TORTS AND DAMAGES

COMPILED CASE DIGESTS

AY 2016-2017 Summer
3A

Atty. Marciano G. Delson

Abarra, Karen Mae Catalo, Maria Cassandra Martinez, Rodrick

Abulencia, Maria Angelica Cordon, John Constantine Mendoza, Manuel Antonio
Acuna, Jared Del Castillo, Lara Anne Navarro, Cedric Constantine
Agraam, Angeli Gimelo, Micah Alvin Perez, Jameela
Anacay, Denise Giray, Karen Jane Portez, Mikee Angelu
Azada Chua, Jan Carlo Imperial, Efren Jr. Ragpala, Marryl Ann
Azarias, Mary Kathleen Jabonillo, Zarah Jane Relox, Alvin Patrick
Batugal, Mark Julius Leano, Janine Aurora Torres, Ma. Rafaella Ruth
Baybay, Bryan Ervin Lira, Alain Marcellius Yap, Roxani Agnes
HUMAN RELATIONS; ABUSE OF
RIGHTS; UNJUST ENRICHMENT;
MALICIOUS PROSECUTION;
INDEPENDENT CIVIL ACTION; ARTS.
1724; 2142; 2154; 2164; 2176, NCC
 1. SPOUSES ALEJANDRO MANZANILLA and REMEDIOS VELASCO vs. WATERFIELDS
INDUSTRIES CORPORATION, represented by its President, ALIZA MA
G.R. No. 177484, July 18, 2014

FACTS:
The spouses Manzanilla are the owners of a parcel of land and on May 24, 1994, they leased a portion of
it to the Waterfields, as represented by its President Aliza Ma (Ma). A monthly rental in the gross amount
of P18,000 shall be payable within the first ten (10) days of each month. The rental deposit of P216,000
shall be used to answer for any unpaid rentals, damages, penalties and unpaid utility charges. Such
deposit or any balance thereof shall be refunded to the Waterfields immediately upon the termination or
expiration of this contract. On June 6, 1994 an Amendment to the Contract of Lease was executed by the
parties. However, beginning April 1997, Waterfields failed to pay its monthly rental. On July 30, 1998, the
spouses Manzanill filed before the Metropolitan Trial Court (MTC) a Complaint for Ejectment against
Waterfields and latter claimed that it did not fail or refuse to pay the monthly rentals but was just utilizing
the rental deposit in the amount of P216,000.00 as rental payment in accordance with Section 4 of the
original Contract of Lease. By way of compulsory counterclaims, Waterfields sought that the spouses
Manzanilla be ordered to pay it moral damages and attorney’s fees. The MTC ruled in favor of the
spouses Manzanilla. The Regional Trial Court (RTC) affirmed MTC’s decision. On appeal, the Court of
Appeals (CA) reversed the trial court’s decision. It gave weight to the spouses Manzanilla’s allegation that
they terminated the Contract of Lease. Upon such termination, it held that the rental deposit should have
been applied as payment for unpaid utilities and other incidental expenses, if any, pursuant to said
amended contract.

ISSUE:
WON the CA erred in reversing the trial court’s decision.

HELD:
Yes. First, the CA should not have immediately assumed as true the spouses Manzanilla’s allegation that
the contract was already terminated. Aside from the fact that this termination was specifically denied by
Waterfields in its Answer, it is settled that a mereassumption cannot be made the basis of a decision in a
case or in granting relief. A judgment must always be based on the court’s factual findings. Second, it
must be stressed that in this case, the violation of the lease through non-payment of rent is
whatconstitutes the cause of action. Hence, once the failure to pay rent is established, a cause of action
for unlawful detainer arises. The CA should have therefore limited itself to the determination of whether
Waterfields failed to pay rents for the months of December 1997 to May 1998 as complained of by the
spouses Manzanilla. Upon coming up with ananswer to this, the CA should have stopped there since at
that point, it can already conclude whether there exists a cause of action for unlawful detainer, which as
mentioned is the only contentious issue involved in this case.The problem, however, is that the CA acted
on its mistaken notion as to when a cause of action arises. It did not base its determination of the
existence of the cause of action from the fact that Waterfields failed to pay rents from December 1997 to
May 1998. The cause of action in this case only arose after the contract was terminated and the rental
deposit was found sufficient to cover the unpaid rentals. This is erroneous since as already discussed, it
is the failure to pay rent which gives rise to the cause of action. Prescinding from this, the CA’s
acknowledgement that Waterfields failed to pay rent, as shown by its declaration that the latter is the
debtor of the spouses Manzanilla with respect to the unpaid rentals, is clearly inconsistent with the
conclusion that no cause of action for ejectment exists against Waterfields. Failure to pay the rent must
precede termination of the contract due to nonpayment of rent. It therefore follows thatthe cause of action
for unlawful detainer in this case must necessarily arise beforethe termination of the contract and not the
other way around as what the CA supposed. Indeed, in going beyond the termination of the contract, the
CA went a bit too far in its resolution of this case.
 2. SESBRENO V. COURT OF APPEALS
GR NO. 160689

FACTS:
VECO was a public utility corporation organized and existing under the laws of the Philippines. VECO
engaged in the sale and distribution of electricity within Metropolitan Cebu. Sesbreño was one of VECO’s
customers under the metered service contract they had entered into on March 2, 1982. The Violation Of
Contracts Team (VOC) of respondent conducted its routine inspection at La Paloma Village, Cebu City,
including that of plaintiff-appellant Sesbreño, for illegal connections, meter tampering, seals, conduit
pipes, jumpers, wiring connections, and meter installations. After Bebe Baledio, plaintiff-appellant
Sesbreño’s maid, unlocked the gate, they inspected the electric meter and found that it had been turned
upside down. Defendant-appellant Arcilla took photographs of the upturned electric meter. But according
to plaintiff-appellant Sesbreño there was nothing routine or proper at all with what the VOC Team did on
May 11, 1989 in his house. Their entry to his house and the surrounding premises was effected without
his permission and over the objections of his maids. They threatened, forced or coerced their way into his
house. They unscrewed the electric meter, turned it upside down and took photographs thereof. They
then replaced it with a new electric meter. They searched the house and its rooms without his permission
or a search warrant. The RTC rendered judgment dismissing the complaint. It did not accord credence to
the testimonies of Sesbreño’s witnesses.

ISSUE:
Was Sesbreno entitled to recover damages for abuse of rights?

HELD:
Sesbreño’s main contention is that the inspection of his residence by the VOC team was an unreasonable
search for being carried out without a warrant and for being allegedly done with malice or bad faith. The
constitutional guaranty against unlawful searches and seizures is intended as a restraint against the
Government and its agents tasked with law enforcement. It is to be invoked only to ensure freedom from
arbitrary and unreasonable exercise of State power
If the search is made upon the request of law enforcers, a warrant must generally be first secured if it is to
pass the test of constitutionality. However, if the search is made at the behest or initiative of the proprietor
of a private establishment for its own and private purposes, as in the case at bar, and without the
intervention of police authorities, the right against unreasonable search and seizure cannot be invoked for
only the act of private individual, not the law enforcers, is involved. In sum, the protection against
unreasonable searches and seizures cannot be extended to acts committed by private individuals so as
to bring it within the ambit of alleged unlawful intrusion by the government.

3. WILLAWARE PRODUCTS CORPORATION VS JESICHRIS MANUFACTURING CORPORATION

G.R. No. 195549 September 3, 2014

FACTS:
Jesichris Manufacturing Company the respondent filed this present complaint for damages for unfair
competition with prayer for permanent injunction to enjoin Willaware Products Corporation the petitioner
from manufacturing and distributing plastic-made automotive parts similar to Jesichris Manufacturing
Company. The respondent, alleged that it is a duly registered partnership engaged in the manufacture
and distribution of plastic and metal products, with principal office at No. 100 Mithi Street, Sampalukan,
Caloocan City. Since its registration in 1992, Jesichris Manufacturing Company has been manufacturing
in its Caloocan plant and distributing throughout the Philippines plastic-made automotive parts. Willaware
Products Corporation, on the other hand, which is engaged in the manufacture and distribution of
kitchenware items made of plastic and metal has its office near that of the Jesichris Manufacturing
Company. Respondent further alleged that in view of the physical proximity of petitioner’s office to
respondent’s office, and in view of the fact that some of the respondent’s employees had transferred to
petitioner, petitioner had developed familiarity with respondent’s products, especially its plastic-made
automotive parts.
That sometime in November 2000, [respondent] discovered that [petitioner] had been manufacturing and
distributing the same automotive parts with exactly similar design, same material and colors but was
selling these products at a lower price as [respondent’s] plastic-made automotive parts and to the same
customers.
Respondent alleged that it had originated the use of plastic in place of rubber in the manufacture of
automotive under chassis parts such as spring eye bushing, stabilizer bushing, shock absorber bushing,
center bearing cushions, among others. [Petitioner’s] manufacture of the same automotive parts with
plastic material was taken from respondent’s idea of using plastic for automotive parts. Also, [petitioner]
deliberately copied [respondent’s] products all of which acts constitute unfair competition, is and are
contrary to law, morals, good customs and public policy and have caused [respondent] damages in terms
of lost and unrealized profits in the amount of 2,000,000 as of the date of respondent’s complaint.

ISSUE:
1. Whether or not there is unfair competition under human relations when the parties are not competitors
and there is actually no damage on the part of Jesichris?
2. Consequently, if there is no unfair competition, should there be moral damages and attorney’s fees?
3. Whether or not the addition of nominal damages is proper although no rights have been established?

HELD:
Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or industrial
enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust,
oppressive or high-handed method shall give rise to a right of action by the person who thereby suffers
damage."
From the foregoing, it is clear that what is being sought to be prevented is not competition per se but the
use of unjust, oppressive or high handed methods which may deprive others of a fair chance to engage in
business or to earn a living. Plainly,what the law prohibits is unfair competition and not competition where
the means use dare fair and legitimate.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been deleted and
in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is awarded, the attorney's
fees should concomitantly be modified and lowered to Fifty Thousand Pesos (P50,000.00).

4. LORIA vs. MUÑOZ

G.R. No. 187240 October 15, 2014.

FACTS:
Muñoz filed a complaint for sum of money and damages against Loria. Muñoz alleged that he has been
engaged in construction under the name, "Ludolfo P. Muñoz, Jr. Construction." Loria invited Muñoz to
advance P2,000,000.00 for a subcontract of a P50,000,000.00 river-dredging project in Guinobatan. Loria
represented that he would make arrangements such that Elizaldy Co, owner of Sunwest Construction and
Development Corporation, would turn out to be the lowest bidder for the project. Elizaldy Co would pay
P8,000,000.00 to ensure the project's award to Sunwest. After the award to Sunwest, Sunwest would
subcontract 20% or P10,000,000.00 worth of the project to Muñoz. Muñoz accepted Loria's proposal.
Muñoz requested Allied Bank to release P3,000,000.00 from his joint account with his business partner,
Christopher Co, to a certain delos Santos. Loria then obtained the money from delos Santos. Four days
later, P1,800,000.00 of the P3,000,000.00 was returned to Muñoz. Loria collected Muñoz's P800,000.00
balance. After deducting Loria's personal loans from Muñoz, Muñoz issued a check to Loria for
P481,800.00. Loria acknowledged receiving this amount from Muñoz. Sunwest allegedly finished
dredging the Masarawag and San Francisco Rivers without subcontracting Muñoz. With the project
allegedly finished, Muñoz demanded Loria to return his P2,000,000.00. Loria, however, did not return the
money. Muñoz first charged Loria and Elizaldy Co with estafa. This criminal case was dismissed by the
Municipal Trial Court of Daraga, Albay for lack of probable cause. Muñoz then filed the complaint for sum
of money.
Trial court held that Loria must return the P2,000,000.00 he received, or he would be "unduly enriching
himself at the expense of [Muñoz]." The Court of Appeals sustained the trial court's factual findings. Loria
filed a petition for review on certiorari arguing that the principle of unjust enrichment does not apply in this
case.
ISSUE:
Whether or not Loria must return Muno’z P 2,000,000.00 under the principle of unjust enrichment.

HELD: YES

Under Article 22 of the Civil Code of the Philippines, "every person who through an act of performance by
another, or any other means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him." There is unjust enrichment "when a person
unjustly retains a benefit to the loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity and good conscience." The principle of unjust
enrichment has two conditions. First, a person must have been benefited without a real or valid basis or
justification. Second, the benefit was derived at another person’s expense or damage.

In this case, Loria received P2,000,000.00 from Muñoz for a subcontract of a government project to
dredge the Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to the parties’
agreement, Muñoz was not subcontracted for the project. Nevertheless, Loria retained the
P2,000,000.00. Thus, Loria was unjustly enriched. He retained Muñoz’s money without valid basis or
justification. Under Article 22 of the Civil Code of the Philippines, Loria must return the P2,000,000.00 to
Muñoz.

5. DOMINGO GONZALO VS. JOHN TARNATE, JR.

G.R. NO. 160600 January 15, 2014
J. BERSAMIN

FACTS:
Domingo (Gonzalo), owner of Gonzalo Construction, was awarded a contract by the DPWH to improve
the Sadsadan-Mabay-an Section of the Mountain Province-Benguet Road, with a contract price of P7,
014,963.33. He then subcontracted to John (Tarnate) the supply of labor and materials under the latter’s
company, JNT Aggregates, with a stipulation that Tarnate would pay to him 8% and 4% of the contract
price after Tarnate’s first and second billing on the project. Gonzalo also executed a Deed of Assignment
whereby he assigned to Tarnate 10% (equivalent to P233, 526.13) of the total collection from the DPWH
for the project, and authorized him to use the official receipts of Gonzalo Construction in the processing of
the documents for the collection of the 10% retention fee and encashment of checks. The Deed of
Assignment was submitted to the DPWH on April 15, 1999. When Tarnate was processing the issuance
of the check for the payment of the retention fee, he learned that Gonzalo had unilaterally rescinded the
Deed of Assignment and executed an affidavit of cancellation of deed of assignment dated April 19, 1999.
The disbursement voucher for the 10% retention fee also showed that it was released to Gonzalo. When
he failed to collect from Domingo the amount, Tarnate then filed an action against him to collect the 10%
retention fee for breach of contract, moral, exemplary damages, and attorney’s fees. Gonzalo admitted
the execution of the deed of assignment, but averred that the project was not fully implemented because
it was cancelled by the DPWH; the deed could not stand alone because it was only a product of the
contract he executed with the DPWH; and Tarnate, being fully aware of the illegality and ineffectuality of
the contract and the deed of assignment, could not got to court with unclean hands to invoke his right
under the deed or its product.
The RTC ruled in favor of Tarnate, which the Court of Appeals affirmed. Although the CA agreed that the
contract was void for being in violation of PD 1594, the appellate court did not apply the doctrine of in pari
delicto as it applies only when the guilt of the parties were more or less equivalent; in this case, Tarnate’s
fault was only in the execution of the subcontract, while Gonzalo went to the extent of violating the Deed
of Assignment, thus he unjustly enriched himself. Gonzalo should reimburse Tarnate the 10% retention
fee because he used the latter’s equipment.
Gonzalo appealed to the Supreme Court, arguing that the subcontract and the deed of assignment had
no force and effect; the RTC and the CA should have applied the rule of in pare delicto; and it as
erroneous for the courts to give relief from their predicaments.

ISSUE:
Whether or not the subcontract and deed of assignment are void contracts.
HELD:
YES. The Court held that the subcontract agreement and deed of assignment between Gonzalo and
Tarnate are void for being contrary to law. However, even though both parties are in pare delicto the
Court allowed Tarnate to recover his retention fee, as an exception, due to unjust enrichment.

Contract is void
Every contractor is prohibited from subcontracting with or assigning to another person any
contract or project that he has with the DPWH unless the DPWH Secretary has approved the
subcontracting or assignment. Gonzalo, who was the sole contractor of the project in question,
subcontracted the implementation of the project to Tarnate in violation of the statutory prohibition. Their
subcontract was illegal, therefore, because it did not bear the approval of the DPWH Secretary.
Necessarily, the deed of assignment was also illegal, because it sprung from the subcontract.
Obviously, without the Sub-Contract Agreement there will be no Deed of Assignment to speak
of. The illegality of the Sub-Contract Agreement necessarily affects the Deed of Assignment because the
rule is that an illegal agreement cannot give birth to a valid contract. To rule otherwise is to sanction the
act of entering into transaction the object of which is expressly prohibited by law and thereafter execute
an apparently valid contract to subterfuge the illegality. The legal proscription in such an instance will be
easily rendered nugatory and meaningless to the prejudice of the general public.
Under Article 1409 (1) of the Civil Code, a contract whose cause, object or purpose is contrary
to law is a void or inexistent contract. As such, a void contract cannot produce a valid one. To the same
effect is Article 1422 of the Civil Code, which declares that “a contract, which is the direct result of a
previous illegal contract, is also void and inexistent.”

Rigid application of in pare delicto in void contracts; exception

According to Article 1412 (1) of the Civil Code, the guilty parties to an illegal contract cannot
recover from one another and are not entitled to an affirmative relief because they are in pari delicto or in
equal fault. The doctrine of in pari delicto is a universal doctrine that holds that no action arises, in equity
or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the
property agreed to be sold or delivered, or the money agreed to be paid, or damages for its violation; and
where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other.
Nonetheless, the application of the doctrine of in pari delicto is not always rigid. An accepted
exception arises when its application contravenes well-established public policy.
There is no question that Tarnate provided the equipment, labor and materials for the project in
compliance with his obligations under the subcontract and the deed of assignment; and that it was
Gonzalo as the contractor who received the payment for his contract with the DPWH as well as the 10%
retention fee that should have been paid to Tarnate pursuant to the deed of assignment. Considering that
Gonzalo refused despite demands to deliver to Tarnate the stipulated 10% retention fee that would have
compensated the latter for the use of his equipment in the project, Gonzalo would be unjustly enriched at
the expense of Tarnate if the latter was to be barred from recovering because of the rigid application of
the doctrine of in pari delicto. The prevention of unjust enrichment called for the exception to apply in
Tarnate’s favor. Given that Tarnate, Jr. performed his obligations under the subcontract and the deed of
assignment, this court ruled that he was entitled to the agreed fee(10% of the retention fee). According to
this court, Gonzalo "would be unjustly enriched at the expense of Tarnate if the latter was to be barred
from recovering because of the rigid application of the doctrine of in pari delicto.

6. SERGIO AMONOY VS SPOUSES GUTIERREZ

G.R. NO. 140420, FEBRUARY 15, 2001

FACTS:
Petitioner was the counsel of the respondents ascendants in a judicial settlement of the estate of
the deceased Julio Cantolos. Attorney’s fees was charged by petitioner for the services rendered and
hence a real estate mortgage was executed on the lots adjudicated to the ascendants to secure payment
of the fees. Since the attorney’s fee’s were not paid, Amonoy filed for the foreclosure of the mortgage
against the Heirs of Alfonso Fornilda. A judgement was rendered in his favor and the subject lots were
sold at an auction sale where Amonoy was the highest bidder. Thereafter on May 6, 1986, upon motion of
Amonoy, orders were issued of the demolition of structures in the said lots. A petition for temporary
restraining order was then filed before the Supreme Court which was granted on June 2, 1986 enjoining
the demolition of the Petitioner’s houses. However when the court later issued a final judgment rendering
the temporary restraining order permanent the houses had already been destroyed hence a Complaint for
damages was filed by respondents against petitioner. The RTC dismissed the suit however this was set
aside by the CA ordering petitioner to pay for actual damages.

ISSUE:
Whether or not petitioner is liable to the respondents for damages?

HELD:
YES. Petitioner invokes the legal precept –damnum absque injuria- which however does not apply in this
case. He maintains that he was merely acting in accordance with the Writ of demolition ordered by the
RTC, where he commenced demolition on May 30, 1986. However, records show that a TRO enjoining
the demolition of respondents house was issued by the Supreme Court on Jun 2, 1986. Petitioner did not
heed the TRO and unlawfully pursued the demolition of the respondents house. His acts constituted not
only an abuse of a right, but an invalid exercise of a right that has been suspended when he received the
TRO from this Court.
Petitioner cannot invoke damnum absque injuria, a principle premised on the valid exercise of a right.
Anything less or beyond such exercise will not give rise to the legal protection that the principle accords.
And when damage or prejudice to another is occasioned thereby, liability cannot be obscured much less
abated.

7. ALBENSON ENTERPRISES CORP. vs. CA

FACTS:

Petitioner Albenson Enterprises Corporation delivered to Guaranteed Industries, Inc. the mild steel plates
which the latter ordered. As part payment thereof, Albenson was given Pacific Banking Corporation
Check No. 136361 in the amount of P2,575.00 and drawn against the account of E.L. Woodworks.

When presented for payment, the check was dishonored for the reason "Account Closed." From the
records of the Securities and Exchange Commission (SEC), Albenson discovered that the president of
Guaranteed, the recipient of the unpaid mild steel plates, was one "Eugenio S. Baltao." Albenson was
informed by the Ministry of Trade and Industry that E.L. Woodworks, a single proprietorship business,
was registered in the name of one "Eugenio Baltao". Upon verification with the drawee bank, Pacific
Banking Corporation, Albenson was advised that the signature appearing on the subject check belonged
to one "Eugenio Baltao."

Albenson, through counsel, made an extrajudicial demand upon private respondent Eugenio S. Baltao,
president of Guaranteed, to replace and/or make good the dishonored check.

Respondent Baltao, through counsel, denied that he issued the check, or that the signature appearing
thereon is his. He further alleged that Guaranteed was a defunct entity and hence, could not have
transacted business with Albenson.

Albenson filed with the Office of the Provincial Fiscal of Rizal a complaint against Eugenio S. Baltao for
violation of Batas Pambansa Bilang 22.

It appears, however, that private respondent has a namesake, his son Eugenio Baltao III, who manages a
business establishment, E.L. Woodworks, on the ground floor of the Baltao Building, 3267 V. Mapa
Street, Sta. Mesa, Manila, the very same business address of Guaranteed.

ISSUE:
Whether or not petitioners violated the principle of abuse of rights
HELD:
No. Certainly, petitioners could not be said to have violated the aforestated principle of abuse of right.
What prompted petitioners to file the case for violation of Batas Pambansa Bilang 22 against private
respondent was their failure to collect the amount of P2,575.00 due on a bounced check which they
honestly believed was issued to them by private respondent. Petitioners had conducted inquiries
regarding the origin of the check, and yielded the following results: from the records of the Securities and
Exchange Commission, it was discovered that the President of Guaranteed (the recipient of the unpaid
mild steel plates), was one "Eugenio S. Baltao"; an inquiry with the Ministry of Trade and Industry
revealed that E.L. Woodworks, against whose account the check was drawn, was registered in the name
of one "Eugenio Baltao"; verification with the drawee bank, the Pacific Banking Corporation, revealed that
the signature appearing on the check belonged to one "Eugenio Baltao".

In a letter, counsel for petitioners wrote private respondent demanding that he make good the amount of
the check. Counsel for private respondent wrote back and denied, among others, that private respondent
ever transacted business with Albenson Enterprises Corporation; that he never issued the check in
question. Private respondent's counsel even went further: he made a warning to defendants to check the
veracity of their claim. It is pivotal to note at this juncture that in this same letter, if indeed private
respondent wanted to clear himself from the baseless accusation made against his person, he should
have made mention of the fact that there are three (3) persons with the same name, i.e.: Eugenio Baltao,
Sr., Eugenio S. Baltao, Jr. (private respondent), and Eugenio Baltao III (private respondent's son, who as
it turned out later, was the issuer of the check). He, however, failed to do this. The last two Baltaos were
doing business in the same building — Baltao Building — located at 3267 V. Mapa Street, Sta. Mesa,
Manila. The mild steel plates were ordered in the name of Guaranteed of which respondent Eugenio S.
Baltao is the president and delivered to Guaranteed at Baltao building. Thus, petitioners had every reason
to believe that the Eugenio Baltao who issued the bouncing check is respondent Eugenio S. Baltao when
their counsel wrote respondent to make good the amount of the check and upon refusal, filed the
complaint for violation of BP Blg. 22.

Private respondent, however, did nothing to clarify the case of mistaken identity at first hand. Instead,
private respondent waited in ambush and thereafter pounced on the hapless petitioners at a time he
thought was propitious by filing an action for damages. The Court will not countenance this devious
scheme.

8.RCPI vs. COURT OF APPEALS and LORETO DIONELA

G.R. No. L-44748 August 29, 1986

FACTS:
Dionela alleges that the defamatory words on the telegram sent to him not only wounded his
feelings but also caused him undue embarrassment and affected adversely his business as well because
other people have come to know of said defamatory words.

The alleged defamatory message:

SA IYO WALANG PAKINABANG DUMATING KA DIYAN-WALA-KANG PADALA DITO KAHIT BULBUL
MO

Defendant corporation as a defense, alleges that the additional words in Tagalog was a private joke
between the sending and receiving operators and that they were not addressed to or intended for plaintiff
and therefore did not form part of the telegram and that the Tagalog words are not defamatory. The
telegram sent through its facilities was received in its station at Legaspi City. Nobody other than the
operator manned the teletype machine which automatically receives telegrams being transmitted. The
said telegram was detached from the machine and placed inside a sealed envelope and delivered to
plaintiff, obviously as is. The additional words in Tagalog were never noticed and were included in the
telegram when delivered.

ISSUE:
Whether petioner is liable to private respondent for damages.
RULING:
Petitioner is a domestic corporation engaged in the business of receiving and transmitting messages.
Everytime a person transmits a message through the facilities of the petitioner, a contract is entered into.
Upon receipt of the rate or fee fixed, the petitioner undertakes to transmit the message accurately. There
is no question that in the case at bar, libelous matters were included in the message transmitted, without
the consent or knowledge of the sender. There is a clear case of breach of contract by the petitioner in
adding extraneous and libelous matters in the message sent to the private respondent. As a corporation,
the petitioner can act only through its employees. Hence the acts of its employees in receiving and
transmitting messages are the acts of the petitioner. To hold that the petitioner is not liable directly for the
acts of its employees in the pursuit of petitioner's business is to deprive the general public availing of the
services of the petitioner of an effective and adequate remedy. In most cases, negligence must be proved
in order that plaintiff may recover. However, since negligence may be hard to substantiate in some cases,
we may apply the doctrine of RES IPSA LOQUITUR (the thing speaks for itself), by considering the
presence of facts or circumstances surrounding the injury.

9. AMELITA CONSTANTINO and MICHAEL CONSTANTINO, the latter represented herein by the
former, his mother and natural guardian, petitioners, vs. IVAN MENDEZ and the HONORABLE
COURT OF APPEALS, respondents.

FACTS:

This is a petition for review on certiorari questioning the decision of the Court of Appeals which dismissed
petitioner’s complaint and set aside the resolution of the then Court of First Instance of Davao, ordering
private respondent: (1) to acknowledge the minor Michael Constantino as his illegitimate child; (2) to give
a monthly support of P300.00 to the minor child; (3) to pay complainant Amelita Constantino the sum of
P8,200.00 as actual and moral damages; and (4) to pay attorney’s fees in the sum of P5,000 plus costs.
Petitioner filed with the then CFI of Davao an action for acknowledgment, support and damages against
private respondent in June 1975. Petitioner alleges, that sometime in the month of August, 1974, she met
respondent at Tony’s Restaurant, where she worked as a waitress; the following day respondent invited
petitioner to dine with him at Hotel Enrico where he was billeted; on the pretext of getting something,
respondent brought petitioner inside his hotel room and through a promise of marriage succeeded in
having sexual intercourse with the latter and repeated whenever respondent is in Manila even after
respondent confessed that he is a married man after their first sexual contact. In respondent’s answer in
August 1975, Ivan admitted that he met petitioner at Tony’s Cocktail Lounge but denied having sexual
knowledge or illicit relations with her. He prayed for the dismissal of the complaint for lack of cause of
action.
The trial court rendered a decision, in favor of petitioner. Respondent is to pay for actual and moral
damages, attorney’s fees and the costs of the suit. Both parties filed their separate motion for
reconsideration. Respondent anchored his motion on the ground that the award of damages was not
supported by evidence. Petitioner sought the recognition and support of her son Michael Constantino as
the illegitimate son of Ivan Mendez.
The trial court granted petitioner’s motion for reconsideration.
On appeal the amended decision was set aside and the complaint was dismissed. Hence, this petition for
review.

ISSUE:
WHETHER OR NOT PETITIONER IS ENTITLED TO CLAIM FOR DAMAGES BASED ON ARTICLES 19
& 21

HELD: NO, PETITIONER CANNOT CLAIM FOR DAMAGES BASED ON ARTICLES 19 & 21
According to ART. 19 Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
In the case at bar petitioner was already 28 years old and she admitted that she was attracted to
respondent. Petitioner’s attraction to respondent is the reason why she surrendered her womanhood. Had
petitioner been induced or deceived because of a promise of marriage, she could have immediately
ended her relation with respondent when she knew that respondent was a married man after their first
sexual contact. Her declaration that in the months of September, October and November, 1974, they
repeated their sexual intercourse only indicates that passion and not the alleged promise of marriage was
the moving force that made her submit herself to respondent. The Supreme Court said “Damages could
only be awarded if sexual intercourse is not a product of voluntariness and mutual desire” therefore
petitioner is not entitled to claim for damages based on articles 19 & 21
WHEREFORE, the instant petition is Dismissed for lack of merit.

