween Lhe
parLles concerned Corollarlly lf Lhe one who clalms havlng enrlched somebody has done so pursuanL Lo a conLracL
wlLh a Lhlrd parLy hls cause of acLlon should be agalnsL Lhe laLLer who ln Lurn may lf Lhere ls any ground Lherefor
seek rellef agalnsL Lhe parLy beneflLed lL ls essenLlal LhaL Lhe acL by whlch Lhe defendanL ls beneflLed musL have
been volunLary and unllaLeral on Lhe parL of Lhe plalnLlff As one dlsLlngulshed clvlllan puLs lL 1he acL ls volunLary
because Lhe acLor ln quaslconLracLs ls noL bound by any preexlsLlng obllgaLlon Lo acL lL ls unllaLeral because lL
arlses from Lhe sole wlll of Lhe acLor who ls noL prevlously bound by any reclprocal or bllaLeral agreemenL 1he
reason why Lhe law creaLes a [urldlcal relaLlons and lmposes cerLaln obllgaLlon ls Lo prevenL a slLuaLlon where a
person ls able Lo beneflL or Lake advanLage of such lawful volunLary and unllaLeral acLs aL Lhe expense of sald
acLor (Ambroslo adllla Clvll Law vol vl p 748 1969 ed) ln Lhe case aL bar slnce appellanL has a clearer and
more dlrecL recourse agalnsL Lhe ueudors wlLh whom he had enLered lnLo an agreemenL regardlng Lhe
lmprovemenLs and expendlLures made by hlm on Lhe land of appellees lL CannoL be sald ln Lhe sense
conLemplaLed ln ArLlcle 2142 LhaL appellees have been enrlched aL Lhe expense of appellanL

ln Lhe ulLlmaLe Lherefore Cur holdlng above LhaL appellanLs flrsL Lwo asslgnmenLs of error are well Laken cannoL
save Lhe day for hlm Aslde from hls havlng no cause of acLlon agalnsL appellees Lhere ls one plaln error of
omlsslon We have found ln Lhe order of Lhe Lrlal courL whlch ls as good a ground as any oLher for us Lo LermlnaLe
Lhls case favorably Lo appellees ln sald order Whlch We have quoLed ln full earller ln Lhls oplnlon Lhe Lrlal courL
ruled LhaL Lhe grounds relled upon ln sald moLlon are mere repeLlLlons of Lhose already resolved and dlscussed by
Lhls CourL ln Lhe order of AugusL 13 1964 an observaLlon whlch We fully share vlrLually Lherefore appellanLs
moLlon for reconslderaLlon was ruled Lo be proforma lndeed a cursory readlng of Lhe record on appeal reveals
LhaL appellanLs moLlon for reconslderaLlon abovequoLed conLalned exacLly Lhe same argumenLs and manner of
dlscusslon as hls lebruary 6 1964 CpposlLlon Lo MoLlon Lo ulsmlss of defendanL Cregorlo AraneLa lnc ((pp 17
23 8ec on Appeal) as well as hls lebruary 17 1964 CpposlLlon Lo MoLlon Lo ulsmlss of uefendanL ! M 1uason
Co (pp 3343 8ec on Appeal and hls lebruary 29 1964 8e[olnder Lo 8eply Cll uefendanL ! M 1uason Co
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(pp 3264 8ec on Appeal) We cannoL see anyLhlng ln sald moLlon for reconslderaLlon LhaL ls subsLanLlally
dlfferenL from Lhe above opposlLlons and re[olnder he had prevlously submlLLed and whlch Lhe Lrlal courL had
already consldered when lL rendered lLs maln order of dlsmlssal ConsequenLly appellanLs moLlon for
reconslderaLlon dld noL suspend hls perlod for appeal (LsLrada vs SLo uomlngo 28 SC8A 890 9036) And as Lhls
polnL was covered by appellees CpposlLlon Lo MoLlon for 8econslderaLlon (pp 8689) hence wlLhln Lhe frame of
Lhe lssues below lL ls wlLhln Lhe amblL of Cur auLhorlLy as Lhe Supreme CourL Lo conslder Lhe same here even lf lL
ls noL dlscussed ln Lhe brlefs of Lhe parLles (lnsular Llfe Assurance Co LLd Lmployees AssoclaLlonnA1u vs lnsular
Llfe Assurance Co LLd 8esoluLlon en banc of March 10 1977 ln C 8 no L23291)

now Lhe lmpugned maln order was lssued on AugusL 13 1964 whlle Lhe appeal was made on SepLember 24 1964
or 42 days laLer Clearly Lhls ls beyond Lhe 30day reglemenLary perlod for appeal Pence Lhe sub[ecL order of
dlsmlssal was already flnal and execuLory when appellanL flled hls appeal

WPL8LlC8L Lhe appeal of lausLlno Cruz ln Lhls case ls dlsmlssed no cosLs

lernando (Chalrman) AnLonlo Aqulno and MarLln !! concur

Concepclon !r !! Look no parL

MarLln ! was deslgnaLed Lo slL ln Lhe Second ulvlslon
SUkLML CCUk1
Manlla
Ln 8AnC
Gk No L9188 December 4 1914
GU1ILkkL2 nLkMANCS plalnLlffappellee
vs
LNGkACIC CkLNSL defendanLappellanL
wllllom A klocolJ 1bos l nottlqoo ooJ cefetloo M vllloteol fot oppelloot
kofoel Je lo 5letto fot oppellee
1CkkLS
Appeal Lhrough blll of excepLlons flled by counsel for Lhe appellanL from Lhe [udgmenL on Aprll 14 1913 by Lhe
Ponorable M Molr [udge whereln he senLenced Lhe defendanL Lo make lmmedlaLe dellvery of Lhe properLy ln
quesLlon Lhrough a publlc lnsLrumenL by Lransferrlng and conveylng Lo Lhe plalnLlff all hls rlghLs ln Lhe properLy
descrlbed ln Lhe complalnL and Lo pay lL Lhe sum of 780 as damages and Lhe cosLs of Lhe sulL
Cn March 3 1913 counsel for CuLlerrez Permanos flled a complalnL afLerwards amended ln Lhe CourL of llrsL
lnsLance of Albay agalnsL Lngaclo Crense ln whlch he seL forLh LhaL on and before lebruary 14 1907 Lhe
defendanL Crense had been Lhe owner of a parcel of land wlLh Lhe bulldlngs and lmprovemenLs Lhereon slLuaLed
ln Lhe pueblo of CulnobaLan Albay Lhe locaLlon area and boundarles of whlch were speclfled ln Lhe complalnL
LhaL Lhe sald properLy has up Lo daLe been recorded ln Lhe new properLy reglsLry ln Lhe name of Lhe sald Crense
accordlng Lo cerLlflcaLe no 3 wlLh Lhe boundarles Lhereln glven LhaL on lebruary 14 1907 !ose uuran a nephew
of Lhe defendanL wlLh Lhe laLLers knowledge and consenL execuLed before a noLary a publlc lnsLrumenL whereby
he sold and conveyed Lo Lhe plalnLlff company for 1300 Lhe aforemenLloned properLy Lhe vendor uuran
reservlng Lo hlmself Lhe rlghL Lo repurchase lL for Lhe same prlce wlLhln a perlod of four years from Lhe daLe of Lhe
sald lnsLrumenL LhaL Lhe plalnLlff company had noL enLered lnLo possesslon of Lhe purchased properLy owlng Lo
lLs conLlnued occupancy by Lhe defendanL and hls nephew !ose uuran by vlrLue of a conLracL of lease execuLed by
Lhe plalnLlff Lo uuran whlch conLracL was ln force up Lo lebruary 14 1911 LhaL Lhe sald lnsLrumenL of sale of Lhe
properLy execuLed by !ose uuran was publlcly and freely conflrmed and raLlfled by Lhe defendanL Crense LhaL ln
order Lo perfecL Lhe LlLle Lo Lhe sald properLy buL LhaL Lhe defendanL Crense refused Lo do so wlLhouL any
[usLlflable cause or reason wherefore he should be compelled Lo execuLe Lhe sald deed by an express order of Lhe
courL for !ose uuran ls noLorlously lnsolvenL and cannoL relmburse Lhe plalnLlff company for Lhe prlce of Lhe sale
whlch he recelved nor pay any sum whaLever for Lhe losses and damages occasloned by Lhe sald sale aslde from
Lhe facL LhaL Lhe plalnLlff had suffered damage by loslng Lhe presenL value of Lhe properLy whlch was worLh
3000 LhaL unless such deed of flnal conveyance were execuLed ln behalf of Lhe plalnLlff company lL would be
ln[ured by Lhe fraud perpeLraLed by Lhe vendor uuran ln connlvance wlLh Lhe defendanL LhaL Lhe laLLer had been
occupylng Lhe sald properLy slnce lebruary 14 1911 and refused Lo pay Lhe renLal Lhereof noLwlLhsLandlng Lhe
demand made upon hlm for lLs paymenL aL Lhe raLe of 30 per monLh Lhe [usL and reasonable value for Lhe
occupancy of Lhe sald properLy Lhe possesslon of whlch Lhe defendanL llkewlse refused Lo dellver Lo Lhe plalnLlff
company ln splLe of Lhe conLlnuous demands made upon hlm Lhe defendanL wlLh bad falLh and Lo Lhe pre[udlce
of Lhe flrm of CuLlerrez Permanos clalmlng Lo have rlghLs of ownershlp and possesslon ln Lhe sald properLy
1herefore lL was prayed LhaL [udgmenL be rendered by holdlng LhaL Lhe land and lmprovemenLs ln quesLlon belong
leglLlmaLely and excluslvely Lo Lhe plalnLlff and orderlng Lhe defendanL Lo execuLe ln Lhe plalnLlffs behalf Lhe sald
lnsLrumenL of Lransfer and conveyance of Lhe properLy and of all Lhe rlghL lnLeresL LlLle and share whlch Lhe
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defendanL has Lhereln LhaL Lhe defendanL be senLenced Lo pay 30 per monLh for damages and renLal of Lhe
properLy from lebruary 14 1911 and LhaL ln case Lhese remedles were noL granLed Lo Lhe plalnLlff Lhe defendanL
be senLenced Lo pay Lo lL Lhe sum of 3000 as damages LogeLher wlLh lnLeresL Lhereon slnce Lhe daLe of Lhe
lnsLlLuLlon of Lhls sulL and Lo pay Lhe cosLs and oLher legal expenses
1he demurrer flled Lo Lhe amended complalnL was overruled wlLh excepLlon on Lhe parL of Lhe defendanL whose
counsel made a general denlal of Lhe allegaLlons conLalned ln Lhe complalnL excepLlng Lhose LhaL were admlLLed
and speclflcally denled paragraph 4 Lhereof Lo Lhe effecL LhaL on lebruary 14 1907 !ose uuran execuLed Lhe deed
of sale of Lhe properLy ln favor of Lhe plalnLlff wlLh Lhe defendanLs knowledge and consenL1owpblloet
As Lhe flrsL speclal defense counsel for Lhe defendanL alleged LhaL Lhe facLs seL forLh ln Lhe complalnL wlLh respecL
Lo Lhe execuLlon of Lhe deed dld noL consLlLuLe a cause of acLlon nor dld Lhose alleged ln Lhe oLher form of acLlon
for Lhe collecLlon of 3000 Lhe value of Lhe realLy
As Lhe second speclal defense he alleged LhaL Lhe defendanL was Lhe lawful owner of Lhe properLy clalmed ln Lhe
complalnL as hls ownershlp was recorded ln Lhe properLy reglsLry and LhaL slnce hls LlLle had been reglsLered
under Lhe proceedlngs lo tem prescrlbed by AcL no 496 lL was concluslve agalnsL Lhe plalnLlff and Lhe preLended
rlghLs alleged Lo have been acqulred by !ose uuran prlor Lo such reglsLraLlon could noL now prevall LhaL Lhe
defendanL had noL execuLed any wrlLLen power of aLLorney nor glven any verbal auLhorlLy Lo !ose uuran ln order
LhaL Lhe laLLer mlghL ln hls name and represenLaLlon sell Lhe sald properLy Lo Lhe plalnLlff company LhaL Lhe
defendanLs knowledge of Lhe sald sale was acqulred long afLer Lhe execuLlon of Lhe conLracL of sale beLween
uuran and CuLlerrez Permanos and LhaL prlor LhereLo Lhe defendanL dld noL lnLenLlonally and dellberaLely
perform any acL such as mlghL have lnduced Lhe plalnLlff Lo belleve LhaL uuran was empowered and auLhorlzed by
Lhe defendanL and whlch would warranL hlm ln acLlng Lo hls own deLrlmenL under Lhe lnfluence of LhaL bellef
Counsel Lherefore prayed LhaL Lhe defendanL be absolved from Lhe complalnL and LhaL Lhe plalnLlff be senLenced
Lo pay Lhe cosLs and Lo hold hls peace forever
AfLer Lhe hearlng of Lhe case and an examlnaLlon of Lhe evldence lnLroduced by boLh parLles Lhe courL rendered
Lhe [udgmenL aforemenLloned Lo whlch counsel for Lhe defendanL excepLed and moved for a new Lrlal 1hls
moLlon was denled an excepLlon was Laken by Lhe defendanL and upon presenLaLlon of Lhe proper blll of
excepLlons Lhe same was approved cerLlfled and forwarded Lo Lhe clerk of hls courL
1hls sulL lnvolves Lhe valldlLy and efflcacy of Lhe sale under rlghL of redempLlon of a parcel of land and a masonry
house wlLh Lhe olpo roof erecLed Lhereon effecLed by !ose uuran a nephew of Lhe owner of Lhe properLy
Lngraclo Crense for Lhe sum of 1300 by means of a noLarlal lnsLrumenL execuLed and raLlfled on lebruary 14
1907
AfLer Lhe lapse of Lhe four years sLlpulaLed for Lhe redempLlon Lhe defendanL refused Lo dellver Lhe properLy Lo
Lhe purchaser Lhe flrm of CuLlerrez Permanos and Lo pay Lhe renLal Lhereof aL Lhe raLe of 30 per monLh for lLs
use and occupaLlon slnce lebruary 14 1911 when Lhe perlod for lLs repurchase LermlnaLed Pls refusal was based
on Lhe allegaLlons LhaL he had been and was Lhen Lhe owner of Lhe sald properLy whlch was reglsLered ln hls name
ln Lhe properLy reglsLry LhaL he had noL execuLed any wrlLLen power of aLLorney Lo !ose uuran nor had he glven
Lhe laLLer any verbal auLhorlzaLlon Lo sell Lhe sald properLy Lo Lhe plalnLlff flrm ln hls name and LhaL prlor Lo Lhe
execuLlon of Lhe deed of sale Lhe defendanL performed no acL such as mlghL have lnduced Lhe plalnLlff Lo belleve
LhaL !ose uuran was empowered and auLhorlzed by Lhe defendanL Lo effecL Lhe sald sale
1he plalnLlff flrm Lherefore charged !ose uuran ln Lhe CourL of llrsL lnsLance of Lhe sald provlnce wlLh esLafa for
havlng represenLed hlmself ln Lhe sald deed of sale Lo be Lhe absoluLe owner of Lhe aforesald land and
lmprovemenLs whereas ln reallLy Lhey dld noL belong Lo hlm buL Lo Lhe defendanL Crense Powever aL Lhe Lrlal of
Lhe case Lngraclo Crense called as a wlLness belng lnLerrogaLed by Lhe flscal as Lo wheLher he and consenLed Lo
uurans selllng Lhe sald properLy under rlghL of redempLlon Lo Lhe flrm of CuLlerrez Permanos replled LhaL he had
ln vlew of Lhls sLaLemenL by Lhe defendanL Lhe courL acqulLLed !ose uuran of Lhe charge of esLafa
As a resulL of Lhe acqulLLal of !ose uuran based on Lhe expllclL LesLlmony of hls uncle Lngaclo Crense Lhe owner
of Lhe properLy Lo Lhe effecL LhaL he had consenLed Lo hls nephew uurans selllng Lhe properLy under rlghL of
repurchase Lo CuLlerrez Permanos counsel for Lhls flrm flled a complalnanL praylng among oLher remedles LhaL
Lhe defendanL Crense be compelled Lo execuLe a deed for Lhe Lransfer and conveyance Lo Lhe plalnLlff company of
all Lhe rlghL LlLle and lnLeresL wlLh Crense had ln Lhe properLy sold and Lo pay Lo Lhe same Lhe renLal of Lhe
properLy due from lebruary 14 1911ltcolf
noLwlLhsLandlng Lhe allegaLlons of Lhe defendanL Lhe record ln Lhls case shows LhaL he dld glve hls consenL ln
order LhaL hls nephew !ose uuran mlghL sell Lhe properLy ln quesLlon Lo CuLlerrez Permanos and LhaL he dld
LhereafLer conflrm and raLlfy Lhe sale by means of a publlc lnsLrumenL execuLed before a noLary
lL havlng been proven aL Lhe Lrlal LhaL he gave hls consenL Lo Lhe sald sale lL follows LhaL Lhe defendanL conferred
verbal or aL leasL lmplled power of agency upon hls nephew uuran who accepLed lL ln Lhe same way by selllng
Lhe sald properLy 1he prlnclpal musL Lherefore fulflll all Lhe obllgaLlons conLracLed by Lhe agenL who acLed wlLhln
Lhe scope of hls auLhorlLy (Clvll Code arLs 1709 1710 and 1727)
Lven should lL be held LhaL Lhe sald consenL was granLed subsequenLly Lo Lhe sale lL ls unquesLlonable LhaL Lhe
defendanL Lhe owner of Lhe properLy approved Lhe acLlon of hls nephew who ln Lhls case acLed as Lhe manager
of hls uncles buslness and Crenser raLlflcaLlon produced Lhe effecL of an express auLhorlzaLlon Lo make Lhe sald
sale (Clvll Code arLs 1888 and 1892)
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ArLlcle 1239 of Lhe Clvll Code prescrlbes no one can conLracL ln Lhe name of anoLher wlLhouL belng auLhorlzed by
hlm or wlLhouL hls legal represenLaLlon accordlng Lo law
A conLracL execuLed ln Lhe name of anoLher by one who has nelLher hls auLhorlzaLlon nor legal represenLaLlon shall
be vold unless lL should be raLlfled by Lhe person ln whose name lL was execuLed before belng revoked by Lhe
oLher conLracLlng parLy
1he sworn sLaLemenL made by Lhe defendanL Crense whlle LesLlfylng as a wlLness aL Lhe Lrlal of uuran for esLafa
vlrLually conflrms and raLlfles Lhe sale of hls properLy effecLed by hls nephew uuran and pursuanL Lo arLlcle 1313
of Lhe Clvll Code remedles all defecLs whlch Lhe conLracL may have conLalned from Lhe momenL of lLs execuLlon
1he sale of Lhe sald properLy made by uuran Lo CuLlerrez Permanos was lndeed null and vold ln Lhe beglnnlng buL
afLerwards became perfecLly valld and cured of Lhe defecL of nulllLy lL bore aL lLs execuLlon by Lhe conflrmaLlon
solemnly made by Lhe sald owner upon hls sLaLlng under oaLh Lo Lhe [udge LhaL he hlmself consenLed Lo hls
nephew !ose uurans maklng Lhe sald sale Moreover pursuanL Lo arLlcle 1309 of Lhe Code Lhe rlghL of acLlon for
nulllflcaLlon LhaL could have been broughL became legally exLlngulshed from Lhe momenL Lhe conLracL was valldly
conflrmed and raLlfled and ln Lhe presenL case lL ls unquesLlonable LhaL Lhe defendanL dld conflrm Lhe sald
conLracL of sale and consenL Lo lLs execuLlon
Cn Lhe LesLlmony glven by Lngaclo Crense aL Lhe Lrlal of uuran for esLafa Lhe laLLer was acqulLLed and lL would
noL be [usL LhaL Lhe sald LesLlmony expresslve of hls consenL Lo Lhe sale of hls properLy whlch deLermlned Lhe
acqulLLal of hls nephew !ose uuran who Lhen acLed as hls buslness manager and whlch LesLlmony wlped ouL Lhe
decepLlon LhaL ln Lhe beglnnlng appeared Lo have been pracLlced by Lhe sald uuran should noL now serve ln
passlng upon Lhe conducL of Lngraclo Crense ln relaLlon Lo Lhe flrm of CuLlerrez Permanos ln order Lo prove hls
consenL Lo Lhe sale of hls properLy for had lL noL been for Lhe consenL admlLLed by Lhe defendanL Crense Lhe
plalnLlff would have been Lhe vlcLlm of esLafa
lf Lhe defendanL Crense acknowledged and admlLLed under oaLh LhaL he had consenLed Lo !ose uurans selllng Lhe
properLy ln llLlgaLlon Lo CuLlerrez Permanos lL ls noL [usL nor ls lL permlsslble for hlm afLerward Lo deny LhaL
admlsslon Lo Lhe pre[udlce of Lhe purchaser who gave 1300 for Lhe sald properLy
1he conLracL of sale of Lhe sald properLy conLalned ln Lhe noLarlal lnsLrumenL of lebruary 14 1907 ls alleged Lo be
lnvalld null and vold under Lhe provlslons of paragraph 3 of secLlon 333 of Lhe Code of Clvll rocedure because
Lhe auLhorlLy whlch Crense may have glven Lo uuran Lo make Lhe sald conLracL of sale ls noL shown Lo have been
ln wrlLlng and slgned by Crense buL Lhe record dlscloses saLlsfacLory and concluslve proof LhaL Lhe defendanL
Crense gave hls consenL Lo Lhe conLracL of sale execuLed ln a publlc lnsLrumenL by hls nephew !ose uuran Such
consenL was proven ln a crlmlnal acLlon by Lhe sworn LesLlmony of Lhe prlnclpal and presenLed ln Lhls clvll sulL by
oLher sworn LesLlmony of Lhe same prlnclpal and by oLher evldence Lo whlch Lhe defendanL made no ob[ecLlon
1herefore Lhe prlnclpal ls bound Lo ablde by Lhe consequences of hls agency as Lhough lL had acLually been glven ln
wrlLlng (Conlu vs AraneLa and Cuanko 13 hll 8ep 387 CallemlL vs 1ablllran 20 hll 8ep 241 kuenzle
SLrelff vs !longco 22 hll 8ep 110)
1he repeaLed and successlve sLaLemenLs made by Lhe defendanL Crense ln Lwo acLlons whereln he afflrmed LhaL
he had glven hls consenL Lo Lhe sale of hls properLy meeL Lhe requlremenLs of Lhe law and legally excuse Lhe lack
of wrlLLen auLhorlLy and as Lhey are a full raLlflcaLlon of Lhe acLs execuLed by hls nephew !ose uuran Lhey
produce Lhe effecLs of an express power of agency
1he [udgmenL appealed from ln harmony wlLh Lhe law and Lhe merlLs of Lhe case and Lhe errors asslgned LhereLo
have been duly refuLed by Lhe foregolng conslderaLlons so lL should be afflrmed
1he [udgmenL appealed from ls hereby afflrmed wlLh Lhe cosLs agalnsL Lhe appellanL
Atellooo cI Iobosoo cotsoo MotelooJ ooJ Atoollo II coocot
SUkLML CCUk1
Manlla
SLCCnu ulvlSlCn
Gk No L4446 Ianuary 29 1988
kUS1ICC ADILLL peLlLloner
vs
1nL nCNCkA8LL CCUk1 CI ALALS LML1LkIA ASLIC 1LCDCkICA ASLIC DCMINGC ASLIC ICSLIA ASLIC
and SAN1IAGC ASLIC respondenLs
SAkMILN1C
ln lssue hereln are properLy and properLy rlghLs a famlllar sub[ecL of conLroversy and a wellsprlng of enormous
confllcL LhaL has led noL only Lo proLracLed legal enLanglemenLs buL Lo even more blLLer consequences llke
sLralned relaLlonshlps and even Lhe forfelLure of llves lL ls a quesLlon LhaL llkewlse reflecLs a Lraglc commenLary on
prevalllng soclal and culLural values and lnsLlLuLlons where as one observer noLes wealLh and lLs accumulaLlon
are Lhe basls of selffulflllmenL and where properLy ls held as sacred as llfe lLself lL ls ln Lhe defense of hls
properLy says Lhls modern Lhlnker LhaL one wlll moblllze hls deepesL proLecLlve devlces and anybody LhaL
LhreaLens hls possesslons wlll arouse hls mosL passlonaLe enmlLy
1

1he Lask of Lhls CourL however ls noL Lo [udge Lhe wlsdom of values Lhe burden of reconsLrucLlng Lhe soclal order
ls shouldered by Lhe pollLlcal leadershlpand Lhe people Lhemselves
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1he parLles have come Lo Lhls CourL for rellef and accordlngly our responslblllLy ls Lo glve Lhem LhaL rellef pursuanL
Lo Lhe decree of law
1he anLecedenL facLs are quoLed from Lhe declslon
2
appealed from
xxx xxx xxx
1he land ln quesLlon LoL 14694 of CadasLral Survey of Albay locaLed ln Legaspl ClLy wlLh an area of some 11323
sq m orlglnally belonged Lo one lellsa Alzul as her own prlvaLe properLy she marrled Lwlce ln her llfeLlme Lhe
flrsL wlLh one 8ernabe Adllle wlLh whom she had as an only chlld hereln defendanL 8usLlco Adllle ln her second
marrlage wlLh one rocoplo Ase[o her chlldren were hereln plalnLlffs now someLlme ln 1939 sald lellsa sold
Lhe properLy ln pocto Je tetto Lo cerLaln 3rd persons perlod of repurchase belng 3 years buL she dled ln 1942
wlLhouL belng able Lo redeem and afLer her deaLh buL durlng Lhe perlod of redempLlon hereln defendanL
repurchased by hlmself alone and afLer LhaL he execuLed a deed of exLra[udlclal parLlLlon represenLlng hlmself Lo
be Lhe only helr and chlld of hls moLher lellsa wlLh Lhe consequence LhaL he was able Lo secure LlLle ln hls name
alone also so LhaL CC1 no 21137 ln Lhe name of hls moLher was Lransferred Lo hls name LhaL was ln 1933 LhaL
was why afLer some efforLs of compromlse had falled hls halfbroLhers and slsLers hereln plalnLlffs flled presenL
case for parLlLlon wlLh accounLlng on Lhe poslLlon LhaL he was only a LrusLee on an lmplled LrusL when he
redeemedand Lhls ls Lhe evldence buL as lL also Lurned ouL LhaL one of plalnLlffs LmeLerla Ase[o was occupylng a
porLlon defendanL counLerclalmed for her Lo vacaLe LhaL
Well Lhen afLer hearlng Lhe evldence Lrlal !udge susLalned defendanL ln hls poslLlon LhaL he was and became
absoluLe owner he was noL a LrusLee and Lherefore dlsmlssed case and also condemned plalnLlff occupanL
LmeLerla Lo vacaLe lL ls because of Lhls LhaL plalnLlffs have come here and conLend LhaL Lrlal courL erred ln
l declarlng Lhe defendanL absoluLe owner of Lhe properLy
ll noL orderlng Lhe parLlLlon of Lhe properLy and
lll orderlng one of Lhe plalnLlffs who ls ln possesslon of Lhe porLlon of Lhe properLy Lo vacaLe Lhe land p 1
AppellanLs brlef
whlch can be reduced Lo slmple quesLlon of wheLher or noL on Lhe basls of evldence and law [udgmenL appealed
from should be malnLalned
3

xxx xxx xxx
1he respondenL CourL of appeals reversed Lhe Lrlal CourL
4
and ruled for Lhe plalnLlffsappellanLs Lhe prlvaLe
respondenLs hereln 1he peLlLloner now appeals by way of cerLlorarl from Lhe CourLs declslon
We requlred Lhe prlvaLe respondenLs Lo flle a commenL and LhereafLer havlng glven due course Lo Lhe peLlLlon
dlrecLed Lhe parLles Lo flle Lhelr brlefs Cnly Lhe peLlLloner however flled a brlef and Lhe prlvaLe respondenLs
havlng falled Lo flle one we declared Lhe case submlLLed for declslon
1he peLlLlon ralses a purely legal lssue May a coowner acqulre excluslve ownershlp over Lhe properLy held ln
common?
LssenLlally lL ls Lhe peLlLloners conLenLlon LhaL Lhe properLy sub[ecL of dlspuLe devolved upon hlm upon Lhe
fallure of hls cohelrs Lo [oln hlm ln lLs redempLlon wlLhln Lhe perlod requlred by law Pe relles on Lhe provlslons of
ArLlcle 1313 of Lhe old Clvll ArLlcle 1613 of Lhe presenL Code glvlng Lhe vendee o tetto Lhe rlghL Lo demand
redempLlon of Lhe enLlre properLy
1here ls no merlL ln Lhls peLlLlon
1he rlghL of repurchase may be exerclsed by a coowner wlLh aspecL Lo hls share alone
Whlle Lhe records show