10. GASHEEM SHOOKAT BAKSH VS CA

219 SCRA 115

FACTS:

Marilou Gonzales, then 21 years old, met Gashem Shookat Baksh, a 29 year old exchange student from
Iran who was studying medicine in Dagupan while working as a waitress in Dagupan City, Pangasinan.
The two got really close and intimate. Marilou alleged that Gashem later offered to marry her at the end of
the semester. Marilou then introduced Gashem to her parents where they expressed their intention to get
married. Marilou’s parents then started inviting sponsors and relatives to the wedding. They even started
looking for animals to slaughter for the occasion.

Meanwhile, Marilou started living with Gashem in his apartment where they had sexual intercourse. But in
no time, their relationship went sour as Gashem began maltreating her. Gashem eventually revoked his
promise of marrying Marilou and he told her that he is already married to someone in Bacolod City.
Marilou went home and later sued Gashem for damages.

The trial court ruled in favor of Marilou and awarded her P20k in moral damages. The Court of Appeals
affirmed the decision of the trial court.

On appeal, Gashem averred that he never proposed marriage to Marilou and that he cannot be adjudged
to have violated Filipino customs and traditions since he, being an Iranian, was not familiar with Filipino
customs and traditions.

ISSUE:
Whether or not the Gashem is liable for damages

HELD:
Yes. Gashem is liable to pay for damages in favor of Marilou not really because of his breach of promise
to marry her but based on Article 21 of the Civil Code which provides:

Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.

Breach of promise to marry is not an actionable wrong per se. In this case, it is the deceit and fraud
employed by Gashem that constitutes a violation of Article 21 of the Civil Code. His promise of marrying
Marilou was a deceitful scheme to lure her into sexual congress. As found by the trial court, Marilou was
not a woman of loose morals. She was a virgin before she met Gashem. She would not have surrendered
herself to Gashem had Gashem not promised to marry her. Gashem’s blatant disregard of Filipino
traditions on marriage and on the reputation of Filipinas is contrary to morals, good customs, and public
policy. As a foreigner who is enjoying the hospitality of our country and even taking advantage of the
opportunity to study here he is expected to respect our traditions. Any act contrary will render him liable
under Article 21 of the Civil Code.

The Supreme Court also elucidated that Article 21 was meant to expand the concepts of torts and quasi
delict. It is meant to cover situations such as this case where the breach complained of is not strictly
covered by existing laws. It was meant as a legal remedy for the untold number of moral wrongs which is
impossible for human foresight to specifically enumerate and punish in the statute books – such as the
absence of a law penalizing a the breach of promise to marry.

The Supreme Court however agreed with legal luminaries that if the promise to marry was made and
there was carnal knowledge because of it, then moral damages may be recovered (presence of moral or
criminal seduction), Except if there was mutual lust; or if expenses were made because of the promise
(expenses for the wedding), then actual damages may be recovered.

11. FIGUEROA v. BARRANCO, JR.

Special Bar Case No. 519; July 31, 1997
Romero, J.

FACTS:
Petitioner Patricia Figueroa and respondent Simeon Barranco were sweethearts since their
teens. They acceded to sexual congress in 1960, which resulted in the birth of their son. It was in 1964
when Barranco promised Figueroa that he would marry her after he passed the bar. After four defeating
tries, Barranco passed the exam but failed to fulfill his promise to marry petitioner.

Their relationship continued and respondent allegedly made more than 20 or 30 promises of
marriage. In 1971, their relationship turned sour and ended. Barranco married another woman and was
about to take his lawyer's oath, when petitioner filed a complaint to deny Barranco to enter the legal
profession. Figueroa recounted her past with Barranco, alleging gross immoral conduct against the latter.

Respondent filed three motions to dismiss for Figueroa's lack of interest in the case. The fourth
motion was filed because Barranco was elected in the Sangguniang Bayan, actively participated in civic
organizations and acquired a good standing in his community while the case was pending.

The trial court dismissed the complaint for failure to prosecute. However, Figueroa filed an
opposition which once again cancelled Barranco's oath-taking. The trial court sought the opinion of the
Integrated Bar of the Philippines, which recommended that Barranco be allowed to take his oath, and to
dismiss Figueroa's complaint. Hence, the petition.

ISSUE:
Whether or not respondent's breach of promise to marry is an actionable tort.

HELD:
NO. We find that these facts do not constitute gross immorality warranting the permanent exclusion of
respondent from the legal profession. His engaging in premarital sexual relations with complainant and
promises to marry suggests a doubtful moral character on his part but the same does not constitute
grossly immoral conduct. The Court has held that to justify suspension or disbarment the act complained
of must not only be immoral, but grossly immoral. A grossly immoral act is one that is so corrupt and false
as to constitute a criminal act or so unprincipled or disgraceful as to be reprehensible to a high degree. It
is a willful, flagrant, or shameless act which shows a moral indifference to the opinion of respectable
members of the community.
Respondent and complainant were sweethearts whose sexual relations were evidently
consensual. We do not find complainant's assertions that she had been forced into sexual intercourse,
credible. All those years of amicable and intimate relations refute her allegations that she was forced to
have sexual congress with him. Figueroa was then an adult who voluntarily and actively pursued their
relationship and was not an innocent young girl who could be easily led astray. Unfortunately, respondent
chose to marry and settle permanently with another woman. We cannot help viewing the instant
complaint as an act of revenge of a woman scorned, bitter and unforgiving to the end.
 12. UNIVERSITY OF THE EAST V JADER
G.R. No. 132344 February 17, 2000

FACTS:
Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first semester of his
last year (School year 1987-1988), he failed to take the regular final examination in Practice Court I for
which he was given an incomplete grade. He filed an application for the removal of the incomplete grade
given him by Prof Ortega, approved by the Dean, after payment of the required fee. Plaintiff’s name
appeared in the Tentative List of Candidates for graduation. After graduation, he thereafter prepared
himself for the bar examination. He took a leave of absence without pay from his job and enrolled at the
pre-bar review class. Having learned of the deficiency he dropped his review class and was not able to
take the bar examination.2 Consequently, respondent sued petitioner for damages alleging that he
suffered moral shock, mental anguish, serious anxiety, besmirched reputation, wounded feelings and
sleepless nights when he was not able to take the 1988 bar examinations arising from the latter's
negligence. He prayed for an award of moral and exemplary damages, unrealized income, attorney's
fees, and costs of suit. In its answer with counterclaim, petitioner denied liability arguing mainly that it
never led respondent to believe that he completed the requirements for a Bachelor of Laws degree when
his name was included in the tentative list of graduating students. After trial, the lower court rendered
judgment in favor of plaintiff which was affirmed by CA with modification (added moral damages)

ISSUE:
W/N an educational institution may be held liable for damages for misleading a student into believing that
the latter had satisfied all the requirements for graduation when such is not the case

HELD:
Yes, the negligent act of a professor who fails to observe the rules of the school, for instance by not
promptly submitting a student's grade, is not only imputable to the professor but is an act of the school,
being his employer. It is the contractual obligation of the school to timely inform and furnish sufficient
notice and information to each and every student as to whether he or she had already complied with all
the requirements for the conferment of a degree or whether they would be included among those who will
graduate. Prior or subsequent to the ceremony, the school has the obligation to promptly inform the
student of any problem involving the latter's grades and performance and also most importantly, of the
procedures for remedying the same. Petitioner, in belatedly informing respondent of the result of the
removal examination, particularly at a time when he had already commenced preparing for the bar
exams, cannot be said to have acted in good faith. Absence of good faith must be sufficiently established
for a successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the Civil
Code. However, while petitioner was guilty of negligence and thus liable to respondent for the latter's
actual damages, we hold that respondent should not have been awarded moral damages.
Educational institutions are duty-bound to inform the students of their academic status and not wait for the
latter to inquire from the former. The conscious indifference of a person to the rights or welfare of the
person/persons who may be affected by his act or omission can support a claim for damages. 10 Want of
care to the conscious disregard of civil obligations coupled with a conscious knowledge of the cause
naturally calculated to produce them would make the erring party liable.

13. IRENE D. OFILADA, petitioner, vs. SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL,
respondents
G.R. No. 192270. January 26, 2015.

Facts:
Irene, together with her husband, Carlos, brought from the heirs of Teresita Liwag a parcel of land with
fruit bearing plants located in Quezon and the sale was evidenced by an Extra-Judicial Settlement of
Estate with Absolute Sale wherein Miraflor Andal,m who brokered the sale of the property signed as
tenant.
Apparently, ten days prior to the sale, Miraflor appeared before Anastacio Lajara (Anastacio), the then
Barangay Agrarian Reform Council (BARC) Chairman of Barangay Puri, San Antonio, and executed
aPagpapatunay 9 stating that:
 Sa kinauukulan:
Ito ay pagpapatunay na si Miraflor Andal ay kusang[-]loob na dumulog sa aking tanggapan
upang ipagbigay[-]alam na ang lupa na pag-aari ni TERESITA LIWAG . . . ay walang "tenant" o
magtatrabaho at hiniling niya na ang nasabing lupa ay mapalipat sa pangalan ng mga bumili na
walang iba kundi sina Carlos at Irene Ofilada.
Pinagtitibay nya na wala na siyang paghahabol na ano man laban sa may-ari o kahalili nito sa
karapatan sapagkat siya ay tumanggap na ng kaukulang halaga hinggil sa naging
pagtatrabaho niya sa nasabing lupa at gayon din ang kanyang mga magulang.
SA KATUNAYAN NG LAHAT NG ITO ay ako ay nagbibigay ng pahintulot na ang nasabing lupa
ay mapagbili na at mapatala sa bagong may-ari na ligtas sa ano mang pananagutan.

Two weeks after the sale, Miraflor, with the consent of her husband, respondent Ruben Andal (Ruben),
executed a Sinumpaang Salaysay wherein she acknowledged Irene and Carlos as the new owners of the
property. While it was stated therein that she will continue to take care of the property, she nevertheless
waived any tenancy rights that she and her husband might have over the land. Eventually, the land was
registered in the names of Irene and Carlos. Eight years later or in October 2005, Irene filed against the
spouses Andal a Complaint for Ejectment and Damages before the MTC of San Antonio, Quezon. She
averred that For humanitarian reasons, she acceded to the spouses Andal's request to take care of her
two parcels of land, provided that they would not be considered as tenants. To stress the fact that neither
she nor the spouses Andal intended that the latter be deemed as tenants, Irene pointed to the following:
(1) the condition for her purchase of the property in Tiaong that the same should not have any tenants;
and (2) Miraflor's execution of a Sinumpaang Salaysay wherein she waived any tenancy rights that she
and her husband might have over the said property. In their Answer, 15 the spouses Andal denied Irene's
allegations and claimed that they were tenants of Irene's predecessor-in-interest and continued to be
such despite the transfer of ownership of the properties to Irene. They likewise contended that since the
suit is an action to dispossess them as tenants, it is not the MTC which has jurisdiction over the complaint
but the Department of Agrarian Reform Adjudication Board (DARAB). Rejecting the tenancy claim, Irene
averred in her Memorandum that her real properties are not covered by agrarian reform laws as they are
within the retention limit allowed by law. She again stressed that the spouses Andal had already
voluntarily surrendered their rights as tenants way back in 1997 as evidenced by the Pagpapatunay and
the Sinumpaang Salaysay. She added the said spouses voluntarily waived their rights and received P1.1
million as commission for brokering the sale of the Tiaong property to her. This was after Irene made
clear that the sale would not materialize and, consequently spouses Andal would not get the commission,
if the property has tenants. Irene averred that the spouses Andal's receipt of the said amount of money,
being advantageous to them, is a valid ground for termination of tenancy relations.
MTC: Spouses Andal failed to adduce proof that they are tenants. It gave weight to the Pagpapatunay
issued by Anastacio in 1997 as against the affidavit he executed in 2005 which it found ambivalent as to
whether spouses Andal are working as tenants on the lands of Irene. The MTC did not also accord any
evidentiary weight to the copy of the Affidavit of Landholding presented by spouses Andal because of the
doubtful insertion. Hence, it concluded that the spouses Andal were in possession of the properties by
mere tolerance of Irene.
RTC: Affirmed
CA: The CA, on the other hand, took a different view of the case. In its assailed Decision of July 13, 2009,
the CA ratiocinated that since the existence of tenancy relations between the previous owners of the
properties and the spouses Andal is undisputed, the question of whether the said spouses may be
dispossessed therefrom constitutes an agrarian dispute despite the severance of such relations. This is
considering that severance of the tenurial arrangement does not render the action beyond the ambit of an
agrarian dispute and, hence, jurisdiction over the same remains with the DARAB.

ISSUES:
1) Whether tenancy relationship between Irene and the spouses Andal exists as to strip off the MTC
of its jurisdiction over Irene’s suit for unlawful detainer
2) Whether a new tenancy relationship between Irene and the spouses Andal was subsequently
formed.
HELD:
1) Indeed, while a tenancy relationship cannot be extinguished by the sale, alienation, or transfer of
the legal possession of the landholding, the same may nevertheless be terminated due to circumstances
more advantageous to the tenant and his/her family. Here, records show that Miraflor, who brokered the
sale between the heirs of Teresita and Irene, voluntarily executed, days prior to the Extrajudicial
Settlement of Estate with Absolute Sale, her Pagpapatunay before the BARC Chairman stating that she
and her parents have already received a 'sufficient consideration' for her to release her former landlord
and the purchaser of the lot from liability. As later disclosed by Irene during trial, such 'sufficient
consideration' amounted to P1.1 million by way of disturbance compensation, a factual allegation which
was again never refuted by the spouses Andal before the lower court and was found to be an
uncontroverted fact by the CA. To the Court, the said amount is adequate enough for the spouses Andal
to relinquish their rights as tenants. In fine, it can be reasonably concluded that the tenancy relationship
between the previous owners and the spouses Andal had already been severed.
2) The fact alone of working on another's landholding does not raise a presumption of the existence
of agricultural tenancy. For tenancy to be proven, all indispensable elements must be established, the
absence of one or more requisites will not make the alleged tenant a de facto one. These are: 1) the
parties are the landowner and the tenant; 2) the subject is agricultural land; 3) there is consent by the
landowner; 4) the purpose is agricultural production; 5) there is personal cultivation; and 6) there is
sharing of the harvests. The Pagpapatunay and the Sinumpaang Salaysay both support Irene's claim that
she purchased the landholdings only on the condition that there will be no tenants. Her refusal to give her
consent to any tenancy relationship is glaring. On the other hand, the spouses Andal, in their attempt to
prove tenancy, submitted their copy of the February 27, 1997 Affidavit of Landholding, which contains an
inserted statement that Irene and Carlos agree "that the same tenant Miraflor Andal, will continue as
tenant, over the said parcel of land." However, serious doubt is cast on the authenticity of said inserted
statement considering that it does not bear the respective initials/signatures of Carlos and Irene attesting
their conformity thereto. More importantly, Irene's copy of the said document does not contain the same
insertion.

14. WILLEM BEUMER vs AVELINA AMORES

GR. No. 195670; December 3, 2012

FACTS:
Petitioner, a Dutch National, and respondent, a Filipina was married but after several years, the RTC of
Negros Oriental declared the nullity of their marriage on the basis of the former’s psychological
incapacity. Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership. In defense,
respondent averred that, with the exception of their two residential houses, she and petitioner did not
acquire any conjugal properties during their marriage, the truth being that she used her own personal
money to purchase. During trial, petitioner testified that while Lots were registered in the name of
respondent, these properties were acquired with the money he received from the Dutch government as
his disability benefit since respondent did not have sufficient income to pay for their acquisition. The RTC
of Negros Oriental rendered its Decision, dissolving the parties’ conjugal partnership, awarding all the
parcels of land to respondent as her paraphernal properties; the tools and equipment in favor of petitioner
as his exclusive properties; the two houses standing on Lots 1 and 2142 as co-owned by the parties.
Regardless of the source of funds for the acquisition of Lots, petitioner could not have acquired any right
whatsoever over these properties as petitioner still attempted to acquire them notwithstanding his
knowledge of the constitutional prohibition against foreign ownership of private lands. CA affirms the
decision of RTC.

ISSUE:
Whether or not Beumer has thr right to claiming half or whole of the purchase price used in the purchase
of the real properties subject of this case?

HELD:
The Court AFFIRMED the rulings of the RTC and CA. In In Re: Petition For Separation of Property-Elena
Buenaventura Muller v. Helmut Muller the Court had already denied a claim for reimbursement of the
value of purchased parcels of Philippine land instituted by a foreigner against his former Filipina spouse.
It held that the foreigner cannot seek reimbursement on the ground of equity where it is clear that he
willingly and knowingly bought the property despite the prohibition against foreign ownership of Philippine
land enshrined under Section 7, Article XII of the 1987 Philippine Constitution. Undeniably, petitioner
openly admitted that he "is well aware of the above-cited constitutional prohibition" and even asseverated
that, because of such prohibition, he and respondent registered the subject properties in the latter’s
name. Clearly, petitioner’s actuations showed his palpable intent to skirt the constitutional prohibition. On
the basis of such admission, the Court finds no reason why it should not apply the Muller ruling. The time-
honored principle is that he who has done inequity shall not be accorded equity. Thus, a litigant may be
denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful. Surely, a contract that violates the Constitution and the law is null
and void, vests no rights, creates no obligations and produces no legal effect at all. Neither can the Court
grant petitioner’s claim for reimbursement on the basis of unjust enrichment. It does not apply if the action
is proscribed by the Constitution. Article 22 of the Civil Code provides that, every person who through an
act or performance by another, or any other means, acquires or comes into possession of something at
the expense of the latter without just or legal ground, shall return the same to him.

15) NESTOR N. PADALHIN, ET AL. VS. NELSON D. LAVIÑA.

G.R. No. 183026. November 14,2012.

TOPICS: Damages for violation of right to privacy; inviolability of diplomatic residence.

FACTS:
Laviña and Nestor were both Filipino diplomats assigned in Kenya as Ambassador and Consul General,
respectively.
In the course of their stay in Kenya, the residence of Laviña was raided twice. Prior to the raids,
Bienvenido Pasturan (Pasturan) delivered messages to the Filipino household helpers in the
ambassador’s residence instructing them to allow the entry of an officer who would come to take
photographs of the ivory souvenirs kept therein.
The first raid on April 18, 1996 was conducted while Laviña and his wife were attending a diplomatic
dinner hosted by the Indian High Commission. Lucy Ercolano Muthua, who was connected with the
Criminal Investigation Division’s Intelligence Office of Kenya and David Menza, an officer in the Digirie
Police Station in Nairobi, participated in the raid. Photographs of the first and second floors of Laviña’s
residence were taken
The second raid was conducted on April 23, 1996 during which occasion; the ambassador and his
spouse were once again not of the residence were taken.
On September 27, 1996, Laviña received an information from the Department of Foreign Affairs (DFA) in
Manila that an investigating team was to be sent to Nairobi to inquire into the complaints filed against him
by the employees of the Philippine Embassy in Kenya, on onehand, and his own complaint against the
spouses Padalhin, on the other.
The team stayed in Kenya from April 20, 1997 to April 30, 1997. The team entered Laviña’s residence
unarmed with a search warrant, court order or letter from the DFA Secretary. Laviña alleged that in the
course of the inspection, the team destroyed cabinet locks, damaged furnitures and took three sets of
carved ivory tusks.
Subsequently, both Nestor and Laviña were recalled from their posts in Kenya.
On November 17, 1997, Laviña filed before the RTC a complaint for damages against Nestor and his
wife, petitioner Annie Padalhin (Annie) Palao, Cabando, Manalo, Ebdalin and Dizon.
Laviña’s complaint alleged the following causes of action, to wit: (a) affront against his privacy and the
sancity and inviolability of his diplomatic residence during the two raids conducted by the Kenyan officials,
supposedly instigated by Padalhin and participated by all the defendants as conspirators; (b) infringement
of his constitutional rights against illegal searches and seizures when the investigating team sent by the
DFA entered into his residence without a warrant, court order or letter from the DFA Secretary and
confiscated some of his personal belongings; and (c) bad faith, malice and deceit exhibited by the
defendants, including Padalhin, in conspiring on the conduct of the raids, engaging in a smear campaign
against him, and seizing without authority his personal effects. Laviña sought payment of actual, moral,
exemplary and nominal damages, attorney’s fees and costs of suits.
In the course of the trial, Nestor denied any involvement in the raids conducted on Laviña’s residence. As
counterclaims, he alleged that the suit filed by Laviña caused him embarasssment and sleepless nights,
as well as unnecessary expenses that he incurred to defend himself against the charges. On the other
hand, Annie denied prior knowledge of and participation in the raids.

On October 3, 2003, the RTC rendered a Decision ordering Nestor to pay Laviña P500,000.00 as moral
damages, P50,000.00 as nominal damages, P75,000.00 as exemplary damages, P150,000.00 as
attorney’s fees and litigation expenses, and costs of suit for the former’s participation in the raid
conducted in the Ambassador’s residence on April 18, 1996.
Both Laviña and Nestor filed their respective appeals to assail the RTC decision. Laviña ascribed error on
the part of the RTC when it absolved Annie and Pasturan from liability anent their supposed participation
in the raid conducted on April 18, 1996. Laviña likewise assailed as insufficient the amount of exemplary
and nominal damages imposed on Nestor by the RTC. Laviña also challenged the propriety of the RTC’s
dismissal of his claims relative to the conduct of the second raid on April 23, 1996. On the other hand,
Nestor lamented that his participation in the April 18, 1996 raid was not proven by clear and substantial
evidence, hence, the award of damages made by the RTC in favor of Laviña lacked basis.
On February 14, 2008, the CA rendered a Decision denying the appeals of both Laviña and Nestor. The
CA, however, reduced to P75,000.00 the award of attorney’s fees and litigation expenses made in
Laviña’s favor.
In affirming, albeit with modification, the RTC’s disquisition, the CA explained:
There is no doubt in our mind that defendant-appellant indeed participated in the first raid that happened
on April 18, 1997 [sic]. This conclusion of ours is based on the admission made by the defendant-
appellant himself in his affidavit dated October 10, 1997.
Hence, Nestor filed before us the instant Petition for Review on Certiorari.

ISSUES:
I. WHETHER OR NOT NESTOR’S PARTICIPATION IN THE RAID CONDUCTED ON LAVIÑA’S
RESIDENCE WAS PROVEN BY CLEAR AND SUBSTANTIAL EVIDENCE AS TO WARRANT THE
AWARD OF MORAL, EXEMPLARY AND NOMINAL DAMAGES AND ATTORNEY’S FEES INTHE
LATTER’S FAVOR.
II. WHETHER OR NOT NESTOR’S COUNTERCLAIMS SHOULD HAVE BEEN GRANTED
CONSIDERING A CLEAR SHOWING THAT LAVIÑA’S SUIT WAS GROUNDLESS.

HELD:
I. As already exhaustively discussed by both the RTC and the CA, Nestor himself admitted that
he caused the taking of the pictures of Lavina’s residence without the latter’s knowledge and consent.
Nestor reiterates that he did so sans bad faith or malice. However, Nestor’s surreptitious acts negate his
allegation of good faith. If it were true that Lavina kept ivories in his diplomatic residence, then, his
behavior deserves condemnation. However, that is not the issue in the case at bar. Nestor violated the
New Civil Code prescriptions concerning the privacy of one’s residence and he cannot hide behind the
cloak of his supposed benevolent intentions to justify the invasion. Hence, the award of damages and
attorney’s fees in Lavina’s favor is proper.
II. In the case at bar, the petitioner spouses present to us issues with an intent to
subject to review the uniform factual findings of the RTC and the CA. Specifically, the
instant petition challenges the existence of clear and substantial evidence warranting
the award of damages and attorney’s fees in Laviña’s favor. Further, the instant
petition prays for the grant of the Spouses Padalhin’s counterclaims on the supposed
showing that the complaint filed by Laviña before the RTC was groundless. It bears
stressing that we are not a trier of facts. Undoubtedly, the questions now raised
before us are factual and not legal in character, hence, beyond the contemplation of
a petition filed under Rule 45 of the Rules of Civil Procedure.
 16. RUKS KONSULT AND CONSTRUCTION, vs. ADWORLD SIGN AND ADVERTISING
CORPORATION and TRANSWORLD MEDIA ADS, INC.,

GR 204866 January 21, 2015

FACTS:
Adworld is the owner of a 75 ft. x 60 ft. billboard structure located at EDSA Tulay. On August 11,
2003, the billboard structure was misaligned and its foundation impaired when the adjacent billboard
structure owned by Transworld collapsed and crashed against it. Adworld sent Transworld a letter
demanding payment for the repairs of its billboard as well as loss of rental income. Transworld sent its
reply, admitting the damage caused by its billboard structure on Adworld’s billboard, but nevertheless,
refused and failed to pay the amounts demanded. Adworld’s final demand letter was also unheeded
prompting the former to file a complaint.
In its Answer with Counterclaim, Transworld averred that the collapse of its billboard structure
was due to extraordinarily strong winds that occurred instantly and unexpectedly, and maintained that the
damage caused to Adworld’s billboard structure was hardly noticeable. They also included Ruks by way
of Third-Party Complaint, stating that Ruks is the company which built the collapsed billboard structure in
the former’s favor; and that the structure constructed by it had a weak and poor foundation not suited for
billboards, thus, prone to collapse, and as such, Ruks should ultimately be held liable for the damages
caused to Adworld’s billboard structure.
Ruks denied liability for the damages caused by its collapse. It contended that when Transworld
hired its services, there was already an existing foundation for the billboard and that it merely finished the
structure according to the terms and conditions of its contract with the latter.

ISSUE:
W/N Ruks is jointly and severally (solidarily) liable with Transworld for damages sustained by
Adworld.

HELD:
YES. Jurisprudence defines negligence as the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or
the doing of something which a prudent and reasonable man would not do. It is the failure to observe for
the protection of the interest of another person that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury.
In this case, the CA correctly affirmed the RTC’s finding that Transworld’s initial construction of its
billboard’s lower structure without the proper foundation, and that of Ruks’s finishing its upper structure
and just merely assuming that Transworld would reinforce the weak foundation are the two (2) successive
acts which were the direct and proximate cause of the damages sustained by Adworld. Worse, both
Transworld and Ruks were fully aware that the foundation for the former’s billboard was weak; yet, neither
of them took any positive step to reinforce the same. They merely relied on each other’s word that repairs
would be done to such foundation, but none was done at all. Clearly, the foregoing circumstances show
that both Transworld and Ruks are guilty of negligence in the construction of the former’s billboard, and
perforce, should be held liable for its collapse and the resulting damage to Adworld’s billboard structure.
As joint tortfeasors, therefore, they are solidarily liable to Adworld. Joint tortfeasors are referred to as
those who act together in committing wrong or whose acts, if independent of each other, unite in causing
a single injury. Under Article 2194 of the Civil Code, joint tortfeasors are solidarily liable for the resulting
damage. In other words, joint tortfeasors are each liable as principals, to the same extent and in the same
manner as if they had performed the wrongful act themselves.
There is no contribution between joint [tortfeasors] whose liability is solidary since both of them are liable
for the total damage. Where the concurrent or successive negligent acts or omissions of two or more
persons, although acting independently, are in combination the direct and proximate cause of a single
injury to a third person, it is impossible to determine in what proportion each contributed to the injury and
either of them is responsible for the whole injury. Hence, each wrongdoer is responsible for the entire
result and is liable as though his acts were the sole cause of the injury.
17. FEDERICO YLARDE and ADELAIDA DORONIO vs. EDGARDO AQUINO, MAURO SORIANO and
COURT OF APPEALS
G.R. No. L-33722. July 29, 1988.

FACTS:
Private respondent Mariano Soriano was the principal of the Gabaldon Primary School in
Pangasinan. Defendant Edgardo Aquino was a teacher therein.
During that time, the school had several concrete blocks which were remnants of the old school
shop destroyed in World War II. Deciding to help a fellow teacher in burying the stones, Aquino gathered
18 of his male pupils. He ordered them to dig beside a one-ton concrete block to make a hole where the
stone can be buried. The work was left unfinished. After the classes, Aquino called four (4) of the original
18 pupils to continue digging. When the depth of the excavation was right enough to accommodate the
concrete block, Aquino left the children to level the loose soil around the open hole while he went to fetch
some rope. Before leaving, Aquino allegedly told children “not to touch the stone.”
After Aquino left, the three of the children playfully jumped into the pit. The fourth one jumped on
top of the concrete block, causing it to slide down towards the opening. Two of the kids in the pit were
able to get out on time but unfortunately for one, Novelito Ylarde, who got caught by the stone, pinning
him to the wall in a standing position. Ylarde sustained physical injuries from which he died three (3) days
later.
The parents of Ylarde filed a suit for damages against the teacher Aquino based on Article 2176
of the Civil Code and against respondent Soriano as the head of the school based on Article 2180 of the
same Code.

ISSUE:
Can the respondents be held liable for damages under cited provisions?