LhaL Lhe peLlLloner redeemed Lhe properLy ln lLs enLlreLy shoulderlng Lhe expenses Lherefor LhaL dld noL make
hlm Lhe owner of all of lL ln oLher words lL dld noL puL Lo end Lhe exlsLlng sLaLe of coownershlp
necessary expenses may be lncurred by one coowner sub[ecL Lo hls rlghL Lo collecL relmbursemenL from Lhe
remalnlng coowners
6
1here ls no doubL LhaL redempLlon of properLy enLalls a necessary expense under Lhe Clvll
Code
A81 488 Lach coowner shall have a rlghL Lo compel Lhe oLher coowners Lo conLrlbuLe Lo Lhe expenses of
preservaLlon of Lhe Lhlng or rlghL owned ln common and Lo Lhe Laxes Any one of Lhe laLLer may exempL hlmself
from Lhls obllgaLlon by renounclng so much of hls undlvlded lnLeresL as may be equlvalenL Lo hls share of Lhe
expenses and Laxes no such walver shall be made lf lL ls pre[udlclal Lo Lhe coownershlp
1he resulL ls LhaL Lhe properLy remalns Lo be ln a condlLlon of coownershlp Whlle a vendee o tetto under ArLlcle
1613 of Lhe Code may noL be compelled Lo consenL Lo a parLlal redempLlon Lhe redempLlon by one cohelr or
coowner of Lhe properLy ln lLs LoLallLy does noL vesL ln hlm ownershlp over lL lallure on Lhe parL of all Lhe co
owners Lo redeem lL enLlLles Lhe vendee o tetto Lo reLaln Lhe properLy and consolldaLe LlLle LhereLo ln hls name
7

8uL Lhe provlslon does noL glve Lo Lhe redeemlng coowner Lhe rlghL Lo Lhe enLlre properLy lL does noL provlde for
a mode of LermlnaLlng a coownershlp
nelLher does Lhe facL LhaL Lhe peLlLloner had succeeded ln securlng LlLle over Lhe parcel ln hls name LermlnaLe Lhe
exlsLlng coownershlp Whlle hls halfbroLhers and slsLers are as we sald llable Lo hlm for relmbursemenL as and
for Lhelr shares ln redempLlon expenses he cannoL clalm excluslve rlghL Lo Lhe properLy owned ln common
8eglsLraLlon of properLy ls noL a means of acqulrlng ownershlp lL operaLes as a mere noLlce of exlsLlng LlLle LhaL ls
lf Lhere ls one
1he peLlLloner musL Lhen be sald Lo be a LrusLee of Lhe properLy on behalf of Lhe prlvaLe respondenLs 1he Clvll
Code sLaLes
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A81 1436 lf properLy ls acqulred Lhrough mlsLake or fraud Lhe person obLalnlng lL ls by force of law consldered a
LrusLee of an lmplled LrusL for Lhe beneflL of Lhe person from whom Lhe properLy comes
We agree wlLh Lhe respondenL CourL of Appeals LhaL fraud aLLended Lhe reglsLraLlon of Lhe properLy 1he
peLlLloners preLenslon LhaL he was Lhe sole helr Lo Lhe land ln Lhe affldavlL of exLra[udlclal seLLlemenL he execuLed
prellmlnary Lo Lhe reglsLraLlon Lhereof beLrays a clear efforL on hls parL Lo defraud hls broLhers and slsLers and Lo
exerclse sole domlnlon over Lhe properLy 1he aforequoLed provlslon Lherefore applles
lL ls Lhe vlew of Lhe respondenL CourL LhaL Lhe peLlLloner ln Laklng over Lhe properLy dld so elLher on behalf of hls
cohelrs ln whlch evenL he had consLlLuLed hlmself a oeqotlotom qestot under ArLlcle 2144 of Lhe Clvll Code or
for hls excluslve beneflL ln whlch case he ls gullLy of fraud and musL acL as LrusLee Lhe prlvaLe respondenLs belng
Lhe beneflclarles under Lhe ArLlcle 1436 1he evldence of course polnLs Lo Lhe second alLernaLlve Lhe peLlLloner
havlng asserLed clalms of excluslve ownershlp over Lhe properLy and havlng acLed ln fraud of hls cohelrs Pe
cannoL Lherefore be sald Lo have assume Lhe mere managemenL of Lhe properLy abandoned by hls cohelrs Lhe
slLuaLlon ArLlcle 2144 of Lhe Code conLemplaLes ln any case as Lhe respondenL CourL lLself afflrms Lhe resulL
would be Lhe same wheLher lL ls one or Lhe oLher 1he peLlLloner would remaln llable Lo Lhe rlvaLe respondenLs
hls cohelrs
1hls CourL ls noL unaware of Lhe wellesLabllshed prlnclple LhaL prescrlpLlon bars any demand on properLy (owned
ln common) held by anoLher (coowner) followlng Lhe requlred number of years ln LhaL evenL Lhe parLy ln
possesslon acqulres LlLle Lo Lhe properLy and Lhe sLaLe of coownershlp ls ended
8
ln Lhe case aL bar Lhe properLy
was reglsLered ln 1933 by Lhe peLlLloner solely ln hls name whlle Lhe clalm of Lhe prlvaLe respondenLs was
presenLed ln 1974 Pas prescrlpLlon Lhen seL ln?
We hold ln Lhe negaLlve rescrlpLlon as a mode of LermlnaLlng a relaLlon of coownershlp musL have been
preceded by repudlaLlon (of Lhe coownershlp) 1he acL of repudlaLlon ln Lurn ls sub[ecL Lo cerLaln condlLlons (1) a
coowner repudlaLes Lhe coownershlp (2) such an acL of repudlaLlon ls clearly made known Lo Lhe oLher co
owners (3) Lhe evldence Lhereon ls clear and concluslve and (4) he has been ln possesslon Lhrough open
conLlnuous excluslve and noLorlous possesslon of Lhe properLy for Lhe perlod requlred by law
9

1he lnsLanL case shows LhaL Lhe peLlLloner had noL complled wlLh Lhese requlslLes We are noL convlnced LhaL he
had repudlaLed Lhe coownershlp on Lhe conLrary he had dellberaLely kepL Lhe prlvaLe respondenLs ln Lhe dark by
felgnlng sole helrshlp over Lhe esLaLe under dlspuLe Pe cannoL Lherefore be sald Lo have made known hls efforLs
Lo deny Lhe coownershlp Moreover one of Lhe prlvaLe respondenLs LmeLerla Ase[o ls occupylng a porLlon of Lhe
land up Lo Lhe presenL yeL Lhe peLlLloner has noL Laken palns Lo e[ecL her Lherefrom As a maLLer of facL he
soughL Lo recover possesslon of LhaL porLlon LmeLerla ls occupylng only as a counLerclalm and only afLer Lhe
prlvaLe respondenLs had flrsL soughL [udlclal rellef
lL ls Lrue LhaL reglsLraLlon under Lhe 1orrens sysLem ls consLrucLlve noLlce of LlLle
10
buL lL has llkewlse been our
holdlng LhaL Lhe 1orrens LlLle does noL furnlsh a shleld for fraud
11
lL ls Lherefore no argumenL Lo say LhaL Lhe acL of
reglsLraLlon ls equlvalenL Lo noLlce of repudlaLlon assumlng Lhere was one noLwlLhsLandlng Lhe longsLandlng rule
LhaL reglsLraLlon operaLes as a unlversal noLlce of LlLle
lor Lhe same reason we cannoL dlsmlss Lhe prlvaLe respondenLs clalms commenced ln 1974 over Lhe esLaLe
reglsLered ln 1933 Whlle acLlons Lo enforce a consLrucLlve LrusL prescrlbes ln Len years
12
reckoned from Lhe daLe
of Lhe reglsLraLlon of Lhe properLy
13
we as we sald are noL prepared Lo counL Lhe perlod from such a daLe ln Lhls
case We noLe Lhe peLlLloners sob toso efforLs Lo geL hold of Lhe properLy excluslvely for hlmself beglnnlng wlLh hls
fraudulenL mlsrepresenLaLlon ln hls unllaLeral affldavlL of exLra[udlclal seLLlemenL LhaL he ls Lhe only helr and chlld
of hls moLher lellza wlLh Lhe consequence LhaL he was able Lo secure LlLle ln hls name also
14
Accordlngly we
hold LhaL Lhe rlghL of Lhe prlvaLe respondenLs commenced from Lhe Llme Lhey acLually dlscovered Lhe peLlLloners
acL of defraudaLlon
1
Accordlng Lo Lhe respondenL CourL of Appeals Lhey came Lo know of lL apparenLly only
durlng Lhe progress of Lhe llLlgaLlon
16
Pence prescrlpLlon ls noL a bar
Moreover and as a rule prescrlpLlon ls an afflrmaLlve defense LhaL musL be pleaded elLher ln a moLlon Lo dlsmlss
or ln Lhe answer oLherwlse lL ls deemed walved
17
and here Lhe peLlLloner never ralsed LhaL defense
18
1here are
recognlzed excepLlons Lo Lhls rule buL Lhe peLlLloner has noL shown why Lhey apply
WPL8LlC8L Lhere belng no reverslble error commlLLed by Lhe respondenL CourL of Appeals Lhe peLlLlon ls
uLnlLu 1he ueclslon soughL Lo be revlewed ls hereby Alll8MLu ln LoLo no pronouncemenL as Lo cosLs
SC C8uL8Lu
op (cboltmoo) Meleoclonetteto lotos ooJ loJlllo II coocot
Iootnotes
1 C8LLnL lLLlx 1PL LnLM? 234 (1971)
2 CaLmalLan Magno AcLlng res ! uomondon SlxLo and 8eyes Samuel !! Concurrlng
3 8ollo 1413
4 Solldum Arsenlc resldlng !udge CourL of llrsL lnsLance of Albay Clvll Case no 3029
3 ClvlL CCuL arL 1612 ClvlL CCuL (1889) arL 1314
6 Supra arL 489
7 Supra arL 1607
8 1he modes of LermlnaLlng a coownershlp oLher Lhan by prescrlpLlon are parLlLlon (ClvlL CCuL arLs 494 1079
1082) merger or consolldaLlon and loss of Lhe Lhlng (3 Manresa 486)
9 SanLos v Pelrs of CrlsosLomo 41 hll 3342 (1921) 8argayo v CamumoL 40 hll 837 (1920)
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10 res uecree no 1329 sec 31
11 Amerol v 8agumbaran C8 no 33261 SepLember 30 1987
12 5opto
13 Cerona v ue Cuzman no L19060 May 29 1964 11 SC8A 133 (1964)
14 8ollo lJ 14
13 Cerona v ue Cuzman sopto
16 8ollo lJ 18
17 8uLLS Cl CCu81 8ule 9 sec 2 A parLy need noL plead Lhe sLaLuLe of llmlLaLlons ln a responslve pleadlng (or
moLlon Lo dlsmlss) where Lhe complalnL lLself shows LhaL Lhe clalms have prescrlbed lerrer v LrlcLa no L41767
AugusL 23 1978 84 SC8A 703 (1978) Llkewlse lL has been held LhaL where Lhe defendanL had no way of knowlng
LhaL Lhe clalm advanced by Lhe plalnLlff had prescrlbed hls fallure Lo lnvoke Lhe sLaLuLe (ln hls answer or moLlon Lo
dlsmlss) does noL consLlLuLe a walver of such a defense Cuanzo v 8amlrez 32 hll 492 (1914) ln anoLher case
we sald LhaL prescrlpLlon need noL be pleaded speclflcally ln an answer where Lhe evldence lLself shows LhaL
prescrlpLlon bars Lhe plalnLlffs clalms hlllpplne naLlonal 8ank v erez no L20412 lebruary 28 1966 16 SC8A
270 (1966) see also Chua Lanko v uloso 97 hll 821 (1933) hlllpplne naLlonal 8ank v aclflc Commlsslon
Pouse no L22673 March 28 1969 27 SC8A 766 (1969)
18 8ollo ld 18
SUkLML CCUk1
Manlla
1Pl8u ulvlSlCn
Gk No 82670 September 1 1989
DCML1ILA M ANDkLS do|ng bus|ness under the name and sty|e IkLNLS WLAkING AAkLL peLlLloner
vs
MANUIAC1UkLkS nANCVLk 1kUS1 CCkCkA1ICN and CCUk1 CI ALALS respondenLs
kopoe A 1omoyo fot petltlooet
komolo Mobooto 8oeooveototo 5oyoc ue los Aoqeles fot ptlvote tespooJeot
CCk1LS
Assalled ln Lhls peLlLlon for revlew on cettlototl ls Lhe [udgmenL of Lhe CourL of Appeals whlch applylng Lhe
docLrlne of solotlo loJebltl reversed Lhe declslon of Lhe 8eglonal 1rlal CourL 8ranch Cv Cuezon ClLy by decldlng ln
favor of prlvaLe respondenL
eLlLloner uslng Lhe buslness name lrenes Wearlng Apparel was engaged ln Lhe manufacLure of ladles
garmenLs chlldrens wear mens apparel and llnens for local and forelgn buyers Among lLs forelgn buyers was
laceLs lunwear lnc (herelnafLer referred Lo as lACL1S) of Lhe unlLed SLaLes
ln Lhe course of Lhe buslness LransacLlon beLween Lhe Lwo lACL1S from Llme Lo Llme remlLLed cerLaln amounLs of
money Lo peLlLloner ln paymenL for Lhe lLems lL had purchased SomeLlme ln AugusL 1980 lACL1S lnsLrucLed Lhe
llrsL naLlonal SLaLe 8ank of new !ersey newark new !ersey uSA (herelnafLer referred Lo as lnS8) Lo Lransfer
$1000000 Lo peLlLloner vla hlllpplne naLlonal 8ank SLa Cruz 8ranch Manlla (herelnafLer referred Lo as n8)
AcLlng on sald lnsLrucLlon lnS8 lnsLrucLed prlvaLe respondenL ManufacLurers Panover and 1rusL CorporaLlon Lo
effecL Lhe above menLloned Lransfer Lhrough lLs faclllLles and Lo charge Lhe amounL Lo Lhe accounL of lnS8 wlLh
prlvaLe respondenL AlLhough prlvaLe respondenL was able Lo send a Lelex Lo n8 Lo pay peLlLloner $1000000
Lhrough Lhe lllplnas 8ank where peLlLloner had an accounL Lhe paymenL was noL effecLed lmmedlaLely because
Lhe payee deslgnaLed ln Lhe Lelex was only Wearlng Apparel upon query by n8 prlvaLe respondenL senL n8
anoLher Lelex daLed AugusL 27 1980 sLaLlng LhaL Lhe paymenL was Lo be made Lo lrenes Wearlng Apparel Cn
AugusL 28 1980 peLlLloner recelved Lhe remlLLance of $1000000 Lhrough uemand urafL no 223634 of Lhe n8
Meanwhlle on AugusL 23 1980 afLer learnlng abouL Lhe delay ln Lhe remlLLance of Lhe money Lo peLlLloner
lACL1S lnformed lnS8 abouL Lhe slLuaLlon Cn SepLember 8 1980 unaware LhaL peLlLloner had already recelved
Lhe remlLLance lACL1S lnformed prlvaLe respondenL abouL Lhe delay and aL Lhe same Llme amended lLs
lnsLrucLlon by asklng lL Lo effecL Lhe paymenL Lhrough Lhe hlllpplne Commerclal and lndusLrlal 8ank (herelnafLer
referred Lo as Cl8) lnsLead of n8
Accordlngly prlvaLe respondenL whlch was also unaware LhaL peLlLloner had already recelved Lhe remlLLance of
$1000000 from n8 lnsLrucLed Lhe Cl8 Lo pay $1000000 Lo peLlLloner Pence on SepLember 11 1980
peLlLloner recelved a second $1000000 remlLLance
rlvaLe respondenL deblLed Lhe accounL of lnS8 for Lhe second $1000000 remlLLance effecLed Lhrough Cl8
Powever when lnS8 dlscovered LhaL prlvaLe respondenL had made a dupllcaLlon of Lhe remlLLance lL asked for a
recredlL of lLs accounL ln Lhe amounL of $1000000 rlvaLe respondenL complled wlLh Lhe requesL
rlvaLe respondenL asked peLlLloner for Lhe reLurn of Lhe second remlLLance of $1000000 buL Lhe laLLer refused Lo
pay Cn May 12 1982 a complalnL was flled wlLh Lhe 8eglonal 1rlal CourL 8ranch Cv Cuezon ClLy whlch was
declded ln favor of peLlLloner as defendanL 1he Lrlal courL ruled LhaL ArL 2134 of Lhe new Clvll Code ls noL
appllcable Lo Lhe case because Lhe second remlLLance was made noL by mlsLake buL by negllgence and peLlLloner
was noL un[usLly enrlched by vlrLue Lhereof 8ecord p 234 Cn appeal Lhe CourL of Appeals held LhaL ArL 2134 ls
appllcable and reversed Lhe 81C declslon 1he dlsposlLlve porLlon of Lhe CourL of Appeals declslon reads as
follows
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WPL8LlC8L Lhe appealed declslon ls hereby 8LvL8SLu and SL1 ASluL and anoLher one enLered ln favor of
plalnLlffappellanL and agalnsL defendanLappellee uomellLa (slc) M Andres dolng buslness under Lhe name and
sLyle lrenes Wearlng Apparel Lo relmburse and/or reLurn Lo plalnLlffappellanL Lhe amounL of $1000000 lLs
equlvalenL ln hlllpplne currency wlLh lnLeresLs aL Lhe legal raLe from Lhe flllng of Lhe complalnL on May 12 1982
unLll Lhe whole amounL ls fully pald plus LwenLy percenL (20) of Lhe amounL due as aLLomeys fees and Lo pay
Lhe cosLs
WlLh cosLs agalnsL defendanLappellee
SC C8uL8Lu 8ollo pp 2930
1hereafLer Lhls peLlLlon was flled 1he sole lssue ln Lhls case ls wheLher or noL Lhe prlvaLe respondenL has Lhe rlghL
Lo recover Lhe second $1000000 remlLLance lL had dellvered Lo peLlLloner 1he resoluLlon of Lhls lssue would
hlnge on Lhe appllcablllLy of ArL 2134 of Lhe new Clvll Code whlch provldes LhaL
ArL 2134 lf someLhlng recelved when Lhere ls no rlghL Lo demand lL and lL was unduly dellvered Lhrough mlsLake
Lhe obllgaLlon Lo reLurn lL arlses
1hls provlslon ls Laken from ArL 1893 of Lhe Spanlsh Clvll Code whlch provlded LhaL
ArL 1893 lf a Lhlng ls recelved when Lhere was no rlghL Lo clalm lL and whlch Lhrough an error has been unduly
dellvered an obllgaLlon Lo resLore lL arlses
ln velez v 8olzotzo 73 hll 630 (1942) Lhe CourL speaklng Lhrough Mr !usLlce 8ocobo explalned Lhe naLure of
Lhls arLlcle Lhus
ArLlcle 1893 now ArLlcle 2134 of Lhe Clvll Code abovequoLed ls Lherefore appllcable 1hls legal provlslon whlch
deLermlnes Lhe quaslconLracL of soluLlon lndeblLl ls one of Lhe concreLe manlfesLaLlons of Lhe anclenL prlnclple
LhaL no one shall enrlch hlmself un[usLly aL Lhe expense of anoLher ln Lhe 8oman Law ulgesL Lhe maxlm was
formulaLed Lhus Iote oototoe ocpoom est oemloem com oltetlos Jettlmeoto et lojotlo fletl locopletlotem And
Lhe arLldas declared Nloqooo ooo Jeoe eotlpoecetse tottlzetomeote coo Jooo Je otto Such axlom has grown
Lhrough Lhe cenLurles ln leglslaLlon ln Lhe sclence of law and ln courL declslons 1he lawmaker has found lL one of
Lhe helpful guldes ln framlng sLaLuLes and codes 1hus lL ls unfolded ln many arLlcles scaLLered ln Lhe Spanlsh Clvll
Code (See for example arLlcles 360 361 464 647 648 797 1138 1163 1293 1303 1304 1893 and 1893 Clvll
Code) 1hls Llmehonored aphorlsm has also been adopLed by [urlsLs ln Lhelr sLudy of Lhe confllcL of rlghLs lL has
been accepLed by Lhe courLs whlch have noL heslLaLed Lo apply lL when Lhe exlgencles of rlghL and equlLy
demanded lLs asserLlon lL ls a parL of LhaL affluenL reservolr of [usLlce upon whlch [udlclal dlscreLlon draws
whenever Lhe sLaLuLory laws are lnadequaLe because Lhey do noL speak or do so wlLh a confused volce aL p 632
lor Lhls arLlcle Lo apply Lhe followlng requlslLes musL concur (1) LhaL he who pald was noL under obllgaLlon Lo do
so and (2) LhaL paymenL was made by reason of an essenLlal mlsLake of facL ClLy of Cebu v lcclo 110 hll 338
363 (1960)
lL ls undlspuLed LhaL prlvaLe respondenL dellvered Lhe second $1000000 remlLLance Powever peLlLloner
conLends LhaL Lhe docLrlne of solotlo loJebltl does noL apply because lLs requlslLes are absenL
llrsL lL ls argued LhaL peLlLloner had Lhe rlghL Lo demand and Lherefore Lo reLaln Lhe second $1000000
remlLLance lL ls alleged LhaL even afLer Lhe Lwo $1000000 remlLLances are credlLed Lo peLlLloners recelvables
from lACL1S Lhe laLLer allegedly sLlll had a balance of $4932400 Pence lL ls argued LhaL Lhe lasL $1000000
remlLLance belng ln paymenL of a preexlsLlng debL peLlLloner was noL Lhereby un[usLly enrlched
1he conLenLlon ls wlLhouL merlL
1he conLracL of peLlLloner as regards Lhe sale of garmenLs and oLher LexLlle producLs was wlLh lACL1S lL was Lhe
laLLer and noL prlvaLe respondenL whlch was lndebLed Lo peLlLloner Cn Lhe oLher hand Lhe conLracL for Lhe
LransmlLLal of dollars from Lhe unlLed SLaLes Lo peLlLloner was enLered lnLo by prlvaLe respondenL wlLh lnS8
eLlLloner alLhough named as Lhe payee was noL prlvy Lo Lhe conLracL of remlLLance of dollars nelLher was prlvaLe
respondenL a parLy Lo Lhe conLracL of sale beLween peLlLloner and lACL1S 1here belng no conLracLual relaLlon
beLween Lhem peLlLloner has no rlghL Lo apply Lhe second $1000000 remlLLance dellvered by mlsLake by prlvaLe
respondenL Lo Lhe ouLsLandlng accounL of lACL1S
eLlLloner nexL conLends LhaL Lhe paymenL by respondenL bank of Lhe second $1000000 remlLLance was noL
made by mlsLake buL was Lhe resulL of negllgence of lLs employees ln connecLlon wlLh Lhls Lhe CourL of Appeals
made Lhe followlng flndlng of facLs
1he facL LhaL laceLs senL only one remlLLance of $1000000 ls noL dlspuLed ln Lhe wrlLLen lnLerrogaLorles senL Lo
Lhe llrsL naLlonal SLaLe 8ank of new !ersey Lhrough Lhe ConsulaLe Ceneral of Lhe hlllpplnes ln new ?ork Adelalde
C Schachel Lhe lnvesLlgaLlon and reconclllaLlon clerk ln Lhe sald bank LesLlfled LhaL a requesL Lo remlL a paymenL
for laceL lunwear lnc was made ln AugusL 1980 1he LoLal amounL whlch Lhe llrsL naLlonal SLaLe 8ank of new
!ersey acLually requesLed Lhe plalnLlffappellanL ManufacLurers Panover 1rusL CorporaLlon Lo remlL Lo lrenes
Wearlng Apparel was uS $1000000 Cnly one remlLLance was requesLed by llrsL naLlonal SLaLe 8ank of new
!ersey as per lnsLrucLlon of laceLs lunwear (LxhlblL ! pp 43)
1haL Lhere was a mlsLake ln Lhe second remlLLance of uS $1000000 ls borne ouL by Lhe facL LhaL boLh remlLLances
have Lhe same reference lnvolce number whlch ls 263 80 (LxhlblLs A1 ueposlLlon of Mr SLanley anasow and
A2ueposlLlon of Mr SLanley anasow)
lalnLlffappellanL made Lhe second remlLLance on Lhe wrong assumpLlon LhaL defendanLappellee dld noL recelve
Lhe flrsL remlLLance of uS $1000000 8ollo pp 2627
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lL ls evldenL LhaL Lhe clalm of peLlLloner ls anchored on Lhe appreclaLlon of Lhe aLLendanL facLs whlch peLlLloner
would have Lhls CourL revlew 1he CourL holds LhaL Lhe flndlng by Lhe CourL of Appeals LhaL Lhe second $1000000
remlLLance was made by mlsLake belng based on subsLanLlal evldence ls flnal and concluslve 1he rule regardlng
quesLlons of facL belng ralsed wlLh Lhls CourL ln a peLlLlon for cettlototl under 8ule 43 of Lhe 8evlsed 8ules of CourL
has been sLaLed ln 8emalanLe v 1lbe C8 no 39314 lebruary 23 1988 138 SC8A 138 Lhus
1he rule ln Lhls [urlsdlcLlon ls LhaL only quesLlons of law may be ralsed ln a peLlLlon for cerLlorarl under 8ule 43 of
Lhe 8evlsed 8ules of CourL 1he [urlsdlcLlon of Lhe Supreme CourL ln cases broughL Lo lL from Lhe CourL of Appeals
ls llmlLed Lo revlewlng and revlslng Lhe errors of law lmpuLed Lo lL lLs flndlngs of facL belng concluslve Chan v
CourL of Appeals C8 no L27488 !une 30 1970 33 SC8A 737 relLeraLlng a long llne of declslons 1hls CourL has
emphaLlcally declared LhaL lL ls noL Lhe funcLlon of Lhe Supreme CourL Lo analyze or welgh such evldence all over
agaln lLs [urlsdlcLlon belng llmlLed Lo revlewlng errors of law LhaL mlghL have been commlLLed by Lhe lower courL
1longco v ue la Merced C8 no L24426 !uly 23 1974 38 SC8A 89 Corona v CourL of Appeals C8 no L
62482 Aprll 28 1983 121 SC8A 863 8anlqued v CourL of Appeals C 8 no L47331 lebruary 20 1984 127 SC8A
396 8arrlng Lherefore a showlng LhaL Lhe flndlngs complalned of are LoLally devold of supporL ln Lhe record or
LhaL Lhey are so glarlngly erroneous as Lo consLlLuLe serlous abuse of dlscreLlon such flndlngs musL sLand for Lhls
CourL ls noL expecLed or requlred Lo examlne or conLrasL Lhe oral and documenLary evldence submlLLed by Lhe
parLles SanLa Ana !r v Pernandez C8 no L16394 uecember 17 1966 18 SC8A 9731 aL pp 144143
eLlLloner lnvokes Lhe equlLable prlnclple LhaL when one of Lwo lnnocenL persons musL suffer by Lhe wrongful acL
of a Lhlrd person Lhe loss musL be borne by Lhe one whose negllgence was Lhe proxlmaLe cause of Lhe loss
1he rule ls LhaL prlnclples of equlLy cannoL be applled lf Lhere ls a provlslon of law speclflcally appllcable Lo a case
hll 8abblL 8us Llnes lnc v Arclaga C8 no L29701 March 16 1987148 SC8A 433 ZabaL !r v CourL of
Appeals C8 no L36938 !uly 10 1986 142 SC8A 387 8ural 8ank of aranaque lnc v 8emolado C8 no 62031
March 18 1983 133 SC8A 409 Cruz v ahaLl 98 hll 788 (1936) Pence Lhe CourL ln Lhe case of ue Cotclo v
coott of Appeols C8 no L20264 !anuary 30 1971 37 SC8A 129 clLlng Azoot v opJlooqco C8 no L18336
March 31 1963 13 SC8A 486 held
1he common law prlnclple LhaL where one of Lwo lnnocenL persons musL suffer by a fraud perpeLraLed by
anoLher Lhe law lmposes Lhe loss upon Lhe parLy who by hls mlsplaced confldence has enabled Lhe fraud Lo be
commlLLed cannoL be applled ln a case whlch ls covered by an express provlslon of Lhe new Clvll Code speclflcally
ArLlcle 339 8eLween a common law prlnclple and a sLaLuLory provlslon Lhe laLLer musL prevall ln Lhls [urlsdlcLlon
aL p 133
Pavlng shown LhaL ArL 2134 of Lhe Clvll Code whlch embodles Lhe docLrlne of solotlo loJebltl applles ln Lhe case
aL bar Lhe CourL musL re[ecL Lhe common law prlnclple lnvoked by peLlLloner
llnally ln her aLLempL Lo defeaL prlvaLe respondenLs clalm peLlLloner makes much of Lhe facL LhaL from Lhe Llme
Lhe second $1000000 remlLLance was made flve hundred and Len days had elapsed before prlvaLe respondenL
demanded Lhe reLurn Lhereof needless Lo say prlvaLe respondenL lnsLlLuLed Lhe complalnL for recovery of Lhe
second $1000000 remlLLance well wlLhln Lhe slx years prescrlpLlve perlod for acLlons based upon a quaslconLracL
ArL 1143 of Lhe new Clvll Code
WPL8LlC8L Lhe peLlLlon ls uLnlLu and Lhe declslon of Lhe CourL of Appeals ls hereby Alll8MLu
SC C8uL8Lu
etooo cI Cotlettez It ooJ 8lJlo II coocot
ellclooo I ls oo leove
SUkLML CCUk1
Manlla
Ln 8AnC
Gk No L17447 Apr|| 30 1963
GCN2ALC UA1 SCNS INC plalnLlffappelle
vs
CI1 CI MANILA AND MAkCLLC SAkMILN1C as C|ty 1reasurer of Man||a defendanLsappellanLs
etlo Mooqlopos Assoclotes fot plolottlffoppelleAsst clty lscol Moooel 1 keyes fot JefeoJootsoppelloots
AkLDLS
1hls ls an appeal from Lhe [udgmenL of Lhe Cll of Manlla Lhe dlsposLlve porLlon of whlch reads
xxx Cf Lhe paymenLs made by Lhe plalnLlff only LhaL made on CcLober 23 1930 ln Lhe amounL of 123000 has
prescrlbed aymenLs made ln 1931 and LhereafLer are sLlll recoverable slnce Lhe exLra[udlclal demand made on
CcLober 30 1936 was well wlLhln Lhe slxyear prescrlpLlve perlod of Lhe new ClvllCode
ln vlew of Lhe foregolng conslderaLlons [udgmenL ls hereby rendered ln favor of Lhe plalnLlff orderlng Lhe
defendanLs Lo refund Lhe amounL of 2982400 wlLhouL lnLeresL no cosLs
Wherefore Lhe parLles respecLfully pray LhaL Lhe foregolng sLlpulaLlon of facLs be admlLLed and approved by Lhls
Ponorable CourL wlLhouL pre[udlce Lo Lhe parLles adduclng oLher evldence Lo prove Lhelr case noL covered by Lhls
sLlpulaLlon of facLs 1owpbt1et
uefendanLs counLerclalm ls hereby dlsmlssed for noL havlng been subsLanLlaLed
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Cn AugusL 11 1938 Lhe plalnLlff Conzalo uyaL Sons lnc flled an acLlon for refund of 8eLall uealerls1axes pald
by lL correspondlng Lo Lhe flrsL CuarLer of 1930 up Lo Lhe Lhlrd CuarLer of 1936 amounLlng Lo 3378300 agalnsL
Lhe ClLy of Manlla and lLs ClLy 1reasurer1he case was submlLLed on Lhe followlng sLlpulaLlon of facLs Lo wlL
1 1haL Lhe plalnLlff ls a corporaLlon duly organlzed and exlsLlng accordlng Lo Lhe laws of Lhe hlllpplnes wlLh
offlces aL Manlla whlle defendanL ClLy Manlla ls a Munlclpal CorporaLlon duly organlzed ln accordance wlLh Lhe
laws of Lhe hlllpplnes and defendanL Marcellno SarmlenLo ls Lhe dulyquallfled lncumbenL ClLy 1reasurer of
Manlla
2 1haL plalnLlff ls engaged ln Lhe buslness of manufacLurlng and selllng all klnds of furnlLure aL lLs facLory aL 190
8odrlguezArlas San Mlguel Manlla and has a dlsplay room locaLed aL 604606 8lzal Avenue Manlla whereln lL
dlsplays Lhe varlous klnd of furnlLure manufacLured by lL and sells some goods lmporLed by lL such as bllllard balls
bowllng balls and oLher accessorles
3 1haL acLlng pursuanL Lo Lhe provlslons of Sec 1 group ll of Crdlnance no 3364 defendanL ClLy 1reasurer of
Manllaassessed from plalnLlff reLall dealers Lax correspondlng Lo Lhe quarLers hereunder sLaLed on Lhe sales of
furnlLure manufacLured and sold by lL aL lLs facLory slLe all of whlch assessmenLs plalnLlff pald wlLhouL proLesL ln
Lhe erroneous bellef LhaL lL was llable Lherefor on Lhe daLes and ln Lhe amounL enumeraLed hereln below
letloJ uote lolJ Ok No
Amooot
AssesseJ
ooJ lolJ
llrsL CuarLer 1930 !an 23 1930 436271x 123300
Second CuarLer 1930 Apr 23 1930 213893x 123000
1hlrd CuarLer 1930 !ul 23 1930 243321x 123000
lourLh CuarLer 1930 CcL 23 1930 271163x 123000
(lollows Lhe assessmenL for dlfferenL quarLers ln 1931 1932
1933 1934 and 1933 flxlng Lhe same amounL quarLerly) x x x
llrsL CuarLer 1936 !an 23 1936 823047x 123000
Second CuarLer 1936 Apr 23 1936 833949x 123000
1hlrd CuarLer 1936 !ul 23 1936 880789x 123000
1 C 1 A L