HELD:
Soriano, as head of an academic school and not a school of arts and trades, cannot be made
responsible for the death of the child Ylarde. As held in Amadora vs. Court of Appeals (1988), under
Article 2180 of the Civil Code, it is only the teach and not the head of academic shool who should be
answerable for torts committed by their students, and that, in a school of arts and trades, it is only the
head of the school who can be held liable. Meanwhile, Aquino can be held liable under Article 2180 as
the teacher-in-charge of the children for being negligent in his supervision over them.
(NOTE: The case was decided before the Family Code. Under 218 of the Family Code, school
administrators and teachers can be held liable for any injury or damage caused under their supervision––
vicarious liability of schools.)
Aquino is found to be liable under Article 2176 for his negligent act in leaving his pupils in such a
dangerous site. Needless to say, the child Ylarde would not have died were it not for the unsafe situation
created by Aquino which exposed the lives of all the pupils concerned to real danger.

18. CUBAO-COGEO OPERATORS AND DRIVERS ASSOCIATION VS CA, LUNGSOD SILANGAN

TRANSPORT SERVICES INC.,
GR NO. 100727 3/18/1992

FACTS:
Petitioner Cubao-Cogeo Association is a non-stock, non-profit organization registered with the SEC with
main purpose of representing the Lungsod Silangan Transport Services Inc., for whatever contract and/or
agreement it will have regarding the ownership of units, and the like, of the members of the association.
The respondent, Lungsod Silangan Transport Services Corp., Inc., is a holder of a certificate of public
convenience to operate a jeepney service plying the cogeo-cubao route sometime in 1983 on the
justification of public necessity and convenience.
Sometime in 1985, after adopting a bandera system wherein a member of the cooperative is permitted to
queue for passengers in exchange for the ticket worth 20 pesos, the proceeds of which shall be used for
christmas programs of the drivers and other benefits. The Petitioner led by Romeo Oliva formed a human
barricade and assumed the dispatching of passenger jeepneys. Thus the respondent claiming for
damages.
The petitioner contends that the association was formed not to compete with the respondent corporations
operation as a common carrier, for it was organized for the common protection of drivers from abusive
traffic officers who extort money from them and elimination of practice of respondent corporation of
requiring jeepney owners to execute deed of sale in favor of the corporation to show that the latter is the
owner of the jeeps under its CPC. And that in organizing the association, the members were merely
exercising their freedom or right to redress their grievances.
The trial court rendered decision in favor of the respondent ordering the petitioner to pay 50,000 actual
damages, 10,000 atorney’s fees.It was elevated to the CA wherein the decision was affirmed but modified
it to awarding nominal damages to the petitioner amounting to 10,000.00

ISSUE:
WON CA’s award of nominal damages is proper

HELD:
YES. THE court ruled that under the Public Service Law, a CPC is an authorization issued by the Public
Service Commission for the operation of public services for which no franchise is required by law. It was
issued to respondent corporation accordingly. A CPC is included in the term property in the broad sense
of the term as it can be sold by the holder for it has considerable material value and as valuable asset. It
represents the right and authority to operate its facilities for public service and CANNOT BE TAKE OR
INTERFERED WITH WITHOUT DUE PROCESS OF LAW. In this case, the petitioner forcibly took over
the operation of jeepney service rout without authorization from the PSC and in violation of the right of
respondent to operate its services in the said route.
The contention of the petitioner’s exercise of constitutional right to redress their grievances with
respondent, the manner by which exercised should not undermine public peace and order nor violate the
legal rights of other persons. Art 21 of NCC provides that any person who willfully causes loss or injury to
another in a manner that is contrary to morals, gc, or pp shall compensate the latter for the damage.
However, it does not necessarily follow that the plaintiff/appellee is entitled to actual damages and atty’s
fees due to lack of concrete proof. In this case, nominal damages may be granted under Art 2222 which
states, the court may award nominal damages in every obligation arising from any source under Art. 1157
or in every case where any property right has been invaded. Hence, the nominal award for damages.

19. FF CRUZ AND CO. VS COURT OF APPEALS

G.R. No. L-52732 August 29, 1988
Cortes, J.:

FACTS:
The furniture manufacturing shop of petitioner in Caloocan City was situated adjacent to the
residence of private respondents. Sometime in August 1971, private respondent Gregorio Mable first
approached Eric Cruz, petitioner's plant manager, to request that a firewall be constructed between the
shop and private respondents' residence. The request was repeated several times but they fell on deaf
ears. In the early morning of September 6, 1974, fire broke out in petitioner's shop. Petitioner's
employees, who slept in the shop premises, tried to put out the fire, but their efforts proved futile. The fire
spread to private respondents' house. Both the shop and the house were razed to the ground. The cause
of the conflagration was never discovered. The National Bureau of Investigation found specimens from
the burned structures negative for the presence of inflammable substances.

Subsequently, private respondents collected P35,000.00 on the insurance on their house and the
contents thereof.

On January 23, 1975, private respondents filed an action for damages against petitioner, praying
for a judgment in their favor awarding P150,000.00 as actual damages, P50,000.00 as moral damages,
P25,000.00 as exemplary damages, P20,000.00 as attorney's fees and costs.

The CFI ruled in favor of respondents.

 The CA affirmed the decision but later on reversed its decision upon motion for reconsideration of
the petitioner.

ISSUE:
Whether or not res ipsa loquitur should be applied?

HELD:
Yes, considering that in the normal course of operations of a furniture manufacturing shop,
combustible material such as wood chips, sawdust, paint, varnish and fuel and lubricants for machinery
may be found thereon.

Even without applying the doctrine of res ipsa loquitur, petitioner's failure to construct a firewall in
accordance with city ordinances would suffice to support a finding of negligence.

In the instant case, with more reason should petitioner be found guilty of negligence since it had
failed to construct a firewall between its property and private respondents' residence, which sufficiently
complies with the pertinent city ordinances. The failure to comply with an ordinance providing for safety
regulations had been ruled by the Court as an act of negligence.

20. PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL vs. THE INTERMEDIATE
APPELLATE COURT and LEONARDO DIONISIO
G.R. No. L-65295 March 10, 1987

FACTS:
In the early morning of 15 November 1975 — at about 1:30 a.m. — private respondent Leonardo Dionisio
was on his way home — he lived in 1214-B Zamora Street, Bangkal, Makati — from a cocktails-and-
dinner meeting with his boss, the general manager of a marketing corporation. During the cocktails phase
of the evening, Dionisio had taken "a shot or two" of liquor. Dionisio was driving his Volkswagen car and
had just crossed the intersection of General Lacuna and General Santos Streets at Bangkal, Makati, not
far from his home, and was proceeding down General Lacuna Street, when his car headlights (in his
allegation) suddenly failed. He switched his headlights on "bright" and thereupon he saw a Ford dump
truck looming some 2-1/2 meters away from his car. The dump truck, owned by and registered in the
name of petitioner Phoenix Construction Inc. ("Phoenix"), was parked on the right hand side of General
Lacuna Street (i.e., on the right hand side of a person facing in the same direction toward which Dionisio's
car was proceeding), facing the oncoming traffic. The dump truck was parked askew (not parallel to the
street curb) in such a manner as to stick out onto the street, partly blocking the way of oncoming traffic.
There were no lights nor any so-called "early warning" reflector devices set anywhere near the dump
truck, front or rear. The dump truck had earlier that evening been driven home by petitioner Armando U.
Carbonel, its regular driver, with the permission of his employer Phoenix, in view of work scheduled to be
carried out early the following morning, Dionisio claimed that he tried to avoid a collision by swerving his
car to the left but it was too late and his car smashed into the dump truck. As a result of the collision,
Dionisio suffered some physical injuries including some permanent facial scars, a "nervous breakdown"
and loss of two gold bridge dentures.
Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically claiming
that the legal and proximate cause of his injuries was the negligent manner in which Carbonel had parked
the dump truck entrusted to him by his employer Phoenix. Phoenix and Carbonel, on the other hand,
countered that the proximate cause of Dionisio's injuries was his own recklessness in driving fast at the
time of the accident, while under the influence of liquor, without his headlights on and without a curfew
pass. Phoenix also sought to establish that it had exercised due rare in the selection and supervision of
the dump truck driver.

ISSUE:
What was the proximate cause?
HELD:
We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and
proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently
respondent Dionisio may recover damages though such damages are subject to mitigation by the courts
(Article 2179, Civil Code of the Philippines).

Turning to the award of damages and taking into account the comparative negligence of private
respondent Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, we believe
that the demands of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio.
Thus, 20% of the damages awarded by the respondent appellate court, except the award of P10,000.00
as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by private respondent
Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who shall be
solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs
shall be borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement from
Carbonel. 18 We see no sufficient reason for disturbing the reduced award of damages made by the
respondent appellate court.

WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate
amount of compensatory damages, loss of expected income and moral damages private respondent
Dionisio is entitled to by 20% of such amount. Costs against the petitioners.

21. THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF DOMINGA
ONG,petitioners-appellants,
vs.
CALTEX (PHIL.), INC., MATEO BOQUIREN and THE COURT OF APPEALS, respondents-appellees.
G.R. No. L-12986, March 31, 1966

FACTS:
In the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the corner of Antipolo
street and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the
underground storage, right at the opening of the receiving tank where the nozzle of the hose was
inserted. The fire spread to and burned several neighboring houses, including the personal properties and
effects inside them. Their owners, among them petitioners here, sued respondents Caltex (Phil.), Inc. and
Mateo Boquiren, the first as alleged owner of the station and the second as its agent in charge of
operation. Negligence on the part of both of them was attributed as the cause of the fire.

ISSUE:
1) Should the doctrine of res ipsa loquitur be applied so as to presume negligence on the part of Caltex
and Boquiren?
2) The next issue is whether Caltex should be held liable for the damages caused to appellants.
3) Can the Art 2207 of the New Civil Code be made to apply to this case when the said Code is not yet in
effect when the loss took place?

HELD:
1) Yes. The gasoline station, with all its appliances, equipment and employees, was under the control of
appellees. The persons who knew or could have known how the fire started were appellees and their
employees, but they gave no explanation thereof whatsoever. It is a fair and reasonable inference that the
incident happened because of want of care. the fire possibly would not have spread to the neighboring
houses were it not for another negligent omission on the part of defendants, namely, their failure to
provide a concrete wall high enough to prevent the flames from leaping over it. "It is the rule that those
who distribute a dangerous article or agent, owe a degree of protection to the public proportionate to and
commensurate with a danger involved ... we think it is the generally accepted rule as applied to torts that
'if the effects of the actor's negligent conduct actively and continuously operate to bring about harm to
another, the fact that the active and substantially simultaneous operation of the effects of a third person's
innocent, tortious or criminal act is also a substantial factor in bringing about the harm, does not protect
the actor from liability.' Stated in another way, "The intention of an unforeseen and unexpected cause, is
not sufficient to relieve a wrongdoer from consequences of negligence, if such negligence directly and
proximately cooperates with the independent cause in the resulting injury."

2) Yes. Boquiren can hardly be considered an independent contractor. Under that agreement Boquiren
would pay Caltex the purely nominal sum of P1.00 for the use of the premises and all the equipment
therein. He could sell only Caltex Products. Maintenance of the station and its equipment was subject to
the approval, in other words control, of Caltex. Boquiren could not assign or transfer his rights as licensee
without the consent of Caltex. The license agreement was supposed to be from January 1, 1948 to
December 31, 1948, and thereafter until terminated by Caltex upon two days prior written notice. Caltex
could at any time cancel and terminate the agreement in case Boquiren ceased to sell Caltex products, or
did not conduct the business with due diligence, in the judgment of Caltex. The control was such that the
latter was virtually an employee of the former.

3) No. However, regardless of the silence of the law on this point at that time, the amount that should be
recovered be measured by the damages actually suffered, otherwise the principle prohibiting unjust
enrichment would be violated. As found by the trial court the Africas sustained a loss of P9,005.80, after
deducting the amount of P2,000.00 collected by them on the insurance of the house. Thus, Caltex and
Boquiren are held liable solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80.

22. GABETO VS. ARANETA

42 PHIL. 232

FACTS:
In 1918, Basilio Ilano and Proceso Gayetano took a carromata with a view to going to a cockpit. When the
driver of the carromata had started in the direction indicated, the defendant, Agaton Araneta, stopped the
horse, at the same time protesting to the driver that he himself had called this carromata first. The driver,
Julio Pagnaya, replied that he had not heard or seen the call of Araneta. Pagnaya pulled on the reins of
the bridle to free the horse from the control of Araneta, in order that the vehicle might pass on. Owing to
the looseness of the bridle on the horse's head or to the rottenness of the material of which it was made,
the bit came out of the horse's mouth; and it became necessary for the driver to get out in order to find the
bridle. Meanwhile one of the passengers, Ilano, had alighted but the other, Gayetano, had unfortunately
retained his seat, and after the runaway horse had proceeded up the street Gayetano jumped or fell from
the rig, and in so doing received injuries from which he soon died.

ISSUE:
W/N the proximate cause of the accident was the stopping of the horse by Araneta.

RULING:
Judgement reversed and defendant absolved from the complaint.

RATIO:
The stopping of the rig by Araneta was too remote from the accident that presently ensued to be
considered the legal or proximate cause thereof. Moreover, by getting out and taking his post at the head
of the horse, the driver was the person primarily responsible for the control of the animal, and the
defendant cannot be charged with liability for the accident resulting from the action of the horse
thereafter. The evidence indicates that the bridle was old, and the leather of which it was made was
probably so weak as to be easily broken. According to the witnesses for the defendant, it was Julio who
jerked the rein, thereby causing the bit to come out of the horse's mouth; and that after alighting, led the
horse over to the curb, and proceeded to fix the bridle; and that in so doing the bridle was slipped entirely
off, when the horse, feeling himself free from control, started to go away as previously stated.
 23. GREGORIO vs. GO
102 Phil 556

FACTS:
On or before June 2, 1952, defendant was the owner of a truck. He had a driver and a cargador or
driver's helper by the name of Francisco Rosomera. In the afternoon of June 2, 1952, defendant ordered
Romera to drive his truck, with instructions to follow another truck driven by his driver and help the latter
in crossing Sumlog river which was then flooded. Romera at that time was not a licensed driver. He only
had a student's permit. The truck started from the town of Lupon at about 5:30 o'clock in the afternoon,
driven by Romera. Some persons boarded the truck and among them was one policeman by the name
of Venancio Orfanel. While the truck was on the way, it made a stop and then Orfanel took the wheel from
Romera, while the latter stayed on the driver's left, reclined on a spare tire inside of the truck. While the
truck was being driven by Orfanel, with another truck ahead of it driven by defendant's driver it so
happened that they came to a truck that was trying to park on the left side of the road. Romera suggested
to Orfanel that he shift to low gear and Orfanel did so. But as they approached the parking truck, and in
order to avoid colliding with it, Orfanel swerved the truck towards the right. It so happened that at that
time two pedestrians were on the right side of the road, As the truck had swerved to the right and was
proceeding to hit the said pedestrians, Romera told Orfanel to apply the brake, but Orfanel instead of
doing so put his foot on the gasoline and the truck did not stop but went on and hit and run over one of
the pedestrians, by the name of Quirico Gregorio. The plaintiffs appellants' in this action are Gregorio's
widow and his children and of the accident, Orfanel was prosecuted for homicide with reckless
imprudence. He pleaded guilty to the charge and was sentenced accordingly. Court of First Instance
absolved defendant from liability for the accidental death of Quirico Gregorio.

ISSUE:
Whether or not the defendant is liable.

RULING:
NO, the defendant is not liable. Where the death or accident is caused by an act or omission of a person
who is not in any way related to the defendant and the said act is the proximate, immediate and direct
cause of the death of the victim or accident which is punishable by law, defendant should be absolved
from any civil liability. The reason is not because one responsible for the accident had already received
indemnification therefor, but because there is no direct and proximate causal connection between the
negligence or violation of the law by the defendant to the death of the victim.
We are of the belief that defendant's claim that Romera gave the wheel to the policeman for fear of, or out
of respect for, the latter, has been proved by a preponderance of the evidence. It is evident that the
proximate, immediate and direct cause of the death of the plaintiffs' intestate was the negligence of
Orfanel, a uniformed policeman, who took the wheel of the truck from defendant's cargador, in spite of the
protest of the latter. The reason for absolving the defendant therefor is not because the one responsible
for the accident had already received indemnification for the accident, but because there is no direct and
proximate causal connection between the negligence or violation of the law by the defendant to the death
of the plaintiff's intestate. For the foregoing considerations, the judgment appealed from is hereby
affirmed, without costs.

24.PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners, vs. THE

INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO
G.R. No. L-65295. March 10, 1987

FACTS:
Private respondent Leonardo Dionisio was on his way home, was driving his Volkswagen car and
had just crossed the intersection of General Lacuna and General Santos Streets at Bangkal, Makati, not
far from his home, and was proceeding down General Lacuna Street, when his car headlights (in his
allegation) suddenly failed. He switched his headlights on "bright" and thereupon he saw a Ford dump
truck looming some 2-1/2 meters away from his car. The dump truck, owned by and registered in the
name of petitioner Phoenix Construction Inc. ("Phoenix"), was parked on the right hand side of General
Lacuna Street (i.e., on the right hand side of a person facing in the same direction toward which Dionisio's
car was proceeding), facing the oncoming traffic. The dump truck was parked askew (not parallel to the
street curb) in such a manner as to stick out onto the street, partly blocking the way of oncoming traffic.
There were no lights nor any so-called "early warning" reflector devices set anywhere near the dump
truck, front or rear. The dump truck had earlier that evening been driven home by petitioner Armando U.
Carbonel, its regular driver, with the permission of his employer Phoenix, in view of work scheduled to be
carried out early the following morning, Dionisio claimed that he tried to avoid a collision by swerving his
car to the left but it was too late and his car smashed into the dump truck. As a result of the collision,
Dionisio suffered some physical injuries including some permanent facial scars, a "nervous breakdown"
and loss of two gold bridge dentures.LLpr Dionisio commenced an action for damages in the Court of
First Instance of Pampanga basically claiming that the legal and proximate cause of his injuries was the
negligent manner in which Carbonel had parked the dump truck entrusted to him by his employer
Phoenix. Phoenix and Carbonel, on the other hand, countered that the proximate cause of Dionisio's
injuries was his own recklessness in driving fast at the time of the accident, while under the influence of
liquor, without his headlights on and without a curfew pass. The trial court rendered judgment in favor of
Dionisio and against Phoenix and Carbonel. Phoenix and Carbonel appealed to the Intermediate
Appellate Court. That court in CA-G.R. No. 65476 affirmed the decision of the trial court but modified the
award of damages

ISSUE:
Whether Phoenix and Carbonel are negligent is the proximate cause of the accident?

HELD:
Yes, The conclusion that the supreme court draw from the factual circumstances outlined above is that
private respondent Dionisio was negligent the night of the accident. He was hurrying home that night and
driving faster than he should have been. Worse, he extinguished his headlights at or near the intersection
of General Lacuna and General Santos Streets and thus did not see he dump truck that was parked
askew and sticking out onto the road lane. Nonetheless, the court agree with the Court of First Instance
and the Intermediate Appellate Court that the legal and proximate cause of the accident and of
Dionisio's injuries was the wrongful or negligent manner in which the dump truck was parked —
in other words, the negligence of petitioner Carbonel. That there was a reasonable relationship
between petitioner Carbonel's negligence on the one hand and the accident and respondent's injuries on
the other hand, is quite clear. Put in a slightly different manner, the collision of Dionisio's car with the
dump truck was a natural and foreseeable consequence of the truck driver's negligence. We believe,
secondly, that the truck driver's negligence far from being a "passive and static condition" was rather an
indispensable and efficient cause. The collision between the dump truck and the private respondent's car
would in all probability not have occurred had the dump truck not been parked askew without any warning
lights or reflector devices. The improper parking of the dump truck created an unreasonable risk of injury
for anyone driving down General Lacuna Street and for having so created this risk, the truck driver must
be held responsible. In our view, Dionisio's negligence, although later in point of time than the truck
driver's negligence and therefore closer to the accident, was not an efficient intervening or independent
cause. We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate
and proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently
respondent Dionisio may recover damages though such damages are subject to mitigation by the courts
(Article 2179, Civil Code of the Philippines)
Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. Under
Article 2179, the task of a court, in technical terms, is to determine whose negligence — the plaintiff's or
the defendant's — was the legal or proximate cause of the injury. That task is not simply or even primarily
an exercise in chronology or physics, as the petitioners seem to imply by the use of terms like "last" or
"intervening" or "immediate." To accept this proposition is to come too close to wiping out the fundamental
principle of law that a man must respond for the foreseeable consequences of his own negligent act or
omission.
Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his
employer Phoenix in supervising its employees properly and adequately. The respondent appellate court
in effect found, correctly in our opinion, that Phoenix was not able to overcome this presumption of
negligence.
 25. PHILIPPINE BANK OF COMMERCE VS. COURT OF APPEALS
GR. No. 97626 March 14, 1997

FACTS:
Romeo Lipana claims to have entrusted RMC funds in the form of cash totalling P304,979.74 to his
secretary, Irene Yabut, for the purpose of depositing said funds in the current accounts of RMC with
Philippine Bank of Commerce (PBC). They were not credited to RMC's account, but were instead
deposited to Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas. Romeo Lipana never
checked their monthly statements of account reposing complete trust and confidence on PBC. Irene
Yabut's modus operandi was to furnish 2 copies of deposit slip upon and both are always validated and
stamped by the teller Azucena Mabayad. The original showed the name of her husband as depositor and
his current account number - retained by the bank. The duplicate copy was written the account number of
her husband but the name of the account holder was left blank. After validation, Yabut would then fill up
the name of RMC in the space left blank in the duplicate copy and change the account number to RMC's
account number. This went on in a span of more than 1 year without private respondent's knowledge.
Upon discovery of the loss of its funds, RMC demanded from PBC the return of its money and later on
filed in the RTC. The ruling of the RTC was that PBC and Azucena Mabayad are jointly and severally
liable. CA affirmed with modification deleting awards of exemplary damages and attorney's fees.

ISSUE:
What is the proximate cause of the loss, to the tune of P304,979.74, suffered by the private respondent
RMC — petitioner bank's negligence or that of private respondent's?

HELD:
The petition has no merit. We sustain the private respondent.

Negligence is the omission to do something which a reasonable man, guided by those considerations
which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would do. The seventy-eight (78)-year-old, yet still relevant, case of Picart v.
Smith, provides the test by which to determine the existence of negligence in a particular case which may
be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and
caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty
of negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that. Applying the above test, it appears that the bank's teller, Ms.
Azucena Mabayad, was negligent in validating, officially stamping and signing all the deposit slips
prepared and presented by Ms. Yabut, despite the glaring fact that the duplicate copy was not completely
accomplished contrary to the self-imposed procedure of the bank with respect to the proper validation of
deposit slips, original or duplicate, as testified to by Ms. Mabayad herself. Clearly, Ms. Mabayad failed to
observe this very important procedure. The fact that the duplicate slip was not compulsorily required by
the bank in accepting deposits should not relieve the petitioner bank of responsibility. The odd
circumstance alone that such duplicate copy lacked one vital information — that of the name of the
account holder — should have already put Ms. Mabayad on guard. Rather than readily validating the
incomplete duplicate copy, she should have proceeded more cautiously by being more probing as to the
true reason why the name of the account holder in the duplicate slip was left blank while that in the
original was filled up. She should not have been so naive in accepting hook, line and sinker the too
shallow excuse of Ms. Irene Yabut to the effect that since the duplicate copy was only for her personal
record, she would simply fill up the blank space later on. A "reasonable man of ordinary prudence" would
not have given credence to such explanation and would have insisted that the space left blank be filled up
as a condition for validation. Unfortunately, this was not how bank teller Mabayad proceeded thus
resulting in huge losses to the private respondent. Negligence here lies not only on the part of Ms.
Mabayad but also on the part of the bank itself in its lackadaisical selection and supervision of Ms.
Mabayad. Prescinding from the above, public respondent Court of Appeals aptly observed: "xxx xxx xxx It
was in fact only when he testified in this case in February, 1983, or after the lapse of more than seven (7)
years counted from the period when the funds in question were deposited in plaintiffs accounts (May,
1975 to July, 1976) that bank manager Bonifacio admittedly became aware of the practice of his teller
Mabayad of validating blank deposit slips. Undoubtedly, this is gross, wanton, and inexcusable
negligence in the appellant bank's supervision of its employees." It was this negligence of Ms. Azucena
Mabayad, coupled by the negligence of the petitioner bank in the selection and supervision of its bank
teller, which was the proximate cause of the loss suffered by the private respondent, and not the latter's
act of entrusting cash to a dishonest employee, as insisted by the petitioners. Proximate cause is
determined on the facts of each case upon mixed considerations of logic, common sense, policy and
precedent. Vda .de Bataclan v. Medina, reiterated in the case of Bank of the Phil. Islands v. Court of
Appeals, defines proximate cause as "that cause, which, in natural and continuous sequence, unbroken
by any efficient intervening cause, produces the injury, and without which the result would not have
occurred. . . ." In this case, absent the act of Ms. Mabayad in negligently validating the incomplete
duplicate copy of the deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her
fraudulent scheme with impunity. Apropos, once again, is the pronouncement made by the respondent
appellate court, to wit: ". . . Even if Yabut had the fraudulent intention to misappropriate the funds
entrusted to her by plaintiff, she would not have been able to deposit those funds in her husband's current
account, and then make plaintiff believe that it was in the latter's accounts wherein she had deposited
them, had it not been for bank teller Mabayad's aforesaid gross and reckless negligence. The latter's
negligence was thus the proximate, immediate and efficient cause that brought about the loss claimed by
plaintiff in this case, and the failure of plaintiff to discover the same soon enough by failing to scrutinize
the monthly statements of account being sent to it by appellant bank could not have prevented the fraud
and misappropriation which Irene Yabut had already completed when she deposited plaintiff's money to
the account of her husband instead of to the latter's accounts."
WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the amount of
actual damages private respondent is entitled to by 40%. Petitioners may recover from Ms. Azucena
Mabayad the amount they would pay the private respondent. Private respondent shall have recourse
against Ms. Irene Yabut. In all other respects, the appellate court's decision is AFFIRMED. Proportionate
costs. SO ORDERED.

26. PANTRANCO NORTH EXPRESS INC. VS BAESA

GR# 79050-51

FACTS:
Spouses Baesa and Spouses Ico along with their respective children were on their way to Isabela when a
bus owned by Pantranco en route to Manila collided with the formers’ jeepney resulting to the death of the
whole Baesa family with only Maricar barely surviving. The members of the Ico family suffered injuries as
a result. The event prompted Maricar’s guardians to file separate actions for damages arising from quasi-
delict against Pantranco. Pantranco argued that it was the jeepney driver, David Ico, who was negligent
and was therefore, the proximate cause of the accident. The RTC ruled in favor of Baesa. Pantranco
then, raised the same issue to the Court of Appeals who also reaffirmed RTC’s decision.

ISSUE:
Whether or not David Ico was indeed, the proximate cause of the accident by virtue of the doctrine of last
clear chance.

HELD:
NO. It won’t apply with David Ico because he was oblivious of the impending danger. The last clear
chance doctrine can only apply when it is necessary to show that the person who has the last opportunity
to avoid the accident was aware of the peril. Last clear chance doctrine can only be invoked for the
purpose of making the defendant liable to a plaintiff who was guilty of prior or antecedent negligence. It
can also be raised as a defense to defeat or nullify claim for damages.
David Ico was unaware of the peril in this case. He assumed that the Pantranco bus will return to its lane
when it saw their jeepney approaching from the opposite direction.
The petition was hereby denied and the CA’s decision was reaffirmed.
 27. CEBU SHIPYARD AND ENGINEERING WORKS, INC vs. WILLIAM LINES INC
306 SCRA 762

FACTS:
The petitioner, Cebu Shipyard, is a domestic corporation engaged in the business of dry docking and
repairing marine vessels. The respondent, Prudential Guarantee, is a non-life insurance company while
William Lines is engaged in the shipping Business. William Lines is the owner of a luxury passenger-
cargo vessel called M/V Manila City, it was insured with Prudential in the amount of 45m. In 1991, Lines
entered into a contract with Cebu Shipyard for the dry docking and repair of M/V Manila City. The contract
stated that during its repair and drydocking, Cebu shipyard will not be liable for the loss or damage of the
vessel unless it is due to the negligence of its employees and in the case of damage or loss, the liability
will only be limited to 1m pesos. During its repair, the vessel caught fire and sank. Lines filed a case for
damages against Cebu Shipyard, subsequently, in the amended complaint, it impleaded Prudential
Guarantee as one of the defendants. Prudential, by virtue of the insurance policy, gave Lines the
insurance proceeds amounting to 45m. Prudential is then subrogated of the rights of Lines and filed a
case against Cebu shipyard for reimbursement of the said amount. Cebu shipyard invoked the contract
executed with Lines alleging that the liability shall not exceed 1m pesos.