3378300

4 1haL plalnLlff belng a manufacLurer of varlous klnds of furnlLure ls exempL from Lhe paymenL of Laxes lmposed
under Lhe provlslons of Sec 1 Croup ll of Crdlnance no 3364whlch Look effecL on SepLember 24 1936 on Lhe
sale of Lhe varlous klnds of furnlLure manufacLured by lL pursuanL Lo Lhe provlslons of Sec 18(n) of 8epubllc AcL
no 409 (8evlsed CharLer of Manlla) as resLaLed ln SecLlon 1 of Crdlnance no3816
3 1haL however plalnLlff ls llable for Lhe paymenL of Laxes prescrlbed ln SecLlon 1 Croup ll or Crdlnance no
3364mas amended by Sec 1 Croup ll of Crdlnance no 3816 whlch Look effecL on SepLember 24 1936 on Lhe
sales of lmporLed bllllard balls bowllng balls and oLher accessorles aL lLs dlsplayroom 1he Laxes pald by Lhe
plalnLlff on Lhe sales of sald arLlcle are as follows
x x x x x x x x x
6 1haL on CcLober 30 1936 Lhe plalnLlff flled wlLh defendanL ClLy 1reasurer of Manlla a formal requesL for
refund of Lhe reLall dealers Laxes unduly pald by lL as aforesLaLed ln paragraph 3 hereof
7 1haL on !uly 24 1938 Lhe defendanL ClLy 1reasurer of ManlladeflnlLely denled sald requesL for refund
8 Pence on AugusL 21 1938 plalnLlff flled Lhe presenL complalnL
9 8ased on Lhe above sLlpulaLlon of facLs Lhe legal lssues Lo be resolved by Lhls Ponorable CourL are (1) Lhe
perlod of prescrlpLlon appllcable ln maLLers of refund of munlclpal Laxes errenously pald by a Laxpayer and (2)
refund of Laxes noL pald under proLesL x x x
Sald [udgmenL was dlrecLly appealed Lo Lhls CourL on Lwo domlnanL lssues Lo wlL (1) WheLher or noL Lhe amounLs
pald by plalnLlffappelle as reLall dealers Laxes under Crdlnance 1923 as amended by Crdlnance no 3364of Lhe
ClLy of Manlla wlLhouL proLesL are refundable(2) Assumlng arguendo LhaL plalnLlffappellee ls enLlLled Lo Lhe
refund of Lhe reLall Laxes ln quesLlon wheLher or noL Lhe clalm for refund flled ln CcLober 1936 ln so far as sald
clalm refers Lo Laxes pald from 1930 Lo 1932 has already prescrlbed
under Lhe flrsL lssue defendanLsappellanLs conLend LhL Lhe Laxes ln quesLlon were volunLarlly pald by appellee
company and slnce ln Lhls [urlsdlcLlon ln order LhaL a legal basls arlse for clalm of refund of Laxes erroneously
assessed paymenL Lhereof musL be made under proLesL and Lhls belng a condlLlon slne qua non and no proLesL
havlng been made verbally or ln wrlLlng LherebylndlcaLlng LhaL Lhe paymenL was volunLary Lhe acLlon musL fall
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ClLed ln supporL of Lhe above conLenLlon are Lhe cases of Zaragoza vs Alfonso 46 hll 160161 and Cavlno v
MunlclpallLy of Calapan 71 hll 438
ln refuLaLlon of Lhe above sLand of appellanLs appellee avers LhL Lhe paymenLs could noL have been volunLaryAL
mosL Lhey were pald mlsLakenly and ln good falLhand wlLhouL proLesL ln Lhe erroneous bellef LhaL lL was llable
Lhereof volunLarlness ls lncompaLlble wlLh proLesL and mlsLake lL submlLs LhaL Lhls ls a slmple case of soluLlo
lndeblLl
AppellanLs do noL dlspuLe Lhe facL LhaL appelleecompanyls exempLed from Lhe paymenL of Lhe Lax ln
quesLlon1hls ls manlfesL from Lhe reply of appellanL ClLy 1reasurer sLaLlng LhaL sales of manufacLured producLs aL
Lhe facLory slLe are noL Laxable elLher under Lhe Wholesalers Crdlnance or under Lhe 8eLallers Crdlnance WlLh
Lhls admlsslon lL would seem clear LhaL Lhe Laxes collecLed from appellee were pald Lhru an error or mlsLake
whlch places sald acL of paymenL wlLhln Lhe pale of Lhe new Clvll Code provlslon on soluLlo lndeblLl 1he appellanL
ClLy of Manlla aL Lhe very sLarL noLwlLhsLandlng Lhe Crdlnance lmposlng Lhe 8eLallers 1ax had no rlghL Lo
demand paymenL Lhereof
lf someLhlng ls recelved when Lhere ls no rlghL Lo demand lL and lL was unduly dellvered Lhrough mlsLake Lhe
obllgaLlonLo reLun lL arlses (ArL 2134 nCC)
Appelle caLegorlcally sLaLed LhaL Lhe paymenL was noL volunLarlly made (a facL found also by Lhe lower courL)buL
on Lhe erronoues bellef LhaL Lhey were due under Lhls clrcumsLance Lhe amounL pald even wlLhouL proLesL ls
recoverable lf Lhe payer was ln doubL wheLher Lhe debL was due he may recover lf he proves LhaL lL was noL
due (ArL 2136 nCC) Appellee had duly proved LhaL Laxes were noL lawfully due 1here ls Lherefore no doubL
LhaL Lhe provlslons of soluLlo lndebLlLl Lhe new Clvll Code apply Lo Lhe admlLLed facLs of Lhe case
WlLh all appellanL quoLed Manresa as saylng x x x ue la mlsma oplnlon son el Sr Sanchez 8oman y el Sr Calcon
eL cual aflrma que sl la paga se hlzo por error de derecho nl exlsLe el cuaslconLraLo nl esLa obllgado a la
resLlLuclon el que cobro aunque no se deblera lo que se pago (Manresa 1omo 12 paglnas 611612) 1hls oplnlon
however has already losL lLs persuaslveness ln vlew of Lhe provlslons of Lhe Clvll Code recognlzlng error de
derecho as a basls for Lhe quaslconLracL of soluLlo lndeblLl
aymenL by reason of a mlsLake ln Lhe conLrucLlon or appllcaLlon of a doubLful or dlfflculL quesLlon of law may
come wlLhln Lhe scope of Lhe precedlng arLlcle (ArL 21333)
1here ls no galnsaylng Lhe facL LhaL Lhe paymenLs made by appellee was due Lo a mlsLake ln Lhe consLrucLlon of a
doubLful quesLlon of law 1he reason underlylng slmllar provlslons as applled Lo lllegal LaxaLlon ln Lhe unlLed
SLaLes ls expressed ln Lhe case of newporL v 8lngo 37 ky 633 636 10 SW 2 ln Lhe followlng manner
lL ls Loo well seLLled ln Lhls sLaLe Lo need Lhe clLaLlon of auLhorlLy LhaL lf money be pald Lhrough a clear mlsLake of
law or facL essenLlally affecLlng Lhe rlghLs of Lhe parLles and whlch ln law or consclence was noL payable and
should noL be reLalned by Lhe parLy recelvlng lL lL may be recovered 8oLh law and sound morallLy so dlcLaLe
Lspeclally should Lhls be Lhe rule as Lo lllegal LaxaLlon 1he Laxpayer has no volce ln Lhe lmposlLlonof Lhe burden
Pe has Lhe rlghL Lo presume LhaL Lhe Laxlng power has been lawfully exerclsed Pe should noL be requlred Lo know
more Lhan Lhose ln auLhorlLy over hlm nor should he suffer loss by complylng wlLh whaL he bona flde belleve Lo be
hls duLy as a good clLlzen upon Lhe conLrary he should be promoLed Lo lLs ready performance by refundlng Lo hlm
any legal exacLlon pald by hlm ln lgnorance of lLs lllegallLy and cerLalnly ln such a case lf be sub[ecL Lo a penalLy
for nonpaymenL hls compllance under bellef of lLs legallLy and wlLhouL awalLlnga resorL Lo [udlclal proceedlngs
should noL be regrded ln law as so far volunLary as Lo affecL hls rlghL of recovery
Lvery person who Lhrough an acL or performance by anoLher or any oLher means acqulres or comes lnLo
possesslon of someLhlng aL Lhe expense of Lhe laLLer wlLhouL [usL or legal grounds shall reLurn Lhe same Lo
hlm(ArL 22 Clvll Code) lL would seems unedlfylng for Lhe governmenL (here Lhe ClLy of Manlla) LhaL knowlng lL
has no rlghL aL all Lo collecL or Lo recelve money for alleged Laxes pald by mlsLake lL would be relucLanL Lo reLurn
Lhe same no one should enrlch lLself un[usLly aL Lhe expense of anoLher (ArL 2123 Clvll Code)
AdmlLLedly plalnLlffappellee pald Lhe Lax wlLhouL proLesLLqually admlLLed ls Lhe facL LhaL secLlon 76 of Lhe
CharLer of Manlla provldes LhaL no courL shall enLerLaln any sulL assalllng Lhe valldlLy of Lax assessed under Lhls
arLlcle unLll Lhe Laxpayer shall have pald under proLesL Lhe Laxes assessed agalnsL hlm xx lL should be noLed
however LhaL Lhe arLlcle referred Lo ln sald secLlon ls ArLlcle xxl enLlLled ueparLmenL of AssessmenL and Lhe
secLlons Lhereunder manlfesLly show LhaL sald arLlcle and lLs secLlons relaLe Lo asseessmenL collecLlon and
recovery of real esLaLe Laxes only Sald secLlon 76 Lherefor ls noL appllcable Lo Lhe case aL bar whlch relaLes Lo
Lhe recover of reLall dealer Laxes
ln Lhe oplnlon of Lhe SecreLary of !usLlce (Cp 90Serles of 1937 ln a quesLlon slmllar Lo Lhe case aL bar lL was held
LhaL Lhe requlredmenL of proLesL refers only Lo Lhe paymenL of Laxes whlch are dlrecLly lmposed by Lhe charLer
lLself LhaL ls real esLaLe Laxes whlch vlew was susLalned by [udlclal and admlnlsLraLlve precedenLs one of whlch ls
Lhe case of Medlna eL al v ClLy of 8agulo C8 no L4269 Aug 29 1932 ln oLher words proLesL ls noL necessary
for Lhe recovery of reLall dealers Laxes llke Lhe presenL because Lhey are noL dlrecLly lmposed by Lhe charLer ln
Lhe Medlna case Lhe CharLer of 8agulo (Chap 61 8evlsed Adm Code) provldes LhaL no courL shall enLerLaln any
sulL assalllng Lhe valldlLy of a Lax assessed unde Lhls charLer unLll Lhe Laxpayer shall have pald under proLesL Lhe
Laxes assessed agalnsL hlm (sec23474b 8ev Adm Code) a provlso slmllar Lo secLlon 76 of Lhe Manlla CharLer
1he refund of speclflc Laxes pald under a vold ordlnance was ordered alLhough lL dld noL appear LhaL paymenL
Lhereof was made under proLesL
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ln a recenL case We sald 1he appellanLs argue LhaL Lhe sum Lhe refund of whlch ls soughL by Lhe appellee was
noL pald under proLesL and hence ls noL refundable Agaln Lhe Lrlal courL correcLly held LhaL belng unauLhorlzed lL
ls noL a Lax assessed under Lhe CharLer of Lhe AppellanL ClLy of uavao and for LhaL reason no proLesL ls necessary
for a clalm or demand for lLs refund (ClLlng Lhe Medlna case supra LasL AslaLlc Co LLd v ClLy of uavao C8 no
L16233 Aug 21 1962) LasLly belng a case of soluLlo lndeblLl proLesL ls noL requlred as a condlLlon slne qua non
for lLs appllcaLlon
1he nexL lssue ln dlscusslon ls LhaL of prescrlpLlon AppellanLs malnLaln LhaL arLlcle 1146 (nCC) whlch provldes for
a perlod of four (4) years (upon ln[ury Lo Lhe rlghLs of Lhe plalnLlff) apply Lo Lhe case Cn Lhe oLher hand appellee
conLends LhaL provlslons of AcL 190 (Code of Clv rocedure) should apply lnsofar as paymenLs made before Lhe
effecLlvlLy of Lhe new Clvll Code on AugusL 30 1930 Lhe perlod of whlch ls Len (10) years (Sec 40AcL no 190
Csorlo v 1an !ongko 31 CC 6211) and arLlcle 1143 (nCC) for paymenLs made afLer sald effecLlvlLy provldlng for
a perlod of slx (6) years (upon quaslconLracLs llke soluLlo lndeblLl) Lven lf Lhe provlslonsof AcL no 190 should
apply Lo Lhose paymenLs made before Lhe effecLlvlLy of Lhe new Clvll Code because prescrlpLlon already runnlg
before Lhe effecLlvlLy of Lhls Code shall be governed by laws prevlously ln force x x x (arL 1116 nCC) for
paymenLs made afLer sald effecLlvlLyprovldlng for a perlod of slx (6) years (upon quaslconLracLs llke soluLlo
lndeblLl) Lven lf Lhe provlslons of AcL no 190should apply Lo Lhose paymenLs made before Lhe effecLlvlLy of Lhe
new Clvll Code because prescrlpLlon already runnlng before Lhe effecLlvlLy of of Lhls Code shall be govern by laws
prevlously ln force xxx (ArL 1116 nCC) SLlll paymenLs made before AugusL 30 1930 are no longer recoverable ln
vlew of Lhe second paragraph of sald arLlcle (1116) whlch provldesbuL lf slnce Lhe Llme Lhls Code Look effecL Lhe
enLlre perlod hereln requlred for prescrlpLlon should elapse Lhe presenL Code shall be appllcable even Lhough by
Lhe former laws a longer perlod mlghL be requlred AnenL Lhe paymenLs made afLer AugusL 30 1930 lL ls abvlous
LhaL Lhe acLlon has prescrlbed wlLh respecL Lo Lhose made before CcLober 30 1930 only conslderlng Lhe facL LhaL
Lhe prescrlpLlon of acLlon ls lnLerrupLed xxx when ls a wrlLLeen exLra[udlclal demand x x x (ArL 1133 nCC) and
Lhe wrlLLen demand ln Lhe case aL bar was made on CcLober 30 1936 (SLlpulaLlon of lacLs)MCulllLu ln Lhe sense
LhaL only paymenLs made on or afLer CcLober 30 1930 should be refunded Lhe declslon appealed from ls
afflrmed ln all oLher respecLs no cosLs
8eoqzoo cI 8ootlsto Aoqelo lobtoJot coocepclooulzoo keqolo ooJ Mokollotol II coocot
loJlllo keyes I8l ooJ 8otteto II Loo no parL
ueclsloo offltmeJ
4 AcLs and ommlsslons punlshable by law ArLs 1167 2177ArL 100 and 104 rpc
ArL 1167 lf a person obllged Lo do someLhlng falls Lo do lL Lhe same shall be execuLed aL hls cosL
1hls same rule shall be observed lf he does lL ln conLravenLlon of Lhe Lenor of Lhe obllgaLlon lurLhermore lL may
be decreed LhaL whaL has been poorly done be undone (1098)
ArL 2177 8esponslblllLy for faulL or negllgence under Lhe precedlng arLlcle ls enLlrely separaLe and dlsLlncL from
Lhe clvll llablllLy arlslng from negllgence under Lhe enal Code 8uL Lhe plalnLlff cannoL recover damages Lwlce for
Lhe same acL or omlsslon of Lhe defendanL (n)
ArL 100 (8C) clvll lloblllty of o petsoo qollty of felooy Lvery person crlmlnally llable for a felony ls also clvllly
llable
ArL 101 koles teqotJloq clvll lloblllty lo cettolo coses 1he exempLlon from crlmlnal llablllLy esLabllshed ln
subdlvlslons 1 2 3 3 and 6 of ArLlcle 12 and ln subdlvlslon 4 of ArLlcle 11 of Lhls Code does noL lnclude exempLlon
from clvll llablllLy whlch shall be enforced sub[ecL Lo Lhe followlng rules
ltst ln cases of subdlvlslons 1 2 and 3 of ArLlcle 12 Lhe clvll llablllLy for acLs commlLLed by an lmbeclle or lnsane
person and by a person under nlne years of age or by one over nlne buL under flfLeen years of age who has acLed
wlLhouL dlscernmenL shall devolve upon Lhose havlng such person under Lhelr legal auLhorlLy or conLrol unless lL
appears LhaL Lhere was no faulL or negllgence on Lhelr parL
Should Lhere be no person havlng such lnsane lmbeclle or mlnor under hls auLhorlLy legal guardlanshlp or conLrol
or lf such person be lnsolvenL sald lnsane lmbeclle or mlnor shall respond wlLh Lhelr own properLy excepLlng
properLy exempL from execuLlon ln accordance wlLh Lhe clvll law
5ecooJ ln cases falllng wlLhln subdlvlslon 4 of ArLlcle 11 Lhe persons for whose beneflL Lhe harm has been
prevenLed shall be clvllly llable ln proporLlon Lo Lhe beneflL whlch Lhey may have recelved
1he courLs shall deLermlne ln sound dlscreLlon Lhe proporLlonaLe amounL for whlch each one shall be llable
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When Lhe respecLlve shares cannoL be equlLably deLermlned even approxlmaLely or when Lhe llablllLy also
aLLaches Lo Lhe CovernmenL or Lo Lhe ma[orlLy of Lhe lnhablLanLs of Lhe Lown and ln all evenLs whenever Lhe
damages have been caused wlLh Lhe consenL of Lhe auLhorlLles or Lhelr agenLs lndemnlflcaLlon shall be made ln
Lhe manner prescrlbed by speclal laws or regulaLlons
1bltJ ln cases falllng wlLhln subdlvlslons 3 and 6 of ArLlcle 12 Lhe persons uslng vlolence or causlng Lhe fears shall
be prlmarlly llable and secondarlly or lf Lhere be no such persons Lhose dolng Lhe acL shall be llable savlng
always Lo Lhe laLLer LhaL parL of Lhelr properLy exempL from execuLlon
ArL 102 5obslJloty clvll lloblllty of lookeepets tovetokeepets ooJ ptoptletots of estobllsbmeots ln defaulL of Lhe
persons crlmlnally llable lnnkeepers Lavernkeepers and any oLher persons or corporaLlons shall be clvllly llable
for crlmes commlLLed ln Lhelr esLabllshmenLs ln all cases where a vlolaLlon of munlclpal ordlnances or some
general or speclal pollce regulaLlon shall have been commlLLed by Lhem or Lhelr employees
lnnkeepers are also subsldlarlly llable for Lhe resLlLuLlon of goods Laken by robbery or LhefL wlLhln Lhelr houses
from guesLs lodglng Lhereln or for Lhe paymenL of Lhe value Lhereof provlded LhaL such guesLs shall have noLlfled
ln advance Lhe lnnkeeper hlmself or Lhe person represenLlng hlm of Lhe deposlL of such goods wlLhln Lhe lnn and
shall furLhermore have followed Lhe dlrecLlons whlch such lnnkeeper or hls represenLaLlve may have glven Lhem
wlLh respecL Lo Lhe care and vlgllance over such goods no llablllLy shall aLLach ln case of robbery wlLh vlolence
agalnsL or lnLlmldaLlon of persons unless commlLLed by Lhe lnnkeepers employeeschan robles vlrLual law llbrary
ArL 103 5obslJloty clvll lloblllty of otbet petsoos 1he subsldlary llablllLy esLabllshed ln Lhe nexL precedlng arLlcle
shall also apply Lo employers Leachers persons and corporaLlons engaged ln any klnd of lndusLry for felonles
commlLLed by Lhelr servanLs puplls workmen apprenLlces or employees ln Lhe dlscharge of Lhelr duLles
ArL 104 wbot ls locloJeJ lo clvll lloblllty 1he clvll llablllLy esLabllshed ln ArLlcles 100 101 102 and 103 of Lhls
Code lncludes
1 8esLlLuLlon
2 8eparaLlon of Lhe damage caused
3 lndemnlflcaLlon for consequenLlal damages
3 CuasldellcLs
ArL 1162 CbllgaLlons derlved from quasldellcLs shall be governed by Lhe provlslons of ChapLer 2 1lLle xvll of Lhls
8ook and by speclal laws (1093a)
ArL 2176 Whoever by acL or omlsslon causes damage Lo anoLher Lhere belng faulL or negllgence ls
obllged Lo pay for Lhe damage done Such faulL or negllgence lf Lhere ls no preexlsLlng conLracLual
relaLlon beLween Lhe parLles ls called a quasldellcL and ls governed by Lhe provlslons of Lhls ChapLe
1nIkD DIVISICN

Gk No 179337 Apr|| 30 2008

ICSLn SALUDAGA et|t|oner vs IAk LAS1LkN UNIVLkSI1 and LDIL8Lk1C C DL ILSUS |n h|s capac|ty as
res|dent of ILU kespondents