ISSUE:
1. Whether or not the doctrine of res ipsa loquitur applies in this case
2. Whether or not the contract limiting the liability to 1m is valid

HELD:
With regard to the first issue, the court held that the doctrine of res ipsa loquitur applies. The elements of
Res Ipsa Loquitur are as follows, (1) the accident was of such character as to warrant an inference that it
would not have happened except for the defendant’s negligence; (2) the accident must have been caused
by an agency or instrumentality within the exclusive management or control of the person charged with
the negligence complained of; and (3) the accident must not have been due to any voluntary action or
contribution on the part of the person injured. In the case at bar, Cebu Shipyard had complete control
over the vessel at the time of the repair and that had the employees exercised proper diligence, the loss
of the vessel wouldn't have occurred.

With regard to the second issue, the court operates to promote justice and fairplay. Though the contract
between Lines and Cebu Shipyard is valid, the liability limit of 1 million is very inadequate and
unconscientious. The total reimbursement sought by Prudential is 45m which means that Cebu Shipyard
should pay the former said amount.

28. .RADIO COMMUNICATIONS OF THE PHILS., INC. (RCPI). petitioner,

vs. COURT OF APPEALS and LORETO DIONELA, respondents.

FACTS:
The basis of the complaint against the defendant corporation is a telegram sent through its Manila Office
to the offended party, Loreto Dionela, reading as follows:

176 AS JR 1215PM 9 PAID MANDALUYONG JUL 22-66 LORETO DIONELA CABANGAN LEGASPI
CITY
WIRE ARRIVAL OF CHECK FER
LORETO DIONELA-CABANGAN-WIRE ARRIVAL OF CHECK-PER
115 PM
SA IYO WALANG PAKINABANG DUMATING KA DIYAN-WALA-KANG PADALA DITO KAHIT BULBUL
MO

Respondent Loreto Dionela alleges that the defamatory words on the telegram sent to him not only
wounded his feelings but also caused him undue embarrassment and affected adversely his business as
well because other people have come to know of said defamatory words. Defendant corporation as a
defense, alleges that the additional words in Tagalog was a private joke between the sending and
receiving operators and that they were not addressed to or intended for plaintiff and therefore did not form
part of the telegram and that the Tagalog words are not defamatory.

ISSUE:
Whether or not petitioner can be sued under Article 19 and 20 of the Civil Code

RATIO:
Petitioner is a domestic corporation engaged in the business of receiving and transmitting
messages. Everytime a person transmits a message through the facilities of the petitioner, a contract is
entered into. Upon receipt of the rate or fee fixed, the petitioner undertakes to transmit the message
accurately. There is no question that in the case at bar, libelous matters were included in the message
transmitted, without the consent or knowledge of the sender. There is a clear case of breach of contract
by the petitioner in adding extraneous and libelous matters in the message sent to the private respondent.
The proximate cause, therefore, resulting in injury to appellee, was the failure of the appellant to take the
necessary or precautionary steps to avoid the occurrence of the humiliating incident now complained of.
The company had not imposed any safeguard against such eventualities and this void in its operating
procedure does not speak well of its concern for their clientele's interests. Negligence here is very patent.
This negligence is imputable to appellant and not to its employees. Therefore the liability of the defendant
is predicated not only on Article 33 of the Civil Code of the Philippines but on the following articles of said
Code:

ART. 19.- Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.
ART. 20.-Every person who, contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

As a corporation, the petitioner can act only through its employees. Hence the acts of its
employees in receiving and transmitting messages are the acts of the petitioner. To hold that the
petitioner is not liable directly for the acts of its employees in the pursuit of petitioner's business is to
deprive the general public availing of the services of the petitioner of an effective and adequate remedy.
In most cases, negligence must be proved in order that plaintiff may recover. However, since negligence
may be hard to substantiate in some cases, we may apply the doctrine of RES IPSA LOQUITUR (the
thing speaks for itself), by considering the presence of facts or circumstances surrounding the injury.

29. CUSTODIO vs. COURT OF APPEALS

253 SCRA 483 (G.R. No. 116100), February 9, 1996

FACTS:
The private respondent PacificoMabasaowns a parcel of land with a two-door apartment erected thereon
situated at Interior P. Burgos St., Palingon, Tipas, Tagig, Metro Manila. Said property may be described
to be surrounded by other immovables pertaining to petitioners herein. When said property was
purchased by Mabasa, there were tenants occupying the premises and who were acknowledged by
Mabasa as tenants. However, sometime in February,1982, one of said tenants vacated the apartment
and when Mabasa went to see the premises, he saw that there had been built an adobe fence in the first
passageway making it narrower in width. Said adobe fence was first constructed by petitioner Spouses
Lito and Maria Cristina Santos (Santoses) along their property which is also along the first passageway.
Rosalina Morato constructed her adobe fence and even extended said fence in such a way that the entire
passageway was enclosed and it was then that the remaining tenants of said apartment vacated the area.
Mabasa then filed its case for the grant of an easement of right of way against herein petitioners before
the Regional Trial Court (RTC). RTC rendered its decision ordering petitioners to give Mabasa permanent
access – ingress and egress, to the public street; and ordering Mabasa to pay the petitioners the sum of
P8,000 as indemnity for the permanent use of the passageway. Upon appeal, the Court of Appeals
affirmed the RTC’s decision but ordered petitioners to pay Mabasa actual, moral and exemplary
damages.
ISSUE:
WON the CA erred in awarding damages in favor of private respondents.

HELD:
Yes. The mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To
warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the
defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without
wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for
the injury caused by a breach or wrong. There is a material distinction between damages and injury.
Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury;
and damages are the recompense or compensation awarded for the damage suffered. Thus, there can
be damage without injury in those instances in which the loss or harm was not the result of a violation of a
legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain
an action for the injuries of which he complains, he must establish that such injuries resulted from a
breach of duty which the defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal
responsibility by the person causing it. The underlying basis for the award of tort damages is the premise
that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty
and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state
that there should be tort liability merely because the plaintiff suffered some pain and suffering.
In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private
respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the
principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the
following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals,
good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the
plaintiff.

30. METROPOLITAN BANK AND TRUST CO. V. TAN CHUAN LEONG

GR NO. L-46539

FACTS:
Tan Chuan Leong, in his capacity as president of Pan-Philippine Trading Corporation, applied with the
plaintiff bank an overdraft line of P300, 000 to finance its business. There was still an outstanding balance
of P63, 561 and respondent failed to pay despite repeated demands thus the plaintiff filed this case. It
appears that Tan Chuan Leong sold his only know asset a parcel of land including the building and
improvements thereon to his son Gilbert Palanca. The same property was mortgaged to B&I Realty, Inc. It
was also mortgaged to Chen Siy Yuan by way of second mortgage. The sale and mortgages were,
thereafter, sought to be annulled in the action for rescission brought before the Court of First Instance of
Manila. It was alleged in the complaint that both transactions were in fraud of creditors, the sale being
fictitious and simulated and the mortgage entered into in bad faith.

The trial court dismissed the plaintiff's complaint and ordered the plaintiff to pay defendants B & I Realty
Co., Inc. and Chen Siy Yuan, on counterclaim, attorney's fees in the amount of P5,000.00 each, it clearly
appearing that said parties were compelled to litigate and defend themselves against the plaintiff's
unfounded claim against them. It appearing that the mortgage in favor of B & I Realty Co., Inc. had
already been cancelled long before this action was filed, appellant has no cause of action against the
former.

ISSUE:
Is the petitioner entitled to recover damages from B&I Realty Inc?

RULING:
Although the respondent corporation may have had knowledge of the simulated sale between Tan Chuan
Leong and his son and had entered into the contract of mortgage pursuant to a design to defraud Leong's
creditors, no damage or prejudice appears to have been suffered by the petitioner thereby. Absent
damage or prejudice, no right of action arises in favor of the petitioner. Actio non datur non damnificato.
No right of action is given where no injury is sustained. A wrongful violation of a legal right is not a
sufficient element of a cause of action unless it has resulted in an injury causing loss or damages. There
must be, therefore, both wrongful violation and damages. The one without the other is not sufficient

31. YU VS COURT OF APPEALS

G.R. No. 217 SCRA 328

FACTS:
Petitioner, the exclusive distributor of the House of Mayfair wallcovering products in the Philippines, cried
foul when his former dealer of the same goods, herein private respondent, purchased the merchandise
from the House of Mayfair in England through FNF Trading in West Germany and sold said merchandise
in the Philippines. Both the court of origin and the appellate court rejected petitioner's thesis that private
respondent was engaged in a sinister form of unfair competition within the context of Article 28 of the New
Civil Code. Hence, the petition at bar.
There is no dispute that petitioner has had an exclusive sales agency agreement with the House of
Mayfair since 1987 to promote and procure orders for Mayfair wall covering products from customers in
the Philippines. Even as petitioner was such exclusive distributor, private respondent, which was then
petitioner's dealer, imported the same goods via the FNF Trading which eventually sold the merchandise
in the domestic market. In the suit for injunction which petitioner filed before the Regional Trial Court of
the National Capital Judicial Region stationed at Manila, petitioner pressed the idea that he was
practically by-passed and that private respondent acted in concert with the FNF Trading in misleading
Mayfair into believing that the goods ordered by the trading firm were intended for shipment to Nigeria
although they were actually shipped to and sold in the Philippines. Private respondent professed
ignorance of the exclusive contract in favor of petitioner. Even then, private respondent responded by
asserting that petitioner's understanding with Mayfair is binding only between the parties thereto.

ISSUE:
WON private respondent has distributed and continues to sell Mayfair covering products in contravention
of petitioner's exclusive right conferred by the covenant with the House of Mayfair.

HELD:
That the exclusive sales contract which links petitioner and the House of Mayfair is solely the concern of
the privies thereto and cannot thus extend its chain as to bind private respondent herein is, We believe,
beside the point. Verily, injunction is the appropriate remedy to prevent a wrongful interference with
contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is
irreparable.
The right to perform an exclusive distributorship agreement and to reap the profits resulting from such
performance are proprietary rights which a party may protect which may otherwise not be diminished,
nay, rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods from
the supplier to defeat the very purpose for which the exclusive distributorship was conceptualized, at the
expense of the sole authorized distributor.

32. VALENZUELA vs. COURT OF APPEALS

G.R. No. 83122. October 19, 1990

FACTS:
Petitioner Valenzuela is a General Agent of private respondent Philippine American General Insurance
Company, Inc. (PHILAMGEN). He was authorized to solicit and sell in behalf of Philamgen all kinds of
non-life insurance, and in consideration of services rendered was entitled to receive the full agent's
commission of 32.5%.
From 1973 to 1975, Valenzuela solicited marine insurance from one of his clients, the Delta Motors, Inc.
in the amount of P4.4 Million from which he was entitled to a commission of 32%. However, Valenzuela
did not receive his full commission which amounted to P1.6 Million from the P4.4 Million insurance
coverage of the Delta Motors. During the period 1976 to 1978, premium payments amounting to
P1,946,886.00 were paid directly to Philamgen and Valenzuela's commission to which he is entitled
amounted to P632,737.00. In 1977, Philamgen started to become interested in and expressed its intent to
share in the commission due Valenzuela on a fifty-fifty basis. Valenzuela refused. Because of the refusal
of Valenzuela, Philamgen and its officers took drastic action against Valenzuela. All of the acts resulted in
the decline of his business as insurance agent. Then Philamgen terminated the General Agency
Agreement of Valenzuela. The petitioners sought relief by filing the complaint against the private
respondents in the court a quo.
The Regional Trial Court favored Valenzuela with reinstatement, commission with interest, monthly
compensatory damages, moral damages, attorney's fees and cost of suit. However, The Court of Appeals
modified by holding Philamgen and Valenzuela jointly and severally liable for the premium.

ISSUES:
1. Whether or not Philmagen and/or its officers can be held liable for damages due to termination of
the General Agency Agreement it entered into with petitioners.
2. Whether or not the petitioners are liable to Philamgen for the unpaid and uncollected premiums

HELD:
1. YES. termination by them of the General Agency Agreement was tainted with bad faith. Hence, if
a principal acts in bad faith and with abuse of right in terminating the agency, then he is liable in
damages. This is in accordance with the precepts in Human Relations enshrined in our Civil Code that
"every person must in the exercise of his rights and in the performance of his duties act with justice, give
every one his due, and observe honesty and good faith: (Art. 19, Civil Code), and every person who,
contrary to law, wilfully or negligently causes damages to another, shall indemnify the latter for the same
(Art. 20). "Any person who wilfully causes loss or injury to another in a manner contrary to morals, good
customs and public policy shall compensate the latter for the damages" (Art. 21)

2. NO. The principal may not defeat the agent's right to indemnification by a termination of the
contract of agency. Where the principal terminates or repudiates the agent's employment in violation of
the contract of employment and without cause. The agent is entitled to receive either the amount of net
losses caused and gains prevented by the breach, or the reasonable value of the services rendered.
Thus, the agent is entitled to prospective profits which he would have made except for such wrongful
termination provided that such profits are not conjectural, or speculative but are capable of determination
upon some fairly reliable basis.

If a principal violates a contractual or quasi-contractual duty which he owes his agent, the agent may as a
rule bring an appropriate action for the breach of that duty. The agent may in a proper case maintain an
action at law for compensation or damages. The question of whether or not the agency agreement is
coupled with interest is helpful to the petitioners' cause but is not the primary and compelling reason.
Section 77 of the Insurance Code, the remedy for the non-payment of premiums is to put an end to and
render the insurance policy not binding unless premium is paid, an insurance contract does not take
effect since admittedly the premiums have not been paid, the policies issued have lapsed. To sue
Valenzuela for the unpaid premiums would be the height of injustice and unfair dealing. Under Article
2200 of the new Civil Code, "indemnification for damages shall comprehend not only the value of the loss
suffered, but also that of the profits which the obligee failed to obtain."

33. DR. FILOTEO A. ALANO VS. ZENAIDA MAGUID-LOGMAO

G.R. NO. 175540 April 7, 2014
J. PERALTA

Principle: To be entitled to damages, negligence must be proven.

FACTS:
Arnelito Logmao was brought to the East Avenue Medical Center (EAMC) by sidewalk vendors who
allegedly saw him fall from the overpass in Cubao, Quezon City. There, his patient’s data sheet identified
him as Angelito Lugmoso. Considering that his deterioration progressively deteriorated, and no vacancy
was available at the ICU of EAMC, Logmao/Lugmoso was transferred to NationaI Kidney Institute (NKI).
His name was recorded as Angelito Lugmoso at the NKI. There being no relatives around, Jennifer, the
transplant coordinator, was instructed to locate his family by enlisting the assistance of the police and the
media. Dr. Ona, the chairman of the Department of Surgery, observing the severity of the brain injury of
Angelito Lugmoso/Logmao, requested the Laboratory Section to conduct cross-matching and tissue
typing, so that if Angelito expires despite the necessary medical care and management, and found a
suitable organ donor, provided his family would consent to it, his organs could be detached and
transplanted promptly to a compatible beneficiary. Jennifer secured the patient data of Angelito from
EAMC, where he was identified as Angelito Lugmoso of Boni Avenue, Mandaluyong and contacted
several television and radio stations for the purpose of locating the family of Lugmoso. She sought the
assistance of the PNP to locate the whereabouts of Angelito’s family. As proof, the radio and tv stations
she contacted, as well as the pertinent police station, issued Certifications attesting to her effort to locate
Angelito’s family.
Angelito was eventually pronounced dead, hence Dr. Ona set in motion the removal of organs of Angelito
for organ transplantation. He sought permission from the Executive Director, Dr. Filoteo Alano, who
issued a Memorandum approving the transplant as long as all the requisite requirements had been
complied with and the NBI had been informed of the planned transplant.
On March 11, 1988, the NKI issued a press release announcing the successful organ transplant. A cousin
of Angelito heard on the radio that the donor was a certain Angelito Lugmoso who is now at Funeraria
Oro. Sensing a vague resemblance to Arnelito Logmao’s name, she reported it to his mother, Zenaida
Logmao. When they went to the Funeraria Oro to see the remains, it was there that they discovered the
remains of Angelito in a cheap casket. Previously, Arnelito’s sister Arlen reported on March 3, 1988 that
her brother, Arnelito did not return home after seeing a movie in Cubao.
Because of this discovery, Zenaida filed a complaint for damages. Only Dr. Filoteo Albano was held liable
for damages by the RTC. On appeal, the Court of Appeals affirmed the decision with modification, by
reducing the award of moral and exemplary damages, as well as attorney’s fees.

ISSUE:
Whether respondent's sufferings were brought about by petitioner's alleged negligence in granting
authorization for the removal or retrieval of the internal organs of respondent's son who had been
declared brain dead.

HELD:
NO. Petitioner Doctor is not negligent. Petitioner gave authorization for the removal of some of the
internal organs to be transplanted to other patients, he did so in accordance with the letter of the law,
Republic Act (R.A.) No. 349, as amended by Presidential Decree (P.D.) 856, i.e., giving his subordinates
instructions to exert all reasonable efforts to locate the relatives or next of kin of respondent's son.
Announcements were made through radio and television, the assistance of police authorities was sought,
and the NBI Medico-Legal Section was notified. There can be no cavil that petitioner employed
reasonable means to disseminate notifications intended to reach the relatives of the deceased.
It is not petitioner’s fault if respondent failed to immediately receive notice of her son's death because the
notices did not properly state the name or identity of the deceased. The lower courts found that it was the
EAMC, who had the opportunity to ascertain the name of the deceased, who recorded the wrong
information regarding the deceased's identity to NKI. The NKI could not have obtained the information
about his name from the patient, because as found by the lower courts, the deceased was already
unconscious by the time he was brought to the NKI.
The Court held that finding the petitioner liable for damages is improper. It should be emphasized that the
internal organs of the deceased were removed only after he had been declared brain dead; thus, the
emotional pain suffered by respondent due to the death of her son cannot in any way be attributed to
petitioner. Neither can the Court find evidence on record to show that respondent’s emotional suffering at
the sight of the pitiful state in which she found her son’s lifeless body be categorically attributed to
petitioner’s conduct.”

34. DAVAO HOLIDAY TRANSPORT SERVICES CORPORATION VS SPOUSES EULOGIO

G.R. NO. 211424 NOVEMBER 26, 2014

FACTS:
Petitioner is the owner and operator of Holiday taxi No. 177, which figured in an accident while it
was being driven by Orlando Tungal when it bumped Christian. An information for reckless imprudence
resulting in homicide was filed and a separate action for damages and attorney’s fees arising from the
vehicular accident against petitioner and Tungal. The cases were jointly tried upon the parties’
agreement.The RTC found Tungal guilty beyond reasonable doubt. In the civil case, petitioner and Tungal
were ordered to pay the respondents, jointly and severally, civil indemnity, moral damages and attorney’s
fees and litigation expenses. Petitioner appealed the case to the CA arguing that it should be absolved of
any liability, as it exercised extraordinary diligence in the selection and supervision of its drivers, including
tungal. The CA affirmed the decision of the RTC

ISSUE:
Whether or not petitioner should be absolved from liability?

HELD:
No. Article 2180 of the New Civil Code provides that an obligation for damages is demandable not only
for one’s own acts or omissions, but also for those of person for whom he is responsible. Employers, in
particular shall be lible for the damages caused by their employees acting within the scope of their
assigned tasks. Such responsibility shall only cease upon proof that they observed all the diligence of the
good father of a family to prevent damage. When an employee causes damage due to his own
negligence while performing his own duties, there arises the juris tantum presumption that his employer is
negligent, rebuttable only by proof of observance of the diligence of a good father of a family. In the
selection of prospective employees, employers are required to examine them as to their qualifications,
experience and service records. With respect to the supervision of employees, employers must formulate
standard operating procedures, monitor their implementation and impose disciplinary measures for
breaches thereof. These facts must be shown by concrete proof, including documentary evidence.
However in the present case, Holiday did not present documentary proof of Tungal’s qualification,
experience and service records hence the court finds that Holiday had been negligent in the selection and
supervision of it’s driver Tungal.

35. CAGAYAN II ELECTRIC COOPERATIVE, INC. vs. RAPANAN

FACTS:
A motorcycle with 3 passengers figured in a mishap along the National Highway of Maddalero, Buguey,
Cagayan. It was driven by its owner Camilo Tangonan who died from the accident, while his companions
respondent Rapanan and one Erwin Coloma suffered injuries.

Rapanan and Camilo’s common law wife, respondent Mary Gine Tangonan, filed before the RTC of
Aparri, Cagayan a complaint for damages against petitioner. They alleged that while the victims were
traversing the national highway, they were struck and electrocuted by a live tension wire from one of the
electric posts owned by petitioner. They contended that the mishap was due to petitioner’s negligence
when it failed to fix and change said live tension wire despite being immediately informed by residents in
the area that it might pose an immediate danger to persons, animals and vehicles passing along the
national highway.

Petitioner alleged that the typhoons that struck its areas of responsibility caused some of its electric poles
to fall and high tension wires to snap or cut-off which caused brownouts in said areas. It claimed that they
cannot be faulted for negligence if there were electric wires dangling along the national road since they
were caused by typhoons which are fortuitous events. It also alleged that it was able to clear the said
areas of fallen electric poles and dangling or hanging high tension wires immediately after the typhoons,
to secure the safety of persons and vehicles traveling in said areas. It likewise contended that the
proximate cause of the mishap was the victims’ negligence and imprudence in operating and driving the
motorcycle they were riding on.

ISSUE:
Whether or not petitioner’s negligence in maintenance of its facilities is the proximate cause of the death
of Camilo and the injuries of Rapanan

HELD:
No. There is no negligence on the part of petitioner that was allegedly the proximate cause of Camilo’s
death and Rapanan’s injuries. Said wires were quietly sitting on the shoulder of the road, far enough from
the concrete portion so as not to pose any threat to passing motor vehicles and even pedestrians. If the
victims of the mishap were strangled by said wires, it can only mean that since the police found the
motorcycle not on the shoulder but still on the road, that the three passengers were thrown off from the
motorcycle to the shoulder of the road and caught up with the wires. As to how that happened cannot be
blamed on petitioner but should be attributed to Camilo’s over speeding as concluded by the police after it
investigated the mishap.

The motorcycle was probably running too fast that it lost control and started tilting and sliding eventually
which made its foot rest cause the skid mark on the road. Therefore, the mishap already occurred even
while they were on the road and away from petitioner's electric wires and was not caused by the latter as
alleged by respondents. It just so happened that after the motorcycle tilted and slid, the passengers were
thrown off to the shoulder where the electric wires were. This Court hence agrees with the trial court that
the proximate cause of the mishap was the negligence of Camilo. Had Camilo driven the motorcycle at an
average speed, the three passengers would not have been thrown off from the vehicle towards the
shoulder and eventually strangulated by the electric wires sitting thereon. Moreover, it was also negligent
of Camilo to have allowed two persons to ride with him and for Rapanan to ride with them when the
maximum number of passengers of a motorcycle is two including the driver. This most likely even
aggravated the situation because the motorcycle was overloaded which made it harder to drive and
control. When the plaintiff's own negligence was the immediate and proximate cause of his injury, he
cannot recover damages.

36. PHILIPPINE NATIONAL BANK, VS. CARMELITA S. SANTOS

G.R. No. 208293, December 10, 2014

FACTS:
Respondents discovered that their father maintained a premium savings account with Philippine National
Bank,. Later, respondents would discover that their father also had a time deposit with PNB. Respondents
went to PNB to withdraw their father's deposit. Lina B. Aguilar, the Branch Manager of PNB, required
them to submit the following: "(1) original or certified true copy of the Death Certificate of Angel C. Santos;
(2) certificate of payment of, or exemption from, estate tax issued by the BIR; (3) Deed of Extrajudicial
Settlement; (4) Publisher's Affidavit of publication of the Deed of Extrajudicial Settlement; and (5) Surety
bond effective for two (2) years and in an amount equal to the balance of the deposit to be withdrawn.
When respondents had obtained the necessary documents. They tried to withdraw the deposit. However,
Aguilar informed them that the deposit had already "been released to a certain Manimbo." The amount
was released upon presentation of: (a) an affidavit of self-adjudication purportedly executed by one of the
respondents, Reyme L. Santos; (b) a certificate of time deposit; and (c) the death certificate of Angel C.
Santos, among others. A special power of attorney was purportedly executed by Reyme L. Santos in
favor of Manimbo and a certain Angel P. Santos for purposes of withdrawing and receiving the proceeds
of the certificate of time deposit.

ISSUE:
Whether PNB was negligent in releasing the deposit to Manibo.

RULING:
The contractual relationship between banks and their depositors is governed by the Civil Code
provisions on simple loan. Once a person makes a deposit of his or her money to the bank, he or she is
considered to have lent the bank that money. The bank becomes his or her debtor, and he or she
becomes the creditor of the bank, which is obligated to pay him or her on demand. The default standard
of diligence in the performance of obligations is "diligence of a good father of a family." Other industries,
because of their nature, are bound by law to observe higher standards of diligence. banking is a business
that is impressed with public interest. It affects economies and plays a significant role in businesses and
commerce. This is why we have recognized the fiduciary nature of the banks' functions, and attached a
special standard of diligence for the exercise of their functions. Petitioners PNB and Aguilar's treatment of
Angel C. Santos' account is inconsistent with the high standard of diligence required of banks. They
accepted Manimbo's representations despite knowledge of the existence of circumstances that should
have raised doubts on such representations. As a result, Angel C. Santos' deposit was given to a person
stranger to him. Petitioners PNB and Aguilar disregarded their own requirements for the release of the
deposit to persons claiming to be heirs of a deceased depositor.

37. R TRANSPORT CORPORATION, Petitioner, vs. LUISITO G. YU, Respondent.

G.R. No. 174161, February 18, 2015

Facts:
Loreta, after having alighted from a passenger bus, was hit and run over by a bus driven by Gimena, who
was then employed by petitioner R Transport Corporation. Loreta was immediately rushed to the hospital
where she was pronounced dead on arrival. As testified by the police officer on duty at the time of the
incident and indicated in the Autopsy Report, the deceased’s clothes were ripped off from her body, her
brain even spewed out from her skull and spilled over the road. The bus driven by Gimena bumped the
deceased in a loading and unloading area of a commercial center.
The husband of the deceased, respondent Luisito, filed a Complaint for damages before the RTC against
petitioner R Transport, Gimena, and Metro Manila Transport Corporation (MMTC) for the death of his
wife.

MMTC denied its liability reasoning that it is merely the registered owner of the bus involved in the
incident, the actual owner, being petitioner R Transport. Since it was not actually operating the bus which
killed respondent’s wife, nor was it the employer of the driver thereof, MMTC alleged that the complaint
against it should be dismissed. For its part, petitioner R Transport alleged that respondent had no cause
of action against it for it had exercised due diligence in the selection and supervision of its employees and
drivers and that its buses are in good condition. Meanwhile, the driver Gimena was declared in default for
his failure to file an answer to the complaint.

After trial on the merits, the trial court rendered judgment in favor of respondent Luisito ruling that
petitioner R Transport failed to prove that it exercised the diligence required of a good father of a family in
the selection and supervision of its driver. The RTC ordered defendants R Transport and Metro Manila
Transport Corporation (MMTC) to be primarily and solidarily liable and defendant Gimena subsidiarily
liable to plaintiff Luisito. The CA affirmed the Decision of the RTC with modification that defendant
Antonio Gimena is made solidarily liable for the damages caused to respondent.

ISSUE:
Is the petitioner liable for the damages caused by its employee?

RULING:
The petitioner is liable for the damages caused by its employee. Negligence has been defined as "the
failure to observe for the protection of the interests of another person that degree of care, precaution, and
vigilance which the circumstances justly demand, whereby such other person suffers injury." Verily,
foreseeability is the fundamental test of negligence. It is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or
the doing of something which a prudent and reasonable man would not do.

Under Article 2180 of the New Civil Code, employers are liable for the damages caused by their
employees acting within the scope of their assigned tasks. Once negligence on the part of the employee
is established, a presumption instantly arises that the employer was remiss in the selection and/or
supervision of the negligent employee. To avoid liability for the quasi-delict committed by its employee, it
is incumbent upon the employer to rebut this presumption by presenting adequate and convincing proof
that it exercised the care and diligence of a good father of a family in the selection and supervision of its
employees.

Unfortunately, however, the records of this case are bereft of any proof showing the exercise by petitioner
of the required diligence. As aptly observed by the CA, no evidence of whatever nature was ever
presented depicting petitioner’s due diligence in the selection and supervision of its driver, Gimena,
despite several opportunities to do so. In fact, in its petition, apart from denying the negligence of its
employee and imputing the same to the bus from which the victim alighted, petitioner merely reiterates its
argument that since it is not the registered owner of the bus which bumped the victim, it cannot be held
liable for the damage caused by the same. Nowhere was it even remotely alleged that petitioner had
exercised the required diligence in the selection and supervision of its employee. Because of this failure,
petitioner cannot now avoid liability for the quasi-delict committed by its negligent employee.

38. UNKNOWN OWNER OF THE VESSEL M/V CHINA JOY VS ASIAN TERMINALS, INC.
G.R. NO. 195661

FACTS:
Under the Charter Party Agreement over M/V "China Joy," ContiQuincyBunge represented itself
as the Charterer of the Vessel, with San Miguel Foods, Inc. as Co-Charterer, and defendant [Samsun]
represented itself as the Agent of the Shipowners. Samsun is a foreign corporation not doing business in
the Philippines. On 3 February 1997 ATI used its Siwertell Unloader No. 2 to unload the soybean meal
from the Vessel's Hold No. 2. The Siwertell Unloader is a pneumatic vacubator that uses compressed gas
to vertically move heavy bulk grain from within the hatch of the ship in order to unload it off the ship.
DcHaET The unloading operations were suddenly halted when the head of Unloader No. 2 hit a flat low-
carbon or "mild" steel bar measuring around 8 to 10 inches in length, 4 inches in width, and 1 1/4 inch in
thickness that was in the middle of the mass of soybean meal. The flat steel bar lodged itself between the
vertical screws of Unloader No. 2, causing portions of screw numbers 2 and 3 to crack and be sheared off
under the torsional load. According to the quotation of BMH Marine AB Sweden, the sole manufacturer of
Siwertell unloaders, the replacement cost of each screw is US$12,395.00 or US$24,790.00 for the 2
screws plus freight. The labor cost to remove and reassemble the screws is estimated at US$2,000.00.
ATI sent a Note of Protest to the Master of the Vessel for the damages sustained by its unloading
equipment as a result of encountering the flat steel bar among the soybean meal. However, the Vessel's
Master wrote a note on the Protest stating that it is not responsible for the damage because the metal
piece came from the cargo and not from the vessel itself. Defendants argued that since the metal foreign
object was found in the middle of the cargo, it could not have come from the bottom of the hatch because
the hatch had been inspected and found clean prior to loading. Defendants further averred that neither
could the metal bar have been part of the Vessel that had broken off and fallen into the hatch because
tests conducted on the metal piece revealed that said metal bar was not part of the Vessel. Defendants
concluded that the metal bar could only have been already co-mingled with the soybean meal upon
loading by ContiQuincyBunge at loadport, and, therefore, defendants are not liable for the damages
sustained by the unloader of ATI.

ISSUE:
Whether or not there is no contract of carriage between the petitioners and ATI

RULING:
There is no contract of carriage between ATI, on one hand, and the shipowner, Samsun,
ContiQuincyBunge L.L.C., and Inter-Asia, on the other. It likewise bears stressing that the subject of the
complaint, from which the instant petition arose, is not the damage caused to the cargo, but to the
equipment of an arrastre operator. Further, ATI's contractual relation is not with the petitioners, but with
the consignee and with the Philippine Ports Authority (PPA). In Insurance Company of North America v.
Asian Terminals, Inc., 30 the Court explained that the liabilities of the arrastre operator for losses and
damages are set forth in the contract for cargo handling services it had executed with the PPA. Corollarily
then, the rights of an arrastre operator to be paid for damages it sustains from handling cargoes do not
likewise spring from contracts of carriage.However, in the instant petition, the contending parties make no
references at all to any provisions in the contract for cargo handling services ATI had executed with the
PPA.
 39. EASTERN SHIPPING LINES, INC. v. BPI/MS INSURANCE CORP., & MITSUI SUMITOMO
INSURANCE CO., LTD.
G.R. No. 182864; January 12, 2015
Perez, J.

FACTS:
On two instances in 2004, Sumitomo Corp. shipped several steel sheets on board the vessel M/V
“Eastern Venus 22” owned by petitioner Eastern Shipping Lines, Inc. (ESLI) The shipments were
consigned to Calamba Steel Center, Inc. and insured with the respondents BPI/MS Insurance Corp. and
Mitsui Sumitomo Insurance Co., Ltd. against all risks. In all, the 77 steel sheets were delivered to shipper
ESLI.
In both occasions, when the shipment arrived in South Harbor, Manila, damages were discovered
in several steel sheets. It was declared in the bills of lading issued by ESLI that part of the shipment was
damaged and was in bad order condition, prompting Calamba Steel to reject the damaged shipment for
being unfit for the intended purpose.
Calamba Steel attributed the damages to both shipments to ESLI as the carrier and Asian
Terminals, Inc. (ATI) as the arrastre operator. Upon demand by Calamba Steel, ESLI and ATI refused to
pay, Calamba Steel filed an insurance claim for the total amount of the cargo against BPI/MS and Mitsui
as cargo insurers. The insurers then became subrogated to the rights of Calamba Steel.
Respondents insurance companies filed an action against ESLI and ATI. ESLI averred that the
damage to the shipments was incurred while in the possession and custody of ATI and Calamba Steel.
ATI also denied the allegations and insisted that the coils in two shipments were already damaged upon
receipt from ESLI’s vessels.
The Regional Trial Court found both ESLI and ATI liable for the damages. ESLI and ATI filed their
respective appeals before the Court of Appeals.
ESLI questioned the ruling on its liability since the survey reports indicated that the cause of loss
and damage was due to the “rough handling of ATI’s stevedores during discharge from vessel to shore
and during loading operation onto the trucks.” ATI argued that the RTC made an error when it ruled that
ATI’s employees were negligent in the handling of the shipments.

The CA absolved ATI from liability, but maintained the liability of ESLI. Hence, the sole petition by ESLI.

ISSUE:
Whether or not Eastern Shipping is liable for the damaged goods over its negligent handling of the
cargoes.

HELD:
YES. It is generally recognized that a tort may involve acts which also constitute a breach of contract, so
that an action for tort will lie notwithstanding the act complained of would also be ground for an action ex
contractu. Hence, there is dual liability in tort and contract. Under this rule, it has been held that
accompanying every contract there is a duty to perform with care, skill, reasonable expedience, and
faithfulness the thing agreed to be done. The negligent failure to observe any of these conditions is a tort,
as well as a breach of contract.
Under the Civil Code, Article 1734 prescribes the general rule on the liability of common carriers
in the delivery of goods. Except for the five circumstances stated therein, common carriers are
responsible for loss, destruction or deterioration of the goods. It is because from the nature of their
business and on public policy considerations, common carriers are bound to observe extraordinary
diligence in the goods transported by them. This extraordinary responsibility lasts from the time the goods
are unconditionally placed in the possession of, and received by the carrier for transportation until the
same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a
right to receive them.
In the case at bar, ESLI bases its non-liability on the survey reports prepared by Mario Manuel,
witness of respondent BPI/MS, who found that the cause of damage was the rough handling on the
shipment by the stevedores of ATI. However, Manuel does not absolve ESLI of liability. The witness in
fact included ESLI in the findings of negligence, when he stated that "During the [discharge of goods], the
employees and forklift operators of ESLI and ATI were very negligent in the handling of the subject
cargoes."
Equally important and cannot be disregarded is the actual condition of the cargoes upon arrival
prior to discharge. This fact is crucial point in determining liability of either or both ESLI and ATI.
Unfortunately, there is lack of determination whether the cargo was in a good order condition
when Rodrigo Victoria, a cargo surveyor, surveyed the cargoes on board the vessel as well as the
manner the ATI employees discharged the coils. ESLI cannot invoke its non-liability solely on the manner
the cargo was discharged and unloaded.
Nonetheless, the bill of lading by ESLI showed that during the first shipment, two Turn Over
Surveys of Bad Order Cargoes reported that "some coils from the two shipments were partly dented and
crumpled." The second shipment has a Turn Over Survey, reflecting "four coils and one skid were partly
dented and crumpled prior to turnover by ESLI to ATI’s possession."
Calamba Steel requested for a re-examination of the damages sustained by the two shipments.
These surveys showed that for the first and second shipments, four coils and eleven coils, respectively,
were damaged prior to turnover to ATI.
Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad
order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no
adequate explanation is given as to how the deterioration, loss, or destruction of the goods happened, the
transporter shall be held responsible. From the foregoing, the fault is attributable to ESLI.

40. BJDC CONSTRUCTION, REPRESENTED BY ITS MANAGER/PROPRIETOR JANET S. DELA

CRUZ, Petitioner,
vs.
NENA E. LANUZO, CLAUDETTE E. LANUZO, JANET E. LANUZO, JOAN BERNABE E. LANUZO,
and RYAN JOSEE. LANUZO, Respondent.
G.R. No. 161151

FACTS:
Nena E. Lanuzo (Nena) filed a complaint for damages1 against BJDC Construction, who was the the
contractor of the re-blocking project to repair the damaged portion of one lane of the national highway at
San Agustin, Pili, Camarines Sur from September 1997to November 1997. Nena alleged that she was the
surviving spouse of the late Balbino Lazuno who figured in an accident that transpired at the site of the re
– blocking on October 30, 1997 when his motorcycle sideswiped the road barricade placed by the
company and that the company’s failure to place illuminated warning signs on the site of the project,
especially during night time, was the proximate cause of the death of Balbino. She prayed that the
company be held liable for damages. The company insisted that the death of Balbino was an accident
brought about by his own negligence, as confirmed by the police investigation report. Thus, it sought the
dismissal of the complaint and prayed, by way of counterclaim, that the Nena be ordered to pay
P100,000.00 as attorney’s fees, as well as moral damages to be proven in the course of trial. RTC
rendered judgment in favour of the company because the plaintiffs were unable to make out a case for
damages with preponderance of evidence. CA reversed and set aside decision of RTC. CA ruled that the
elements for the application of the doctrine of res ipsa loquitur were present, namely: (1) the accident was
of such character as to warrant an inference that it would not have happened except for the defendant’s
negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive
management or control of the person charged with the negligence complained of; and (3) the accident
must not have been due to any voluntary action or contribution on the part of the person injured.

ISSUE:
W/N the Lanuzo heirs were able to establish by preponderance of evidence that the negligence on the
part of the company was the proximate cause of the fatal accident of Balbino

HELD:
No, upon a review of the records, the Court affirms the findings of the RTC, and rules that the Lanuzo
heirs, the parties carrying the burden of proof, did not establish by preponderance of evidence that the
negligence on the part of the company was the proximate cause of the fatal accident of Balbino. In order
that a party may be held liable for damages for any injury brought about by the negligence of another, the
claimant must prove that the negligence was the immediate and proximate cause of the injury. Proximate
cause is defined as "that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury and without which the result would not have occurred." 20 Also, the
doctrine of res ipsa loquitur had no application here. Based on the evidence adduced by the Lanuzo
heirs, negligence cannot be fairly ascribed to the company considering that it has shown its installation of
the necessary warning signs and lights in the project site. In that context, the fatal accident was not
caused by any instrumentality within the exclusive control of the company. In contrast, Balbino had the
exclusive control of how he operated and managed his motorcycle. The records disclose that he himself
did not take the necessary precautions. The RTC was correct on its conclusions and findings that the
company was not negligent in ensuring safety at the project site. All the established circumstances
showed that the proximate and immediate cause of the death of Balbino was his own negligence. Hence,
the Lanuzo heirs could not recover damages.32
* The party alleging the negligence of the other as the cause of injury has the burden to establish the
allegation with competent evidence. If the action based on negligence is civil in nature, the proof required
is preponderance of evidence.

41. VICENTE JOSEFA, petitioner, vs. MANILA ELECTRIC COMPANY, respondent.

G.R. No. 182705. July 18, 2014.

FACTS:
At around 1:45 p.m. on April 21, 1991, a dump truck, a jeepney and a car figured in a vehicular accident
along Ortigas Avenue, Pasig City. As a result of the accident, a 45-foot wooden electricity post, 3 75 KVA
transformers, and other electrical line attachments were damaged. Upon investigation, Meralco
discovered that it was a truck registered in Josefa's name that hit the electricity post. Meralco demanded
from Josefa reimbursement for the replacement cost of the electricity post and its attachments, but Josefa
refused to pay. Thus, Meralco sued Josefa and Pablo Manoco, the truck driver, for damages before the
RTC of Pasig City.

In its complaint, Meralco alleged that (Bautista) Manoco's reckless driving resulted in damage to its
properties. It also imputed primary liability on Josefa for his alleged negligence in the selection and
supervision of Manoco. The RTC dismissed the complaint for insufficiency of evidence. The RTC held
that Meralco failed to establish that it was the truck that hit the electricity post. The RTC ruled that SPO2
Galang's account of the accident was merely hearsay since he did not personally witness the incident. It
also did not give probative value to the police blotter entry dated January 7, 1994 since the accident had
long occurred in 1991.

The CA reversed the RTC ruling and held that the RTC erred in disregarding the parties ‘stipulation at the
pre-trial that it was the truck that hit the electricity post. The CA also found that Bautista was Josefa's
employee when the accident occurred since Josefa did not specifically deny this material allegation in the
amended complaint. It likewise noted that the sheriff's return stated that Bautista was under Josefa's
employ until 1993. The CA concluded that the fact that the truck hit the electricity post was sufficient to
hold Josefa vicariously liable regardless of whether Bautista was negligent in driving the truck. In the
same breath, the CA also stated that the employer's presumptive liability in quasi-delicts was anchored on
injuries caused by the employee's negligence. Even assuming that Bautista was not Josefa's employee,
the CA maintained that Josefa would still be liable for damages since the law presumes that the
registered owner has control of his vehicle and its driver at the time of the accident. It thus ordered Josefa
to pay Meralco. Josefa filed the present petition after the CA denied his motion for reconsideration.

ISSUE/S:

(1) Whether or not Bautista exercised due diligence in driving when the truck hit the electricity post;
(2) Whether or not Josefa was the employer of driver Bautista being the registered owner of the vehicle
making the former vicariously liable for the latter’s negligence under paragraph 5, Article 2180 of the Civil
Code;
(3) Whether Meralco is entitled to actual damages, attorney's fees, and expenses of litigation.
HELD:
(1) Bautista did not exercise due diligence. Bautista's negligence was the proximate cause of the property
damage caused to Meralco. Bautista is presumed to be negligent in driving the truck under the doctrine of
res ipsa loquitur. Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. This fault or negligence, if there is no pre-existing contractual
relation between the parties, is called quasi-delict. Thus, for a quasi-delict case to prosper, the
complainant must establish: (1) damages to the complainant; (2) negligence, by act or omission, of the
defendant or by some person for whose acts the defendant must respond, was guilty; and (3) the
connection of cause and effect between such negligence and the damages. With respect to the third
element, the negligent act or omission must be the proximate cause of the injury. Contrary to the CA's
finding, the parties did not stipulate that the truck hit the electricity post. The pre-trial order shows that the
parties merely agreed that the truck "was involved in an accident on April 21, 1991. Nonetheless, Meralco
has sufficiently established the direct causal link between the truck and the electricity post through Abio's
testimony. Abio categorically stated during trial that he saw the truck hit the electricity post. We find his
first-hand account of the incident during the direct examination frank and straightforward. Even without
Abio's testimony, it does not escape this Court's attention that Josefa judicially admitted in his motions
and pleading that his truck hit the electricity post. These statements constitute deliberate, clear and
unequivocal admissions of the causation in fact between the truck and the electricity post.

Contrary to the CA's opinion, the finding that it was the truck that hit the electricity post would not
immediately result in Josefa's liability. It is a basic rule that it is essentially the wrongful or negligent act or
omission that creates the vinculum juris in extra-contractual obligations. In turn, the employee’s
negligence established to be the proximate cause of the damage would give rise to the disputable
presumption that the employer did not exercise the diligence of a good father of a family in the selection
and supervision of the erring employee. The procedural effect of res ipsa loquitur in quasi-delict cases is
that the defendant’s negligence is presumed. For this doctrine to apply, the complainant must show that:
(1) the accident is of such character as to warrant an inference that it would not have happened except
for the defendant’s negligence; (2) the accident must have been caused by an agency or instrumentality
within the exclusive management or control of the person charged with the negligence complained of; and
(3) the accident must not have been due to any voluntary action or contribution on the part of the person
injured. The present case satisfies all the elements of res ipsa loquitur. It is very unusual and
extraordinary for the truck to hit an electricity post, an immovable and stationary object, unless Bautista,
who had the exclusive management and control of the truck, acted with fault or negligence.

We cannot also conclude that Meralco contributed to the injury since it safely and permanently installed
the electricity post beside the street. Thus, in Republic v. Luzon Stevedoring Corp., we imputed vicarious
responsibility to Luzon Stevedoring Corp. whose barge rammed the bridge, also an immovable and
stationary object.

(2) YES. Josefa is vicariously liable under paragraph 5, Article 2180 of the Civil Code because there is an
employer-employee relations between Bautista and Josefa, and Josefa failed to show that he exercised
the diligence of a good father of a family in the selection and supervision of Bautista.

The finding that Bautista acted with negligence in driving the truck gives rise to the application of
paragraph 5, Article 2180 of the Civil Code which holds the employer vicariously liable for damages
caused by his employees within the scope of their assigned tasks.

In the present case, Josefa avoids the application of this provision by denying that Bautista was his
employee at the time of the incident. Josefa cannot evade his responsibility by mere denial of his
employment relations with Bautista in the absence of proof that his truck was used without authorization
or that it was stolen when the accident occurred. In quasi-delict cases, the registered owner of a motor
vehicle is the employer of its driver in contemplation of law. The registered owner of any vehicle, even if
not used for public service, would primarily be responsible to the public or to third persons for injuries
caused while the vehicle was being driven on highways or streets.
In order for Josefa to be relieved of his vicarious liability, he must show that he exercised due diligence in
the selection and supervision of Bautista. In concrete terms, Josefa should show by competent object or
documentary evidence that he examined Bautista as to the latter's qualifications, experience and service
records prior to employment. He should likewise prove by competent objector documentary evidence that
he formulated standard operating procedures, monitored their implementation and imposed disciplinary
measures for breach of these procedures. However, Josefa failed to overcome the presumption of
negligence against him since he waived his right to present evidence during trial.

(3) Meralco is only entitled to temperate damages with interest at legal rate. Notwithstanding Josefa's
vicarious liability, Meralco failed to point out the specific facts that afford a basis for its claim for actual
damages. Actual damages cannot be presumed; they must be pleaded and proven in court in order to be
recoverable. One is entitled to an adequate compensation only for the pecuniary loss that he has
adequately proved based upon competent proof and on the best evidence obtainable by him. We cannot
give weight to Exhibit "D" as to the amount of actual damages for being hearsay. Exhibit "D" constitutes
hearsay evidence since it was derived on alleged pieces of documentary evidence that were not identified
and authenticated in court during trial.

Meralco is entitled to temperate damages because it clearly suffered pecuniary loss as a result of
Bautista and Josefa's negligence. When the court finds that some pecuniary loss has been suffered but
the amount cannot, from the nature of the case, be proven with certainty, the court may award temperate
damages in the exercise of its sound discretion. Considering the attendant circumstances of this case, we
find the amount of P200, 000.00 to be a fair and sufficient award byway of temperate damages. Meralco
is not entitled to attorney's fees and expenses of litigation. The CA likewise erred in awarding Meralco
attorney's fees and expenses of litigation without explaining its basis. In Buan v.Camaganacan, we held
that the text of the decision should state the reason why attorney's fees are being awarded; otherwise, the
award should be disallowed. Besides, no bad faith has been imputed to Josefa that would warrant the
award of attorney's fees under Article 2208 (5) of the Civil Code. It isa settled rule that attorney's fees
shall not be recovered as cost where the party's persistence in litigation is based on his mistaken belief in
the righteousness of his cause. There is also no factual, legal, or equitable justification that would justify
the Court's award of attorney's fees under Article2208 (11) of the Civil Code.

Finally, we impose an interest rate of 6% per annum on temperate damages pursuant to theguidelines
enunciated in Eastern Shipping Lines v. CA, as modified by Nacar v. Gallery Frames.

42. INDOPHIL TEXTILE MILLS, INC. vs ENGR. SALVADOR ADVIENTO

GR. No. 171212; August 4, 2012

FACTS:
Indophil Textile Mills, Inc hired respondent Engr. Salvador Adviento as Civil Engineer to maintain its
facilities. Respondent consulted a physician due to recurring weakness and dizziness. Few days later, he
was diagnosed with Chronic Poly Sinusitis, and thereafter, with moderate, severe and persistent Allergic
Rhinitis. Accordingly, respondent was advised by his doctor to totally avoid house dust mite and textile
dust as it will transmute into health problems. Distressed, respondent filed a complaint against petitioner
with the National Labor Relations Commission for alleged illegal dismissal and for the payment of
backwages, separation pay, actual damages and attorney’s fees. Subsequently, respondent filed another
Complaint with the Regional Trial Court of Cagayan, alleging that he contracted such occupational
disease by reason of the gross negligence of petitioner to provide him with a safe, healthy and workable
environment. Respondent averred that, being the only breadwinner in the family, he made several
attempts to apply for a new job, but to his dismay and frustration, employers who knew of his present
health condition discriminated against him and turned down his application. petitioner filed a Motion to
Dismiss on the ground that: (1) the RTC has no jurisdiction over the subject matter of the complaint
because the same falls under the original and exclusive jurisdiction of the Labor Arbiter under the Labor
Code; and (2) there is another action pending with the Regional Arbitration Branch III of the NLRC in
Pampanga, involving the same parties for the same cause. RTC issued a Resolution denying the
aforesaid Motion and sustaining its jurisdiction over the instant case. It held that petitioner’s alleged failure
to provide its employees with a safe, healthy and workable environment is an act of negligence, a case of
quasi-delict. As such, it is not within the jurisdiction of the LA under Article the Labor Code. On the matter
of dismissal based on lis pendencia, the RTC ruled that the complaint before the NLRC has a different
cause of action which is for illegal dismissal and prayer for backwages, actual damages, attorney’s fees
and separation pay due to illegal dismissal while in the present case, the cause of action is for quasi-
delict. Petitioner filed a motion for reconsideration thereto, which was likewise denied. He then filed a
Petition for Certiorari with the CA on the ground that the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction but was dismissed for lack of merit.

ISSUE:
Whether or not there is a cause of action for quasi- delict in this case in order for RTC to have jurisdiction
over the case?

HELD:
The court ruled that the jurisdiction rests on the regular courts. According to the Court, not all claims
involving employees can be resolved solely by labor courts, specifically when the law provides otherwise.
The Court formulated the “reasonable causal connection rule,” wherein if there is a reasonable causal
connection between the claim asserted and the employer-employee relations, then the case is within the
jurisdiction of the labor courts; and in the absence thereof, it is the regular courts that have jurisdiction. In
the case at bar, Adviento's claim for damages is specifically grounded on Indophil's gross negligence to
provide a safe, healthy and workable environment for its employees –a case of quasi-delict. The Court
ascertained this from reading the complaint, which enumerated the acts and/or omissions of Indophil
relative to the conditions in the workplace. It is a basic tenet that jurisdiction over the subject matter is
determined upon the allegations made in the complaint, irrespective of whether or not the plaintiff is
entitled to recover upon the claim asserted therein, which is a matter resolved only after and as a result of
a trial. Neither can jurisdiction of a court be made to depend upon the defenses made by a defendant in
his answer or motion to dismiss. In this case, a perusal of the complaint would reveal that the subject
matter is one of claim for damages arising from quasi-delict, which is within the ambit of the regular
court's jurisdiction. Adviento alleges that due to the continued and prolonged exposure to textile dust
seriously inimical to his health, he suffered work-contracted disease which is now irreversible and
incurable, and deprived him of job opportunities. Clearly, injury and damages were allegedly suffered by
respondent, an element of quasi-delict. It also bears stressing that respondent is not praying for any relief
under the Labor Code of the Philippines. He neither claims for reinstatement nor backwages or
separation pay resulting from an illegal termination. The cause of action herein pertains to the
consequence of petitioner’s omission which led to a work-related disease suffered by respondent,
causing harm or damage to his person. Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts. Where the resolution of the dispute
requires expertise, not in labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil law, such claim falls outside the
area of competence of expertise ordinarily ascribed to the LA and the NLRC. The RTC has jurisdiction
over the subject matter of respondent’s complaint praying for moral damages, exemplary damages,
compensatory damages, anchored on petitioner’s alleged gross negligence in failing to provide a safe
and healthy working environment for respondent.

43. NEDLLOYD LIJNEN B.V. ROTTERDAM AND THE EAST ASIATIC CO., VS. GLOW LAKS
ENTERPRISES, LTD.

FACTS:
Glow Laks Enterprises Ltd., (respondent) a foreign corporation not doing business business in the
Philippines, filed a complaint against Nedlloyd Lijnen B.V. Rotterdam, a foreign corporation doing
business in the Philippines thru its local ship agent, East Asiatic Co. Ltd, (petitioners) for the recovery of
the amount of US$53,640.00. According to the respondent, it loaded on the ship of petitioners (M/S
Scandutch) 343 cartoons of garments for pre-carriage to Hongkong. Thereat, it was transferred to
another ship of the petitioners, M/S Amethyst, for final carriage to the Port of Colon, Panama, to be
released to the consignee, Pierre Kasem, International, S.A. upon presentation of the original copies of
the covering bills of lading. Upon arrival at the Port of Colon, petitioners informed consignee of the arrival
of the shipments, and custody was turned over to the National Ports Authority in accordance with
Panamanian laws, customs regulations and practice of trade in Panama. However, the shipment was
released to unauthorised persons who managed to forge the covering bills of lading, on the basis of which
the ports authority released the shipment. In their answer, the petitioners denied liability for the loss.
They discharged the goods in good order and condition into the custody of the National Ports Authority in
accordance with the laws of Panama, and their extraordinary responsibility as a common carrier ceased
at the time the possession of the goods were turned over to the port authorities.
On appeal to the CA, however, the latter reversed the RTC decision. It ruled that Panamanian law was
not proven in accordance with Section 24, Rule 132 of the Rules of Court, thus it cannot be given full faith
and credit. For failure to prove the foreign law, it is presumed that foreign laws are the same as our local
or domestic or internal law under the doctrine of processual presumption. Under the New Civil Code, the
discharge of the goods into the custody of the ports authority therefore does not relieve the common
carrier from liability because the extraordinary responsibility of the common carriers lasts until actual or
constructive delivery of the cargoes to the consignee or to the person who has the right to receive them.
Absent any proof that the notify party or the consignee was informed of the arrival of the goods, the
appellate court held that the extraordinary responsibility of common carriers remains.
The petitioners elevated the case to the Supreme Court via petition for review on certiorari.

ISSUE:
Whether the petitioners were able to prove Panamanian foreign law thus absolving them of liability as
common carrier for the loos of the goods.

HELD:
We find the petition bereft of merit.
While petitioners concede that, as a common carrier, they are bound to observe extraordinary diligence in
the care and custody of the goods in their possession, they insist that they cannot be held liable for the
loss of the shipments, their extraordinary responsibility having ceased at the time the goods were
discharged into the custody of the customs arrastre operator, who in turn took complete responsibility
over the care, storage and delivery of the cargoes.
In contrast, respondent, submits that the fact that the shipments were not delivered to the consignee as
stated in the bill of lading or to the party designated or named by the consignee, constitutes misdelivery
thereof, and under the law it is presumed that the common carrier is at fault or negligent if the goods they
transported, as in this case, fell into the hands of persons who have no right to receive them.
We sustain the position of the respondent.
Article 1736 and Article 1738 are the provisions in the New Civil Code which define the period when the
common carrier is required to exercise diligence lasts, viz:
Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the same
are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right
to receive them, without prejudice to the provisions of article 1738.
Article 1738. The extraordinary liability of the common carrier continues to be operative even during the
time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has
been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or
otherwise dispose of them.
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common
carrier begins from the time the goods are delivered to the carrier. ⁠ This responsibility remains in full force
and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner
exercises the right of stoppage in transitu, and terminates only after the lapse of a reasonable time for the
acceptance, of the goods by the consignee or such other person entitled to receive them.⁠
It was further provided in the same statute that the carrier may be relieved from the responsibility for loss
or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee
or to the person who has the right to receive them.⁠ In sales, actual delivery has been defined as the
ceding of the corporeal possession by the seller, and the actual apprehension of the corporeal
possession by the buyer or by some person authorized by him to receive the goods as his representative
for the purpose of custody or disposal.⁠ By the same token, there is actual delivery in contracts for
the transport of goods when possession has been turned over to the consignee or to his duly
authorized agent and a reasonable time is given him to remove the goods.
In this case, there is no dispute that the custody of the goods was never turned over to the consignee or
his agents but was lost into the hands of unauthorized persons who secured possession thereof on the
strength of falsified documents. The loss or the misdelivery of the goods in the instant case gave rise to
the presumption that the common carrier is at fault or negligent.
A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary
vigilance over the goods it transported.⁠ When the goods shipped are either lost or arrived in
damaged condition, a presumption arises against the carrier of its failure to observe that
diligence, and there need not be an express finding of negligence to hold it liable.⁠ To overcome
the presumption of negligence, the common carrier must establish by adequate proof that it
exercised extraordinary diligence over the goods.⁠ It must do more than merely show that some
other party could be responsible for the damage.⁠
In the present case, petitioners failed to prove that they did exercise the degree of diligence required by
law over the goods they transported. Indeed, aside from their persistent disavowal of liability by
conveniently posing an excuse that their extraordinary responsibility is terminated upon release of the
goods to the Panamanian Ports Authority, petitioners failed to adduce sufficient evidence they exercised
extraordinary care to prevent unauthorized withdrawal of the shipments. Nothing in the New Civil Code,
however, suggests, even remotely, that the common carriers’ responsibility over the goods ceased upon
delivery thereof to the custom authorities. To the mind of this Court, the contract of carriage remains in
full force and effect even after the delivery of the goods to the port authorities; the only delivery that
releases it from their obligation to observe extraordinary care is the delivery to the consignee or his
agents. Even more telling of petitioners’ continuing liability for the goods transported to the fact that the
original bills of lading up to this time, remains in the possession of the notify party or consignee. Explicit
on this point is the provision of Article 353 of the Code of Commerce which provides:
Article 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of
lading, by the contents of which the disputes which may arise regarding their execution and performance
shall be decided, no exceptions being admissible other than those of falsity and material error in the
drafting.
After the contract has been complied with, the bill of lading which the carrier has issued shall be
returned to him, and by virtue of the exchange of this title with the thing transported, the
respective obligations and actions shall be considered cancelled, unless in the same act the claim
which the parties may wish to reserve be reduced to writing, with the exception of that provided
for in Article 366.
In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier,
because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this
receipt producing the same effects as the return of the bill of lading.
While surrender of the original bill of lading is not a condition precedent for the common carrier to be
discharged from its contractual obligation, there must be, at the very least, an acknowledgement of the
delivery by signing the delivery receipt, if surrender of the original of the bill of lading is not possible.⁠
There was neither surrender of the original copies of the bills of lading nor was there acknowledgment of
the delivery in the present case. This leads to the conclusion that the contract of carriage still subsists
and petitioners could be held liable for the breach thereof.
Petitioners could have offered evidence before the trial court to show that they exercised the highest
degree of care and caution even after the goods was turned over to the custom authorities, by promptly
notifying the consignee of its arrival at the Port of Cristobal in order to afford them ample opportunity to
remove the cargoes from the port of discharge. We have scoured the records and found that neither the
consignee nor the notify party was informed by the petitioners of the arrival of the goods, a crucial fact
indicative of petitioners’ failure to observe extraordinary diligence in handling the goods entrusted to their
custody for transport. They could have presented proof to show that they exercised extraordinary care
but they chose in vain, full reliance to their cause on applicability of Panamanian law to local jurisdiction.
It is for this reason that we find petitioners liable for the misdelivery of the goods. It is evident from the
review of the records and by the evidence adduced by the respondent that petitioners failed to rebut the
prima facie presumption of negligence. We find no compelling reason to depart from the ruling of the
Court of Appeals that under the contract of carriage, petitioners are liable for the value of the misdelivered
goods.
WHEREFORE, premises considered, the petition is hereby DENIED. The assailed Resolution of the
Court of Appeals is hereby AFFIRMED.