D L C I S I C N

NAkLSSA1IAGC I

1hls eLlLlon for 8evlew on cettlototl
1
under 8ule 43 of Lhe 8ules of CourL assalls Lhe !une 29 2007 ueclslon
2
of
Lhe CourL of Appeals ln CAC8 Cv no 87030 nulllfylng and seLLlng aslde Lhe november 10 2004 ueclslon
3
of Lhe
8eglonal 1rlal CourL of Manlla 8ranch 2 ln Clvll Case no 9889483 and dlsmlsslng Lhe complalnL flled by
peLlLloner as well as lLs AugusL 23 2007 8esoluLlon
4
denylng Lhe MoLlon for 8econslderaLlon
3

1he anLecedenL facLs are as follows

eLlLloner !oseph Saludaga was a sophomore law sLudenL of respondenL lar LasLern unlverslLy (lLu) when he was
shoL by Ale[andro 8oseLe (8oseLe) one of Lhe securlLy guards on duLy aL Lhe school premlses on AugusL 18 1996
eLlLloner was rushed Lo lLuur nlcanor 8eyes Medlcal loundaLlon (lLun8Ml) due Lo Lhe wound he susLalned
6

Meanwhlle 8oseLe was broughL Lo Lhe pollce sLaLlon where he explalned LhaL Lhe shooLlng was accldenLal Pe was
evenLually released conslderlng LhaL no formal complalnL was flled agalnsL hlm

eLlLloner LhereafLer flled a complalnL for damages agalnsL respondenLs on Lhe ground LhaL Lhey breached Lhelr
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obllgaLlon Lo provlde sLudenLs wlLh a safe and secure envlronmenL and an aLmosphere conduclve Lo learnlng
8espondenLs ln Lurn flled a 1hlrdarLy ComplalnL
7
agalnsL Calaxy uevelopmenL and ManagemenL CorporaLlon
(Calaxy) Lhe agency conLracLed by respondenL lLu Lo provlde securlLy servlces wlLhln lLs premlses and Marlano u
lmperlal (lmperlal) Calaxys resldenL Lo lndemnlfy Lhem for whaLever would be ad[udged ln favor of peLlLloner lf
any and Lo pay aLLorneys fees and cosL of Lhe sulL Cn Lhe oLher hand Calaxy and lmperlal flled a lourLharLy
ComplalnL agalnsL Al Ceneral lnsurance
8

Cn november 10 2004 Lhe Lrlal courL rendered a declslon ln favor of peLlLloner Lhe dlsposlLlve porLlon of whlch
reads
WPL8LlC8L from Lhe foregolng [udgmenL ls hereby rendered orderlng
1 lLu and LdllberLo de !esus ln hls capaclLy as presldenL of lLu Lo pay [olnLly and severally !oseph Saludaga
Lhe amounL of 3329823 for acLual damages wlLh 12 lnLeresL per annum from Lhe flllng of Lhe
complalnL unLll fully pald moral damages of 30000000 exemplary damages of 30000000 aLLorneys
fees of 10000000 and cosL of Lhe sulL
2 Calaxy ManagemenL and uevelopmenL Corp and lLs presldenL Col Marlano lmperlal Lo lndemnlfy [olnLly
and severally 3rd parLy plalnLlffs (lLu and LdllberLo de !esus ln hls capaclLy as resldenL of lLu) for Lhe
abovemenLloned amounLs
3 And Lhe 4Lh parLy complalnL ls dlsmlssed for lack of cause of acLlon no pronouncemenL as Lo cosLs
SC C8uL8Lu
9

8espondenLs appealed Lo Lhe CourL of Appeals whlch rendered Lhe assalled ueclslon Lhe decreLal porLlon of whlch
provldes vlz
WPL8LlC8L Lhe appeal ls hereby C8An1Lu 1he ueclslon daLed november 10 2004 ls hereby 8LvL8SLu and SL1
ASluL 1he complalnL flled by !oseph Saludaga agalnsL appellanL lar LasLern unlverslLy and lLs resldenL ln Clvll
Case no 9889483 ls ulSMlSSLu

SC C8uL8Lu
10

eLlLloner flled a MoLlon for 8econslderaLlon whlch was denled hence Lhe lnsLanL peLlLlon based on Lhe followlng
grounds
1PL CCu81 Cl ALALS SL8lCuSL? L88Lu ln MAnnL8 CCn18A8? 1C LAW Anu !u8lS8uuLnCL ln 8uLlnC
1PA1

31 1PL SPCC1lnC lnCluLn1 lS A lC81ul1CuS LvLn1

32 8LSCnuLn1S A8L nC1 LlA8LL lC8 uAMACLS lC8 1PL ln!u8? 8LSuL1lnC l8CM A CunSPC1 WCunu
SullL8Lu 8? 1PL L1l1lCnL8 l8CM 1PL PAnuS Cl nC LLSS 1PAn 1PLl8 CWn SLCu8l1? CuA8u ln vlCLA1lCn
Cl 1PLl8 8ulL1ln CCn18AC1uAL C8LlCA1lCn 1C L1l1lCnL8 8LlnC 1PLl8 LAW S1uuLn1 A1 1PA1 1lML 1C
8CvluL PlM Wl1P A SAlL Anu SLCu8L LuuCA1lCnAL Lnvl8CnMLn1

33 SLCu8l1? CAu8u ALL!Anu8C 8CSL1L WPC SPC1 L1l1lCnL8 WPlLL PL WAS WALklnC Cn PlS WA? 1C 1PL
LAW Ll88A8? Cl 8LSCnuLn1 lLu lS nC1 1PLl8 LMLC?LL 8? vl81uL Cl 1PL CCn18AC1 lC8 SLCu8l1?
SL8vlCLS 8L1WLLn CALAx? Anu lLu nC1Wl1PS1AnulnC 1PL lAC1 1PA1 L1l1lCnL8 nC1 8LlnC A A81? 1C
l1 lS nC1 8Cunu 8? 1PL SAML unuL8 1PL 8lnClLL Cl 8LLA1lvl1? Cl CCn18AC1S and

34 8LSCnuLn1 LxL8ClSLu uuL ulLlCLnCL ln SLLLC1lnC CALAx? AS 1PL ACLnC? WPlCP WCuLu 8CvluL
SLCu8l1? SL8vlCLS Wl1Pln 1PL 8LMlSLS Cl 8LSCnuLn1 lLu
11

eLlLloner ls sulng respondenLs for damages based on Lhe alleged breach of sLudenLschool conLracL for a safe
learnlng envlronmenL 1he perLlnenL porLlons of peLlLloners ComplalnL read
60 AL Lhe Llme of plalnLlffs conflnemenL Lhe defendanLs or any of Lhelr represenLaLlve dld noL boLher Lo vlslL and
lnqulre abouL hls condlLlon 1hls ab[ecL lndlfference on Lhe parL of Lhe defendanLs conLlnued even afLer plalnLlff
was dlscharged from Lhe hosplLal when noL even a word of consolaLlon was heard from Lhem lalnLlff walLed for
more Lhan one (1) year for Lhe defendanLs Lo perform Lhelr moral obllgaLlon buL Lhe walL was frulLless 1hls
lndlfference and LoLal lack of concern of defendanLs served Lo exacerbaLe plalnLlffs mlserable condlLlon
x x x x

110 uefendanLs are responslble for ensurlng Lhe safeLy of lLs sLudenLs whlle Lhe laLLer are wlLhln Lhe unlverslLy
premlses And LhaL should anyLhlng unLoward happens Lo any of lLs sLudenLs whlle Lhey are wlLhln Lhe unlverslLys
premlses shall be Lhe responslblllLy of Lhe defendanLs ln Lhls case defendanLs desplLe belng legally and morally
bound mlserably falled Lo proLecL plalnLlff from ln[ury and LhereafLer Lo mlLlgaLe and compensaLe plalnLlff for sald
ln[ury

120 When plalnLlff enrolled wlLh defendanL lLu a conLracL was enLered lnLo beLween Lhem under Lhls conLracL
defendanLs are supposed Lo ensure LhaL adequaLe sLeps are Laken Lo provlde an aLmosphere conduclve Lo sLudy
and ensure Lhe safeLy of Lhe plalnLlff whlle lnslde defendanL lLus premlses ln Lhe lnsLanL case Lhe laLLer
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breached Lhls conLracL when defendanL allowed harm Lo befall upon Lhe plalnLlff when he was shoL aL by of all
people Lhelr securlLy guard who was Lasked Lo malnLaln peace lnslde Lhe campus
12

ln lblllpploe 5cbool of 8osloess AJmlolsttotloo v coott of Appeols
13
we held LhaL
When an academlc lnsLlLuLlon accepLs sLudenLs for enrollmenL Lhere ls esLabllshed a conLracL beLween Lhem
resulLlng ln bllaLeral obllgaLlons whlch boLh parLles are bound Lo comply wlLh lor lLs parL Lhe school underLakes
Lo provlde Lhe sLudenL wlLh an educaLlon LhaL would presumably sufflce Lo equlp hlm wlLh Lhe necessary Lools and
skllls Lo pursue hlgher educaLlon or a professlon Cn Lhe oLher hand Lhe sLudenL covenanLs Lo ablde by Lhe
schools academlc requlremenLs and observe lLs rules and regulaLlons

lnsLlLuLlons of learnlng musL also meeL Lhe lmpllclL or bullLln obllgaLlon of provldlng Lhelr sLudenLs wlLh an
aLmosphere LhaL promoLes or asslsLs ln aLLalnlng lLs prlmary underLaklng of lmparLlng knowledge CerLalnly no
sLudenL can absorb Lhe lnLrlcacles of physlcs or hlgher maLhemaLlcs or explore Lhe realm of Lhe arLs and oLher
sclences when bulleLs are flylng or grenades explodlng ln Lhe alr or where Lhere looms around Lhe school premlses
a consLanL LhreaL Lo llfe and llmb necessarlly Lhe school musL ensure LhaL adequaLe sLeps are Laken Lo malnLaln
peace and order wlLhln Lhe campus premlses and Lo prevenL Lhe breakdown Lhereof
14

lL ls undlspuLed LhaL peLlLloner was enrolled as a sophomore law sLudenL ln respondenL lLu As such Lhere was
creaLed a conLracLual obllgaLlon beLween Lhe Lwo parLles Cn peLlLloners parL he was obllged Lo comply wlLh Lhe
rules and regulaLlons of Lhe school Cn Lhe oLher hand respondenL lLu as a learnlng lnsLlLuLlon ls mandaLed Lo
lmparL knowledge and equlp lLs sLudenLs wlLh Lhe necessary skllls Lo pursue hlgher educaLlon or a professlon AL
Lhe same Llme lL ls obllged Lo ensure and Lake adequaLe sLeps Lo malnLaln peace and order wlLhln Lhe campus

lL ls seLLled LhaL ln culpa conLracLual Lhe mere proof of Lhe exlsLence of Lhe conLracL and Lhe fallure of lLs
compllance [usLlfy prlma facle a correspondlng rlghL of rellef
13
ln Lhe lnsLanL case we flnd LhaL when peLlLloner
was shoL lnslde Lhe campus by no less Lhe securlLy guard who was hlred Lo malnLaln peace and secure Lhe
premlses Lhere ls a prlma facle showlng LhaL respondenLs falled Lo comply wlLh lLs obllgaLlon Lo provlde a safe and
secure envlronmenL Lo lLs sLudenLs

ln order Lo avold llablllLy however respondenLs aver LhaL Lhe shooLlng lncldenL was a forLulLous evenL because
Lhey could noL have reasonably foreseen nor avolded Lhe accldenL caused by 8oseLe as he was noL Lhelr
employee
16
and LhaL Lhey complled wlLh Lhelr obllgaLlon Lo ensure a safe learnlng envlronmenL for Lhelr sLudenLs
by havlng exerclsed due dlllgence ln selecLlng Lhe securlLy servlces of Calaxy

AfLer a Lhorough revlew of Lhe records we flnd LhaL respondenLs falled Lo dlscharge Lhe burden of provlng LhaL
Lhey exerclsed due dlllgence ln provldlng a safe learnlng envlronmenL for Lhelr sLudenLs 1hey falled Lo prove LhaL
Lhey ensured LhaL Lhe guards asslgned ln Lhe campus meL Lhe requlremenLs sLlpulaLed ln Lhe SecurlLy Servlce
AgreemenL lndeed cerLaln documenLs abouL Calaxy were presenLed durlng Lrlal however no evldence as Lo Lhe
quallflcaLlons of 8oseLe as a securlLy guard for Lhe unlverslLy was offered

8espondenLs also falled Lo show LhaL Lhey underLook sLeps Lo ascerLaln and conflrm LhaL Lhe securlLy guards
asslgned Lo Lhem acLually possess Lhe quallflcaLlons requlred ln Lhe SecurlLy Servlce AgreemenL lL was noL proven
LhaL Lhey examlned Lhe clearances psychlaLrlc LesL resulLs 201 flles and oLher vlLal documenLs enumeraLed ln lLs
conLracL wlLh Calaxy 1oLal rellance on Lhe securlLy agency abouL Lhese maLLers or fallure Lo check Lhe papers
sLaLlng Lhe quallflcaLlons of Lhe guards ls negllgence on Lhe parL of respondenLs A learnlng lnsLlLuLlon should noL
be allowed Lo compleLely rellnqulsh or abdlcaLe securlLy maLLers ln lLs premlses Lo Lhe securlLy agency lL hlred 1o
do so would resulL Lo conLracLlng away lLs lnherenL obllgaLlon Lo ensure a safe learnlng envlronmenL for lLs
sLudenLs

ConsequenLly respondenLs defense of fotce mojeote musL fall ln order for fotce mojeote Lo be consldered
respondenLs musL show LhaL no negllgence or mlsconducL was commlLLed LhaL may have occasloned Lhe loss An
acL of Cod cannoL be lnvoked Lo proLecL a person who has falled Lo Lake sLeps Lo foresLall Lhe posslble adverse
consequences of such a loss Cnes negllgence may have concurred wlLh an acL of Cod ln produclng damage and
ln[ury Lo anoLher noneLheless showlng LhaL Lhe lmmedlaLe or proxlmaLe cause of Lhe damage or ln[ury was a
forLulLous evenL would noL exempL one from llablllLy When Lhe effecL ls found Lo be parLly Lhe resulL of a persons
parLlclpaLlon wheLher by acLlve lnLervenLlon neglecL or fallure Lo acL Lhe whole occurrence ls humanlzed and
removed from Lhe rules appllcable Lo acLs of Cod
17

ArLlcle 1170 of Lhe Clvll Code provldes LhaL Lhose who are negllgenL ln Lhe performance of Lhelr obllgaLlons are
llable for damages Accordlngly for breach of conLracL due Lo negllgence ln provldlng a safe learnlng envlronmenL
respondenL lLu ls llable Lo peLlLloner for damages lL ls essenLlal ln Lhe award of damages LhaL Lhe clalmanL musL
have saLlsfacLorlly proven durlng Lhe Lrlal Lhe exlsLence of Lhe facLual basls of Lhe damages and lLs causal
connecLlon Lo defendanLs acLs
18

ln Lhe lnsLanL case lL was esLabllshed LhaL peLlLloner spenL 3329823 for hls hosplLallzaLlon and oLher medlcal
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expenses
19
Whlle Lhe Lrlal courL correcLly lmposed lnLeresL on sald amounL however Lhe case aL bar lnvolves an
obllgaLlon arlslng from a conLracL and noL a loan or forbearance of money As such Lhe proper raLe of legal lnLeresL
ls slx percenL (6) per annum of Lhe amounL demanded Such lnLeresL shall conLlnue Lo run from Lhe flllng of Lhe
complalnL unLll Lhe flnallLy of Lhls ueclslon
20
AfLer Lhls ueclslon becomes flnal and execuLory Lhe appllcable raLe
shall be Lwelve percenL (12) per annum unLll lLs saLlsfacLlon

1he oLher expenses belng clalmed by peLlLloner such as LransporLaLlon expenses and Lhose lncurred ln hlrlng a
personal asslsLanL whlle recuperaLlng were however noL duly supporLed by recelpLs
21
ln Lhe absence Lhereof no
acLual damages may be awarded noneLheless LemperaLe damages under ArL 2224 of Lhe Clvll Code may be
recovered where lL has been shown LhaL Lhe clalmanL suffered some pecunlary loss buL Lhe amounL Lhereof cannoL
be proved wlLh cerLalnLy Pence Lhe amounL of 2000000 as LemperaLe damages ls awarded Lo peLlLloner

As regards Lhe award of moral damages Lhere ls no hard and fasL rule ln Lhe deLermlnaLlon of whaL would be a falr
amounL of moral damages slnce each case musL be governed by lLs own pecullar clrcumsLances
22
1he LesLlmony
of peLlLloner abouL hls physlcal sufferlng menLal angulsh frlghL serlous anxleLy and moral shock resulLlng from
Lhe shooLlng lncldenL
23
[usLlfy Lhe award of moral damages Powever moral damages are ln Lhe caLegory of an
award deslgned Lo compensaLe Lhe clalmanL for acLual ln[ury suffered and noL Lo lmpose a penalLy on Lhe
wrongdoer 1he award ls noL meanL Lo enrlch Lhe complalnanL aL Lhe expense of Lhe defendanL buL Lo enable Lhe
ln[ured parLy Lo obLaln means dlverslon or amusemenLs LhaL wlll serve Lo obvlaLe Lhe moral sufferlng he has
undergone lL ls almed aL Lhe resLoraLlon wlLhln Lhe llmlLs of Lhe posslble of Lhe splrlLual sLaLus quo anLe and
should be proporLlonaLe Lo Lhe sufferlng lnfllcLed 1rlal courLs musL Lhen guard agalnsL Lhe award of exorblLanL
damages Lhey should exerclse balanced resLralned and measured ob[ecLlvlLy Lo avold susplclon LhaL lL was due Lo
passlon pre[udlce or corrupLlon on Lhe parL of Lhe Lrlal courL
24
We deem lL [usL and reasonable under Lhe
clrcumsLances Lo award peLlLloner moral damages ln Lhe amounL of 10000000

Llkewlse aLLorneys fees and llLlgaLlon expenses ln Lhe amounL of 3000000 as parL of damages ls reasonable ln
vlew of ArLlcle 2208 of Lhe Clvll Code
23
Powever Lhe award of exemplary damages ls deleLed conslderlng Lhe
absence of proof LhaL respondenLs acLed ln a wanLon fraudulenL reckless oppresslve or malevolenL manner

We noLe LhaL Lhe Lrlal courL held respondenL ue !esus solldarlly llable wlLh respondenL lLu ln lowtoo
cooqlometote loc v Aqcollcol
26
we held LhaL
A corporaLlon ls lnvesLed by law wlLh a personallLy separaLe and dlsLlncL from Lhose of Lhe persons composlng lL
such LhaL save for cerLaln excepLlons corporaLe offlcers who enLered lnLo conLracLs ln behalf of Lhe corporaLlon
cannoL be held personally llable for Lhe llablllLles of Lhe laLLer ersonal llablllLy of a corporaLe dlrecLor LrusLee or
offlcer along (alLhough noL necessarlly) wlLh Lhe corporaLlon may so valldly aLLach as a rule only when (1) he
assenLs Lo a paLenLly unlawful acL of Lhe corporaLlon or when he ls gullLy of bad falLh or gross negllgence ln
dlrecLlng lLs affalrs or when Lhere ls a confllcL of lnLeresL resulLlng ln damages Lo Lhe corporaLlon lLs sLockholders
or oLher persons (2) he consenLs Lo Lhe lssuance of waLered down sLocks or who havlng knowledge Lhereof does
noL forLhwlLh flle wlLh Lhe corporaLe secreLary hls wrlLLen ob[ecLlon LhereLo (3) he agrees Lo hold hlmself
personally and solldarlly llable wlLh Lhe corporaLlon or (4) he ls made by a speclflc provlslon of law personally
answerable for hls corporaLe acLlon
27

none of Lhe foregolng excepLlons was esLabllshed ln Lhe lnsLanL case hence respondenL ue !esus should noL be
held solldarlly llable wlLh respondenL lLu

lncldenLally alLhough Lhe maln cause of acLlon ln Lhe lnsLanL case ls Lhe breach of Lhe schoolsLudenL conLracL
peLlLloner ln Lhe alLernaLlve also holds respondenLs vlcarlously llable under ArLlcle 2180 of Lhe Clvll Code whlch
provldes
ArL 2180 1he obllgaLlon lmposed by ArLlcle 2176 ls demandable noL only for ones own acLs or omlsslons buL also
for Lhose of persons for whom one ls responslble
x x x x

Lmployers shall be llable for Lhe damages caused by Lhelr employees and household helpers acLlng wlLhln Lhe
scope of Lhelr asslgned Lasks even Lhough Lhe former are noL engaged ln any buslness or lndusLry
x x x x

1he responslblllLy LreaLed of ln Lhls arLlcle shall cease when Lhe persons hereln menLloned prove LhaL Lhey
observed all Lhe dlllgence of a good faLher of a famlly Lo prevenL damage
We agree wlLh Lhe flndlngs of Lhe CourL of Appeals LhaL respondenLs cannoL be held llable for damages under ArL
2180 of Lhe Clvll Code because respondenLs are noL Lhe employers of 8oseLe 1he laLLer was employed by Calaxy
1he lnsLrucLlons lssued by respondenLs SecurlLy ConsulLanL Lo Calaxy and lLs securlLy guards are ordlnarlly no
more Lhan requesLs commonly envlsaged ln Lhe conLracL for servlces enLered lnLo by a prlnclpal and a securlLy
agency 1hey cannoL be consLrued as Lhe elemenL of conLrol as Lo LreaL respondenLs as Lhe employers of 8oseLe
28

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As held ln Metcoty utoq cotpototloo v llboooo
29

ln 5ollmoo It v 1oozoo
30
we held LhaL where Lhe securlLy agency recrulLs hlres and asslgns Lhe works of lLs
waLchmen or securlLy guards Lo a cllenL Lhe employer of such guards or waLchmen ls such agency and noL Lhe
cllenL slnce Lhe laLLer has no hand ln selecLlng Lhe securlLy guards 1hus Lhe duLy Lo observe Lhe dlllgence of a
good faLher of a famlly cannoL be demanded from Lhe sald cllenL
lL ls seLLled ln our [urlsdlcLlon LhaL where Lhe securlLy agency as here recrulLs hlres and asslgns Lhe work of lLs
waLchmen or securlLy guards Lhe agency ls Lhe employer of such guards or waLchmen LlablllLy for lllegal or
harmful acLs commlLLed by Lhe securlLy guards aLLaches Lo Lhe employer agency and noL Lo Lhe cllenLs or
cusLomers of such agency As a general rule a cllenL or cusLomer of a securlLy agency has no hand ln selecLlng who
among Lhe pool of securlLy guards or waLchmen employed by Lhe agency shall be asslgned Lo lL Lhe duLy Lo
observe Lhe dlllgence of a good faLher of a famlly ln Lhe selecLlon of Lhe guards cannoL ln Lhe ordlnary course of
evenLs be demanded from Lhe cllenL whose premlses or properLy are proLecLed by Lhe securlLy guards

x x x x
1he facL LhaL a cllenL company may glve lnsLrucLlons or dlrecLlons Lo Lhe securlLy guards asslgned Lo lL does noL by
lLself render Lhe cllenL responslble as an employer of Lhe securlLy guards concerned and llable for Lhelr wrongful
acLs or omlsslons
31

We now come Lo respondenLs 1hlrd arLy Clalm agalnsL Calaxy ln ltestooe 1lte ooJ kobbet compooy of tbe
lblllpploes v 1empeoqko
32
we held LhaL
1he LhlrdparLy complalnL ls Lherefore a procedural devlce whereby a `Lhlrd parLy who ls nelLher a parLy nor prlvy
Lo Lhe acL or deed complalned of by Lhe plalnLlff may be broughL lnLo Lhe case wlLh leave of courL by Lhe
defendanL who acLs as LhlrdparLy plalnLlff Lo enforce agalnsL such LhlrdparLy defendanL a rlghL for conLrlbuLlon
lndemnlLy subrogaLlon or any oLher rellef ln respecL of Lhe plalnLlffs clalm 1he LhlrdparLy complalnL ls acLually
lndependenL of and separaLe and dlsLlncL from Lhe plalnLlffs complalnL Were lL noL for Lhls provlslon of Lhe 8ules
of CourL lL would have Lo be flled lndependenLly and separaLely from Lhe orlglnal complalnL by Lhe defendanL
agalnsL Lhe LhlrdparLy 8uL Lhe 8ules permlL defendanL Lo brlng ln a LhlrdparLy defendanL or so Lo speak Lo
llLlgaLe hls separaLe cause of acLlon ln respecL of plalnLlffs clalm agalnsL a LhlrdparLy ln Lhe orlglnal and prlnclpal
case wlLh Lhe ob[ecL of avoldlng clrculLry of acLlon and unnecessary prollferaLlon of law sulLs and of dlsposlng
expedlLlously ln one llLlgaLlon Lhe enLlre sub[ecL maLLer arlslng from one parLlcular seL of facLs
33

8espondenLs and Calaxy were able Lo llLlgaLe Lhelr respecLlve clalms and defenses ln Lhe course of Lhe Lrlal of
peLlLloners complalnL Lvldence duly supporLs Lhe flndlngs of Lhe Lrlal courL LhaL Calaxy ls negllgenL noL only ln Lhe
selecLlon of lLs employees buL also ln Lhelr supervlslon lndeed no admlnlsLraLlve sancLlon was lmposed agalnsL
8oseLe desplLe Lhe shooLlng lncldenL moreover he was even allowed Lo go on leave of absence whlch led
evenLually Lo hls dlsappearance
34
Calaxy also falled Lo monlLor peLlLloners condlLlon or exLend Lhe necessary
asslsLance oLher Lhan Lhe 300000 lnlLlally glven Lo peLlLloner Calaxy and lmperlal falled Lo make good Lhelr
pledge Lo relmburse peLlLloners medlcal expenses

lor Lhese acLs of negllgence and for havlng supplled respondenL lLu wlLh an unquallfled securlLy guard whlch
resulLed Lo Lhe laLLers breach of obllgaLlon Lo peLlLloner lL ls proper Lo hold Calaxy llable Lo respondenL lLu for
such damages equlvalenL Lo Lhe abovemenLloned amounLs awarded Lo peLlLloner

unllke respondenL ue !esus we deem lmperlal Lo be solldarlly llable wlLh Calaxy for belng grossly negllgenL ln
dlrecLlng Lhe affalrs of Lhe securlLy agency lL was lmperlal who assured peLlLloner LhaL hls medlcal expenses wlll be
shouldered by Calaxy buL sald represenLaLlons were noL fulfllled because Lhey presumed LhaL peLlLloner and hls
famlly were no longer lnLeresLed ln flllng a formal complalnL agalnsL Lhem
33

WnLkLICkL Lhe peLlLlon ls GkAN1LD 1he !une 29 2007 ueclslon of Lhe CourL of Appeals ln CAC8 Cv no
87030 nulllfylng Lhe ueclslon of Lhe Lrlal courL and dlsmlsslng Lhe complalnL as well as Lhe AugusL 23 2007
8esoluLlon denylng Lhe MoLlon for 8econslderaLlon are kLVLkSLD and SL1 ASIDL 1he ueclslon of Lhe 8eglonal
1rlal CourL of Manlla 8ranch 2 ln Clvll Case no 9889483 flndlng respondenL lLu llable for damages for breach of
lLs obllgaLlon Lo provlde sLudenLs wlLh a safe and secure learnlng aLmosphere ls AIIIkMLD wlLh Lhe followlng
MCDIIICA1ICNS
a respondenL lar LasLern unlverslLy (lLu) ls CkDLkLD Lo pay peLlLloner acLual damages ln Lhe amounL of
3329823 plus 6 lnLeresL per annum from Lhe flllng of Lhe complalnL unLll Lhe flnallLy of Lhls ueclslon
AfLer Lhls declslon becomes flnal and execuLory Lhe appllcable raLe shall be Lwelve percenL (12) per
annum unLll lLs saLlsfacLlon
b respondenL lLu ls also CkDLkLD Lo pay peLlLloner LemperaLe damages ln Lhe amounL of 2000000
moral damages ln Lhe amounL of 10000000 and aLLorneys fees and llLlgaLlon expenses ln Lhe amounL
of 3000000
c Lhe award of exemplary damages ls DLLL1LD
1he ComplalnL agalnsL respondenL LdllberLo C ue !esus ls DISMISSLD 1he counLerclalms of respondenLs are
llkewlse DISMISSLD
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Calaxy uevelopmenL and ManagemenL CorporaLlon (Calaxy) and lLs presldenL Marlano u lmperlal are CkDLkLD
Lo [olnLly and severally pay respondenL lLu damages equlvalenL Lo Lhe abovemenLloned amounLs awarded Lo
peLlLloner