44. SANITARY STEAM LAUNDRY, INC. vs CA

G.R. No. 119092 December 10, 1998

FACTS:
This case involves a collision between a Mercedes Benz panel truck of petitioner Sanitary Steam
Laundry and a Cimarron which caused the death of three persons and the injuries of several others. The
accident took place at the Aguinaldo Highway in Imus, Cavite on August 31, 1980. All the victims were
riding in the Cimarron.
Driving the vehicle was Rolando Hernandez. It appears that at about 8:00 p.m., as it was traveling
along Aguinaldo Highway in Imus, Cavite on its way back to Manila, the Cimarron was hit on its front
portion by petitioner’s panel truck which was traveling in the opposite direction. The driver of the
Mercedes Benz panel truck claimed that a jeepney in front of him suddenly stopped; that he stepped on
the brakes to avoid hitting the jeepney and that this caused his vehicle to swerve to the left and encroach
on a portion of the opposite lane. As a result, his panel truck collided with the Cimarron on the north-
bound lane.
The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely, Jason
Bernabe and Dalmacio Salunoy, died. Several of the other passengers of the Cimarron were injured and
taken to various hospitals
RTC of Makati rendered judgment in favor of private respondents. The CA affirmed the decision
on January 26, 1995.
Hence, this appeal.
Petitioner Sanitary Steam Laundry contends that the driver of the Cimarron was guilty of
contributory negligence, and therefore, its liability should be mitigated, if not totally extinguished; that the
driver was guilty of violation of traffic rules and regulations, particularly the ‘Land Transportation and
Traffic Code’ for (1) being overloaded with 25 passengers when its capacity was only 17, (2) being
overcrowded in the front seat thereby “decreasing maneuverability”, and (3) for having only one headlight
funcitoning thereby “decreasing visibility”

ISSUES:
Whether the driver of the Cimarron was guilty of contributory negligence

HELD:
NO.
Petitioner has the burden of showing a causal connection between the injury received and the
violation of the Land Transportation and Traffic Code. He must show that the violation of the statute was
the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence,
consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence
unless it is a contributing cause of the injury. Petitioner says that “driving an overloaded vehicle with only
one functioning headlight during nighttime certainly increases the risk of accident,”; and that the fact that
the vehicle was overloaded and its front seat overcrowded “decreased [its]maneuverability.” However,
mere allegations such as these are not sufficient to discharge its burden of proving clearly that such
alleged negligence was the contributing cause of the injury.
The panel truck driver’s testimony is consistent with the testimonies of private respondents that
the panel truck went out of control and simply smashed into the Cimarron in which they were riding.
Likewise, the doctrine of last clear chance cannot be applied in the case. The driver of the
Cimarron cannot be held to have had the last opportunity to avoid the accident, as it appreared from the
testimonies of both parties that the driver of the Cimarron tried to avoid the collision. But because of the
emergency created by the speeding panel truck he was not able to fully move his Cimarron away from the
path of the oncoming vehicle. The Court is convinced that no “maneuvering” which the Cimarron driver
could have done would have avoided a collision with the panel truck, given the suddenness of the events.
45. GEORGE MCKEE and ARACELI KOH MCKEE vs. INTERMEDIATE APPELLATE COURT, JAIME
TAYAG and ROSALINDA MANALO
G.R. No. L-68102. July 16, 1992.

FACTS:
A cargo truck was travelling southward from Angeles City to San Fernando, Pampanga while a
Ford Escort was northbound. As the Escort approached a bridge, two (2) boys suddenly ran from the right
side of the road into the Escort’s lane. As the boys were going back and forth, unsure of whether to cross
all the way or turn back, the driver of Escort, Jose Koh, blew his horn. He was then forced to swerve left
and into the lane of the truck. Jose switched his headlights on, applied his brakes, and attempted to
return to his lane. However, he failed to get back into the right lane, and collided with the cargo truck. The
collision occurred in the lane of the truck on the said bridge. It resulted in the deaths of Jose and two
others, and physical injuries to other three, all passengers of Ford Escort.
Two civil cases for indemnity and damages were filed based on quasi-delict. The first one by the
wife and children of Jose; and, the second one by petitioner Araceli Koh McKee and her husband for the
death of one of their children and injuries to Arceli and her other children. The respondents Jaime Tayag
and Rosalinda Manalo were impleaded against as the employers of the truck driver Ruben Galang who
was not included. These cases were eventually consolidated.
An information was filed against Galang, charging him for reckless imprudence resulting in
multiple homicide, physical injuries, and damage to property. He was found guilty beyond reasonable
doubt which was affirmed by the CA. The decision achieved finality after the denial by the CA of his MR
and the denial by the SC of his Petition for Review.
The two civil cases were dismissed. On appeal, the IAC reversed the ruling, finding Galang as
negligent and holding his employers liable. Upon filing of an MR, IAC set aside its original decision based
on the fact that Jose’s car invaded the lane of the truck. Hence this petition.

ISSUE:
Was the IAC correct in reversing their original decision?

HELD: No.
(The cases (civil and criminal) should have been consolidated to prevent separate appreciation of
the evidence. However, the guilty verdict of Galang was deemed by the Court as irrelevant to the the
case at bar. The result in the criminal case, whether acquittal or conviction, is irrelevant in the
independent civil action under the Civil Code unless acquittal is based on the court’s declaration that the
fact from which the civil action arose did not exist, hence the dismissal of criminal action carries with the
extinction of the civil liability.)
Negligence is the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do. The test to determine the existence of
negligence is whether the defendant, in doing the alleged negligent act use that reasonable care and
caution which an ordinarily prudent person would have used in the same situation. If not, then he is guilty
of negligence. On the basis of the foregoing, the Court held that no negligence could be imputed to Jose
Koh. Any reasonable and ordinary prudent man would have tried to avoid running over the two boys
swerving the car away from where they were, even if this would mean entering the opposite lane.
Moreover, under the “emergency rule,” one who suddenly finds himself in a place of danger, and
is required to act without time to consider the best means that may be adopted to avoid the impending
danger, is not guilty of negligence if he fails to adopt what subsequently and upon reflection may appear
to have been a better method, unless if the emergency in which he finds himself is brought about by his
own negligence. Considering the sudden intrusion of the two boys into the lane of the car, the Court found
that Jose Koh adopted the best means possible in the given situation to avoid hitting them.
 46. JULIAN DEL ROSARIO VS MANILA ELECTRIC CO
GR NO. 35283 NOVEMBER 5, 1932

FACTS:
Petitioner Julian is the mother of Alberto (deceased). Whereas the respondent is a corporation organized
for distributing electricity for profit. On August 4, 1930 at around 2:00pm a wire along Dimas-Alang Street
was burning and its connections smoking. The people within the vicinity notified the Malabon station of
the respondent of the incident at around 2:25pm. The incident developed until the end of the wire was on
the ground after 3:00pm. At around 4:00pm the nieghborhood school was dismissed and the children
went home. One of which was petitioner’s son Alberto together with 2 school mates. The three neared the
place where the wire was down and One had cautioned Alberto not to touch it, despite warnings Alberto
touched it and was electrocuted. He was pronounced dead after taking him to the hospital.

ISSUE:
WON the the respondent was negligent and the award of damages was proper

HELD:
The court ruled that the respondent was negligent as when the notice was received, no dispatch was
made to the scene of trouble or no other measures were taken to guard the public from the danger. More
than an hour and a half has passed before anyone from the company appeared on the scene. It is
doubtful that contributory negligence can be properly imputed to the deceased owing to his immature
years and natural curiosity and the mere fact that the deceased ignored the caution of a companion does
not alter the case. Even if so, it is not wholly fatal to the right of action in this case, not having been the
determining cause of the accident. The damages recoverable is for expenses incurred with the death and
burial (P250) and P1000 as general damages for loss of service. DISSENTING : J ABAD SANTOS – as
to the amount of damages recoverable in this case; in criminal cases, the court adopted the rule of
allowing the sum of P1,000 as indemnity to the heirs. Following that rule, the court has allowed to recover
the sum of P1,000 as general damages for loss of service. The indemnity allowed in criminal cases are
merely incidental to the main object sought, which is punishment of the guilty party. In a civil action, the
principal object it the recovery of damages for wrongful death, where the defendant is a corporation is not
subject to criminal prosecution. The liability of a corporation for damage must be regarded as part of the
risks which it assume when it undertakes to promote its own business and just as it is entitled to earn
profits, so it should be made to compensate those who have suffered damages by its own negligence
making the plaintiff recover 2,250 as damages

47. ASTUDILLO VS MANILA ELECTRIC CO.

G.R. No. L-33380 December 17, 1930
Malcolm, J.:

FACTS:
In August, 1928, a young man by the name of Juan Diaz Astudillo met his death through
electrocution, when he placed his right hand on a wire connected with an electric light pole situated near
Santa Lucia Gate, Intramuros, in the City of Manila. Shortly thereafter, the mother of the deceased
instituted an action in the Court of First Instance of Manila to secure from the Manila Electric Company
damages in the amount of P30,000. The answer of the company set up as special defenses that the
death of Juan Diaz Astudillo was due solely to his negligence and lack of care, and that the company had
employed the diligence of a good father of a family to prevent the injury.

After trial, which included an ocular inspection of the place where the fatality occurred, judgment
was rendered in favor of the plaintiff and against the defendant for the sum of P15,000, and costs.

ISSUE:
Whether or not the company is liable?
HELD:
Yes.

We cannot agree with the defense of the Manila Electric Company in the lower court to the effect
that the death of Juan Diaz Astudillo was due exclusively to his negligence. He only did the natural thing
to be expected of one not familiar with the danger arising from touching an electric wire, and was wholly
unconscious of his peril. Had not the wire caused the death of this young man, it would undoubtedly have
been only a question of time when someone else, like a playful boy, would have been induced to take
hold of the wire, with fatal results. The cause of the injury was one which could have been foreseen and
guarded against. The negligence came from the act of the Manila Electric Company in so placing its pole
and wires as to be within proximity to a place frequented by many people, with the possibility ever present
of one of them losing his life by coming in contact with a highly charged and defectively insulated wire.

Compliance with a franchise, an ordinance, or a statute is not conclusive proof that there was no
negligence. The franchise, ordinance, or statute merely states the minimum conditions. The fulfillment of
these conditions does not render unnecessary other precautions required by ordinary care.

48. JUAN BERNARDO vs. M. B. LEGASPI

G.R. No. L-9308 December 23, 1914

FACTS:
This is an appeal from a judgment of the Court of First Instance of the city of Manila dismissing the
complaint on the merits filed in an action to recover damages for injuries sustained by plaintiff's
automobile by reason of defendant's negligence in causing a collision between his automobile and that of
plaintiff. The court in its judgment also dismissed a cross-complaint filed by the defendant, praying for
damages against the plaintiff on the ground that the injuries sustained by the defendant's automobile in
the collision referred to, as well as those to plaintiff's machine, were caused by the negligence of the
plaintiff in handling his automobile.

ISSUE:
Who is liable for the collision of the automobiles?

HELD:
The court found upon the evidence that both the plaintiff and the defendant were negligent in handling
their automobiles and that said negligence was of such a character and extent on the part of both as to
prevent either from recovering.1awphil.net
Upon the facts, as they appear of record, the judgment must be affirmed, as the evidence clearly supports
the decision of the trial court. The law applicable to the facts also requires an affirmance of the judgment
appealed from. Where the plaintiff in a negligence action, by his own carelessness contributes to the
principal occurrence, that is, to the accident, as one of the determining causes thereof, he cannot recover.
This is equally true of the defendant; and as both of them, by their negligent acts, contributed to the
determining cause of the accident, neither can recover.
The judgment appealed from is affirmed, with costs against the appellant.

49. NEGROS NAVIGATION CO., INC., petitioner,

vs.
THE COURT OF APPEALS, RAMON MIRANDA, SPS. RICARDO and VIRGINIA DE LA VICTORIA,
respondents.
G.R. No. 110398, November 7,1997

FACTS:
In April of 1980, private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four
special cabin tickets (#74411, 74412, 74413 and 74414) for his wife, daughter, son and niece who were
going to Bacolod City to attend a family reunion. The tickets were for Voyage No. 457-A of the M/V Don
Juan, leaving Manila at 1:00 p.m. on April 22, 1980.
The ship sailed from the port of Manila on schedule.
At about 10:30 in the evening of April 22, 1980, the Don Juan collided off the Tablas Strait in Mindoro,
with the M/T Tacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC) and the
PNOC Shipping and Transport Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several of
her passengers perished in the sea tragedy. The bodies of some of the victims were found and brought to
shore, but the four members of private respondents families were never found.

ISSUE/S:
1) Is the ruling in Mecenas v. Court of Appeals, finding the crew members of petitioner to be grossly
negligent in the performance of their duties, binding in this case;

2) Did the total loss of the M/V Don Juan extinguished petitioners liability; and

HELD:
1) Yes. Petitioner Negros Navigation was found equally negligent in tolerating the playing of mahjong by
the ship captain and other crew members while on board the ship and failing to keep the M/V Don Juan
seaworthy so much so that the ship sank within 10 to 15 minutes of its impact with the M/T Tacloban City.
In addition, the Court found that the Don Juan was overloaded. Taking these circumstances together,
and the fact that the M/V Don Juan, as the faster and better-equipped vessel, could have avoided a
collision with the PNOC tanker, this Court held that even if the Tacloban City had been at fault for failing
to observe an internationally-recognized rule of navigation, the Don Juan was guilty of contributory
negligence.
Adherence to the Mecenas case is dictated by this Courts policy of maintaining stability in jurisprudence
in accordance with the legal maxim stare decisis et non quieta movere (Follow past precedents and do
not disturb what has been settled.) Where, as in this case, the same questions relating to the same event
have been put forward by parties similarly situated as in a previous case litigated and decided by a
competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue.

2) No. The rule is well-entrenched in our jurisprudence that a shipowner may be held liable for injuries to
passengers notwithstanding the exclusively real and hypothecary nature of maritime law if fault can be
attributed to the shipowner.

50. PLDT VS. CA

G.R. No. L-57079, September 29, 1989

FACTS:
Sps. Esteban were riding their jeep along the inside lane of Lacson Street where they resided [at 25km/hr
as Antonio Esteban claimed; CA said jeep ran fast; if the jeep braked at that speed, the spouses would
not have been thrown against the windshield]. The jeep abruptly swerved from the inside lane, then it ran
over a mound of earth and fell into an open trench, an excavation allegedly undertaken by PLDT for the
installation of its underground conduit system. Antonio failed to notice the open trench which was left
uncovered because of the darkness and the lack of any warning light or signs. The spouses were thrown
against the windshield. Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a
permanent scar on her cheek, while Antonio suffered cut lips. The jeep’s windshield was also shattered.
PLDT denies liability, contending that the injuries sustained by the spouses were due to their own
negligence, and that it should be the independent contractor L.R. Barte and Co. [Barte] who should be
held liable. PLDT filed a third-party complaint against Barte, alleging that under the terms of their
agreement, PLDT should not be answerable for any accident or injuries arising from the negligence of
Barte or its employees. Barte claimed that it was not aware, nor was it notified of the accident, and that it
complied with its contract with PLDT by installing the necessary and appropriate signs.
RTC ruled in favor of the spouses. CA reversed RTC and dismissed the spouses’ complaint, saying
that the spouses were negligent. Later, it set aside its earlier decision and affirmed in totoRTC’s decision.
(SC declared this later decision null and void. The first decision already became final and executory
because no appeal was taken seasonably.)
ISSUE:
WON PLDT is liable for the injuries sustained by Sps. Esteban. NO

RULING:
The accident which befell the spouses was due to the lack of diligence of Antonio, and was not imputable
to the negligent omission on the part of PLDT. If the accident did not happen because thejeep was
running quite fast on the inside lane and for some reason or other it had to swerve suddenly to the right
and had to climb over the accident mound, then Antonio had not exercised the diligence of a good father
of a family to avoid the accident. With the drizzle, he should not have run on dim lights, but should have
put on his regular lights which should have made him see the accident mound in time. The mound was
relatively big and visible, being 2-3 ft high and 1-1/2 ft wide. Also, he knew of the existence and location
of the mound, having seen it many previous times.
The negligence of Antonio was not only contributory to his and his wife’s injuries but goes to
thevery cause of the occurrence of the accident, as one of its determining factors, and therebyprecludes
their right to recover damages. The perils of the road were known to the spouses. By exercising
reasonable care and prudence, Antonio could have avoided the injurious consequences of his act, even
assuming arguendo that there was some alleged negligence on the part of PLDT.
The omission to perform a duty, such as the placing of warning signs on the site of the excavation,
constitutes the proximate cause only when the doing of the said omitted act would have prevented the
injury. As a resident of Lacson Street, he passed on that street almost everyday and had knowledge of
the presence and location of the excavations there; hence, the presence of warning signs could not have
completely prevented the accident. Furthermore, Antonio had the last clear chance to avoid the accident,
notwithstanding the negligence he imputes to PLDT.
A person claiming damages for the negligence of another has the burden of proving the existence
of such fault or negligence causative thereof, otherwise, his action must fail. The facts constitutive of
negligence must be affirmatively established by competent evidence. In this case, there was insufficient
evidence to prove any negligence on the part of PLDT. What was presented was just the self-serving
testimony of Antonio and the unverified photograph of a portion of the scene of the accident. The absence
of a police report and the non-submission of a medical report from the hospital where the spouses were
allegedly treated have not even been explained.

51. DR. IDOL BONDOC vs. MARILOU MANTALA

GR 203080 Nov 12, 2014

FACTS:
Respondent was admitted at the Oriental Mindoro Provincial Hospital (OMPH) on April 3, 2009, at around
11:00am, with referral from the Bansud Municipal Health Office. She was due to deliver her 5th child and
was advised for a caesarian section because her baby was big and there was excessive amniotic fluid in
her womb. She started to labor at 7:00am and was initially brought to the Bongabon Health Center.
However, said health center also told her to proceed directly to the hospital. In her complaint-affidavit,
respondent alleged that inside the delivery room of OMPH, she was attended to by petitioner who
instructed the midwife and two younger assistants to press down on respondent’s abdomen and even
demonstrated to them how to insert their fingers into her vagina. Thereafter, petitioner went out of the
delivery room and later, his assistants also left. After hours of being in labor, respondent pleaded for a
caesarian section. The midwife and the younger assistants pressed down on her abdomen causing
excruciating pains on her ribs and made her very weak. They repeatedly did this pressing until the bay
and placenta came out. When she regained consciousness, she was already at the recovery room, she
learned that an operation was performed on her by petitioner to remove her ruptured uterus but what
depressed her most was her stillborn baby and the loss of her reproductive capacity. The respondent
noticed her swollen vulva and an open wound which widened and was re-stitched by petitioner. Petitioner
was heard uttering words unbecoming of his profession pertaining to the respondent’s state while in labor.
Respondent filed then a complaint for grave misconduct against the petitioner before the ombudsman.
The petitioner resigned as medical officer of OMPH, alleging that the complaint against him is now moot
and academic.
ISSUE:
Whether or not petitioner’s conduct during the delivery of respondent’s baby constitute grave misconduct.

RULING:
Yes, it is grave misconduct. Misconduct is defined as a transgression of some established and definite
rule of action, more particularly unlawful behavior or gross negligence by a public officer, a forbidden act,
a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. It
generally means wrongful, improper or unlawful conduct motivated by a premeditated, obstinate or
intentional purpose. The term, however does not necessarily imply corruption or criminal intent. To
constitute an administrative offense, misconduct should relate to or be connected with the performance of
the official functions and duties of a public officer. On the other hand, when the elements of corruption,
clear intent to violate the law or flagrant disregard of established rule are manifest, the public officer shall
be liable for grave misconduct. In deliberately leaving the respondent to a midwife and two inexperienced
assistants despite knowing that she was under prolonged painful labor and about to give birth to a
macrosomic baby by vaginal delivery, petitioner clearly committed a dereliction of duty and a breach of
his professional obligations. The gravity of respondent’s conditions is highlighted by the expected
complications she suffered – her stillborn baby, a ruptured uterus that necessitated the immediate surgery
and blood transfusion and vulvar hematomas.

52. NOEL CASUMPANG, RUBY SANGA-MIRANDA and SAN JUAN DE DIOS HOSPITAL, petitioners,
vs. NELSON CORTEJO, respondent.

FACTS:
Mrs. Jesusa Cortejo brought her 11- year old son, Edmer Cortejo (Edmer), to the Emergency Room of the
San Juan de Dios Hospital (SJDH) because of difficulty in breathing, chest pain, stomach pain, and fever.
Dr. Ramoncito Livelo (Dr. Livelo) initially attended to and examined Edmer. er taking Edmer's medical
history, Dr. Livelo took his vital signs, body temperature, and blood pressure. Based on these initial
examinations and the chest x-ray test that followed, Dr. Livelo diagnosed Edmer with
"bronchopneumonia." Edmer's blood was also taken for testing, typing, and for purposes of administering
antibiotics. Afterwards, Dr. Livelo gave Edmer an antibiotic medication to lessen his fever and to loosen
his phlegm. Mrs. Cortejo did not know any doctor at SJDH. She used her Fortune Care card and was
referred to an accredited Fortune Care coordinator, who was then out of town. She was thereafter
assigned to Dr. Noel Casumpang (Dr. Casumpang), a pediatrician accredited. Casumpang for the ⁠first
time examined Edmer in his room. Using only a stethoscope, he con⁠rmed the initial diagnosis of
"Bronchopneumonia." Forty-five minutes later, Dr. Ruby Sanga-Miranda ( Dr. Miranda), one of the
resident physicians of SJDH, arrived. She claimed that although aware that Edmer had vomited "phlegm
with blood streak," she failed to examine the blood specimen because the respondent washed it away.
Thereafter, Dr. Miranda conducted a physical check-up. After the blood test came out, Dr. Miranda
advised Edmer's parents that the blood test results showed that Edmer was suffering from "Dengue
Hemorrhagic Fever." One hour later, Dr. Casumpang arrived at Edmer's room and he recommended his
transfer to the Intensive Care Unit (ICU), to which the respondent consented. Since the ICU was then full,
Dr. Casumpang suggested to the respondent that they hire a private nurse. The respondent, however,
insisted on transferring his son to Makati Medical Center. After the respondent had signed the waiver, Dr.
Casumpang, for the last time, checked Edmer's condition, found that his blood pressure was stable, and
noted that he was "comfortable." The respondent requested for an ambulance but he was informed that
the driver was nowhere to be found. Casumpang immediately gave the attending physician the patient's
clinical history and laboratory exam results. Upon examination, the attending physician diagnosed
"Dengue Fever Stage IV" that was already in its irreversible stage. Edmer died. Believing that Edmer's
death was caused by the negligent and erroneous diagnosis of his doctors, the respondent instituted an
action for damages against SJDH, and its attending physicians: Dr. Casumpang and Dr. Miranda
(collectively referred to as the "petitioners") before the RTC of Makati City. The RTC ruled in favor of the
respondent, and awarded actual and moral damages, plus attorney's fees and costs. The CA affirmed en
toto the RTC's ruling, finding that SJDH and its attending physicians failed to exercise the minimum
medical care, attention, and treatment expected of an ordinary doctor under like circumstances. The CA
found the petitioning doctors' failure to read even the most basic signs of "dengue fever" expected of an
ordinary doctor as medical negligence. The CA also considered the petitioning doctors' testimonies as
self-serving, noting that they presented no other evidence to prove that they exercised due diligence in
diagnosing Edmer's illness. On SJDH's solidary liability, the CA ruled that the hospital's liability is based
on Article 2180 of the Civil Code. The petitioners separately moved to reconsider the CA decision, but the
CA denied their motion in its resolution of January 12, 2006; hence, the present consolidated petitions
pursuant to Rule 45 of the Rules of Court. Dr. Casumpang contends that he gave his patient medical
treatment and care to the best of his abilities, and within the proper standard of care required from
physicians under similar circumstances. He claims that his initial diagnosis of bronchopneumonia was
supported by the chest x-ray result. Dr. Miranda faults the CA for holding her responsible for Edmer's
wrong diagnosis, stressing that the function of making the diagnosis and undertaking the medical
treatment devolved upon Dr. Casumpang, the doctor assigned to Edmer, and who confirmed
"bronchopneumonia." Dr. Miranda also alleged that she exercised prudence in performing her duties as a
physician, underscoring that it was her professional intervention that led to the correct diagnosis of
"Dengue Hemorrhagic Fever." SJDH, on the other hand, disclaims liability by asserting that Dr.
Casumpang and Dr. Miranda are mere independent contractors and "consultants" (not employees) of the
hospital. SJDH alleges that since it did not exercise control or supervision over the consultants' exercise
of medical profession, there is no employer-employee relationship between them, and consequently,
Article 2180 of the Civil Code does not apply.