SC CkDLkLD

AosttloMottloez cblcoNozotlo Nocboto and keyes II concur

1
kollo pp 333

2
lJ aL 3862 penned by AssoclaLe !usLlce Marlano C uel CasLlllo and concurred ln by AssoclaLe !usLlces
ArcangellLa 8omllla LonLok and 8omeo l 8arza

3
lJ aL 6773 penned by !udge Ale[andro C 8l[asa

4
lJ aL 6463

3
lJ aL 160177

6
lJ aL 188

7
8ecords vol l pp 136139

8
lJ aL 287290

9
kollo pp 7473

10
lJ aL 61

11
lJ aL 1314

12
8ecords vol l pp 16

13
C8 no 84698 lebruary 4 1992 203 SC8A 729

14
lJ aL 733734

13
CD losotooce cotpototloo v Cl 5otmleoto 1tockloq cotpototloo 433 hll 333 341 (2002)

16
8ecords vol 1 pp 7686

17
MloJex kesootces uevelopmeot v Motlllo 428 hll 934 944 (2002)

18
kopoe It v 1ottes C8 no 137632 uecember 6 2006 310 SC8A 336 348

19
1Sn SepLember 20 1999 pp 2021 8ecords vol l pp 316322 8ecords vol ll p 397

20
osteto 5blpploq lloes loc v coott of Appeols C8 no 97412 !uly 12 1994 234 SC8A 78 9397

21
1Sn SepLember 27 1999 pp 3 9

22
kopoe v 1ottes sopto noLe 18 aL 349

23
1Sn SepLember 20 1999 pp 10 1213 SepLember 27 1999 pp 3 39

24
A85c8N 8tooJcostloq cotpototloo v coott of Appeols 361 hll 499 329330 (1999)

23
Clvll Code ArL 2208

ln Lhe absence of sLlpulaLlon aLLorneys fees and expenses of llLlgaLlon oLher Lhan [udlclal cosLs cannoL be
recovered excepL
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(2) when Lhe defendanLs acL or omlsslon has compelled Lhe plalnLlff Lo llLlgaLe wlLh Lhlrd persons or Lo lncur
expenses Lo proLecL hls lnLeresL

26
448 hll 643 (2003)

27
lJ aL 636

28
8ecords vol l pp 4333 (lLu) and pp 3668 (Calaxy)

29
C8 no 144438 !uly 14 2004 434 SC8A 404

30
C8 no 66207 May 18 1992 209 SC8A 47

31
Metcoty utoq cotpototloo v llboooo sopto aL 414418

32
137 hll 239 (1969)

33
lJ aL 243244

34
kollo p 74

33
8ecords vol l p 330
SUkLML CCUk1
Manlla
Ln 8AnC
Gk No L376 Iune 30 192
SAGkADA CkDLN DL kLDICADCkLS DLL SAN1ISMC kCSAkIC DL IILIINAS plalnLlffappellee
vs
NA1ICNAL CCCCNU1 CCkCkA1ICN defendanLappellanL
ltst Asslstoot cotpotote cooosel eJetlco c Allkpolo ooJ Asslstoot Attotoey Aoqosto kolow fot oppelloot
komltez ooJ Ottlqos fot oppellee
LA8kADCk
1hls ls an acLlon Lo recover Lhe possesslon of a plece of real properLy (land and warehouses) slLuaLed ln andacan
Manlla and Lhe renLals for lLs occupaLlon and use 1he land belongs Lo Lhe plalnLlff ln whose name Lhe LlLle was
reglsLered before Lhe war Cn !anuary 4 1943 durlng Lhe !apanese mlllLary occupaLlon Lhe land was acqulred by a
!apanese corporaLlon by Lhe name of 1alwan 1ekkosho for Lhe sum of 14000 and Lhereupon LlLle LhereLo lssued
ln lLs name (Lransfer cerLlflcaLe of LlLle no 64330 8eglsLer of ueeds Manlla) AfLer llberaLlon more speclflcally on
Aprll 4 1946 Lhe Allen roperLy CusLodlan of Lhe unlLed SLaLes of Amerlca Look possesslon conLrol and cusLody
Lhereof under secLlon 12 of Lhe 1radlng wlLh Lhe Lnemy AcL 40 SLaL 411 for Lhe reason LhaL lL belonged Lo an
enemy naLlonal uurlng Lhe year 1946 Lhe properLy was occupled by Lhe Copra LxporL ManagemenL Company
under a cusLodlanshlp agreemenL wlLh unlLed SLaLes Allen roperLy CusLodlan (LxhlblL C) and when lL vacaLed Lhe
properLy lL was occupled by Lhe defendanL hereln 1he hlllpplne CovernmenL made represenLaLlons wlLh Lhe
Cfflce Allen roperLy CusLodlan for Lhe use of properLy by Lhe CovernmenL (see LxhlblLs 2 2A 28 and 1) Cn
March 31 1947 Lhe defendanL was auLhorlzed Lo repalr Lhe warehouse on Lhe land and acLually spenL Lhereon
Lhe repalrs Lhe sum of 2689827 ln 1948 defendanL leased oneLhlrd of Lhe warehouse Lo one uloscoro Sarlle aL
a monLhly renLal of 300 whlch was laLer ralsed Lo 1000 a monLh Sarlle dld noL pay Lhe renLs so acLlon was
broughL agalnsL hlm lL ls noL shown however lf Lhe [udgmenL was ever execuLed
lalnLlff made clalm Lo Lhe properLy before Lhe Allen roperLy CusLodlan of Lhe unlLed SLaLes buL as Lhls was
denled lL broughL an acLlon ln courL (CourL of llrsL lnsLance of Manlla clvll case no 3007 enLlLled La Sagrada
Crden redlcadores de la rovlnlcla del SanLlslmo 8osarlo de llllplnas vs hlllpplne Allen roperLy AdmlnlsLraLor
defendanL 8epubllc of Lhe hlllpplnes lnLervenor) Lo annul Lhe sale of properLy of 1alwan 1ekkosho and recover
lLs possesslon 1he 8epubllc of Lhe hlllpplnes was allowed Lo lnLervene ln Lhe acLlon 1he case dld noL come for
Lrlal because Lhe parLles presenLed a [olnL peLlLlon ln whlch lL ls clalmed by plalnLlff LhaL Lhe sale ln favor of Lhe
1alwan 1ekkosho was null and vold because lL was execuLed under LhreaLs duress and lnLlmldaLlon and lL was
agreed LhaL Lhe LlLle lssued ln Lhe name of Lhe 1alwan 1ekkosho be cancelled and Lhe orlglnal LlLle of plalnLlff re
lssued LhaL Lhe clalms rlghLs LlLle and lnLeresL of Lhe Allen roperLy CusLodlan be cancelled and held for naughL
LhaL Lhe occupanL naLlonal CoconuL CorporaLlon has unLll lebruary 28 1949 Lo recover lLs equlpmenL from Lhe
properLy and vacaLe Lhe premlses LhaL plalnLlff upon enLry of [udgmenL pay Lo Lhe hlllpplne Allen roperLy
AdmlnlsLraLlon Lhe sum of 140000 and LhaL Lhe hlllpplne Allen roperLy AdmlnlsLraLlon be free from
responslblllLy or llablllLy for any acL of Lhe naLlonal CoconuL CorporaLlon eLc ursuanL Lo Lhe agreemenL Lhe courL
rendered [udgmenL releaslng Lhe defendanL and Lhe lnLervenor from llablllLy buL reverslng Lo Lhe plalnLlff Lhe rlghL
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Lo recover from Lhe naLlonal CoconuL CorporaLlon reasonable renLals for Lhe use and occupaLlon of Lhe premlses
(LxhlblL A1)
1he presenL acLlon ls Lo recover Lhe reasonable renLals from AugusL 1946 Lhe daLe when Lhe defendanL began Lo
occupy Lhe premlses Lo Lhe daLe lL vacaLed lL 1he defendanL does noL conLesL lLs llablllLy for Lhe renLals aL Lhe raLe
of 3000 per monLh from lebruary 28 1949 (Lhe daLe speclfled ln Lhe [udgmenL ln clvll case no 3007) buL reslsLs
Lhe clalm Lherefor prlor Lo Lhls daLe lL lnLerposes Lhe defense LhaL lL occupled Lhe properLy ln good falLh under no
obllgaLlon whaLsoever Lo pay renLals for Lhe use and occupaLlon of Lhe warehouse !udgmenL was rendered for Lhe
plalnLlff Lo recover from Lhe defendanL Lhe sum of 3000 a monLh as reasonable renLals from AugusL 1946 Lo
Lhe daLe Lhe defendanL vacaLes Lhe premlses 1he [udgmenL declares LhaL plalnLlff has always been Lhe owner as
Lhe sale of !apanese purchaser was vold ob loltlo LhaL Lhe Allen roperLy AdmlnlsLraLlon never acqulred any rlghL
Lo Lhe properLy buL LhaL lL held Lhe same ln LrusL unLll Lhe deLermlnaLlon as Lo wheLher or noL Lhe owner ls an
enemy clLlzen 1he Lrlal courL furLher declares LhaL defendanL can noL clalm any beLLer rlghLs Lhan lLs predecessor
Lhe Allen roperLy AdmlnlsLraLlon and LhaL as defendanL has used Lhe properLy and had subleased porLlon
Lhereof lL musL pay reasonable renLals for lLs occupaLlon
AgalnsL Lhls [udgmenL Lhls appeal has been lnLerposed Lhe followlng asslgnmenL of error havlng been made on
defendanLappellanLs behalf
1he Lrlal courL erred ln holdlng Lhe defendanL llable for renLals or compensaLlon for Lhe use and occupaLlon of Lhe
properLy from Lhe mlddle of AugusL 1946 Lo uecember 14 1948
1 WanL Lo ownershlp rlghLs of Lhe hlllpplne Allen roperLy AdmlnlsLraLlon dld noL render lllegal or lnvalldaLe lLs
granL Lo Lhe defendanL of Lhe free use of properLy
2 Lhe declslon of Lhe CourL of llrsL lnsLance of Manlla declarlng Lhe sale by Lhe plalnLlff Lo Lhe !apanese purchaser
null and vold ab lnlLlo and LhaL Lhe plalnLlff was and has remalned as Lhe legal owner of Lhe properLy wlLhouL legal
lnLerrupLlon ls noL concluslve
3 8eservaLlon Lo Lhe plalnLlff of Lhe rlghL Lo recover from Lhe defendanL corporaLlon noL blndlng on Lhe laLer
4 use of Lhe properLy for commerclal purposes ln lLself alone does noL [usLlfy paymenL of renLals
3 uefendanLs possesslon was ln good falLh
6 uefendanLs possesslon ln Lhe naLure of usufrucL
ln reply plalnLlffappellees counsel conLends LhaL Lhe hlllpplne Alllen roperLy AdmlnlsLraLlon (AA) was a mere
admlnlsLraLor of Lhe owner (who ulLlmaLely was declded Lo be plalnLlff) and LhaL as defendanL has used lL for
commerclal purposes and has leased porLlon of lL lL should be responslble Lherefore Lo Lhe owner who had been
deprlved of Lhe possesslon for so many years (Appellees brlef pp 20 23)
We can noL undersLand how Lhe Lrlal courL from Lhe mere facL LhaL plalnLlffappellee was Lhe owner of Lhe
properLy and Lhe defendanLappellanL Lhe occupanL whlch used for lLs own beneflL buL by Lhe express permlsslon
of Lhe Allen roperLy CusLodlan of Lhe unlLed SLaLes so easlly [umped Lo Lhe concluslon LhaL Lhe occupanL ls llable
for Lhe value of such use and occupaLlon lf defendanLappellanL ls llable aL all lLs obllgaLlons musL arlse from any
of Lhe four sources of obllgaLlons namley law conLracL or quaslconLracL crlme or negllgence (ArLlcle 1089
Spanlsh Clvll Code) uefendanLappellanL ls noL gullLy of any offense aL all because lL enLered Lhe premlses and
occupled lL wlLh Lhe permlsslon of Lhe enLlLy whlch had Lhe legal conLrol and admlnlsLraLlon Lhereof Lhe Alllen
roperLy AdmlnlsLraLlon nelLher was Lhere any negllgence on lLs parL 1here was also no prlvlLy (of conLracL or
obllgaLlon) beLween Lhe Allen roperLy CusLodlan and Lhe 1alwan 1ekkosho whlch had secured Lhe possesslon of
Lhe properLy from Lhe plalnLlffappellee by Lhe use of duress such LhaL Lhe Allen roperLy CusLodlan or lLs
permlLLee (defendanLappellanL) may be held responslble for Lhe supposed lllegallLy of Lhe occupaLlon of Lhe
properLy by Lhe sald 1alwan 1ekkosho 1he Alllen roperLy AdmlnlsLraLlon had Lhe conLrol and admlnlsLraLlon of
Lhe properLy noL as successor Lo Lhe lnLeresLs of Lhe enemy holder of Lhe LlLle Lhe 1alwan 1ekkosho buL by
express provlslon of law (1radlng wlLh Lhe Lnemy AcL of Lhe unlLed SLaLes 40 SLaL 411 30 uSCA 189) nelLher
ls lL a LrusLee of Lhe former owner Lhe plalnLlffappellee hereln buL a LrusLee of Lhen CovernmenL of Lhe unlLed
SLaLes (32 Cp ALLy Cen 249 30 uSCA 283) ln lLs own rlghL Lo Lhe excluslon of and agalnsL Lhe clalm or LlLle of
Lhe enemy owner (?oughloheny Chlo Coal Co vs Lasevlch 1920 179 nW 333 171 Wls 347 uSCA 282
283) lrom AugusL 1946 when defendanLappellanL Look possesslon Lo Lhe laLe of [udgmenL on lebruary 28
1948 Alllen roperLy AdmlnlsLraLlon had Lhe absoluLe conLrol of Lhe properLy as LrusLee of Lhe CovernmenL of Lhe
unlLed SLaLes wlLh power Lo dlspose of lL by sale or oLherwlse as Lhough lL were Lhe absoluLe owner (uS vs
Chemlcal loundaLlon CCA uel 1923 3 l 2d 191 30 uSCA 283) 1herefore even lf defendanLappellanL
were llable Lo Lhe Alllen roperLy AdmlnlsLraLlon for renLals Lhese would noL accrue Lo Lhe beneflL of Lhe plalnLlff
appellee Lhe owner buL Lo Lhe unlLed SLaLes CovernmenL
8uL Lhere ls anoLher ground why Lhe clalm or renLals can noL be made agalnsL defendanLappellanL 1here was no
agreemenL beLween Lhe Allen roperLy CusLodlan and Lhe defendanLappellanL for Lhe laLLer Lo pay renLals on Lhe
properLy 1he exlsLence of an lmplled agreemenL Lo LhaL effecL ls conLrary Lo Lhe clrcumsLances 1he copra LxporL
ManagemenL Company whlch preceded Lhe defendanLappellanL ln Lhe possesslon and use of Lhe properLy does
noL appear Lo have pald renLals Lherefor as lL occupled lL by whaL Lhe parLles denomlnaLed a cusLodlanshlp
agreemenL and Lhere ls no provlslon Lhereln for Lhe paymenL of renLals or of any compensaLlon for lLs cusLody
and or occupaLlon and Lhe use 1he 1radlng wlLh Lhe Lnemy AcL as orlglnally enacLed was purely a measure of
conversaLlon hence lL ls very unllkely LhaL renLals were demanded for Lhe use of Lhe properLy When Lhe naLlonal
coconuL CorporaLlon succeeded Lhe Copra LxporL ManagemenL Company ln Lhe possesslon and use of Lhe
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properLy lL musL have been also free from paymenL of renLals especlally as lL was CovernmenL corporaLlon and
sLeps where Lhen belng Laken by Lhe hlllpplne CovernmenL Lo secure Lhe properLy for Lhe naLlonal CoconuL
CorporaLlon So LhaL Lhe clrcumsLances do noL [usLlfy Lhe flndlng LhaL Lhere was an lmplled agreemenL LhaL Lhe
defendanLappellanL was Lo pay for Lhe use and occupaLlon of Lhe premlses aL all
1he above conslderaLlons show LhaL plalnLlffappellees clalm for renLals before lL obLalned Lhe [udgmenL annulllng
Lhe sale of Lhe 1alwan 1ekkosho may noL be predlcaLed on any negllgence or offense of Lhe defendanLappellanL
or any conLracL express or lmplled because Lhe Alllen roperLy AdmlnlsLraLlon was nelLher a LrusLee of plalnLlff
appellee nor a prlvy Lo Lhe obllgaLlons of Lhe 1alwan 1ekkosho lLs LlLle belng based by legal provlslon of Lhe
selzure of enemy properLy We have also Lrled ln valn Lo flnd a law or provlslon Lhereof or any prlnclple ln quasl
conLracLs or equlLy upon whlch Lhe clalm can be supporLed Cn Lhe conLrary as defendanLappellanL enLered lnLo
possesslon wlLhouL any expecLaLlon of llablllLy for such use and occupaLlon lL ls only falr and [usL LhaL lL may noL
be held llable Lherefor And as Lo Lhe renLs lL collecLed from lLs lessee Lhe same should accrue Lo lL as a possessor
ln good falLh as Lhls CourL has already expressly held (8esoluLlon naLlonal CoconuL CorporaLlon vs Ceronlmo 83
hll 467)
LasLly Lhe reservaLlon of Lhls acLlon may noL be consldered as vesLlng a new rlghL lf no rlghL Lo clalm for renLals
exlsLed aL Lhe Llme of Lhe reservaLlon no rlghLs can arlse or accrue from such reservaLlon alone
Wherefore Lhe parL of Lhe [udgmenL appealed from whlch senLences defendanLappellanL Lo pay renLals from
AugusL 1946 Lo lebruary 28 1949 ls hereby reversed ln all oLher respecLs Lhe [udgmenL ls afflrmed CosLs of Lhls
appeal shall be agalnsL Lhe plalnLlffappellee
lotos cI loblo 8eoqzoo loJlllo 1oosoo Mootemoyot ooJ 8ootlsto Aoqelo II concur
SUkLML CCUk1
Manlla
Ln 8AnC
Gk No L36840 May 22 1973
LCLLS CAk INC plalnLlffappellanL
vs
CCMMANDC SLCUkI1 SLkVICL AGLNC defendanLappellee
1LLnANkLL
ln Lhls appeal from Lhe adverse [udgmenL of Lhe uavao courL of flrsL lnsLance llmlLlng plalnLlffappellanLs recovery
under lLs complalnL Lo Lhe sum of 100000 lnsLead of Lhe acLual damages of 848910 clalmed and suffered by lL
as a dlrecL resulL of Lhe wrongful acLs of defendanL securlLy agencys guard asslgned aL plalnLlffs premlses ln
pursuance of Lhelr Cuard Servlce ConLracL Lhe CourL flnds merlL ln Lhe appeal and accordlngly reverses Lhe Lrlal
courLs [udgmenL
1he appeal was cerLlfled Lo Lhls CourL by a speclal dlvlslon of Lhe CourL of Appeals on a fourLoone voLe as per lLs
resoluLlon of Aprll 14 1973 LhaL Slnce Lhe case was submlLLed Lo Lhe courL o poo for declslon on Lhe sLrengLh of
Lhe sLlpulaLlon of facLs only quesLlons of law can be lnvolved ln Lhe presenL appeal
1he CourL has accepLed such cerLlflcaLlon and dockeLed Lhls appeal on Lhe sLrengLh of lLs own flndlng from Lhe
records LhaL plalnLlffs noLlce of appeal was expressly Lo Lhls CourL (noL Lo Lhe appellaLe courL) on pure quesLlons
of law
1
and lLs record on appeal accordlngly prayed LhaL Lhe correspondlng records be cerLlfled and forwarded
Lo Lhe Ponorable Supreme CourL
2
1he Lrlal courL so approved Lhe same
3
on !uly 3 1971 lnsLead of havlng
requlred Lhe flllng of a peLlLlon for revlew of Lhe [udgmenL soughL Lo be appealed from dlrecLly wlLh Lhls CourL ln
accordance wlLh Lhe provlslons of 8epubllc AcL 3440 8y some unexplalned and hlLherLo undlscovered error of Lhe
clerk of courL furLhermore Lhe record on appeal was erroneously forwarded Lo Lhe appellaLe courL raLher Lhan Lo
Lhls CourL
1he parLles submlLLed Lhe case for [udgmenL on a sLlpulaLlon of facLs 1here ls Lhus no dlspuLe as Lo Lhe facLual
bases of plalnLlffs complalnL for recovery of acLual damages agalnsL defendanL Lo wlL LhaL under Lhe subslsLlng
Cuard Servlce ConLracL beLween Lhe parLles defendanLappellee as a duly llcensed securlLy servlce agency
underLook ln conslderaLlon of Lhe paymenLs made by plalnLlff Lo safeguard and proLecL Lhe buslness premlses of
(plalnLlff) from LhefL pllferage robbery vandallsm and all oLher unlawful acLs of any person or person pre[udlclal
Lo Lhe lnLeresL of (plalnLlff)
4

Cn Aprll 3 1970 aL around 100 AM however defendanLs securlLy guard on duLy aL plalnLlffs premlses wlLhouL
any auLhorlLy consenL approval knowledge or orders of Lhe plalnLlff and/or defendanL broughL ouL of Lhe
compound of Lhe plalnLlff a car belonglng Lo lLs cusLomer and drove sald car for a place or places unknown
abandonlng hls posL as such securlLy guard on duLy lnslde Lhe plalnLlffs compound and whlle so drlvlng sald car ln
one of Lhe ClLy sLreeLs losL conLrol of sald car causlng Lhe same Lo fall lnLo a dlLch along ! Laurel SL uavao ClLy
by reason of whlch Lhe plalnLlffs complalnL for quallfled LhefL agalnsL sald drlver was bloLLered ln Lhe offlce of Lhe
uavao ClLy ollce ueparLmenL

As a resulL of Lhese wrongful acLs of defendanLs securlLy guard Lhe car of plalnLlffs cusLomer !oseph Luy whlch
had been lefL wlLh plalnLlff for servlclng and malnLenance suffered exLenslve damage ln Lhe LoLal amounL of
7079
6
besldes Lhe car renLal value chargeable Lo defendanL ln Lhe sum of 141000 for a car LhaL plalnLlff
had Lo renL and make avallable Lo lLs sald cusLomer Lo enable hlm Lo pursue hls buslness and occupaLlon for Lhe
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perlod of forLyseven (47) days (from Aprll 23 Lo !une 10 1970) LhaL lL Look plalnLlff Lo repalr Lhe damaged car
7
or
LoLal acLual damages lncurred by plalnLlff ln Lhe sum of 848910
lalnLlff clalmed LhaL defendanL was llable for Lhe enLlre amounL under paragraph 3 of Lhelr conLracL whereunder
defendanL assumed sole responslblllLy for Lhe acLs done durlng Lhelr waLch hours by lLs guards whereas
defendanL conLended wlLhouL quesLlonlng Lhe amounL of Lhe acLual damages lncurred by plalnLlff LhaL lLs llablllLy
shall noL exceed one Lhousand (100000) pesos per guard posL under paragraph 4 of Lhelr conLracL
1he parLles Lhus llkewlse sLlpulaLed on Lhls sole lssue submlLLed by Lhem for ad[udlcaLlon as follows
lnLerpreLaLlon of Lhe conLracL as Lo Lhe exLenL of Lhe llablllLy of Lhe defendanL Lo Lhe plalnLlff by reason of Lhe acLs
of Lhe employees of Lhe defendanL ls Lhe only lssue Lo be resolved
1he defendanL relles on ar 4 of Lhe conLracL Lo supporL lLs conLenLlon whlle Lhe plalnLlff relles on ar 3 of Lhe
same conLracL ln supporL of lLs clalms agalnsL Lhe defendanL lor ready reference Lhey are quoLed hereunder
ar 4 arLy of Lhe Second arL (defendanL) Lhrough Lhe negllgence of lLs guards afLer an lnvesLlgaLlon has
been conducLed by Lhe arLy of Lhe llrsL arL (plalnLlff) whereln Lhe arLy of Lhe Second arL has been duly
represenLed shall assume full responslblllLles for any loss or damages LhaL may occur Lo any properLy of Lhe arLy
of Lhe llrsL arL for whlch lL ls accounLable durlng Lhe waLch hours of Lhe arLy of Lhe Second arL provlded Lhe
same ls reporLed Lo Lhe arLy of Lhe Second arL wlLhln LwenLyfour (24) hours of Lhe occurrence excepL where
such loss or damage ls due Lo fotce mojeote provlded however LhaL afLer Lhe proper lnvesLlgaLlon Lo be made
Lhereof LhaL Lhe guard on posL ls found negllgenL and LhaL Lhe amounL of Lhe loss shall noL exceed CnL 1PCuSAnu
(100000) LSCS per guard posL
ar 3 1he parLy of Lhe Second arL assumes Lhe responslblllLy for Lhe proper performance by Lhe guards
employed of Lhelr duLles and (shall) be solely responslble for Lhe acLs done durlng Lhelr waLch hours Lhe arLy of
Lhe llrsL arL belng speclflcally released from any and all llablllLles Lo Lhe formers employee or Lo Lhe Lhlrd parLles
arlslng from Lhe acLs or omlsslons done by Lhe guard durlng Lhelr Lour of
duLy
8

1he Lrlal courL mlsreadlng Lhe abovequoLed conLracLual provlslons held LhaL Lhe llablllLy of Lhe defendanL ln
favor of Lhe plalnLlff falls under paragraph 4 of Lhe Cuard Servlce ConLracL and rendered [udgmenL flndlng Lhe
defendanL llable Lo Lhe plalnLlff ln Lhe amounL of 100000 wlLh cosLs
Pence Lhls appeal whlch as already lndlcaLed ls merlLorlous and musL be granLed
aragraph 4 of Lhe conLracL whlch llmlLs defendanLs llablllLy for Lhe amounL of loss or damage Lo any properLy of
plalnLlff Lo 100000 per guard posL ls by lLs own Lerms appllcable only for loss or damage Lhrough Lhe
oeqllqeoce of lLs guards durlng Lhe waLch hours provlded LhaL Lhe same ls duly reporLed by plalnLlff wlLhln 24
hours of Lhe occurrence and Lhe guards negllgence ls verlfled afLer proper lnvesLlgaLlon wlLh Lhe aLLendance of
boLh conLracLlng parLles Sald paragraph ls manlfesLly lnappllcable Lo Lhe sLlpulaLed facLs of record whlch lnvolve
nelLher properLy of plalnLlff LhaL has been losL or damaged aL lLs premlses nor mere negllgence of defendanLs
securlLy guard on duLy
Pere lnsLead of defendanL Lhrough lLs asslgned securlLy guards complylng wlLh lLs conLracLual underLaklng Lo
safeguard and proLecL Lhe buslness premlses of (plalnLlff) from LhefL robbery vandallsm and all oLher unlawful
acLs of any person or persons defendanLs own guard on duLy unlawfully and wrongfully drove ouL of plalnLlffs
premlses a cusLomers car losL conLrol of lL on Lhe hlghway causlng lL Lo fall lnLo a dlLch Lhereby dlrecLly causlng
plalnLlff Lo lncur acLual damages ln Lhe LoLal amounL of 848910
uefendanL ls Lherefore undoubLedly llable Lo lndemnlfy plalnLlff for Lhe enLlre damages Lhus lncurred slnce under
paragraph 3 of Lhelr conLracL lL assumed Lhe responslblllLy for Lhe proper performance by Lhe guards employed of
Lhelr duLles and (conLracLed Lo) be solely tespooslble for Lhe acLs done durlng Lhelr waLch hours and speclflcally
released (plalnLlff) from any and all llablllLles Lo Lhe Lhlrd parLles arlslng from Lhe acLs or omlsslons done by Lhe
guards durlng Lhelr Lour of duLy As plalnLlff had duly dlscharged lLs llablllLy Lo Lhe Lhlrd parLy lLs cusLomer !oseph
Luy for Lhe undlspuLed damages of 848910 caused sald cusLomer due Lo Lhe wanLon and unlawful acL of
defendanLs guard defendanL ln Lurn was clearly llable under Lhe Lerms of paragraph 3 of Lhelr conLracL Lo
lndemnlfy plalnLlff ln Lhe same amounL
1he Lrlal courLs approach LhaL had plalnLlff undersLood Lhe llablllLy of Lhe defendanL Lo fall under paragraph 3 lL
should have Lold !oseph Luy owner of Lhe car LhaL under Lhe Cuard Servlce ConLracL lL was noL llable for Lhe
damage buL Lhe defendanL and had Luy lnslsLed on Lhe llablllLy of Lhe plalnLlff Lhe laLLer should have challenged
hlm Lo brlng Lhe maLLer Lo courL lf Luy accepLed Lhe challenge and lnsLlLuLed an acLlon agalnsL Lhe plalnLlff lL
should have flled a LhlrdparLy complalnL agalnsL Lhe Commando SecurlLy Servlce Agency 8uL lf Luy lnsLlLuLed Lhe
acLlon agalnsL Lhe plalnLlff and Lhe defendanL Lhe plalnLlff should have flled a crossclalm agalnsL Lhe laLLer
9
was
unduly Lechnlcal and unreallsLlc and unLenable
lalnLlff was ln law llable Lo lLs cusLomer for Lhe damages caused Lhe cusLomers car whlch had been enLrusLed
lnLo lLs cusLody lalnLlff Lherefore was ln law [usLlfled ln maklng good such damages and relylng ln Lurn on
defendanL Lo honor lLs conLracL and lndemnlfy lL for such undlspuLed damages whlch had been caused dlrecLly by
Lhe unlawful and wrongful acLs of defendanLs securlLy guard ln breach of Lhelr conLracL As ordalned ln ArLlcle
1139 Clvll Code obllgaLlons arlslng from conLracLs have Lhe force of law beLween Lhe conLracLlng parLles and
should be complled wlLh ln good falLh
lalnLlff ln law could noL Lell lLs cusLomer as per Lhe Lrlal courLs vlew LhaL under Lhe Cuard Servlce ConLracL lL
was noL llable for Lhe damage buL Lhe defendanL slnce Lhe cusLomer could noL hold defendanL Lo accounL for
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Lhe damages as he had no prlvlLy of conLracL wlLh defendanL Such an approach of Lelllng Lhe adverse parLy Lo go
Lo courL noLwlLhsLandlng hls plalnly valld clalm aslde from lLs eLhlcal deflclency among oLhers could hardly creaLe
any goodwlll for plalnLlffs buslness ln Lhe same way LhaL defendanLs baseless aLLempL Lo evade fully dlscharglng
lLs conLracLual llablllLy Lo plalnLlff cannoL be expecLed Lo have broughL lL more buslness Worse Lhe admlnlsLraLlon
of [usLlce ls pre[udlced slnce Lhe courL dockeLs are unduly burdened wlLh unnecessary llLlgaLlon
ACCC8ulnCL? Lhe [udgmenL appealed from ls hereby reversed and [udgmenL ls hereby rendered senLenclng
defendanLappellee Lo pay plalnLlffappellanL Lhe sum of 848910 as and by way of relmbursemenL of Lhe
sLlpulaLed acLual damages and expenses as well as Lhe cosLs of sulL ln boLh lnsLances lL ls so ordered
Mokollotol 2olJlvot costto etoooJo 8otteJo Mokoslot Aotoolo ooJ sqoetto II coocot
Iootnotes
1 8ec on appeal p 39
2 lJem pp 4041
3 lJem p 42
4 Annex A complalnL 8ec on app pp 813
3 ar 1 SLlpulaLlon of lacLs 8ec on app p 24
6 ar 2 lJem
7 ar 3 lJem
8 8ec on app pp 2627 noLes ln emphasls supplled
9 ueclslon 8ec on App pp 2930
SUkLML CCUk1
Manlla

Ln 8AnC

uLClSlCn

CcLober 14 1918

C8 no L12191
ICSL CANGCC plalnLlffappellanL
vs
MANILA kAILkCAD CC defendanLappellee

komoo 5otelo fot oppelloot
klocolJ nottlqoo fot oppellee

I|sher

AL Lhe Llme of Lhe occurrence whlch gave rlse Lo Lhls llLlgaLlon Lhe plalnLlff !ose Cangco was ln Lhe employmenL of
Manlla 8allroad Company ln Lhe capaclLy of clerk wlLh a monLhly wage of 23 Pe llved ln Lhe pueblo of San
MaLeo ln Lhe provlnce of 8lzal whlch ls locaLed upon Lhe llne of Lhe defendanL rallroad company and ln comlng
dally by Lraln Lo Lhe companys offlce ln Lhe clLy of Manlla where he worked he used a pass supplled by Lhe
company whlch enLlLled hlm Lo rlde upon Lhe companys Lralns free of charge upon Lhe occaslon ln quesLlon
!anuary 20 1913 Lhe plalnLlff arose from hls seaL ln Lhe second classcar where he was rldlng and maklng hls exlL
Lhrough Lhe door Look hls poslLlon upon Lhe sLeps of Lhe coach selzlng Lhe uprlghL guardrall wlLh hls rlghL hand
for supporL

Cn Lhe slde of Lhe Lraln where passengers allghL aL Lhe San MaLeo sLaLlon Lhere ls a cemenL plaLform whlch beglns
Lo rlse wlLh a moderaLe gradlenL some dlsLance away from Lhe companys offlce and exLends along ln fronL of sald
offlce for a dlsLance sufflclenL Lo cover Lhe lengLh of several coaches As Lhe Lraln slowed down anoLher passenger
named Lmlllo Zunlga also an employee of Lhe rallroad company goL off Lhe same car allghLlng safely aL Lhe polnL
where Lhe plaLform beglns Lo rlse from Lhe level of Lhe ground When Lhe Lraln had proceeded a llLLle farLher Lhe
plalnLlff !ose Cangco sLepped off also buL one or boLh of hls feeL came ln conLacL wlLh a sack of waLermelons wlLh
Lhe resulL LhaL hls feeL sllpped from under hlm and he fell vlolenLly on Lhe plaLform Pls body aL once rolled from
Lhe plaLform and was drawn under Lhe movlng car where hls rlghL arm was badly crushed and laceraLed lL
appears LhaL afLer Lhe plalnLlff allghLed from Lhe Lraln Lhe car moved forward posslbly slx meLers before lL came Lo
a full sLop

1he accldenL occurred beLween 7 and 8 oclock on a dark nlghL and as Lhe rallroad sLaLlon was llghLed dlmly by a
slngle llghL locaLed some dlsLance away ob[ecLs on Lhe plaLform where Lhe accldenL occurred were dlfflculL Lo
dlscern especlally Lo a person emerglng from a llghLed car
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1he explanaLlon of Lhe presence of a sack of melons on Lhe plaLform where Lhe plalnLlff allghLed ls found ln Lhe
facL LhaL lL was Lhe cusLomary season for harvesLlng Lhese melons and a large loL had been broughL Lo Lhe sLaLlon
for Lhe shlpmenL Lo Lhe markeL 1hey were conLalned ln numerous sacks whlch has been plled on Lhe plaLform ln a
row one upon anoLher 1he LesLlmony shows LhaL Lhls row of sacks was so placed of melons and Lhe edge of
plaLform and lL ls clear LhaL Lhe fall of Lhe plalnLlff was due Lo Lhe facL LhaL hls fooL allghLed upon one of Lhese
melons aL Lhe momenL he sLepped upon Lhe plaLform Pls sLaLemenL LhaL he falled Lo see Lhese ob[ecLs ln Lhe
darkness ls readlly Lo be credlLed

1he plalnLlff was drawn from under Lhe car ln an unconsclous condlLlon and lL appeared LhaL Lhe ln[urles whlch he
had recelved were very serlous Pe was Lherefore broughL aL once Lo a cerLaln hosplLal ln Lhe clLy of Manlla where
an examlnaLlon was made and hls arm was ampuLaLed 1he resulL of Lhls operaLlon was unsaLlsfacLory and Lhe
plalnLlff was Lhen carrled Lo anoLher hosplLal where a second operaLlon was performed and Lhe member was agaln
ampuLaLed hlgher up near Lhe shoulder lL appears ln evldence LhaL Lhe plalnLlff expended Lhe sum of 79023 ln
Lhe form of medlcal and surglcal fees and for oLher expenses ln connecLlon wlLh Lhe process of hls curaLlon

upon AugusL 31 1913 he lnsLlLuLed Lhls proceedlng ln Lhe CourL of llrsL lnsLance of Lhe clLy of Manlla Lo recover
damages of Lhe defendanL company foundlng hls acLlon upon Lhe negllgence of Lhe servanLs and employees of Lhe
defendanL ln placlng Lhe sacks of melons upon Lhe plaLform and leavlng Lhem so placed as Lo be a menace Lo Lhe
securlLy of passenger allghLlng from Lhe companys Lralns AL Lhe hearlng ln Lhe CourL of llrsL lnsLance hls Ponor
Lhe Lrlal [udge found Lhe facLs subsLanLlally as above sLaLed and drew Lherefrom hls concluslon Lo Lhe effecL LhaL
alLhough negllgence was aLLrlbuLable Lo Lhe defendanL by reason of Lhe facL LhaL Lhe sacks of melons were so
placed as Lo obsLrucL passengers passlng Lo and from Lhe cars neverLheless Lhe plalnLlff hlmself had falled Lo use
due cauLlon ln allghLlng from Lhe coach and was Lherefore precluded form recoverlng !udgmenL was accordlngly
enLered ln favor of Lhe defendanL company and Lhe plalnLlff appealed

lL can noL be doubLed LhaL Lhe employees of Lhe rallroad company were gullLy of negllgence ln plllng Lhese sacks
on Lhe plaLform ln Lhe manner above sLaLed LhaL Lhelr presence caused Lhe plalnLlff Lo fall as he allghLed from Lhe
Lraln and LhaL Lhey Lherefore consLlLuLed an effecLlve legal cause of Lhe ln[urles susLalned by Lhe plalnLlff lL
necessarlly follows LhaL Lhe defendanL company ls llable for Lhe damage Lhereby occasloned unless recovery ls
barred by Lhe plalnLlffs own conLrlbuLory negllgence ln resolvlng Lhls problem lL ls necessary LhaL each of Lhese
concepLlons of llablllLy LowlL Lhe prlmary responslblllLy of Lhe defendanL company and Lhe conLrlbuLory
negllgence of Lhe plalnLlff should be separaLely examlned

lL ls lmporLanL Lo noLe LhaL Lhe foundaLlon of Lhe legal llablllLy of Lhe defendanL ls Lhe conLracL of carrlage and LhaL
Lhe obllgaLlon Lo respond for Lhe damage whlch plalnLlff has suffered arlses lf aL all from Lhe breach of LhaL
conLracL by reason of Lhe fallure of defendanL Lo exerclse due care ln lLs performance 1haL ls Lo say lLs llablllLy ls
dlrecL and lmmedlaLe dlfferlng essenLlally ln legal vlewpolnL from LhaL presumpLlve responslblllLy for Lhe
negllgence of lLs servanLs lmposed by arLlcle 1903 of Lhe Clvll Code whlch can be rebuLLed by proof of Lhe exerclse
of due care ln Lhelr selecLlon and supervlslon ArLlcle 1903 of Lhe Clvll Code ls noL appllcable Lo obllgaLlons arlslng
ex conLracLu buL only Lo exLraconLracLual obllgaLlons or Lo use Lhe Lechnlcal form of expresslon LhaL arLlcle
relaLes only Lo culpa aqulllana and noL Lo culpa conLracLual

Manresa (vol 8 p 67) ln hls commenLarles upon arLlcles 1103 and 1104 of Lhe Clvll Code clearly polnLs ouL Lhls
dlsLlncLlon whlch was also recognlzed by Lhls CourL ln lLs declslon ln Lhe case of 8akes vs ALlanLlc Culf and aclflc
Co (7 hll rep 339) ln commenLlng upon arLlcle 1093 Manresa clearly polnLs ouL Lhe dlfference beLween culpa
subsLanLlve and lndependenL whlch of lLself consLlLuLes Lhe source of an obllgaLlon beLween persons noL formerly
connecLed by any legal Lle and culpa consldered as an accldenL ln Lhe performance of an obllgaLlon already
exlsLlng

ln Lhe 8akes case (supra) Lhe declslon of Lhls courL was made Lo resL squarely upon Lhe proposlLlon LhaL arLlcle
1903 of Lhe Clvll Code ls noL appllcable Lo acLs of negllgence whlch consLlLuLe Lhe breach of a conLracL

upon Lhls polnL Lhe CourL sald

1he acLs Lo whlch Lhese arLlcles 1902 and 1903 of Lhe Clvll Code are appllcable are undersLood Lo be Lhose noL
growlng ouL of preexlsLlng duLles of Lhe parLles Lo one anoLher 8uL where relaLlons already formed glve rlse Lo
duLles wheLher sprlnglng from conLracL or quaslconLracL Lhen breaches of Lhose duLles are sub[ecL Lo arLlcle
1101 1103 and 1104 of Lhe same code (8akes vs ALlanLlc Culf and aclflc Co 7 hll 8ep 339 aL 363)

1hls dlsLlncLlon ls of Lhe uLmosL lmporLance 1he llablllLy whlch under Lhe Spanlsh law ls ln cerLaln cases lmposed
upon employers wlLh respecL Lo damages occasloned by Lhe negllgence of Lhelr employees Lo persons Lo whom
Lhey are noL bound by conLracL ls noL based as ln Lhe Lngllsh Common Law upon Lhe prlnclple of respondeaL
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superlor lf lL were Lhe masLer would be llable ln every case and uncondlLlonally buL upon Lhe prlnclple
announced ln arLlcle 1902 of Lhe Clvll Code whlch lmposes upon all persons who by Lhelr faulL or negllgence do
ln[ury Lo anoLher Lhe obllgaLlon of maklng good Lhe damage caused Cne who places a powerful auLomoblle ln Lhe
hands of a servanL whom he knows Lo be lgnoranL of Lhe meLhod of managlng such a vehlcle ls hlmself gullLy of an
acL of negllgence whlch makes hlm llable for all Lhe consequences of hls lmprudence 1he obllgaLlon Lo make good
Lhe damage arlses aL Lhe very lnsLanL LhaL Lhe unsklllful servanL whlle acLlng wlLhln Lhe scope of hls employmenL
causes Lhe ln[ury 1he llablllLy of Lhe masLer ls personal and dlrecL 8uL lf Lhe masLer has noL been gullLy of any
negllgence whaLever ln Lhe selecLlon and dlrecLlon of Lhe servanL he ls noL llable for Lhe acLs of Lhe laLLer
whaLever done wlLhln Lhe scope of hls employmenL or noL lf Lhe damage done by Lhe servanL does noL amounL Lo
a breach of Lhe conLracL beLween Lhe masLer and Lhe person ln[ured

lL ls noL accuraLe Lo say LhaL proof of dlllgence and care ln Lhe selecLlon and conLrol of Lhe servanL relleves Lhe
masLer from llablllLy for Lhe laLLers acLs on Lhe conLrary LhaL proof shows LhaL Lhe responslblllLy has never
exlsLed As Manresa says (vol 8 p 68) Lhe llablllLy arlslng from exLraconLracLual culpa ls always based upon a
volunLary acL or omlsslon whlch wlLhouL wlllful lnLenL buL by mere negllgence or lnaLLenLlon has caused damage
Lo anoLher A masLer who exerclses all posslble care ln Lhe selecLlon of hls servanL Laklng lnLo conslderaLlon Lhe
quallflcaLlons Lhey should possess for Lhe dlscharge of Lhe duLles whlch lL ls hls purpose Lo conflde Lo Lhem and
dlrecLs Lhem wlLh equal dlllgence Lhereby performs hls duLy Lo Lhlrd persons Lo whom he ls bound by no
conLracLual Lles and he lncurs no llablllLy whaLever lf by reason of Lhe negllgence of hls servanLs even wlLhln Lhe
scope of Lhelr employmenL such Lhlrd person suffer damage 1rue lL ls LhaL under arLlcle 1903 of Lhe Clvll Code Lhe
law creaLes a presumpLlon LhaL he has been negllgenL ln Lhe selecLlon or dlrecLlon of hls servanL buL Lhe
presumpLlon ls rebuLLable and yleld Lo proof of due care and dlllgence ln Lhls respecL

1he supreme courL of orLo 8lco ln lnLerpreLlng ldenLlcal provlslons as found ln Lhe orLo 8lco Code has held LhaL
Lhese arLlcles are appllcable Lo cases of exLraconLracLual culpa excluslvely (Carmona vs CuesLa 20 orLo 8lco
8eporLs 213)

1hls dlsLlncLlon was agaln made paLenL by Lhls CourL ln lLs declslon ln Lhe case of 8ahla vs LlLon[ua and Leynes (30
hll rep 624) whlch was an acLlon broughL upon Lhe Lheory of Lhe exLraconLracLual llablllLy of Lhe defendanL Lo
respond for Lhe damage caused by Lhe carelessness of hls employee whlle acLlng wlLhln Lhe scope of hls
employmenL 1he CourL afLer clLlng Lhe lasL paragraph of arLlcle 1903 of Lhe Clvll Code sald

lrom Lhls arLlcle Lwo Lhlngs are apparenL (1) 1haL when an ln[ury ls caused by Lhe negllgence of a servanL or
employee Lhere lnsLanLly arlses a presumpLlon of law LhaL Lhere was negllgence on Lhe parL of Lhe masLer or
employer elLher ln selecLlon of Lhe servanL or employee or ln supervlslon over hlm afLer Lhe selecLlon or boLh
and (2) LhaL LhaL presumpLlon ls [urls LanLum and noL [urls eL de [ure and consequenLly may be rebuLLed lL
follows necessarlly LhaL lf Lhe employer shows Lo Lhe saLlsfacLlon of Lhe courL LhaL ln selecLlon and supervlslon he
has exerclsed Lhe care and dlllgence of a good faLher of a famlly Lhe presumpLlon ls overcome and he ls relleved
from llablllLy PChllhue

1hls Lheory bases Lhe responslblllLy of Lhe masLer ulLlmaLely on hls own negllgence and noL on LhaL of hls servanL
1hls ls Lhe noLable pecullarlLy of Lhe Spanlsh law of negllgence lL ls of course ln sLrlklng conLrasL Lo Lhe Amerlcan
docLrlne LhaL ln relaLlons wlLh sLrangers Lhe negllgence of Lhe servanL ln concluslvely Lhe negllgence of Lhe
masLer

1he oplnlon Lhere expressed by Lhls CourL Lo Lhe effecL LhaL ln case of exLraconLracLual culpa based upon
negllgence lL ls necessary LhaL Lhere shall have been some faulL aLLrlbuLable Lo Lhe defendanL personally and LhaL
Lhe lasL paragraph of arLlcle 1903 merely esLabllshes a rebuLLable presumpLlon ls ln compleLe accord wlLh Lhe
auLhorlLaLlve oplnlon of Manresa who says (vol 12 p 611) LhaL Lhe llablllLy creaLed by arLlcle 1903 ls lmposed by
reason of Lhe breach of Lhe duLles lnherenL ln Lhe speclal relaLlons of auLhorlLy or superlorlLy exlsLlng beLween Lhe
person called upon Lo repalr Lhe damage and Lhe one who by hls acL or omlsslon was Lhe cause of lL

Cn Lhe oLher hand Lhe llablllLy of masLers and employers for Lhe negllgenL acLs or omlsslons of Lhelr servanLs or
agenLs when such acLs or omlsslons cause damages whlch amounL Lo Lhe breach of a conLacL ls noL based upon a
mere presumpLlon of Lhe masLers negllgence ln Lhelr selecLlon or conLrol and proof of exerclse of Lhe uLmosL
dlllgence and care ln Lhls regard does noL relleve Lhe masLer of hls llablllLy for Lhe breach of hls conLracL

Lvery legal obllgaLlon musL of necesslLy be exLraconLracLual or conLracLual LxLraconLracLual obllgaLlon has lLs
source ln Lhe breach or omlsslon of Lhose muLual duLles whlch clvlllzed socleLy lmposes upon lL members or whlch
arlse from Lhese relaLlons oLher Lhan conLracLual of cerLaln members of socleLy Lo oLhers generally embraced ln
Lhe concepL of sLaLus 1he legal rlghLs of each member of socleLy consLlLuLe Lhe measure of Lhe correspondlng
legal duLles malnly negaLlve ln characLer whlch Lhe exlsLence of Lhose rlghLs lmposes upon all oLher members of
socleLy 1he breach of Lhese general duLles wheLher due Lo wlllful lnLenL or Lo mere lnaLLenLlon lf producLlve of
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ln[ury glve rlse Lo an obllgaLlon Lo lndemnlfy Lhe ln[ured parLy 1he fundamenLal dlsLlncLlon beLween obllgaLlons of
Lhls characLer and Lhose whlch arlse from conLracL resLs upon Lhe facL LhaL ln cases of nonconLracLual obllgaLlon lL
ls Lhe wrongful or negllgenL acL or omlsslon lLself whlch creaLes Lhe vlnculum [urls whereas ln conLracLual relaLlons
Lhe vlnculum exlsLs lndependenLly of Lhe breach of Lhe volunLary duLy assumed by Lhe parLles when enLerlng lnLo
Lhe conLracLual relaLlon

WlLh respecL Lo exLraconLracLual obllgaLlon arlslng from negllgence wheLher of acL or omlsslon lL ls compeLenL
for Lhe leglslaLure Lo elecL and our LeglslaLure has so elecLed whom such an obllgaLlon ls lmposed ls morally
culpable or on Lhe conLrary for reasons of publlc pollcy Lo exLend LhaL llablllLy wlLhouL regard Lo Lhe lack of
moral culpablllLy so as Lo lnclude responslblllLy for Lhe negllgence of Lhose person who acLs or mlsslon are
lmpuLable by a legal flcLlon Lo oLhers who are ln a poslLlon Lo exerclse an absoluLe or llmlLed conLrol over Lhem
1he leglslaLure whlch adopLed our Clvll Code has elecLed Lo llmlL exLraconLracLual llablllLy wlLh cerLaln well
deflned excepLlons Lo cases ln whlch moral culpablllLy can be dlrecLly lmpuLed Lo Lhe persons Lo be charged
1hls moral responslblllLy may conslsL ln havlng falled Lo exerclse due care ln Lhe selecLlon and conLrol of ones
agenLs or servanLs or ln Lhe conLrol of persons who by reason of Lhelr sLaLus occupy a poslLlon of dependency
wlLh respecL Lo Lhe person made llable for Lhelr conducL

1he poslLlon of a naLural or [urldlcal person who has underLaken by conLracL Lo render servlce Lo anoLher ls wholly
dlfferenL from LhaL Lo whlch arLlcle 1903 relaLes When Lhe sources of Lhe obllgaLlon upon whlch plalnLlffs cause of
acLlon depends ls a negllgenL acL or omlsslon Lhe burden of proof resLs upon plalnLlff Lo prove Lhe negllgence lf
he does noL hls acLlon falls 8uL when Lhe facLs averred show a conLracLual underLaklng by defendanL for Lhe
beneflL of plalnLlff and lL ls alleged LhaL plalnLlff has falled or refused Lo perform Lhe conLracL lL ls noL necessary
for plalnLlff Lo speclfy ln hls pleadlngs wheLher Lhe breach of Lhe conLracL ls due Lo wlllful faulL or Lo negllgence on
Lhe parL of Lhe defendanL or of hls servanLs or agenLs roof of Lhe conLracL and of lLs nonperformance ls sufflclenL
prlma facle Lo warranL a recovery

As a general rule lL ls loglcal LhaL ln case of exLraconLracLual culpa a sulng credlLor should assume Lhe burden
of proof of lLs exlsLence as Lhe only facL upon whlch hls acLlon ls based whlle on Lhe conLrary ln a case of
negllgence whlch presupposes Lhe exlsLence of a conLracLual obllgaLlon lf Lhe credlLor shows LhaL lL exlsLs and LhaL
lL has been broken lL ls noL necessary for hlm Lo prove negllgence (Manresa vol 8 p 71 1907 ed p 76) Lcfr

As lL ls noL necessary for Lhe plalnLlff ln an acLlon for Lhe breach of a conLracL Lo show LhaL Lhe breach was due Lo
Lhe negllgenL conducL of defendanL or of hls servanLs even Lhough such be ln facL Lhe acLual cause of Lhe breach lL
ls obvlous LhaL proof on Lhe parL of defendanL LhaL Lhe negllgence or omlsslon of hls servanLs or agenLs caused Lhe
breach of Lhe conLracL would noL consLlLuLe a defense Lo Lhe acLlon lf Lhe negllgence of servanLs or agenLs could
be lnvoked as a means of dlscharglng Lhe llablllLy arlslng from conLracL Lhe anomalous resulL would be LhaL person
acLlng Lhrough Lhe medlum of agenLs or servanLs ln Lhe performance of Lhelr conLracLs would be ln a beLLer
poslLlon Lhan Lhose acLlng ln person lf one dellvers a valuable waLch Lo waLchmaker who conLracL Lo repalr lL and
Lhe ballee by a personal negllgenL acL causes lLs desLrucLlon he ls unquesLlonably llable Would lL be loglcal Lo free
hlm from hls llablllLy for Lhe breach of hls conLracL whlch lnvolves Lhe duLy Lo exerclse due care ln Lhe preservaLlon
of Lhe waLch lf he shows LhaL lL was hls servanL whose negllgence caused Lhe ln[ury? lf such a Lheory could be
accepLed [urldlcal persons would en[oy pracLlcally compleLe lmmunlLy from damages arlslng from Lhe breach of
Lhelr conLracLs lf caused by negllgenL acLs as such [urldlcal persons can of necesslLy only acL Lhrough agenLs or
servanLs and lL would no doubL be Lrue ln mosL lnsLances LhaL reasonable care had been Laken ln selecLlon and
dlrecLlon of such servanLs lf one dellvers securlLles Lo a banklng corporaLlon as collaLeral and Lhey are losL by
reason of Lhe negllgence of some clerk employed by Lhe bank would lL be [usL and reasonable Lo permlL Lhe bank
Lo relleve lLself of llablllLy for Lhe breach of lLs conLracL Lo reLurn Lhe collaLeral upon Lhe paymenL of Lhe debL by
provlng LhaL due care had been exerclsed ln Lhe selecLlon and dlrecLlon of Lhe clerk?