ISSUES:
1. Whether or not the petitioning doctors had committed "inexcusable lack of precaution" in
diagnosing and in treating the patient;
2. Whether or not there is a causal connection between the petitioners' negligent act/omission and
the patient's resulting death;
3. Whether or not the petitioner hospital is solidarily liable with the petitioning doctors;

HELD:
1. The claim for damages is based on the petitioning doctors' negligence in diagnosing and treating the
deceased Edmer, the child of the respondent. It is a medical malpractice suit, an action available to
victims to redress a wrong committed by medical professionals who caused bodily harm to, or the death
of, a patient.As the term is used, the suit is brought whenever a medical practitioner or health care
provider fails to meet the standards demanded by his profession, or deviates from this standard, and
causes injury to the patient.
The elements of medical negligence are: (1) duty; (2) breach; (3) injury; and (4) proximate causation. Duty
refers to the standard of behavior that imposes restrictions on one's conduct. Once a physician-patient
relationship is established, the legal duty of care follows. The doctor accordingly becomes duty-bound to
use at least the same standard of care that a reasonably competent doctor would use to treat a medical
condition under similar circumstances. Breach of duty occurs when the doctor fails to comply with, or
improperly performs his duties under professional standards. To successfully claim damages, the patient
must lastly prove the causal relation between the negligence and the injury. This connection must be
direct, natural, and should be unbroken by any intervening efficient causes. In other words, the
negligence must be the proximate cause of the injury.
In the present case, the physician-patient relationship between Dr. Casumpang and Edmer was created
when the latter's parents sought the medical services of Dr. Casumpang, and the latter knowingly
accepted Edmer as a patient. Dr. Casumpang's acceptance is implied from his affrmative examination,
diagnosis and treatment of Edmer. med the obligation to provide resident supervision over the latter. As
second year resident doctor tasked to do rounds and assist other physicians, Dr. Miranda is deemed to
have agreed to the creation of physician-patient relationship with the hospital's patients when she
participated in the diagnosis and prescribed a course of treatment for Edmer.
Standard of Care and Breach of Duty
In the present case, expert testimony is crucial in determining first, the standard medical examinations,
tests, and procedures that the attending physicians should have undertaken in the diagnosis and
treatment of dengue fever; and second, the dengue fever signs and symptoms that the attending
physicians should have noticed and considered. The court found that Dr. Casumpang, as Edmer's
attending physician, did not act according to these standards and, hence, was guilty of breach of duty.
The court do not find Dr. Miranda liable for the reasons discussed below.
Dr. Casumpang's Negligence
 Dr. Casumpang that the characteristic symptoms of dengue (as Dr. Jaudian testi⁠ed) are:
patient's rapid breathing; chest and stomach pain; fever; and the presence of blood in his saliva. All these
manifestations were present and known to Dr. Casumpang at the time of his first and second visits to
Edmer. While he noted some of these symptoms in confirming bronchopneumonia, he did not seem to
have considered the patient's other manifestations in ruling out dengue fever or dengue hemorrhagic
fever. Dr. Casumpang selectively appreciated some, and not all of the symptoms; worse, he casually
ignored the pieces of information that could have been material in detecting dengue fever. The court
dound it strange why Dr. Casumpang did not even bother to check Edmer's throat despite knowing that
as early as 9:00 in the morning of April 23, 1988, Edmer had blood streaks in his sputum. Dr. Jaudian
likewise opined that Dr. Casumpang's medical examination was not comprehensive enough to
reasonably lead to a correct diagnosis. Dr. Casumpang only used a stethoscope in coming up with
the diagnosis that Edmer was suffering from bronchopneumonia; he never confirmed this finding with the
use of a bronchoscope. Furthermore, Dr. Casumpang based his diagnosis largely on the chest x-ray
result that is generally inconclusive.
Even assuming that Edmer's symptoms completely coincided with the diagnosis of bronchopneumonia
(so that this diagnosis could not be considered "wrong"), The SC held that still Dr. Casumpang guilty of
negligence. First, SC emphasize that we do not decide the correctness of a doctor's diagnosis, or the
accuracy of the medical findings and treatment. Court’s duty in medical malpractice cases is to decide —
based on the evidence adduced and expert opinion presented — whether a breach of duty took place.
Second, court clarify that a wrong diagnosis is not by itself medical malpractice. Physicians are generally
not liable for damages resulting from a bona fide error of judgment. Nonetheless, when the physician's
erroneous diagnosis was the result of negligent conduct (e.g., neglect of medical history, failure
to order the appropriate tests, failure to recognize symptoms), it becomes an evidence of medical
malpractice.
In the present case, evidence on record established that in confirming the diagnosis of
bronchopneumonia, Dr. Casumpang selectively appreciated some and not all of the symptoms presented,
and failed to promptly conduct the appropriate tests to confirm his findings. In sum, Dr. Casumpang failed
to timely detect dengue fever, which failure, especially when reasonable prudence would have shown that
indications of dengue were evident and/or foreseeable, constitutes negligence.
Apart from failing to promptly detect dengue fever, Dr. Casumpang also failed to promptly undertake the
proper medical management needed for this disease.
Dr. Casumpang failed to measure up to these standards. The evidence strongly suggests that he
ordered a transfusion of platelet concentrate instead of blood transfusion. The tourniquet test was only
conducted after Edmer's second episode of bleeding, and the medical management (as re⁠ected in the
records) did not include antibiotic therapy and complete physical examination.
Dr. Miranda is Not Liable for Negligence
In considering the case of Dr. Miranda, the junior resident physician who was on-duty at the time of
Edmer's con⁠nement, we see the need to draw distinctions between the responsibilities and
corresponding liability of Dr. Casumpang, as the attending physician, and that of Dr. Miranda. The
attending physician, on the other hand, is primarily responsible for managing the resident's exercise of
duties. While attending and resident physicians share the collective
We find that Dr. Miranda was not independently negligent . Although she had greater patient exposure,
and was subject to the same standard of care applicable to attending physicians, the court believe that a
finding of negligence should also depend on several competing factors, among them, her authority to
make her own diagnosis, the degree of supervision of the attending physician over her, and the shared
responsibility between her and the attending physicians.
In this case, before Dr. Miranda attended to Edmer, both Dr. Livelo and Dr. Casumpang had diagnosed
Edmer with bronchopneumonia. In her testimony, Dr. Miranda admitted that she had been briefed about
Edmer's condition, his medical history, and initial diagnosis; and based on these pieces of information,
she confirmed the finding of bronchopneumonia. We note however, that during Edmer's second episode
of bleeding, Dr. Miranda failed to immediately examine and note the cause of the blood specimen. Like
Dr. Casumpang, she merely assumed that the blood in Edmer's phlegm was caused by
bronchopneumonia
Based on her statements court found that Dr. Miranda was not entirely faultless. Nevertheless, her failure
to discern the import of Edmer's second bleeding does not necessarily amount to negligence as the
respondent himself admitted that Dr. Miranda failed to examine the blood specimen because he washed it
away. In addition, considering the diagnosis previously made by two doctors, and the uncontroverted fact
that the burden of final diagnosis pertains to the attending physician (in this case, Dr. Casumpang), we
believe that Dr. Miranda's error was merely an honest mistake of judgment influenced in no small
measure by her status in the hospital hierarchy; hence, she should not be held liable for medical
negligence.
2. The Causation between Dr. Casumpang's Negligent Act/Omission, and the Patient's Resulting
Death was Adequately Proven
Dr. Jaudian's testimony strongly suggests that due to Dr. Casumpang's failure to timely diagnose Edmer
with dengue, the latter was not immediately given the proper treatment. In fact, even after Dr. Casumpang
had discovered Edmer's real illness, he still failed to promptly perform the standard medical procedure.
The court agree with these findings.
3. Liability of SJDH
The court affirm the hospital's liability not on the basis of Article 2180 of the Civil Code, but on the basis of
the doctrine of apparent authority or agency by estoppel.
As a rule, hospitals are not liable for the negligence of its independent contractors. However, it may be
found liable if the physician or independent contractor acts as an ostensible agent of the hospital. This
exception is also known as the "doctrine of apparent authority."
In sum, a hospital can be held vicariously liable for the negligent acts of a physician (or an independent
contractor) providing care at the hospital if the plaintiff can prove these two factors: first, the hospital's
manifestations; and second, the patient's reliance.
In this case, the court considered the act of the hospital of holding itself out as provider of complete
medical care, and considered the hospital to have impliedly created the appearance of authority. On
Patient’s reliance, In this case, the court considered the act of the hospital of holding itself out as provider
of complete medical care, and considered the hospital to have impliedly created the appearance of
authority. Thus, this requirement is deemed satisfied if the plaintiff can prove that he/she relied upon the
hospital to provide care and treatment, rather than upon a specific physician. In this case, we shall limit
the determination of the hospital's apparent authority to Dr. Casumpang, in view of our finding that Dr.
Miranda is not liable for negligence.
Significantly, the respondent had relied on SJDH's representation of Dr. Casumpang's authority. To recall,
when Mrs. Cortejo presented her Fortune Care card, she was initially referred to the Fortune Care
coordinator, who was then out of town. She was thereafter referred to Dr. Casumpang, who is also
accredited with Fortune Care. In both instances, SJDH through its agent failed to advise Mrs. Cortejo that
Dr. Casumpang is an independent contractor. referring Dr. Casumpang to care and treat for Edmer,
SJDH impliedly held out Dr. Casumpang, not only as an accredited member of Fortune Care, but also as
a member of its medical staff. SJDH cannot now disclaim liability since there is no showing that Mrs.
Cortejo or the respondent knew, or should have known, that Dr. Casumpang is only an independent
contractor of the hospital. In this case, estoppel has already set in.

53. The Conjugal Partnership of the Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo (both
deceased), substituted by their heirs, namely: Herminia, Pastora, Heirs of Fructuosa, Heirs of
Raquel, Evangeline, Vicente, Jr., and Armando, all surnamed Cadavedo vs. Victorino (Vic) T.
Lacaya, married to Rosa Legados
GR No. 173188 Janurary 15, 2014

FACTS:
The Spouses Cadavedo acquired a homestead grant over a 230, 765- square meter parcel of land known
as Lot 5415 (subject lot) located in Gumay, Pinan, Zamboanga del Norte. They were issued Homestead
Patent No. V- 15414 on March 13, 1953 and Original Certificate of Title No. P-376 on July 2, 1953. On
April 30, 1955, the spouses Cadavedo sold the subject lot to the spouses Vicente Ames and Martha
Fernandez (the spouses Ames) Transfer Certificate of Title (TCT) No. T-4792 was subsequently issued in
the name of the spouses Ames.
The present controversy arose when the spouses Cadavedo filed an action before the RTC against the
spouses Ames for sum of money and/or voiding of contract of the sale of homestead after the latter failed
to pay the balance of the purchase price. The spouses Cadavedo initially engaged the services of Atty.
Rosendo Bandal, who for health reasons, later withdrew from the case; he was substituted by Atty.
Lacaya.
On February 24, 1969, Atty. Lacaya amended the complaint to assert the nullity of the sale and issuance
of TCT No. T-4792 in the names of the spouses Ames as gross violation of the public land law. The
amended complaint stated that the spouses Cadavedo hired Atty. Lacaya on a contingency fee bases.
The contingency fee stipulation specifically reads:
10. That due to the above circumstances, the plaintiffs were forced to hire a lawyer on a contingent basis
and if they become the prevailing parties in the case at bar, they will pay the sum of P2000.00 for
attorney’s fees.
Eventually, Atty. Lacaya represented the Cadavedo spouses in two other cases in connection with the
subject lot.
On appeal to the CA, the appellate court granted attorney’s fee consisting of one-half or 10.5383 hectares
of the subject lot to Atty. Lacaya, instead of confirming the agreed contingent attorney’s fees of P2000.00.

ISSUE:
WON the attorney's fee consisting of one-half of the subject lot is valid and reasonable, and binds the
petitioners.

HELD:
We rule in the NEGATIVE for the reasons discussed below.
1. The written agreement providing for a contingent fee of P 2,000.00 should prevail over the oral
agreement providing for one half of the subject lot.
2. The contingent fee agreement between the spouses Cadavedo and Atty. Lacaya, awarding the latter
one-half of the subject lot, is champertous.
Champerty, along with maintenance (of which champerty is an aggravated form), is a common law
doctrine that traces its origin to the medieval period. The doctrine of maintenance was directed "against
wanton and inofficious intermeddling in the disputes of others in which the intermeddler has no interest
whatever, and where the assistance rendered is without justication or excuse." Champerty, on the other
hand, is characterized by "the receipt of a share of the proceeds of the litigation by the intermeddler."
Some common law court decisions, however, add a second factor in determining champertous contracts,
namely, that the lawyer must also, "at his own expense maintain, and take all the risks of, the litigation."
The doctrines of champerty and maintenance were created in response "to medieval practice of assigning
doubtful or fraudulent claims to persons of wealth and inuence in the expectation that such individuals
would enjoy greater success in prosecuting those claims in court, in exchange for which they would
receive an entitlement to the spoils of the litigation." "In order to safeguard the administration of justice,
instances of champerty and maintenance were made subject to criminal and tortuous liability and a
common law rule was developed, striking down champertous agreements and contracts of maintenance
as being unenforceable on the grounds of public policy." In this jurisdiction, we maintain the rules on
champerty, as adopted from American decisions, for public policy considerations. As matters currently
stand, any agreement by a lawyer to "conduct the litigation in his own account, to pay the expenses
thereof or to save his client therefrom and to receive as his fee a portion of the proceeds of the judgment
is obnoxious to the law." The rule of the profession that forbids a lawyer from contracting with his client for
part of the thing in litigation in exchange for conducting the case at the lawyer's expense is designed to
prevent the lawyer from acquiring an interest between him and his client. To permit these arrangements is
to enable the lawyer to "acquire additional stake in the outcome of the action which might lead him to
consider his own recovery rather than that of his client or to accept a settlement which might take care of
his interest in the verdict to the sacrice of that of his client in violation of his duty of undivided fidelity to his
client's cause."
3. The attorney's fee consisting of one-half of the subject lot is excessive and unconscionable.
4. Atty. Lacaya's acquisition of the one-half portion contravenes Article 1491 (5) of the Civil Code.
5. The compromise agreement could not validate the void oral contingent fee agreement; neither did it
supersede the written contingent fee agreement.
6. Atty. Lacaya is entitled to receive attorney's fees on a quantum meruit basis.
"Quantum meruit — meaning 'as much as he deserves' — is used as basis for determining a lawyer's
professional fees in the absence of a contract . . . taking into account certain factors in fixing the amount
of legal fees." "Its essential requisite is the acceptance of the benefits by one sought to be charged for
the services rendered under circumstances as reasonably to notify him that the lawyer performing the
task was expecting to be paid compensation" for it. The doctrine of quantum meruit is a device to prevent
undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without
paying for it.
In the present case, the following considerations guide this Court in considering and setting Atty. Lacaya's
fees based on quantum meruit : (1) the questions involved in these civil cases were not novel and did not
require of Atty. Lacaya considerable effort in terms of time, skill or the performance of extensive research;
(2) Atty. Lacaya rendered legal services for the Spouses Cadavedo in three civil cases beginning in 1969
until 1988 when the petitioners led the instant case; (3) the rest of these civil cases (Cadavedo v. Ames)
lasted for twelve years and reaching up to this Court; the second (Ames v. Cadavedo) lasted for seven
years; and the third (Cadavedo and Lacaya v. DBP) lasted for six years, reaching up to the CA; and (4)
the property subject of these civil cases is of a considerable size of 230,765 square meters or 23.0765
hectares. All things considered, we hold as fair and equitable the RTC's considerations in appreciating the
character of the services that Atty. Lacaya rendered in the three cases, subject to modication on
valuation. We believe and so hold that the respondents are entitled to two (2) hectares (or approximately
one-tenth [1/10] of the subject lot), with the fruits previously received from the disputed one-half portion,
as attorney's fees. They shall return to the petitioners the remainder of the disputed one-half portion. The
allotted portion of the subject lot properly recognizes that litigation should be for the benefit of the client,
not the lawyer, particularly in a legal situation when the law itself holds clear and express protection to the
rights of the client to the disputed property (a homestead lot). Premium consideration, in other words, is
on the rights of the owner, not on the lawyer who only helped the owner protect his rights. Matters cannot
be the other way around; otherwise, the lawyer does indeed effectively acquire a property right over the
disputed property. If at all, due recognition of parity between a lawyer and a client should be on the fruits
of the disputed property, which in this case, the Court properly accords. WHEREFORE, in view of these
considerations, we hereby GRANT the petition. We AFFIRM the decision dated September 17, 1996 and
the resolution dated December 27, 1996 of the Regional Trial Court of Dipolog City, Branch 10, in Civil
Case No. 4038, with the MODIFICATION that the respondents, the spouses Victorino (Vic) T. Lacaya and
Rosa Legados, are entitled to two (2) hectares (or approximately one-tenth [1/10] of the subject lot) as
attorney's fees. The fruits that the respondents previously received from the disputed one-half portion
shall also form part of the attorney's fees. We hereby ORDER the respondents to return to the petitioners
the remainder of the 10.5383-hectare portion of the subject lot that Atty. Vicente Lacaya acquired
pursuant to the compromise agreement. SO ORDERED.

54. PEDRITO DE LA TORRE VS IMBUIDO

GR# 192973

FACTS:
Pedrito’s wife, Carmen, was brought to Divine Spirit General Hospital to give birth. The doctors’ decided
to give her a Caesarian operation which was performed by Dr. Nestor. The baby was successfully
delivered. However, Carmen begun experiencing stomach pains and a noticeable enlargement of her
stomach which resulted to a second operation performed by Dr. Norma that caused her death. It was
diagnosed that the cause of death was a cardio-respiratory arrest secondary to cerebro vascular
accident, hypertension and chronic nephritis induced by pregnancy. However in an autopsy report
prepared by the medico-legal officer of Olongapo City, the cause of Carmen’s death was shock due to
peritonitis severe with multiple intestinal adhesions; status post caesarian section and exploratory
laparotomy. Pedrito then filed a complaint for failure of the respondents to exercise due diligence claiming
that they were unskillfulness, and ignorance resulted to the death of his wife.

ISSUE:
Whether or not respondents are liable for medical malpractice.

HELD:
NO. The respondents are not liable or guilty of medical malpractice because Dr. Partilano’s autopsy
report is null and void. Dr. Partilano’s expertise on the practice especially on the field of Carmen’s
condition was not established. For medical malpractice to be invoked, for requisites must be present: (1)
duty, (2) breach (3) injury, and (4) proximate causation. Since the expertise or specialization of the Doctor
who prepared the autopsy report was not clearly established, medical malpractice cannot be properly
invoked in the case at bar. Petition is hereby denied.
 55. RAMOS vs COURT OF APPEALS
321 SCRA 584

FACTS:
Erlinda Ramos underwent a surgical procedure to remove stone from her gall bladder (cholecystectomy).
They hired Dr. Hosaka, a surgeon, to conduct the surgery at the De Los Santos Medical Center (DLSMC).
Hosaka assured them that he would find a good anesthesiologist. But the operation did not go as
planned, Dr. Hosaka arrived 3 hours late for the operation, Dra. Gutierrez, the anesthesiologist “botched”
the administration of the anesthesia causing Erlinda to go into a coma and suffer brain damage. The
botched operation was witnessed by Herminda Cruz, sister in law of Erlinda and Dean of College of
Nursing of Capitol Medical Center.

The family of Ramos (petitioners) sued the hospital, the surgeon and the anesthesiologist for damages.
The petitioners showed expert testimony showing that Erlinda's condition was caused by the
anesthesiologist in not exercising reasonable care in “intubating” Erlinda. Eyewitnesses heard the
anesthesiologist saying “Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan.”

Diagnostic tests prior to surgery showed that Erlinda was robust and fit to undergo surgery.

The RTC held that the anesthesiologist ommitted to exercise due care in intubating the patient, the
surgeon was remiss in his obligation to provide a “good anesthesiologist” and for arriving 3 hours late and
the hospital is liable for the negligence of the doctors and for not cancelling the operation after the
surgeon failed to arrive on time. The surgeon, anesthesiologist and the DLSMC were all held jointly and
severally liable for damages to petitioners. The CA reversed the decision of the Trial Court.

ISSUES:
Whether or not the private respondents were negligent and thereby caused the comatose condition of
Ramos.

HELD:
Yes, private respondents were all negligent and are solidarily liable for the damages.

Res ipsa loquitur – a procedural or evidentiary rule which means “the thing or the transaction speaks for
itself.” It is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding
circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff’s
prima facie case, and present a question of fact for defendant to meet with an explanation, where
ordinarily in a medical malpractice case, the complaining party must present expert testimony to prove
that the attending physician was negligent.

This doctrine finds application in this case. On the day of the operation, Erlinda Ramos already
surrendered her person to the private respondents who had complete and exclusive control over her.
Apart from the gallstone problem, she was neurologically sound and fit. Then, after the procedure, she
was comatose and brain damaged—res ipsa loquitur!—the thing speaks for itself!

Negligence – Private respondents were not able to disprove the presumption of negligence on their part
in the care of Erlinda and their negligence was the proximate cause of her condition. One need not be an
anesthesiologist in order to tell whether or not the intubation was a success. [res ipsa loquitur applies
here]. The Supreme Court also found that the anesthesiologist only saw Erlinda for the first time on the
day of the operation which indicates unfamiliarity with the patient and which is an act of negligence and
irresponsibility.

The head surgeon, Dr. Hosaka was also negligent. He failed to exercise the proper authority as the
“captain of the ship” in determining if the anesthesiologist observed the proper protocols. Also, because
he was late, he did not have time to confer with the anesthesiologist regarding the anesthesia delivery.
The hospital failed to adduce evidence showing that it exercised the diligence of a good father of the
family in hiring and supervision of its doctors (Art. 2180). The hospital was negligent since they are the
one in control of the hiring and firing of their “consultants”. While these consultants are not employees,
hospitals still exert significant controls on the selection and termination of doctors who work there which is
one of the hallmarks of an employer-employee reationship. Thus, the hospital was allocated a share in
the liability.

Damages – temperate damages can and should be awarded on top of actual or compensatory damages
in instances where the injury is chronic and continuing.

56. DR. VICTORIA L. BATIQUIN and ALLAN BATIQUIN, petitioners,

vs. COURT OF APPEALS, SPOUSES QUEDO D. ACOGIDO and FLOTILDE G. VILLEGAS,
respondents.

FACTS:
In the morning of September 21, 1988 Dr. Batiquin, with the assistance of Dr. Doris Teresita Sy, Nurse
Arlene Diones and some student nurses performed a simple cesarean section on Mrs. Villegas at the
Negros Oriental Provincial Hospital and after 45 minutes Mrs. Villegas delivered her first child, Rachel
Acogido.

Soon after leaving the Hospital Mrs. Villegas began to suffer abdominal pains and complained of being
feverish. She also gradually lost her appetite, so she consulted Dr. Batiquin at the latter's polyclinic who
prescribed for her certain medicines.

The abdominal pains and fever kept on recurring and bothered Mrs. Villegas no end and despite the
medications administered by Dr. Batiquin. When the pains become unbearable and she was rapidly
losing weight she consulted Dr. Ma. Salud Kho at the Holy Child's Hospital in Dumaguete City on January
20, 1989.

When Dr. Kho opened the abdomen of Mrs. Villegas she found whitish-yellow discharge inside, an
ovarian cyst on each of the left and right ovaries which gave out pus, dirt and pus behind the uterus, and
a piece of rubber materials on the right side of the uterus embedded on the ovarian cyst. This piece of
rubber material which Dr. Kho described as a "foreign body" looked like a piece of a "rubber glove". And
this foreign body was the cause of the infection of the ovaries and consequently of all the discomfort
suffered by Mrs. Villegas after her delivery on September 21, 1988.

ISSUE:
Whether or not Dr. Batiquin can be sued for negligence?

RATIO:
The rule of res ipsa loquitur comes to fore. This Court has had occasion to delve into the nature and
operation of this doctrine:

This doctrine res ipsa loquitur is stated thus: "Where the thing which causes injury is shown to be under
the management of the defendant, and the accident is such as in the ordinary course of things does not
happen if those who have the management use proper care, it affords reasonable evidence, in the
absence of an explanation by the defendant, that the accident arose from want of care." Or as Black's
Law Dictionary puts it:

Res ipsa loquitur. The thing speaks for itself. Rebuttable presumption or inference that defendant was
negligent, which arises upon proof that the instrumentality causing injury was in defendant's exclusive
control, and that the accident was one which ordinary does not happen in absence of negligence. Res
ipsa loquitur is a rule of evidence whereby negligence of the alleged wrongdoer may be inferred from the
mere fact that the accident happened provided [the] character of [the] accident and circumstances
attending it lead reasonably to belief that in [the] absence of negligence it would not have occurred and
that thing which caused injury is shown to have been under the management and control of the alleged
wrongdoer . . . . Under this doctrine . . . the happening of an injury permits an inference of negligence
where plaintiff produces substantial evidence that the injury was caused by an agency or instrumentality
under [the] exclusive control and management of defendant, and that the occurrence [sic] was such that
in the ordinary course of things would not happen if reasonable care had been used.

The doctrine of res ipsa loquitur as a rule of evidence is peculiar to the law of negligence which
recognizes that prima facie negligence may be established without direct proof and furnishes a substitute
for specific proof of negligence. The rule, when applicable to the facts and circumstances of a particular
case, is not intended to and does not dispense with the requirement of proof of culpable negligence on
the party charged. It merely determines and regulates what shall be prima facie evidence thereof and
facilitates the burden of plaintiff of proving a breach of the duty of due care. The doctrine can be invoked
when and only when, under the circumstances involved, direct evidence is absent and not readily
available.

In the instant case, all the requisites for recourse to the doctrine are present. First, the entire proceedings
of the cesarean section were under the exclusive control of Dr. Batiquin. In this light, the private
respondents were bereft of direct evidence as to the actual culprit or the exact cause of the foreign object
finding its way into private respondent Villegas' body, which, needless to say, does not occur unless
through the intervention of negligence. Second, since aside from the cesarean section, private
respondent Villegas underwent no other operation which could have caused the offending piece of rubber
to appear in her uterus, it stands to reason that such could only have been a by-product of the cesarean
section performed by Dr. Batiquin. The petitioners, in this regard, failed to overcome the presumption of
negligence arising from resort to the doctrine of res ipsa loquitur. Dr. Batiquin is therefore liable for
negligently leaving behind a piece of rubber in private respondent Villegas' abdomen and for all the
adverse effects thereof.

57. ROQUE vs. GUNIGUNDO

89 SCRA 178 (A.C. No. 1664), March 30, 1979

FACTS:
Respondent Magtanggol C. Gunigundowas the counsel of the plaintiffs in Civil Case No. 3826-M of the
Court of First Instance of Bulacan, entitled "Dionisio Roque, et al. vs. Julieta V. Adriano, et al.".
Respondent Gunigundo received a copy of the order in the said case dismissing it on the grounds of
laches and prior judgment. On the last day of the reglementary period within which to appeal or file a
motion for new trial he filed, through an associate, a motion for an extension of fifteen days within which
to file a motion for reconsideration. The motion was granted but Gunigundo was not able to file the motion
for reconsideration. On the last day, he sent by registered mail a motion for a second extension of ten
days and on the last day of the second extension sought by him, he filed a motion for a third extension of
forty-eight hours. The motion for reconsideration was mailed on the last day of the third extension.The
trial court denied the second and third motions for extension on the ground that the order of dismiss was
already final It also denied Gunigundo's motion for reconsideration of the orders denying his motions for
extension. He then filed in the Court of Appeals a petition for certiorari and mandamus but the same were
dismissed. Thereafter, the spouses Dominga Roque and Jose Zaplan, two of the eight plaintiffs in Civil
Case No. 3826-M, filed in this Court a joint affidavit charging Atty. Gunigundo with gross negligence in not
seasonably filing the motion for reconsideration and in not perfecting an appeal from the trial court's order
of dismissal.

ISSUE:
WON the lawyer, through his own fault, is liable for damage.

HELD:
No. The fact that the complaints and their six co-plaintiffs lost the right to appeal would not necessarily
mean that they were damaged. The lower court's order of dismissal has in its favor the presumption of
validity or correctness. Indeed, an examination of that order discloses that the trial court painstakingly
studied the motion to dismiss and carefully rationalized its order. If found that the action was filed more
than forty years after the disputed land was registered in the name of defendants' predecessor-in-
interest.Where a judgment became final through the fault of the lawyer who did not appeal therefrom, that
fact alone is not a sufficient ground for the losing party to recover damages from his lawyer since the
action for damages rests "on the unsubstantiated and arbitrary supposition of the injustice of the decision
which became final through the fault and negligence" of the lawyer.

58. ADARNE V. ALDABA

83 SCRA 734

FACTS:
Raymunda Cumpio and her husband, Rufo Cumpio, filed an action for forcible entry against herein
complainant Cesario Adarne, Aning Arante, and Miguel Inokando with the Justice of the Peace of
Alangalang, Leyte. The case was docketed in the said court as Civil Case No. 96. Atty. Isauro Marmita
represented the defendants who raised the issue of ownership of the land in question. After hearing the
parties, the Justice of the Peace dismissed the complaint for lack of jurisdiction. Consequently, the
plaintiffs therein appealed to the Court of First Instance of Leyte and the case was assigned to Branch VI
of Carigara, where it was docketed as Civil Case No. 556. Resolving the issue interposed by the
appellants, the Judge of the Court of First Instance found that the Justice of the Peace Court has
jurisdiction over the case and returned the same to the lower court for trial on the merits. After trial on the
merits, the Justice of the Peace again dismissed the case and the plaintiffs again appealed to the Court of
First Instance of Leyte where the case was docketed anew as Civil Case No. 632. Attys. Arturo Mirales
and Generoso Casimpan filed the answer for the defendants. 1

At the hearing of the case on August 7, 1961, the herein complainant Cesario Adarne, one of the
defendants in the aforementioned Civil Case No. 632, noting that his attorneys had not yet arrived,
prevailed upon the respondent Atty. Damian Aldaba, who was then present in court to attend the trial of
an electoral case, to appear as counsel for them and ask for the postponement of the trial. The
respondent, who is a third degree cousin of the complainant, agreed, and entered a special appearance.
Upon noticing that the plaintiffs and their counsel were not also present in court, the respondent, instead
of asking for a postponement, moved for the dismissal of the case. His motion was granted and the case
was again dismissed. Thereafter, the plaintiffs filed a motion for the reconsideration of the order, 2 to
which the respondent filed an opposition in behalf of the defendants, 3 and the motion was denied. 4
Whereupon, the plaintiffs appealed to the Court of Appeals. After appropriate proceedings, the appellate
court set aside the order of dismissal and remanded the case to the lower court for further proceedings.
At the hearing of the case on October 23, 1964 before the Court of First Instance of Leyte, the respondent
was again prevailed upon by the complainant to appear in his behalf. The respondent entered a "special
appearance" for the complainant and thereafter argued that the interest of justice would best be served if
the defendants were allowed to file an action for quieting of title and the case heard jointly with the action
for forcible entry. Finding merit in the argument, the court ordered the defendant Cesario Adarne to file an
action for quieting of title within one (1) week and the plaintiffs to answer the same within the
reglementary period, after which both cases would be tried jointly. The hearing was deferred until after the
filing of the action for quieting of title. 5

On June 17, 1965, the court declared the defendants in default for their failure to appear at the hearing
set for that day and directed the plaintiffs to present evidence to support their claim.
At the hearing of Civil Case No. 632 for forcible entry before the Court of First Instance of Leyte,
respondent attorney was prevailed upon be complainant to appear for him and his co-defendants and to
ask for the postponement of the trial as their counsels of record had not arrived. Respondent entered a
special appearance and was able to obtain favorable action on a motion to dismiss. On appeal, however,
this order was set aside and the case was remanded to the lower court for further proceedings. At the
hearing of the case where respondent was again requested by complainant to appear in his behalf,
respondent argued that defendants be allowed to file an action for quieting of title to be heard jointly with
the pending action for forcible entry. On the day of the scheduled hearing of both cases, the defendants
were declared in default for non-appearance, a decision was rendered and a writ of execution therefor
was issued. Because of this, respondent was charged with gross negligence, misconduct and
malpractice.
The Supreme Court ruled that the judgment by default rendered against complainant cannot be attributed
to respondent attorney as the blamed lies with the former for having engaged the services of several
lawyers to handle his case without formally withdrawing the authority he had given them to appear in his
behalf as to place the responsibility upon the Respondent. Finding no convincing proof to warrant the
disbarment of respondent attorney, the administrative complaint filed against him was dismissed.