1hls dlsLlncLlon beLween culpa aqulllana as Lhe source of an obllgaLlon and culpa conLracLual as a mere lncldenL Lo
Lhe performance of a conLracL has frequenLly been recognlzed by Lhe supreme courL of Spaln (SenLenclas of !une
27 1894 november 20 1896 and uecember 13 1896) ln Lhe declslons of november 20 1896 lL appeared LhaL
plalnLlffs acLlon arose ex conLracLu buL LhaL defendanL soughL Lo avall hlmself of Lhe provlslons of arLlcle 1902 of
Lhe Clvll Code as a defense 1he Spanlsh Supreme CourL re[ecLed defendanLs conLenLlon saylng

1hese are noL cases of ln[ury caused wlLhouL any preexlsLlng obllgaLlon by faulL or negllgence such as Lhose Lo
whlch arLlcle 1902 of Lhe Clvll Code relaLes buL of damages caused by Lhe defendanLs fallure Lo carry ouL Lhe
underLaklngs lmposed by Lhe conLracLs

A brlef revlew of Lhe earller declslon of Lhls courL lnvolvlng Lhe llablllLy of employers for damage done by Lhe
negllgenL acLs of Lhelr servanLs wlll show LhaL ln no case has Lhe courL ever declded LhaL Lhe negllgence of Lhe
defendanLs servanLs has been held Lo consLlLuLe a defense Lo an acLlon for damages for breach of conLracL

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ln Lhe case of !ohnson vs uavld (3 hll 8ep 663) Lhe courL held LhaL Lhe owner of a carrlage was noL llable for
Lhe damages caused by Lhe negllgence of hls drlver ln LhaL case Lhe courL commenLed on Lhe facL LhaL no evldence
had been adduced ln Lhe Lrlal courL LhaL Lhe defendanL had been negllgenL ln Lhe employmenL of Lhe drlver or LhaL
he had any knowledge of hls lack of sklll or carefulness

ln Lhe case of 8aer Senlor Cos Successors vs Companla MarlLlma (6 hll 8ep 213) Lhe plalnLlff sued Lhe
defendanL for damages caused by Lhe loss of a barge belonglng Lo plalnLlff whlch was allowed Lo geL adrlfL by Lhe
negllgence of defendanLs servanLs ln Lhe course of Lhe performance of a conLracL of Lowage 1he courL held clLlng
Manresa (vol 8 pp 29 69) LhaL lf Lhe obllgaLlon of Lhe defendanL grew ouL of a conLracL made beLween lL and
Lhe plalnLlff we do noL Lhlnk LhaL Lhe provlslons of arLlcles 1902 and 1903 are appllcable Lo Lhe case

ln Lhe case of Chapman vs underwood (27 hll 8ep 374) plalnLlff sued Lhe defendanL Lo recover damages for
Lhe personal ln[urles caused by Lhe negllgence of defendanLs chauffeur whlle drlvlng defendanLs auLomoblle ln
whlch defendanL was rldlng aL Lhe Llme 1he courL found LhaL Lhe damages were caused by Lhe negllgence of Lhe
drlver of Lhe auLomoblle buL held LhaL Lhe masLer was noL llable alLhough he was presenL aL Lhe Llme saylng

unless Lhe negllgenL acLs of Lhe drlver are conLlnued for a lengLh of Llme as Lo glve Lhe owner a reasonable
opporLunlLy Lo observe Lhem and Lo dlrecL Lhe drlver Lo deslsL Lherefrom 1he acL complalned of musL be
conLlnued ln Lhe presence of Lhe owner for such lengLh of Llme LhaL Lhe owner by hls acqulescence makes Lhe
drlvers acLs hls own u9sb1

ln Lhe case of ?amada vs Manlla 8allroad Co and 8achrach Carage 1axlcab Co (33 hll 8ep 8) lL ls Lrue LhaL
Lhe courL resLed lLs concluslon as Lo Lhe llablllLy of Lhe defendanL upon arLlcle 1903 alLhough Lhe facLs dlsclosed
LhaL Lhe ln[ury complalnL of by plalnLlff consLlLuLed a breach of Lhe duLy Lo hlm arlslng ouL of Lhe conLracL of
LransporLaLlon 1he express ground of Lhe declslon ln Lhls case was LhaL arLlcle 1903 ln deallng wlLh Lhe llablllLy of
a masLer for Lhe negllgenL acLs of hls servanLs makes Lhe dlsLlncLlon beLween prlvaLe lndlvlduals and publlc
enLerprlse LhaL as Lo Lhe laLLer Lhe law creaLes a rebuLLable presumpLlon of negllgence ln Lhe selecLlon or
dlrecLlon of servanLs and LhaL ln Lhe parLlcular case Lhe presumpLlon of negllgence had noL been overcome

lL ls evldenL Lherefore LhaL ln lLs declslon ?amada case Lhe courL LreaLed plalnLlffs acLlon as Lhough founded ln
LorL raLher Lhan as based upon Lhe breach of Lhe conLracL of carrlage and an examlnaLlon of Lhe pleadlngs and of
Lhe brlefs shows LhaL Lhe quesLlons of law were ln facL dlscussed upon Lhls Lheory vlewed from Lhe sLandpolnL of
Lhe defendanL Lhe pracLlcal resulL musL have been Lhe same ln any evenL 1he proof dlsclosed beyond doubL LhaL
Lhe defendanLs servanL was grossly negllgenL and LhaL hls negllgence was Lhe proxlmaLe cause of plalnLlffs ln[ury
lL also afflrmaLlvely appeared LhaL defendanL had been gullLy of negllgence ln lLs fallure Lo exerclse proper
dlscreLlon ln Lhe dlrecLlon of Lhe servanL uefendanL was Lherefore llable for Lhe ln[ury suffered by plalnLlff
wheLher Lhe breach of Lhe duLy were Lo be regarded as consLlLuLlng culpa aqulllana or culpa conLracLual As
Manresa polnLs ouL (vol 8 pp 29 and 69) wheLher negllgence occurs an lncldenL ln Lhe course of Lhe performance
of a conLracLual underLaklng or lLs lLself Lhe source of an exLraconLracLual underLaklng obllgaLlon lLs essenLlal
characLerlsLlcs are ldenLlcal 1here ls always an acL or omlsslon producLlve of damage due Lo carelessness or
lnaLLenLlon on Lhe parL of Lhe defendanL ConsequenLly when Lhe courL holds LhaL a defendanL ls llable ln damages
for havlng falled Lo exerclse due care elLher dlrecLly or ln falllng Lo exerclse proper care ln Lhe selecLlon and
dlrecLlon of hls servanLs Lhe pracLlcal resulL ls ldenLlcal ln elLher case 1herefore lL follows LhaL lL ls noL Lo be
lnferred because Lhe courL held ln Lhe ?amada case LhaL defendanL was llable for Lhe damages negllgenLly caused
by lLs servanLs Lo a person Lo whom lL was bound by conLracL and made reference Lo Lhe facL LhaL Lhe defendanL
was negllgenL ln Lhe selecLlon and conLrol of lLs servanLs LhaL ln such a case Lhe courL would have held LhaL lL
would have been a good defense Lo Lhe acLlon lf presenLed squarely upon Lhe Lheory of Lhe breach of Lhe
conLracL for defendanL Lo have proved LhaL lL dld ln facL exerclse care ln Lhe selecLlon and conLrol of Lhe servanL

1he Lrue explanaLlon of such cases ls Lo be found by dlrecLlng Lhe aLLenLlon Lo Lhe relaLlve spheres of conLracLual
and exLraconLracLual obllgaLlons 1he fleld of non conLracLual obllgaLlon ls much more broader Lhan LhaL of
conLracLual obllgaLlons comprlslng as lL does Lhe whole exLenL of [urldlcal human relaLlons 1hese Lwo flelds
flguraLlvely speaklng concenLrlc LhaL ls Lo say Lhe mere facL LhaL a person ls bound Lo anoLher by conLracL does
noL relleve hlm from exLraconLracLual llablllLy Lo such person When such a conLracLual relaLlon exlsLs Lhe obllgor
may break Lhe conLracL under such condlLlons LhaL Lhe same acL whlch consLlLuLes Lhe source of an exLra
conLracLual obllgaLlon had no conLracL exlsLed beLween Lhe parLles

1he conLracL of defendanL Lo LransporL plalnLlff carrled wlLh lL by lmpllcaLlon Lhe duLy Lo carry hlm ln safeLy and
Lo provlde safe means of enLerlng and leavlng lLs Lralns (clvll code arLlcle 1238) 1haL duLy belng conLracLual was
dlrecL and lmmedlaLe and lLs nonperformance could noL be excused by proof LhaL Lhe faulL was morally
lmpuLable Lo defendanLs servanLs

1he rallroad companys defense lnvolves Lhe assumpLlon LhaL even granLlng LhaL Lhe negllgenL conducL of lLs
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servanLs ln placlng an obsLrucLlon upon Lhe plaLform was a breach of lLs conLracLual obllgaLlon Lo malnLaln safe
means of approachlng and leavlng lLs Lralns Lhe dlrecL and proxlmaLe cause of Lhe ln[ury suffered by plalnLlff was
hls own conLrlbuLory negllgence ln falllng Lo walL unLll Lhe Lraln had come Lo a compleLe sLop before allghLlng
under Lhe docLrlne of comparaLlve negllgence announced ln Lhe 8akes case (supra) lf Lhe accldenL was caused by
plalnLlffs own negllgence no llablllLy ls lmposed upon defendanLs negllgence and plalnLlffs negllgence merely
conLrlbuLed Lo hls ln[ury Lhe damages should be apporLloned lL ls Lherefore lmporLanL Lo ascerLaln lf defendanL
was ln facL gullLy of negllgence xLZCC

lL may be admlLLed LhaL had plalnLlff walLed unLll Lhe Lraln had come Lo a full sLop before allghLlng Lhe parLlcular
ln[ury suffered by hlm could noL have occurred uefendanL conLends and clLes many auLhorlLles ln supporL of Lhe
conLenLlon LhaL lL ls negllgence per se for a passenger Lo allghL from a movlng Lraln We are noL dlsposed Lo
subscrlbe Lo Lhls docLrlne ln lLs absoluLe form We are of Lhe oplnlon LhaL Lhls proposlLlon ls Loo badly sLaLed and ls
aL varlance wlLh Lhe experlence of everyday llfe ln Lhls parLlcular lnsLance LhaL Lhe Lraln was barely movlng when
plalnLlff allghLed ls shown concluslvely by Lhe facL LhaL lL came Lo sLop wlLhln slx meLers from Lhe place where he
sLepped from lL 1housands of person allghL from Lralns under Lhese condlLlons every day of Lhe year and susLaln
no ln[ury where Lhe company has kepL lLs plaLform free from dangerous obsLrucLlons 1here ls no reason Lo belleve
LhaL plalnLlff would have suffered any ln[ury whaLever ln allghLlng as he dld had lL noL been for defendanLs
negllgenL fallure Lo perform lLs duLy Lo provlde a safe allghLlng place

We are of Lhe oplnlon LhaL Lhe correcL docLrlne relaLlng Lo Lhls sub[ecL ls LhaL expressed ln 1hompsons work on
negllgence (vol 3 sec 3010) as follows

1he LesL by whlch Lo deLermlne wheLher Lhe passenger has been gullLy of negllgence ln aLLempLlng Lo allghL from a
movlng rallway Lraln ls LhaL of ordlnary or reasonable care lL ls Lo be consldered wheLher an ordlnarlly prudenL
person of Lhe age sex and condlLlon of Lhe passenger would have acLed as Lhe passenger acLed under Lhe
clrcumsLances dlsclosed by Lhe evldence 1hls care has been deflned Lo be noL Lhe care whlch may or should be
used by Lhe prudenL man generally buL Lhe care whlch a man of ordlnary prudence would use under slmllar
clrcumsLances Lo avold ln[ury (1hompson CommenLarles on negllgence vol 3 sec 3010)

Cr lL we prefer Lo adopL Lhe mode of exposlLlon used by Lhls courL ln lcarL vs SmlLh (37 hll rep 809) we may
say LhaL Lhe LesL ls Lhls Was Lhere anyLhlng ln Lhe clrcumsLances surroundlng Lhe plalnLlff aL Lhe Llme he allghLed
from Lhe Lraln whlch would have admonlshed a person of average prudence LhaL Lo geL off Lhe Lraln under Lhe
condlLlons Lhen exlsLlng was dangerous? lf so Lhe plalnLlff should have deslsLed from allghLlng and hls fallure so Lo
deslsL was conLrlbuLory negllgence

As Lhe case now before us presenLs lLself Lhe only facL from whlch a concluslon can be drawn Lo Lhe effecL LhaL
plalnLlff was gullLy of conLrlbuLory negllgence ls LhaL he sLepped off Lhe car wlLhouL belng able Lo dlscern clearly
Lhe condlLlon of Lhe plaLform and whlle Lhe Lraln was yeL slowly movlng ln conslderlng Lhe slLuaLlon Lhus
presenLed lL should noL be overlooked LhaL Lhe plalnLlff was as we flnd lgnoranL of Lhe facL LhaL Lhe obsLrucLlon
whlch was caused by Lhe sacks of melons plled on Lhe plaLform exlsLed and as Lhe defendanL was bound by reason
of lLs duLy as a publlc carrler Lo afford Lo lLs passengers faclllLles for safe egress from lLs Lralns Lhe plalnLlff had a
rlghL Lo assume ln Lhe absence of some clrcumsLance Lo warn hlm Lo Lhe conLrary LhaL Lhe plaLform was clear
1he place as we have already sLaLed was dark or dlmly llghLed and Lhls also ls proof of a fallure upon Lhe parL of
Lhe defendanL ln Lhe performance of a duLy owlng by lL Lo Lhe plalnLlff for lf lL were by any posslblllLy concede LhaL
lL had rlghL Lo plle Lhese sacks ln Lhe paLh of allghLlng passengers Lhe placlng of Lhem adequaLely so LhaL Lhelr
presence would be revealed

As perLlnenL Lo Lhe quesLlon of conLrlbuLory negllgence on Lhe parL of Lhe plalnLlff ln Lhls case Lhe followlng
clrcumsLances are Lo be noLed 1he companys plaLform was consLrucLed upon a level hlgher Lhan LhaL of Lhe
roadbed and Lhe surroundlng ground 1he dlsLance from Lhe sLeps of Lhe car Lo Lhe spoL where Lhe allghLlng
passenger would place hls feeL on Lhe plaLform was Lhus reduced Lhereby decreaslng Lhe rlsk lncldenL Lo sLepplng
off 1he naLure of Lhe plaLform consLrucLed as lL was of cemenL maLerlal also assured Lo Lhe passenger a sLable
and even surface on whlch Lo allghL lurLhermore Lhe plalnLlff was possessed of Lhe vlgor and aglllLy of young
manhood and lL was by no means so rlsky for hlm Lo geL off whlle Lhe Lraln was yeL movlng as Lhe same acL would
have been ln an aged or feeble person ln deLermlnlng Lhe quesLlon of conLrlbuLory negllgence ln performlng such
acL LhaL ls Lo say wheLher Lhe passenger acLed prudenLly or recklessly Lhe age sex and physlcal condlLlon of
Lhe passenger are clrcumsLances necessarlly affecLlng Lhe safeLy of Lhe passenger and should be consldered
Women lL has been observed as a general rule are less capable Lhan men of allghLlng wlLh safeLy under such
condlLlons as Lhe naLure of Lhelr wearlng apparel obsLrucLs Lhe free movemenL of Lhe llmbs Agaln lL may be
noLed LhaL Lhe place was perfecLly famlllar Lo Lhe plalnLlff as lL was hls dally cusLom Lo geL on and of Lhe Lraln aL
Lhls sLaLlon 1here could Lherefore be no uncerLalnLy ln hls mlnd wlLh regard elLher Lo Lhe lengLh of Lhe sLep
whlch he was requlred Lo Lake or Lhe characLer of Lhe plaLform where he was allghLlng Cur concluslon ls LhaL Lhe
conducL of Lhe plalnLlff ln underLaklng Lo allghL whlle Lhe Lraln was yeL sllghLly under way was noL characLerlzed by
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lmprudence and LhaL Lherefore he was noL gullLy of conLrlbuLory negllgence

1he evldence shows LhaL Lhe plalnLlff aL Lhe Llme of Lhe accldenL was earnlng 23 a monLh as a copylsL clerk and
LhaL Lhe ln[urles he has suffered have permanenLly dlsabled hlm from conLlnulng LhaL employmenL uefendanL has
noL shown LhaL any oLher galnful occupaLlon ls open Lo plalnLlff Pls expecLancy of llfe accordlng Lo Lhe sLandard
morLallLy Lables ls approxlmaLely LhlrLyLhree years We are of Lhe oplnlon LhaL a falr compensaLlon for Lhe
damage suffered by hlm for hls permanenL dlsablllLy ls Lhe sum of 2300 and LhaL he ls also enLlLled Lo recover of
defendanL Lhe addlLlonal sum of 79023 for medlcal aLLenLlon hosplLal servlces and oLher lncldenLal
expendlLures connecLed wlLh Lhe LreaLmenL of hls ln[urles

1he declslon of lower courL ls reversed and [udgmenL ls hereby rendered plalnLlff for Lhe sum of 329023 and
for Lhe cosLs of boLh lnsLances So ordered

Arellano C! 1orres SLreeL and Avancena !! concur bnv4Luqn

SeparaLe Cplnlons

MALCCLM ! dlssenLlng

WlLh one senLence ln Lhe ma[orlLy declslon we are of full accord namely lL may be admlLLed LhaL had plalnLlff
walLed unLll Lhe Lraln had come Lo a full sLop before allghLlng Lhe parLlcular ln[ury suffered by hlm could noL have
occurred WlLh Lhe general rule relaLlve Lo a passengers conLrlbuLory negllgence we are llkewlse ln full accord
namely An aLLempL Lo allghL from a movlng Lraln ls negllgence per se Addlng Lhese Lwo polnLs LogeLher should
be absolved from Lhe complalnL and [udgmenL afflrmed

!ohnson ! concur
SUkLML CCUk1
Manlla
Ln 8AnC
Gk No 34840 September 23 1931
NAkCISC GU1ILkkL2 plalnLlffappellee
vs
8CNIIACIC GU1ILkkL2 MAkIA V DL GU1ILkkL2 MANULL GU1ILkkL2 A8LLAkDC VLLASCC and SA1UkNINC
CCk1L2 defendanLsappellanLs
lu lockwooJ fot oppelloots velosco ooJ cottez
5oo Aqostlo ooJ koxos fot otbet oppelloots
komoo ulokoo fot oppellee
MALCCLM
1hls ls an acLlon broughL by Lhe plalnLlff ln Lhe CourL of llrsL lnsLance of Manlla agalnsL Lhe flve defendanLs Lo
recover damages ln Lhe amounL of 10000 for physlcal ln[urles suffered as a resulL of an auLomoblle accldenL Cn
[udgmenL belng rendered as prayed for by Lhe plalnLlff boLh seLs of defendanLs appealed
Cn lebruary 2 1930 a passenger Lruck and an auLomoblle of prlvaLe ownershlp colllded whlle aLLempLlng Lo pass
each oLher on Lhe 1alon brldge on Lhe Manlla SouLh 8oad ln Lhe munlclpallLy of Las lnas rovlnce of 8lzal 1he
Lruck was drlven by Lhe chauffeur Abelardo velasco and was owned by SaLurnlno CorLez 1he auLomoblle was
belng operaLed by 8onlfaclo CuLlerrez a lad 18 years of age and was owned by 8onlfaclos faLher and moLher Mr
and Mrs Manuel CuLlerrez AL Lhe Llme of Lhe colllslon Lhe faLher was noL ln Lhe car buL Lhe moLher LogeLher wlll
several oLher members of Lhe CuLlerrez famlly seven ln all were accommodaLed Lhereln A passenger ln Lhe
auLobus by Lhe name of narclso CuLlerrez was en rouLe from San ablo Laguna Lo Manlla 1he colllslon beLween
Lhe bus and Lhe auLomoblle resulLed ln narclso CuLlerrez sufferlng a fracLure rlghL leg whlch requlred medlcal
aLLendance for a conslderable perlod of Llme and whlch even aL Lhe daLe of Lhe Lrlal appears noL Lo have healed
properly
lL ls conceded LhaL Lhe colllslon was caused by negllgence pure and slmple 1he dlfference beLween Lhe parLles ls
LhaL whlle Lhe plalnLlff blames boLh seLs of defendanLs Lhe owner of Lhe passenger Lruck blames Lhe auLomoblle
and Lhe owner of Lhe auLomoblle ln Lurn blames Lhe Lruck We have glven close aLLenLlon Lo Lhese hlghly
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debaLable polnLs and havlng done so a ma[orlLy of Lhe courL are of Lhe oplnlon LhaL Lhe flndlngs of Lhe Lrlal [udge
on all conLroverslal quesLlons of facL flnd sufflclenL supporL ln Lhe record and so should be malnLalned WlLh Lhls
general sLaLemenL seL down we Lurn Lo conslder Lhe respecLlve legal obllgaLlons of Lhe defendanLs
ln ampllflcaLlon of so much of Lhe above pronouncemenL as concerns Lhe CuLlerrez famlly lL may be explalned
LhaL Lhe youLh 8onlfaclo was ln lncompeLenL chauffeur LhaL he was drlvlng aL an excesslve raLe of speed and LhaL
on approachlng Lhe brldge and Lhe Lruck he losL hls head and so conLrlbuLed by hls negllgence Lo Lhe accldenL 1he
guaranLy glven by Lhe faLher aL Lhe Llme Lhe son was granLed a llcense Lo operaLe moLor vehlcles made Lhe faLher
responslble for Lhe acLs of hls son 8ased on Lhese facLs pursuanL Lo Lhe provlslons of arLlcle 1903 of Lhe Clvll
Code Lhe faLher alone and noL Lhe mlnor or Lhe moLher would be llable for Lhe damages caused by Lhe mlnor
We are deallng wlLh Lhe clvll law llablllLy of parLles for obllgaLlons whlch arlse from faulL or negllgence AL Lhe same
Llme we belleve LhaL as has been done ln oLher cases we can Lake cognlzance of Lhe common law rule on Lhe
same sub[ecL ln Lhe unlLed SLaLes lL ls unlformly held LhaL Lhe head of a house Lhe owner of an auLomoblle who
malnLalns lL for Lhe general use of hls famlly ls llable for lLs negllgenL operaLlon by one of hls chlldren whom he
deslgnaLes or permlLs Lo run lL where Lhe car ls occupled and belng used aL Lhe Llme of Lhe ln[ury for Lhe pleasure
of oLher members of Lhe owners famlly Lhan Lhe chlld drlvlng lL 1he Lheory of Lhe law ls LhaL Lhe runnlng of Lhe
machlne by a chlld Lo carry oLher members of Lhe famlly ls wlLhln Lhe scope of Lhe owners buslness so LhaL he ls
llable for Lhe negllgence of Lhe chlld because of Lhe relaLlonshlp of masLer and servanL (Puddy Cn AuLomoblles
6Lh ed sec 660 Mlssell vs Payes 1914 91 ALl 322) 1he llablllLy of SaLurnlno CorLez Lhe owner of Lhe Lruck
and of hls chauffeur Abelardo velasco resLs on a dlfferenL basls namely LhaL of conLracL whlch we Lhlnk has been
sufflclenLly demonsLraLed by Lhe allegaLlons of Lhe complalnL noL conLroverLed and Lhe evldence 1he reason for
Lhls concluslon reaches Lo Lhe flndlngs of Lhe Lrlal courL concernlng Lhe poslLlon of Lhe Lruck on Lhe brldge Lhe
speed ln operaLlng Lhe machlne and Lhe lack of care employed by Lhe chauffeur Whlle Lhese facLs are noL as
clearly evldenced as are Lhose whlch convlcL Lhe oLher defendanL we neverLheless heslLaLe Lo dlsregard Lhe polnLs
emphaslzed by Lhe Lrlal [udge ln lLs broader aspecLs Lhe case ls one of Lwo drlvers approachlng a narrow brldge
from opposlLe dlrecLlons wlLh nelLher belng wllllng Lo slow up and glve Lhe rlghL of way Lo Lhe oLher wlLh Lhe
lnevlLable resulL of a colllslon and an accldenL
1he defendanLs velasco and CorLez furLher conLend LhaL Lhere exlsLed conLrlbuLory negllgence on Lhe parL of Lhe
plalnLlff conslsLlng prlnclpally of hls keeplng hls fooL ouLslde Lhe Lruck whlch occasloned hls ln[ury ln Lhls
connecLlon lL ls sufflclenL Lo sLaLe LhaL aslde from Lhe facL LhaL Lhe defense of conLrlbuLory negllgence was noL
pleaded Lhe evldence bearlng ouL Lhls Lheory of Lhe case ls conLradlcLory ln Lhe exLreme and leads us far afleld
lnLo speculaLlve maLLers
1he lasL sub[ecL for conslderaLlon relaLes Lo Lhe amounL of Lhe award 1he appellee suggesLs LhaL Lhe amounL could
[usLly be ralsed Lo 16317 buL naLurally ls noL serlous ln asklng for Lhls sum slnce no appeal was Laken by hlm
from Lhe [udgmenL 1he oLher parLles unlLe ln challenglng Lhe award of 10000 as excesslve All facLs consldered
lncludlng acLual expendlLures and damages for Lhe ln[ury Lo Lhe leg of Lhe plalnLlff whlch may cause hlm
permanenL lameness ln connecLlon wlLh oLher ad[udlcaLlons of Lhls courL lead us Lo conclude LhaL a LoLal sum for
Lhe plalnLlff of 3000 would be falr and reasonable 1he dlfflculLy ln approxlmaLlng Lhe damages by moneLary
compensaLlon ls well elucldaLed by Lhe dlvergence of oplnlon among Lhe members of Lhe courL Lhree of whom
have lncllned Lo Lhe vlew LhaL 3000 would be amply sufflclenL whlle a fourLh member has argued LhaL 7300
would be none Loo much
ln consonance wlLh Lhe foregolng rullngs Lhe [udgmenL appealed from wlll be modlfled and Lhe plalnLlff wlll have
[udgmenL ln hls favor agalnsL Lhe defendanLs Manuel CuLlerrez Abelardo velasco and SaLurnlno CorLez [olnLly
and severally for Lhe sum of 3000 and Lhe cosLs of boLh lnsLances
Avooceo cI Iobosoo 5tteet vlllomot OsttooJ komoolJez ooJ lmpetlol II concur

VILLAkLAL I
l voLe for an lndemnlLy of 7300
8 Compllance wlLh CbllgaLlons
ArL 19 11631166124412461460442440
Compllance wlLh CbllgaLlons
ArL 19 Lvery person musL ln Lhe exerclse of hls rlghLs and ln Lhe performance of hls duLles acL wlLh
[usLlce glve everyone hls due and observe honesLy and good falLh

CPA1L8 2
nA1u8L Anu LllLC1 Cl C8LlCA1lCnS

ArL 1163 Lvery person obllged Lo glve someLhlng ls also obllged Lo Lake care of lL wlLh Lhe proper
dlllgence of a good faLher of a famlly unless Lhe law or Lhe sLlpulaLlon of Lhe parLles requlres anoLher
sLandard of care (1094a)
ArL 1164 1he credlLor has a rlghL Lo Lhe frulLs of Lhe Lhlng from Lhe Llme Lhe obllgaLlon Lo dellver lL arlses
Powever he shall acqulre no real rlghL over lL unLll Lhe same has been dellvered Lo hlm (1093)
ArL 1163 When whaL ls Lo be dellvered ls a deLermlnaLe Lhlng Lhe credlLor ln addlLlon Lo Lhe rlghL
granLed hlm by ArLlcle 1170 may compel Lhe debLor Lo make Lhe dellvery
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lf Lhe Lhlng ls lndeLermlnaLe or generlc he may ask LhaL Lhe obllgaLlon be complled wlLh aL Lhe expense of
Lhe debLor
lf Lhe obllgor delays or has promlsed Lo dellver Lhe same Lhlng Lo Lwo or more persons who do noL have
Lhe same lnLeresL he shall be responslble for any forLulLous evenL unLll he has effecLed Lhe dellvery
(1096)
ArL 1166 1he obllgaLlon Lo glve a deLermlnaLe Lhlng lncludes LhaL of dellverlng all lLs accesslons and
accessorles even Lhough Lhey may noL have been menLloned (1097a)
ArL 1244 1he debLor of a Lhlng cannoL compel Lhe credlLor Lo recelve a dlfferenL one alLhough Lhe laLLer
may be of Lhe same value as or more valuable Lhan LhaL whlch ls due
ln obllgaLlons Lo do or noL Lo do an acL or forbearance cannoL be subsLlLuLed by anoLher acL or
forbearance agalnsL Lhe obllgees wlll (1166a)
ArL 1246 When Lhe obllgaLlon conslsLs ln Lhe dellvery of an lndeLermlnaLe or generlc Lhlng whose quallLy
and clrcumsLances have noL been sLaLed Lhe credlLor cannoL demand a Lhlng of superlor quallLy nelLher
can Lhe debLor dellver a Lhlng of lnferlor quallLy 1he purpose of Lhe obllgaLlon and oLher clrcumsLances
shall be Laken lnLo conslderaLlon
ArL 1460 A Lhlng ls deLermlnaLe when lL ls parLlcularly deslgnaLed or physlcal segregaLed from all oLher of
Lhe same class
1he requlslLe LhaL a Lhlng be deLermlnaLe ls saLlsfled lf aL Lhe Llme Lhe conLracL ls enLered lnLo Lhe Lhlng ls
capable of belng made deLermlnaLe wlLhouL Lhe necesslLy of a new or furLher agreemenL beLween Lhe
parLles (n)
ArL 442 naLural frulLs are Lhe sponLaneous producLs of Lhe soll and Lhe young and oLher producLs of
anlmals
lndusLrlal frulLs are Lhose produced by lands of any klnd Lhrough culLlvaLlon or labor
Clvll frulLs are Lhe renLs of bulldlngs Lhe prlce of leases of lands and oLher properLy and Lhe amounL of
perpeLual or llfe annulLles or oLher slmllar lncome (333a)
ArL 440 1he ownershlp of properLy glves Lhe rlghL by accesslon Lo everyLhlng whlch ls produced Lhereby
or whlch ls lncorporaLed or aLLached LhereLo elLher naLurally or arLlflclally (333)

C klnds of Clvll CbllgaLlons
1 As Lo perfecLlon and exLlngulshmenL
a ure ArL 11791197
ArL 1179 Lvery obllgaLlon whose performance does noL depend upon a fuLure or uncerLaln evenL or upon a pasL
evenL unknown Lo Lhe parLles ls demandable aL once
Lvery obllgaLlon whlch conLalns a resoluLory condlLlon shall also be demandable wlLhouL pre[udlce Lo Lhe effecLs
of Lhe happenlng of Lhe evenL (1113)
ArL 1197 lf Lhe obllgaLlon does noL flx a perlod buL from lLs naLure and Lhe clrcumsLances lL can be lnferred LhaL a
perlod was lnLended Lhe courLs may flx Lhe duraLlon Lhereof
1he courLs shall also flx Lhe duraLlon of Lhe perlod when lL depends upon Lhe wlll of Lhe debLor
ln every case Lhe courLs shall deLermlne such perlod as may under Lhe clrcumsLances have been probably
conLemplaLed by Lhe parLles Cnce flxed by Lhe courLs Lhe perlod cannoL be changed by Lhem (1128a)
b CondlLlonal
ArL 1181 ln condlLlonal obllgaLlons Lhe acqulslLlon of rlghLs as well as Lhe exLlngulshmenL or loss of Lhose already
acqulred shall depend upon Lhe happenlng of Lhe evenL whlch consLlLuLes Lhe condlLlon (1114)
ArL 1182 When Lhe fulflllmenL of Lhe condlLlon depends upon Lhe sole wlll of Lhe debLor Lhe condlLlonal
obllgaLlon shall be vold lf lL depends upon chance or upon Lhe wlll of a Lhlrd person Lhe obllgaLlon shall Lake effecL
ln conformlLy wlLh Lhe provlslons of Lhls Code (1113)
ArL 1183 lmposslble condlLlons Lhose conLrary Lo good cusLoms or publlc pollcy and Lhose prohlblLed by law shall
annul Lhe obllgaLlon whlch depends upon Lhem lf Lhe obllgaLlon ls dlvlslble LhaL parL Lhereof whlch ls noL affecLed
by Lhe lmposslble or unlawful condlLlon shall be valld
1he condlLlon noL Lo do an lmposslble Lhlng shall be consldered as noL havlng been agreed upon (1116a)
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ArL 1184 1he condlLlon LhaL some evenL happen aL a deLermlnaLe Llme shall exLlngulsh Lhe obllgaLlon as soon as
Lhe Llme explres or lf lL has become lndublLable LhaL Lhe evenL wlll noL Lake place (1117)
ArL 1183 1he condlLlon LhaL some evenL wlll noL happen aL a deLermlnaLe Llme shall render Lhe obllgaLlon
effecLlve from Lhe momenL Lhe Llme lndlcaLed has elapsed or lf lL has become evldenL LhaL Lhe evenL cannoL occur
lf no Llme has been flxed Lhe condlLlon shall be deemed fulfllled aL such Llme as may have probably been
conLemplaLed bearlng ln mlnd Lhe naLure of Lhe obllgaLlon (1118)
ArL 1186 1he condlLlon shall be deemed fulfllled when Lhe obllgor volunLarlly prevenLs lLs fulflllmenL (1119)
ArL 1187 1he effecLs of a condlLlonal obllgaLlon Lo glve once Lhe condlLlon has been fulfllled shall reLroacL Lo Lhe
day of Lhe consLlLuLlon of Lhe obllgaLlon neverLheless when Lhe obllgaLlon lmposes reclprocal presLaLlons upon
Lhe parLles Lhe frulLs and lnLeresLs durlng Lhe pendency of Lhe condlLlon shall be deemed Lo have been muLually
compensaLed lf Lhe obllgaLlon ls unllaLeral Lhe debLor shall approprlaLe Lhe frulLs and lnLeresLs recelved unless
from Lhe naLure and clrcumsLances of Lhe obllgaLlon lL should be lnferred LhaL Lhe lnLenLlon of Lhe person
consLlLuLlng Lhe same was dlfferenL
ln obllgaLlons Lo do and noL Lo do Lhe courLs shall deLermlne ln each case Lhe reLroacLlve effecL of Lhe condlLlon
LhaL has been complled wlLh (1120)
ArL 1188 1he credlLor may before Lhe fulflllmenL of Lhe condlLlon brlng Lhe approprlaLe acLlons for Lhe
preservaLlon of hls rlghL
1he debLor may recover whaL durlng Lhe same Llme he has pald by mlsLake ln case of a suspenslve condlLlon
(1121a)
ArL 1189 When Lhe condlLlons have been lmposed wlLh Lhe lnLenLlon of suspendlng Lhe efflcacy of an obllgaLlon
Lo glve Lhe followlng rules shall be observed ln case of Lhe lmprovemenL loss or deLerloraLlon of Lhe Lhlng durlng
Lhe pendency of Lhe condlLlon
(1) lf Lhe Lhlng ls losL wlLhouL Lhe faulL of Lhe debLor Lhe obllgaLlon shall be exLlngulshed
(2) lf Lhe Lhlng ls losL Lhrough Lhe faulL of Lhe debLor he shall be obllged Lo pay damages lL ls undersLood
LhaL Lhe Lhlng ls losL when lL perlshes or goes ouL of commerce or dlsappears ln such a way LhaL lLs
exlsLence ls unknown or lL cannoL be recovered
(3) When Lhe Lhlng deLerloraLes wlLhouL Lhe faulL of Lhe debLor Lhe lmpalrmenL ls Lo be borne by Lhe
credlLor
(4) lf lL deLerloraLes Lhrough Lhe faulL of Lhe debLor Lhe credlLor may choose beLween Lhe resclsslon of
Lhe obllgaLlon and lLs fulflllmenL wlLh lndemnlLy for damages ln elLher case
(3) lf Lhe Lhlng ls lmproved by lLs naLure or by Llme Lhe lmprovemenL shall lnure Lo Lhe beneflL of Lhe
credlLor
(6) lf lL ls lmproved aL Lhe expense of Lhe debLor he shall have no oLher rlghL Lhan LhaL granLed Lo Lhe
usufrucLuary (1122)
ArL 1190 When Lhe condlLlons have for Lhelr purpose Lhe exLlngulshmenL of an obllgaLlon Lo glve Lhe parLles
upon Lhe fulflllmenL of sald condlLlons shall reLurn Lo each oLher whaL Lhey have recelved
ln case of Lhe loss deLerloraLlon or lmprovemenL of Lhe Lhlng Lhe provlslons whlch wlLh respecL Lo Lhe debLor are
lald down ln Lhe precedlng arLlcle shall be applled Lo Lhe parLy who ls bound Lo reLurn
As for Lhe obllgaLlons Lo do and noL Lo do Lhe provlslons of Lhe second paragraph of ArLlcle 1187 shall be observed
as regards Lhe effecL of Lhe exLlngulshmenL of Lhe obllgaLlon (1123)
c WlLh a 1erm or erlod
ArL 1180 When Lhe debLor blnds hlmself Lo pay when hls means permlL hlm Lo do so Lhe obllgaLlon shall be
deemed Lo be one wlLh a perlod sub[ecL Lo Lhe provlslons of ArLlcle 1197
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SLC1lCn 2 CbllgaLlons wlLh a erlod

ArL 1193 CbllgaLlons for whose fulflllmenL a day cerLaln has been flxed shall be demandable only when LhaL day
comes
CbllgaLlons wlLh a resoluLory perlod Lake effecL aL once buL LermlnaLe upon arrlval of Lhe day cerLaln
A day cerLaln ls undersLood Lo be LhaL whlch musL necessarlly come alLhough lL may noL be known when
lf Lhe uncerLalnLy conslsLs ln wheLher Lhe day wlll come or noL Lhe obllgaLlon ls condlLlonal and lL shall be
regulaLed by Lhe rules of Lhe precedlng SecLlon (1123a)
ArL 1194 ln case of loss deLerloraLlon or lmprovemenL of Lhe Lhlng before Lhe arrlval of Lhe day cerLaln Lhe rules
ln ArLlcle 1189 shall be observed (n)
ArL 1193 AnyLhlng pald or dellvered before Lhe arrlval of Lhe perlod Lhe obllgor belng unaware of Lhe perlod or
bellevlng LhaL Lhe obllgaLlon has become due and demandable may be recovered wlLh Lhe frulLs and lnLeresLs
(1126a)
ArL 1196 Whenever ln an obllgaLlon a perlod ls deslgnaLed lL ls presumed Lo have been esLabllshed for Lhe
beneflL of boLh Lhe credlLor and Lhe debLor unless from Lhe Lenor of Lhe same or oLher clrcumsLances lL should
appear LhaL Lhe perlod has been esLabllshed ln favor of one or of Lhe oLher (1127)
ArL 1197 lf Lhe obllgaLlon does noL flx a perlod buL from lLs naLure and Lhe clrcumsLances lL can be lnferred LhaL a
perlod was lnLended Lhe courLs may flx Lhe duraLlon Lhereof
1he courLs shall also flx Lhe duraLlon of Lhe perlod when lL depends upon Lhe wlll of Lhe debLor
ln every case Lhe courLs shall deLermlne such perlod as may under Lhe clrcumsLances have been probably
conLemplaLed by Lhe parLles Cnce flxed by Lhe courLs Lhe perlod cannoL be changed by Lhem (1128a)
ArL 1198 1he debLor shall lose every rlghL Lo make use of Lhe perlod
(1) When afLer Lhe obllgaLlon has been conLracLed he becomes lnsolvenL unless he glves a guaranLy or securlLy for
Lhe debL
(2) When he does noL furnlsh Lo Lhe credlLor Lhe guaranLles or securlLles whlch he has promlsed
(3) When by hls own acLs he has lmpalred sald guaranLles or securlLles afLer Lhelr esLabllshmenL and when
Lhrough a forLulLous evenL Lhey dlsappear unless he lmmedlaLely glves new ones equally saLlsfacLory
(4) When Lhe debLor vlolaLes any underLaklng ln conslderaLlon of whlch Lhe credlLor agreed Lo Lhe perlod
(3) When Lhe debLor aLLempLs Lo abscond (1129a)

SLCCnu ulvlSlCn

C8 no 178610 november 17 2010

PCnCkCnC Anu SPAnCPAl 8AnklnC CC8 L1u S1All 8L1l8LMLn1 LAn (now PS8C 8eLlremenL 1rusL lund
lnc) eLlLloner v SCuSLS 8lLnvLnluC Anu Lul1PA 88CCuLZA 8espondenLs

u L C l S l C n

CA8lC !

C8 no 178610 ls a peLlLlon for revlew1 assalllng Lhe ueclslon2 promulgaLed on 30 March 2006 by Lhe CourL of
Appeals (CA) ln CAC8 S no 62683 1he appellaLe courL granLed Lhe peLlLlon flled by le Cerong (Cerong) and
Spouses 8lenvenldo and LdlLha 8roqueza (spouses 8roqueza) and dlsmlssed Lhe consolldaLed complalnLs flled by
Pongkong and Shanghal 8anklng CorporaLlon LLd SLaff 8eLlremenL lan (PS8CLS8) for recovery of sum of
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money 1he appellaLe courL reversed and seL aslde Lhe ueclslon3 of 8ranch 139 of Lhe 8eglonal 1rlal CourL of
MakaLl ClLy (81C) ln Clvll Case no 00787 daLed 11 uecember 2000 as well as lLs Crder4 daLed 3 SepLember
2000 1he 81C's declslon afflrmed Lhe ueclslon3 daLed 28 uecember 1999 of 8ranch 61 of Lhe MeLropollLan 1rlal
CourL (Me1C) of MakaLl ClLy ln Clvll Case no 32400 for 8ecovery of a Sum of Money

1he lacLs

1he appellaLe courL narraLed Lhe facLs as followschanroblesvlrLuallawllbrary

eLlLloners Cerong and LdlLha 8roqueza (defendanLs below) are employees of Pongkong and Shanghal 8anklng
CorporaLlon (PS8C)cra1hey are also members of respondenL Pongkong Shanghal 8anklng CorporaLlon LLd SLaff
8eLlremenL lan (PS8CLS8 plalnLlff below)cra1he PS8CLS8 ls a reLlremenL plan esLabllshed by PS8C Lhrough
lLs 8oard of 1rusLees for Lhe beneflL of Lhe employees

Cn CcLober 1 1990 peLlLloner LdlLha 8roqueza obLalned a car loan ln Lhe amounL of hp17300000 Cn
uecember 12 1991 she agaln applled and was granLed an appllance loan ln Lhe amounL of hp2400000 Cn Lhe
oLher hand peLlLloner Cerong applled and was granLed an emergency loan ln Lhe amounL of hp3378000 on !une
2 1993 1hese loans are pald Lhrough auLomaLlc salary deducLlon

Meanwhlle ln 1993 a labor dlspuLe arose beLween PS8C and lLs employees Ma[orlLy of PS8C's employees were
LermlnaLed among whom are peLlLloners LdlLha 8roqueza and le Cerong 1he employees Lhen flled an lllegal
dlsmlssal case before Lhe naLlonal Labor 8elaLlons Commlsslon (nL8C) agalnsL PS8C 1he legallLy or lllegallLy of
such LermlnaLlon ls now pendlng before Lhls appellaLe CourL ln CA C8 Cv no 36797 enLlLled Pongkong Shanghal
8anklng Corp Lmployees unlon eL al vs naLlonal Labor 8elaLlons Commlsslon eL al

8ecause of Lhelr dlsmlssal peLlLloners were noL able Lo pay Lhe monLhly amorLlzaLlons of Lhelr respecLlve loans
1hus respondenL PS8CLS8 consldered Lhe accounLs of peLlLloners dellnquenL uemands Lo pay Lhe respecLlve
obllgaLlons were made upon eLlLloners buL Lhey falled Lo pay6cralaw

PS8CLS8 acLlng Lhrough lLs 8oard of 1rusLees and represenLed by Ale[andro L CusLodlo flled Clvll Case no
32400 agalnsL Lhe spouses 8roqueza on 31 !uly 1996 Cn 19 SepLember 1996 PS8CLS8 flled Clvll Case no 32911
agalnsL Cerong 8oLh sulLs were clvll acLlons for recovery and collecLlon of sums of money

1he MeLropollLan 1rlal CourL's 8ullng

Cn 28 uecember 1999 Lhe Me1C promulgaLed lLs ueclslon7 ln favor of PS8CLS8 1he Me1C ruled LhaL Lhe
naLure of PS8CLS8's demands for paymenL ls clvll and has no connecLlon Lo Lhe ongolng labor dlspuLe Cerong
and LdlLha 8roqueza's LermlnaLlon from employmenL resulLed ln Lhe loss of conLlnued beneflLs under Lhelr
reLlremenL plans 1hus Lhe loans secured by Lhelr fuLure reLlremenL beneflLs Lo whlch Lhey are no longer enLlLled
are reduced Lo unsecured and pure clvll obllgaLlons As unsecured and pure obllgaLlons Lhe loans are lmmedlaLely
demandable

1he dlsposlLlve porLlon of Lhe Me1C's declslon readschanroblesvlrLuallawllbrary

WPL8LlC8L premlses consldered and ln vlew of Lhe foregolng Lhe CourL flnds LhaL Lhe plalnLlff was able Lo prove
by a preponderance of evldence Lhe exlsLence and lmmedlaLe demandablllLy of Lhe defendanLs' loan obllgaLlons as
[udgmenL ls hereby rendered ln favor of Lhe plalnLlff and agalnsL Lhe defendanLs ln boLh cases orderlng Lhe
laLLerchanroblesvlrLuallawllbrary

1 ln Clvll Case no 32400 Lo pay Lhe amounL of hp11674000 aL slx percenL lnLeresL per annum from Lhe Llme of
demand and ln Clvll Case no 32911 Lo pay Lhe amounL of hp2334412 aL slx percenL per annum from Lhe Llme of
Lhe flllng of Lhese cases unLll Lhe amounL ls fully pald

2 1o pay Lhe amounL of hp2000000 each as reasonable aLLorney's fees

3 CosL of sulL

SC C8uL8Lu8cralaw

Cerong and Lhe spouses 8roqueza flled a [olnL appeal of Lhe Me1C's declslon before Lhe 81C Cerong's case was
dockeLed Clvll Case no 00786 whlle Lhe spouses 8roqueza's case was dockeLed as Clvll Case no 00787

1he 8eglonal 1rlal CourL's 8ullng
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1he 81C lnlLlally denled Lhe [olnL appeal because of Lhe belaLed flllng of Cerong and Lhe spouses 8roqueza's
memorandum 1he 81C laLer reconsldered Lhe order of denlal and resolved Lhe lssues ln Lhe lnLeresL of [usLlce

Cn 11 uecember 2000 Lhe 81C afflrmed Lhe Me1C's declslon ln LoLo9cralaw

1he 81C ruled LhaL Cerong and LdlLha 8roqueza's LermlnaLlon from employmenL dlsquallfled Lhem from avalllng of
beneflLs under Lhelr reLlremenL plans As a consequence Lhere ls no longer any securlLy for Lhe loans PS8CLS8
has a legal rlghL Lo demand lmmedlaLe seLLlemenL of Lhe unpald balance because of Cerong and LdlLha 8roqueza's
conLlnued defaulL ln paymenL and Lhelr fallure Lo provlde new securlLy for Lhelr loans Moreover Lhe absence of a
perlod wlLhln whlch Lo pay Lhe loan allows PS8CLS8 Lo demand lmmedlaLe paymenL 1he loan obllgaLlons are
consldered pure obllgaLlons Lhe fulflllmenL of whlch are demandable aL once

Cerong and Lhe spouses 8roqueza Lhen flled a eLlLlon for 8evlew under 8ule 42 before Lhe CA

1he 8ullng of Lhe CourL of Appeals

Cn 30 March 2006 Lhe CA rendered lLs ueclslon10 whlch reversed Lhe 11 uecember 2000 ueclslon of Lhe 81C
1he CA ruled LhaL Lhe PS8CLS8's complalnLs for recovery of sum of money agalnsL Cerong and Lhe spouses
8roqueza are premaLure as Lhe loan obllgaLlons have noL yeL maLured 1hus no cause of acLlon accrued ln favor of
PS8CLS8 1he dlsposlLlve porLlon of Lhe appellaLe courL's ueclslon reads as followschanroblesvlrLuallawllbrary

WPL8LlC8L Lhe assalled ueclslon of Lhe 81C ls 8LvL8SLu and SL1 ASluL A new one ls hereby rendered
ulSMlSSlnC Lhe consolldaLed complalnLs for recovery of sum of money

SC C8uL8Lu11cralaw

PS8CLS8 flled a moLlon for reconslderaLlon whlch Lhe CA denled for lack of merlL ln lLs 8esoluLlon12
promulgaLed on 19 !une 2007

Cn 6 AugusL 2007 PS8CLS8 flled a manlfesLaLlon wlLhdrawlng Lhe peLlLlon agalnsL Cerong because she already
seLLled her obllgaLlons ln a 8esoluLlon13 of Lhls CourL daLed 10 SepLember 2007 Lhls CourL LreaLed Lhe
manlfesLaLlon as a moLlon Lo wlLhdraw Lhe peLlLlon agalnsL Cerong granLed Lhe moLlon and consldered Lhe case
agalnsL Cerong closed and LermlnaLed

lssues

PS8CLS8 enumeraLed Lhe followlng grounds Lo supporL lLs eLlLlonchanroblesvlrLuallawllbrary

l 1he CourL of Appeals has declded a quesLlon of subsLance ln a way noL ln accord wlLh law and appllcable
declslons of Lhls Ponorable CourL and

ll 1he CourL of Appeals has deparLed from Lhe accepLed and usual course of [udlclal proceedlngs ln reverslng Lhe
declslon of Lhe 8eglonal 1rlal CourL and Lhe MeLropollLan 1rlal CourL14cralaw

1he CourL's 8ullng

1he peLlLlon ls merlLorlous We agree wlLh Lhe rullngs of Lhe Me1C and Lhe 81C

1he romlssory noLes unlformly provldechanroblesvlrLuallawllbrary

8CMlSSC8? nC1L

_____ MakaLl MM ____ 19__

lC8 vALuL 8LCLlvLu l/WL _____ [olnLly and severally promlse Lo pay Lo 1PL PS8C 8L1l8LMLn1 LAn
(herelnafLer called Lhe LAn") aL lLs offlce ln Lhe MunlclpallLy of MakaLl MeLro Manlla on or before unLll fully
pald Lhe sum of LSCS ___ (___) hlllpplne Currency wlLhouL dlscounL wlLh lnLeresL from daLe hereof aL Lhe raLe
of Slx per cenL (6) per annum payable monLhly

l/WL agree LhaL Lhe LAn may upon wrlLLen noLlce lncrease Lhe lnLeresL raLe sLlpulaLed ln Lhls noLe aL any Llme
dependlng on prevalllng condlLlons

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l/WL hereby expressly consenL Lo any exLenslons or renewals hereof for a porLlon or whole of Lhe prlnclpal
wlLhouL noLlce Lo Lhe oLher(s) and ln such a case our llablllLy shall remaln [olnL and several

ln case collecLlon ls made by or Lhrough an aLLorney l/WL [olnLly and severally agree Lo pay Len percenL (10) of
Lhe amounL due on Lhls noLe (buL ln no case less Lhan 20000) as and for aLLorney's fees ln addlLlon Lo expenses
and cosLs of sulL

ln case of [udlclal execuLlon l/WL hereby [olnLly and severally walve our rlghLs under Lhe provlslons of 8ule 39
SecLlon 12 of Lhe 8ules of CourL13cralaw

ln rullng for PS8CLS8 we apply Lhe flrsL paragraph of ArLlcle 1179 of Lhe Clvll CodechanroblesvlrLuallawllbrary

ArL 1179 Lvery obllgaLlon whose performance does noL depend upon a fuLure or uncerLaln evenL or upon a pasL
evenL unknown Lo Lhe parLles ls demandable aL once

x x x (Lmphasls supplled)

We afflrm Lhe flndlngs of Lhe Me1C and Lhe 81C LhaL Lhere ls no daLe of paymenL lndlcaLed ln Lhe romlssory
noLes 1he 81C ls correcL ln rullng LhaL slnce Lhe romlssory noLes do noL conLaln a perlod PS8CLS8 has Lhe
rlghL Lo demand lmmedlaLe paymenL ArLlcle 1179 of Lhe Clvll Code applles 1he spouses 8roqueza's obllgaLlon Lo
pay PS8CLS8 ls a pure obllgaLlon 1he facL LhaL PS8CLS8 was conLenL wlLh Lhe prlor monLhly checkoff from
LdlLha 8roqueza's salary ls of no momenL Cnce LdlLha 8roqueza defaulLed ln her monLhly paymenL PS8CLS8
made a demand Lo enforce a pure obllgaLlon

ln Lhelr Answer Lhe spouses 8roqueza admlLLed LhaL prlor Lo LdlLha 8roqueza's dlsmlssal from PS8C ln uecember
1993 she rellglously pald Lhe loan amorLlzaLlons whlch PS8C collecLed Lhrough payroll checkoff"16 A deflnlLe
amounL ls pald Lo PS8CLS8 on a speclflc daLe LdlLha 8roqueza auLhorlzed PS8CLS8 Lo make deducLlons from
her payroll unLll her loans are fully pald LdlLha 8roqueza however defaulLed ln her monLhly loan paymenL due Lo
her dlsmlssal uesplLe Lhe spouses 8roqueza's proLesLaLlons Lhe payroll deducLlon ls merely a convenlenL mode of
paymenL and noL Lhe sole source of paymenL for Lhe loans PS8CLS8 never agreed LhaL Lhe loans wlll be pald
only Lhrough salary deducLlons nelLher dld PS8CLS8 agree LhaL lf LdlLha 8roqueza ceases Lo be an employee of
PS8C her obllgaLlon Lo pay Lhe loans wlll be suspended PS8CLS8 can lmmedlaLely demand paymenL of Lhe
loans aL anyLlme because Lhe obllgaLlon Lo pay has no perlod Moreover Lhe spouses 8roqueza have already
lncurred ln defaulL ln paylng Lhe monLhly lnsLallmenLs

llnally Lhe enforcemenL of a loan agreemenL lnvolves debLorcredlLor relaLlons founded on conLracL and does noL
ln any way concern employee relaLlons As such lL should be enforced Lhrough a separaLe clvll acLlon ln Lhe regular
courLs and noL before Lhe Labor ArblLer"17cralaw

WPL8LlC8L we C8An1 Lhe peLlLlon 1he ueclslon of Lhe CourL of Appeals ln CAC8 S no 62683 promulgaLed
on 30 March 2006 ls 8LvL8SLu and SL1 ASluL 1he declslon of 8ranch 139 of Lhe 8eglonal 1rlal CourL of MakaLl
ClLy ln Clvll Case no 00787 as well as Lhe declslon of 8ranch 61 of Lhe MeLropollLan 1rlal CourL of MakaLl ClLy ln
Clvll Case no 32400 agalnsL Lhe Spouses 8lenvenldo and LdlLha 8roqueza are Alll8MLu CosLs agalnsL
8espondenLs

SC C8uL8Lu

An1CnlC 1 CA8lC

AssoclaLe !usLlce

WL CCnCu8chanroblesvlrLuallawllbrary

An1CnlC LuuA8uC 8 nACPu8A

AssoclaLe !usLlce

ClvlL 8LvlLW 2
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ulCSuAuC M L8AL1A

AssoclaLe !usLlce

8C8L81C A A8Au

AssoclaLe !usLlce

!CSL C MLnuCZA

AssoclaLe !usLlce

A11LS1A1lCn

l aLLesL LhaL Lhe concluslons ln Lhe above ueclslon had been reached ln consulLaLlon before Lhe case was asslgned
Lo Lhe wrlLer of Lhe oplnlon of Lhe CourL's ulvlslon

An1CnlC 1 CA8lC

AssoclaLe !usLlce

Chalrperson

CL81lllCA1lCn

ursuanL Lo SecLlon 13 ArLlcle vlll of Lhe ConsLlLuLlon and Lhe ulvlslon Chalrperson's ALLesLaLlon l cerLlfy LhaL Lhe
concluslons ln Lhe above ueclslon had been reached ln consulLaLlon before Lhe case was asslgned Lo Lhe wrlLer of
Lhe oplnlon of Lhe CourL's ulvlslon

8LnA1C C CC8CnA

Chlef !usLlce

Obli - Cases.codal Provisions

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Obli - Cases.codal Provisions

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ClvlL 8LvlLW 2

no doubL ln Lhls case respondenL Confesor slgned Lhe second

Whlle Lhe records show

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