Administrative complaint dismissed.

The rule followed on matters of substitution of attorneys as laid down by this Court is that no substitution
of attorneys will be allowed unless there be filed: (1) a written application for such substitution; (2) the
written consent of the client; (3) the written consent of the attorney substituted; and (4) in case such
written consent can not be secured, there must be filed with the application proof of service of notice of
such motion upon the attorney to be substituted, in the manner prescribed by the rules. Unless the
foregoing formalities are complied with, substitution will not be permitted, and the attorney who properly
appeared last in the cause, before such application for substitution, will be regarded as the attorney of
record and will be held responsible for the proper conduct of the cause.

An attorney is not bound to exercise extraordinary diligence, but only a reasonable degree of care and
skill having reference to the character of the business he undertakes to do. Prone to err like any other
human being, he is not answerable for every error or mistake, and will be protected as long as he acts
honestly and in good faith to the best of his skill and knowledge.

disbarment proceedings, the burden of proof rests upon the complainant and for the Court to exercise its
disciplinary powers, the case against the respondent attorney must be established by convincing proof.

There is no malpractice to warrant the exercise of the court of its disciplinary powers where the
respondent lawyer honestly believed that he had appeared for the complainant and agreed to contact his
attorney of record to handle his case after said appearance, so that he (the lawyer) did nothing more
about it. And if a judgment by default is rendered against the complainant, the same cannot be attributed
to the Respondent. The blame lies with the complainant for having engaged the services of several
lawyers to handle his case without formally withdrawing the authority he had given to them to appear in
his behalf as to place the responsibility upon the Respondent.

Administrative action against the respondent attorney for gross negligence and misconduct, for failure to
give his entire devotion to the interest of his client, warm zeal in the maintenance and defense of his
rights, and exertion of his utmost learning and ability in the prosecution and defense of his client, and for
not taking steps to protect the interests of his client in the face of an adverse decision.

The record shows that sometime in 1958, Raymunda Cumpio and her husband, Rufo Cumpio, filed an
action for forcible entry against herein complainant Cesario Adarne, Aning Arante, and Miguel Inokando
with the Justice of the Peace of Alangalang, Leyte. The case was docketed in the said court as Civil Case
No. 96. Atty. Isauro Marmita represented the defendants who raised the issue of ownership of the land in
question. After hearing the parties, the Justice of the Peace dismissed the complaint for lack of
jurisdiction. Consequently, the plaintiffs therein appealed to the Court of First Instance of Leyte and the
case was assigned to Branch VI of Carigara, where it was docketed as Civil Case No. 556. Resolving the
issue interposed by the appellants, the Judge of the Court of First Instance found that the Justice of the
Peace Court has jurisdiction over the case and returned the same to the lower court for trial on the merits.
After trial on the merits, the Justice of the Peace again dismissed the case and the plaintiffs again
appealed to the Court of First Instance of Leyte where the case was docketed anew as Civil Case No.
632. Attys. Arturo Mirales and Generoso Casimpan filed the answer for the defendants.

At the hearing of the case on August 7, 1961, the herein complainant Cesario Adarne, one of the
defendants in the aforementioned Civil Case No. 632, noting that his attorneys had not yet arrived,
prevailed upon the respondent Atty. Damian Aldaba, who was then present in court to attend the trial of
an electoral case, to appear as counsel for them and ask for the postponement of the trial. The
respondent, who is a third degree cousin of the complainant, agreed, and entered a special appearance.
Upon noticing that the plaintiffs and their counsel were not also present in court, the respondent, instead
of asking for a postponement, moved for the dismissal of the case. His motion was granted and the case
was again dismissed. Thereafter, the plaintiffs filed a motion for the reconsideration of the order, to which
the respondent filed an opposition in behalf of the defendants, and the motion was denied. Whereupon,
the plaintiffs appealed to the Court of Appeals. After appropriate proceedings, the appellate court set
aside the order of dismissal and remanded the case to the lower court for further proceedings.

At the hearing of the case on October 23, 1964 before the Court of First Instance of Leyte, the respondent
was again prevailed upon by the complainant to appear in his behalf. The respondent entered a "special
appearance" for the complainant and thereafter argued that the interest of justice would best be served if
the defendants were allowed to file an action for quieting of title and the case heard jointly with the action
for forcible entry. Finding merit in the argument, the court ordered the defendant Cesario Adarne to file an
action for quieting of title within one (1) week and the plaintiffs to answer the same within the
reglementary period, after which both cases would be tried jointly. The hearing was deferred until after the
filing of the action for quieting of title.

On June 17, 1965, the court declared the defendants in default for their failure to appear at the hearing
set for that day and directed the plaintiffs to present evidence to support their claim. On September 17,
1965, the court rendered a decision and a writ of execution was issued thereafter.

Because of this, Cesario Adarne filed the present complaint against the respondent Atty. Damian V.
Aldaba for malpractice

ISSUE:
Whether or not Aldaba is guilty of Malpractice

RULING:
No formalities whatever were observed in those changes such that the respondent entered a "special
appearance" for the complainant in order that he could ask for the dismissal of the case for the failure of
the adverse party to prosecute. The rule followed on matters of substitution of attorneys as laid down by
this Court is that no substitution of attorneys will be allowed unless there be filed: (1) a written application
for such substitution; (2) the written consent of the client; (3) the written consent of the attorney
substituted; and (4) in case such written consent can not be secured, there must be filed with the
application proof of service of notice of such motion upon the attorney to be substituted, in the manner
prescribed by the rules. Unless the foregoing formalities are complied with, substitution will not be
permitted, and the attorney who properly appeared last in the cause, before such application for
substitution, will be regarded as the attorney of record and will be held responsible for the proper conduct
of the cause.

59. VESTIL VS IAC

179 SCRA 47

FACTS:
On July 29, 1915, Theness was bitten by a dog while she was playing with a child of the petitioners in the
house of the late Vicente Miranda, the father of Purita Vestil, at F. Ramos Street in Cebu City. She was
rushed to the Cebu General Hospital, where she was treated for "multiple lacerated wounds on the
forehead" and administered an anti-rabies vaccine by Dr. Antonio Tautjo. She was discharged after nine
days but was readmitted one week later due to "vomiting of saliva." The following day, on August 15,
1975, the child died. The cause of death was certified as broncho-pneumonia.
Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the
possessors of "Andoy," the dog that bit and eventually killed their daughter. The Vestils rejected the
charge, insisting that the dog belonged to the deceased Vicente Miranda, that it was a tame animal, and
that in any case no one had witnessed it bite Theness. After trial, Judge Jose R. Ramolete of the Court of
First Instance of Cebu sustained the defendants and dismissed the complaint.
ISSUE:
In the proceedings now before us, Purita Vestil insists that she is not the owner of the house or of the dog
left by her father as his estate has not yet been partitioned and there are other heirs to the property.

HELD:
Pursuing the logic of the Uys, she claims, even her sister living in Canada would be held responsible for
the acts of the dog simply because she is one of Miranda's heirs. However, that is hardly the point. What
must be determined is the possession of the dog that admittedly was staying in the house in question,
regardless of the ownership of the dog or of the house.
Article 2183 reads as follows:
The possessor of an animal or whoever may make use of the same is responsible for the damage which
it may cause, although it may escape or be lost. 'This responsibility shall cease only in case the damages
should come from force majeure from the fault of the person who has suffered damage.
Thus, in Afialda v. Hisole, a person hired as caretaker of a carabao gored him to death and his heirs
thereupon sued the owner of the animal for damages. The complaint was dismissed on the ground that it
was the caretaker's duty to prevent the carabao from causing injury to any one, including himself.
While it is true that she is not really the owner of the house, which was still part of Vicente Miranda's
estate, there is no doubt that she and her husband were its possessors at the time of the incident in
question. She was the only heir residing in Cebu City and the most logical person to take care of the
property, which was only six kilometers from her own house. Moreover, there is evidence showing that
she and her family regularly went to the house, once or twice weekly, according to at least one witness,
and used it virtually as a second house. Interestingly, her own daughter was playing in the house with
Theness when the little girl was bitten by the dog. The dog itself remained in the house even after the
death of Vicente Miranda in 1973 and until 1975, when the incident in question occurred. It is also
noteworthy that the petitioners offered to assist the Uys with their hospitalization expenses although
Purita said she knew them only casually.

60. AMADORA vs. COURT OF APPEALS

G.R. No. L-47745. April 15, 1988.

FACTS:
Amadora, a 17-year old prospective graduate, was in the auditorium of his high school, Colegio de San
Jose-Recoletos, when his classmate, Pablito Damon, fired a gun that mortally hit Alfredo. Daffon was
convicted of homicide thru reckless imprudence. The petitioners, as the victim's parents, filed a civil action
for damages under Article 2180 of the Civil Code against the Colegio de San Jose-Recoletos, its rector,
the high school principal, the dean of boys, and the physics teacher, together with Daffon and two other
students, through their respective parents. The complaint against the students was later dropped.

The Court of First Instance of Cebu held the remaining defendants liable to the plaintiffs representing
death compensation, loss of earning capacity, costs of litigation, funeral expenses, moral damages,
exemplary damages, and attorney's fees. On appeal to the respondent court, however, the decision was
reversed and all the defendants were completely absolved. In its decision, which is now the subject of this
petition for certiorari under Rule 45 of the Rules of Court, the respondent court found that Article 2180
was not applicable as the Colegio de San Jose-Recoletos was not a school of arts and trades but an
academic institution of learning. It also held that the students were not in the custody of the school at the
time of the incident as the semester had already ended, that there was no clear identification of the fatal
gun, and that in any event the defendants had exercised the necessary diligence in preventing the injury.
The petitioners contend that their son was in the school to finish his physics experiment as a prerequisite
to his graduation; hence, he was then under the custody of the private respondents. The private
respondents submit that Alfredo Amadora had gone to the school only for the purpose of submitting his
physics report and that he was no longer in their custody because the semester had already ended.
There is also the question of the identity of the gun used which the petitioners consider important
because of an earlier incident which they claim underscores the negligence of the school and at least one
of the private respondents. Sergio Damaso, dean of boys, confiscated a gun from Jose Gumban but later
returned it without making a report to the principal or taking further action. Gumban was one of the
companions of Damon when he fired the gun. Respondents replies that there is no proof that it was the
same firearm that killed Alfredo. Both parties invoked Article 2180 of the Civil Code.

ISSUE:
Whether or not Colegio de San Jose-Recoletos is liable under Article 2180 of the Civil Code for the
tortuous act of its students.

HELD: NO

The time Alfredo was fatally shot, he was in the custody of the authorities of the school notwithstanding
classes had formally ended when the incident happened. It was immaterial if he was in the school
auditorium to finish his physics requirement. What was important is that he was there for a legitimate
purpose. On the other hand, the rector, high school principal and the dean of boys cannot be held liable
because none of them was the teacher-in-charge as defined in the provision. Each was exercising only a
general authority over the students and not direct control and influence exerted by the teacher placed in-
charge of particular classes. In the absence of a teacher- in charge, dean of boys should probably be held
liable considering that he had earlier confiscated an unlicensed gun from a student and later returned to
him without taking disciplinary action or reporting the matter to the higher authorities. Though it was clear
negligence on his part, no proof was shown to necessarily link this gun with the shooting incident.

Collegio San Jose-Recoletos cannot directly be held liable under the provision because only the teacher
of the head of school of arts and trade is made responsible for the damage caused by the student.
Hence, under the facts disclosed, none of the respondents were held liable for the injury inflicted with
Alfredo resulting to his death.

61. MARCIAL T. CAEDO VS. YU KHE TAI

G.R. NO. L-20392 December 18, 1968
J. MAKALINTAL

FACTS:
Marcial Caedo, and his family, was driving his Mercury car were traveling Highway 54 on the way to the
airport. Coming from the opposite direction was the Cadillac of Yu Khe Thai, with his driver Rafael
Bernardo at the wheel, taking the owner from his Parañaque home to Wack Wack for his regular round of
golf. Both vehicles were running at moderate speeds when a carretela was traveling the same direction
as Bernardo’s, the carretela was towing another horse by means of a short rope coiled around the rig's
ver-tical post on the right side. Instead of slowing down Bernardo veered to the left to overtake and in so
doing the car hit the carretella’s left wheel and skidded obliquely hitting the oncoming car of Caedo who
despite slackened speed to avoid the collision was hit resulting to the injuries of Caedo and his family.

ISSUE:
Whether or not the car owner - Yu Khe Thai who was riding with the driver at the time of the accident be
held solidarily liable.

HELD:
NO. The court ruled that if the causative factor was the driver’s negligence, the owner of the vehicle who
was present is likewise held liable if he could have prevented the mishap by the existence of due
diligence. The basis of the master's liability in civil law is not respondeat superior but rather the
relationship of Pater Familias. The theory is that ultimately the negligence of the servant, if known to the
master and susceptible of timely correction by him, reflects the master’s own negligence if he fails to
correct it in order to prevent injury or damage.
However, the owner of the car Yu was not liable because as earlier stated, the car was not running at an
unreasonable speed. The road was wide and open, and devoid of traffic that early morning. There was
no reason for the car owner to be in any special state of alert. He had reason to rely on the skill and
experience of his driver. He became aware of the presence of the carretela when his car was only 12
meters behind it, but then his failure to see it earlier did not constitute negligence, for he was not himself
at the wheel. And even when he did see it at that distance, he could not have anticipated his driver's
sudden decision to pass the carretela on its left side in spite of the fact that another car was approaching
from the opposite direction. The time element was such that there was no reasonable opportunity for Yu
Khe Thai to assess the risks involved and warn the driver accordingly. The thought that entered his mind,
he said, was that if he sounded a sudden warning it might only make the other man nervous and make
the situation worse. It was a thought that, wise or not, connotes no absence of that due diligence
required by law to prevent the misfortune.
The test of imputed negligence under Article 2184 of the Civil Code is, to a great degree, necessarily
subjective. Car owners are not held to a uniform and inflexible standard of diligence as are professional
drivers. In many cases they refrain from driving their own cars and instead hire other persons to drive for
them precisely because they are not trained or endowed with sufficient discernment to know the rules of
traffic or to appreciate the relative dangers posed by the different situations that are continually
encountered on the road. What would be a negligent omission under the aforesaid Article on the part of a
car owner who is in the prime of age and knows how to handle a motor vehicle is not necessarily so on
the part, say, of an old and infirm person who is not similarly equipped.
The law does not require that a person must possess a certain measure of skill or proficiency either in the
mechanics of driving or in the observance of traffic rules before he may own a motor vehicle. The test of
his negligence, within the meaning of Article 2184, is his omission to do that which the evidence of his
own senses tells him he should do in order to avoid the accident. And as far as perception is concerned,
absenta minimum level imposed by law, a maneuver that appears to be fraught with danger to one
passenger may appear to be entirely safe and commonplace to another. Were the law to require a
uniform standard of perceptiveness, employment of professional drivers by car owners who, by their very
inadequacies, have real need of drivers' services, would be effectively proscribed.
The Court held that the imputation of liability to Yu Khe Thai, solidarily with Rafael Bernardo, is an error.
Plaintiffs appealed from the award, claiming that the Court should have granted them also actual or
compensatory damages, aggregating P225,000, for the injuries they sus-tained. Defendants, on the other
hand, maintain that the amounts awarded as moral damages are excessive and should be reduced. We
find no justification for either side. The amount of actual damages suffered by the individual plain-tiffs by
reason of their injuries, other than expenses for medical treatment, has not been shown by the evidence.
Actual damages, too be compensable, must be proven. Pain and suffering are not capable of pecuniary
estimation, and constitute a proper ground for granting moral, not actual, damages, as provided in Article
2217 of the Civil Code.

62. ANDAMO VS IAC

G.R. NO. 74761 NOVEMBER 6, 1990

FACTS:
Spouses Andamo are the owners of a parcel of land which is adjacent to that of private
respondent, Missionaries of Our Lady of La Salette, a religious coporation. Within the land of respondent,
waterpaths and contrivances, including an artificial lake were constructed, which allegedly eroded
petitioner’s land, caused a young man to drown and other events which caused damage to petitioners.
Petitioners the filed a criminal action agaisnst the officers and directors of respondent, for destruction by
means of injunction under article 342 of the RPC. They also subsequently filed a civil action for damages.
The trial court dismissed the case for lack of jurisdiction, as the criminal case which was instituted ahead
of the civil case was still unresolved. Petitioners appealed the order to the CA which affirmed the decision
of the lower court.

ISSUE:
Whether or not the trial court and appellate court erred in dismissing the civil case since it is
predicated on a quasi-delict?

HELD:
Yes. Based on the complaint it shows that the civil action is one under Articles 2176 and 2177 of the Civil
Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the
plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond;
and (c) the connection of cause and effect between the fault or negligence of the defendant and the
damages incurred by the plaintiff.
Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or
omission constituting fault or negligence, thus:
Article 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this chapter.
Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law" but
also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate
civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found
guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually charged
also criminally), to recover damages on both scores, and would be entitled in such eventuality only to the
bigger award of the two, assuming the awards made in the two cases vary.
In the case of Castillo vs. Court of Appeals, this Court held that a quasi-delict or culpa aquiliana is a
separate legal institution under the Civil Code with a substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime — a distinction exists between the civil liability
arising from a crime and the responsibility for quasi-delicts or culpa extra-contractual. The same
negligence causing damages may produce civil liability arising from a crime under the Penal Code, or
create an action for quasi-delicts or culpa extra-contractual under the Civil Code. Therefore, the acquittal
or conviction in the criminal case is entirely irrelevant in the civil case, unless, of course, in the event of an
acquittal where the court has declared that the fact from which the civil action arose did not exist, in which
case the extinction of the criminal liability would carry with it the extinction of the civil liability.
In Azucena vs. Potenciano, the Court declared that in quasi-delicts, "the civil action is entirely
independent of the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no
logical conclusion than this, for to subordinate the civil action contemplated in the said articles to the
result of the criminal prosecution — whether it be conviction or acquittal — would render meaningless the
independent character of the civil action and the clear injunction in Article 31, that his action may proceed
independently of the criminal proceedings and regardless of the result of the latter."

63. PONCE vs. LEGASPI

FACTS:
Petitioner Ponce, together with her husband Manuel, owned 43% of the stockholdings of L'NOR Marine
Services, Inc. She was then Treasurer and director of the Board of Directors of L'NOR while her husband
was a director. Forty eight percent (48%) of L'NOR's stocks was owned by the spouses Edward and
Norma Porter who were then serving as President/General Manager and Secretary respectively.

Spouses Edward J. Porter and Norma Y. Porter, together with Zenaida T. Manaloto, facilitated, assisted
and aided by herein respondent Legaspi, incorporated the Yrasport Drydocks, Inc., which they control in
terms of stockholdings, and whose line of business is in direct competition with L'NOR.

In view of the illegal manipulations, illicit schemes, palpable frauds and estafa committed by said
President-General Manager Edward J. Porter, in confabulation and conspiracy with the other officers of
the corporation, namely: his wife Norma Y. Porter and Zenaida T. Manaloto, herein complainant
requested respondent Valentino Legaspi to take and pursue appropriate local steps and seasonable
actions in order to protect the paramount interest of L'NOR of which he is the legal counsel by retainer,
but the latter, without any valid excuse whatsoever, refused to do so, although he is still collecting his
monthly retainer. However, respondent Legaspi appeared as legal counsel and attorney of Edward J.
Porter and his confederates.

The Court issued a resolution dismissing the disbarment complaint against Legaspi.

Atty. Legaspi filed a complaint for damages against the petitioner.

ISSUE:
Whether or not petitioner is guilty of bad faith in instituting a complaint for disbarment against private
respondent
HELD:
No. The general rule is well settled that one cannot be held liable in damages for maliciously instituting a
prosecution where he acted with probable cause. In other words, a suit will lie only in cases where a legal
prosecution has been carried on without probable cause. Since the petitioner, however, was of the honest
perception that YRASPORT was actually organized to appropriate for itself some of L'NOR's business,
the Court finds that she had probable cause to file the disbarment suit. Since petitioner Ponce was moved
by probable cause, the Court need not anymore ascertain whether or not the petitioner acted with malice
in filing the complaint. The existence of probable cause alone, regardless of considerations of malice, is
sufficient to defeat the charge of malicious prosecution.

64. EASTERN SHIPPING LINES v. BPI/MS INSURANCE

G.R. No. 193986

FACTS:
Sumimoto shipped thru a vessel owned by petitioner several coils of steel sheets. The cargo was
insured by Mitsui. The cargo is to be shipped from Japan to Calamba steel, the consignee. Upon arrival,
the cargo was inspected and it was found that several of them were damaged. The cargo was then
forwarded to ATI for stevedoring and storage untill withdrawn by consignee. ATI also noted the damage
sustained by several of the cargo. When Calamba steel claimed the cargo, it rejected the damaged
goods. A second and a third shippment was made by Sumimoto thru Petioner, insured by Mitsui. Several
of cargo in both shippments were damaged and rejected by Calamba. Calamba claimed the insurance
and was paid by Mitsui. Mitsui thru BPI its agent filed an action for collection against ATI and petioner.

ISSUE:
Whether petitioner is liable against BPI/MS.

RULING:
It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain
under the custody of the carrier. As hereinbefore found by the RTC and affirmed by the CA based on the
evidence presented, the goods were damaged even before they were turned over to ATI. Such damage
was even compounded by the negligent acts of petitioner and ATI which both mishandled the goods
during the discharging operations. Thus, it bears stressing unto petitioner that common carriers, from the
nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in
the vigilance over the goods transported by them. Subject to certain exceptions enumerated under Article
1734 of the Civil Code, common carriers are responsible for the loss, destruction, or deterioration of the
goods. The extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the same
are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right
to receive them. Owing to this high degree of diligence required of them, common carriers, as a general
rule, are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost
or destroyed. That is, unless they prove that they exercised extraordinary diligence in transporting the
goods. In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving
that they observed such high level of diligence. In this case, petitioner failed to hurdle such burden.

65. VICENTE JOSEFA, Petitioner, vs.MANILA ELECTRIC COMPANY, Respondent.

FACTS:
At around 1 :45 p.m. on April 21, 1991, a dump truck, a jeepney and a car figured in a vehicular accident
along Ortigas Avenue, Pasig City. As a result of the accident, a 45-foot wooden electricity post, three 75
KVA transformers, and other electrical line attachments were damaged. Upon investigation, respondent
Manila Electric Company (Meralco) discovered that it was the truck with plate number PAK-874 and
registered in Josefa’s name that hit the electricity post.
In a letter dated April 19, 1993, Meralco demanded from Josefa reimbursement for the replacement cost
of the electricity post and its attachments, but Josefa refused to pay.Thus, on September 28, 1993,
Meralco sued Josefa and Pablo Manoco, the truck driver, for damages before the Regional Trial Court
(RTC) of Pasig City.
In its complaint, Meralco alleged that Manoco’s reckless driving resulted in damage to itsproperties. It
also imputed primary liability on Josefa for his alleged negligence in the selection and supervision of
Manoco.

The RTC dimissied the complaint for insufficiency of evidence and helpd that Meralco failed to establish
that it was the truck that hit the electrinicy post. Futhermore, SPO2 Galang’s account of the accident was
merely heresay since he did not personally witness the incident.
However the CA reversed the ruling of RTC and held that RTC erred in disregarding the parties’
stipulation at the pre-tiral that it was the truck that hit the electricity post. The CA concluded that the fact
that the truck hit the electricity post was sufficient to hold josefa liable regardless of the negligence of the
truck driver.

ISSUE:
W/N Josefa, the employer of driver Bautista, being the registered owner of the vehicle is liable under
article 2180 of the civil code and whether Meralco is entitled to actual damages

HELD:

Yes. Joefa is liable under par 5 of article 2180 of the Civil Code because there is an employer-employee
relationship between Bautista and Josefa. Moreover, Josefa failed to show that diligence of a good father
of a family was exercised.

However, Meralco is only entitled to temperate damages with legal interest at legal rate not withstanding
the vicarious liability of Josefa. Meralco failed to point out the specific facts that afford a basis for its claim
for actual damages because actual damages cannot be presumed; they must be pleaded and proven in
court in order to be recoverable. The Supreme Court further ruled that Meralco is not entitled to attorney’s
fees and expenses of litigation citing the case of Buan v Camaganacan where it was held that the text of
the decision should state the reason why attorney’s fees are being awarded; otherwise, the award should
be disallowed. It was also shown that there was no bad faith imputed to Josefa that would warrant the
award of attorney’s fees under Article 2208 paragraph 5.

Finally, the Supreme Court imposed in this case an interest rate of 6% per annum on temperate damages
pursuant to the guidelines enunciated in Eastern Shipping Lines v CA as modified by Nacar vs Gallery
Frames.

66. UNKNOWN OWNER OF THE VESSEL M/V CHINA JOY VS ASIAN TERMINALS, INC.
G.R. NO. 195661

FACTS:
Under the Charter Party Agreement over M/V "China Joy," ContiQuincyBunge represented itself
as the Charterer of the Vessel, with San Miguel Foods, Inc. as Co-Charterer, and defendant [Samsun]
represented itself as the Agent of the Shipowners. Samsun is a foreign corporation not doing business in
the Philippines. On 3 February 1997 ATI used its Siwertell Unloader No. 2 to unload the soybean meal
from the Vessel's Hold No. 2. The Siwertell Unloader is a pneumatic vacubator that uses compressed gas
to vertically move heavy bulk grain from within the hatch of the ship in order to unload it off the ship.
DcHaET The unloading operations were suddenly halted when the head of Unloader No. 2 hit a flat low-
carbon or "mild" steel bar measuring around 8 to 10 inches in length, 4 inches in width, and 1 1/4 inch in
thickness that was in the middle of the mass of soybean meal. The flat steel bar lodged itself between the
vertical screws of Unloader No. 2, causing portions of screw numbers 2 and 3 to crack and be sheared off
under the torsional load. According to the quotation of BMH Marine AB Sweden, the sole manufacturer of
Siwertell unloaders, the replacement cost of each screw is US$12,395.00 or US$24,790.00 for the 2
screws plus freight. The labor cost to remove and reassemble the screws is estimated at US$2,000.00.
ATI sent a Note of Protest to the Master of the Vessel for the damages sustained by its unloading
equipment as a result of encountering the flat steel bar among the soybean meal. However, the Vessel's
Master wrote a note on the Protest stating that it is not responsible for the damage because the metal
piece came from the cargo and not from the vessel itself. Defendants argued that since the metal foreign
object was found in the middle of the cargo, it could not have come from the bottom of the hatch because
the hatch had been inspected and found clean prior to loading. Defendants further averred that neither
could the metal bar have been part of the Vessel that had broken off and fallen into the hatch because
tests conducted on the metal piece revealed that said metal bar was not part of the Vessel. Defendants
concluded that the metal bar could only have been already co-mingled with the soybean meal upon
loading by ContiQuincyBunge at loadport, and, therefore, defendants are not liable for the damages
sustained by the unloader of ATI.

ISSUE:
Whether or not there is no contract of carriage between the petitioners and ATI

RULING:
There is no contract of carriage between ATI, on one hand, and the shipowner, Samsun,
ContiQuincyBunge L.L.C., and Inter-Asia, on the other. It likewise bears stressing that the subject of the
complaint, from which the instant petition arose, is not the damage caused to the cargo, but to the
equipment of an arrastre operator. Further, ATI's contractual relation is not with the petitioners, but with
the consignee and with the Philippine Ports Authority (PPA). In Insurance Company of North America v.
Asian Terminals, Inc., 30 the Court explained that the liabilities of the arrastre operator for losses and
damages are set forth in the contract for cargo handling services it had executed with the PPA. Corollarily
then, the rights of an arrastre operator to be paid for damages it sustains from handling cargoes do not
likewise spring from contracts of carriage.However, in the instant petition, the contending parties make no
references at all to any provisions in the contract for cargo handling services ATI had executed with the
PPA.

67. INTERNATIONAL CONTAINER TERMINAL SERVICES, INC. V. CHUA

G.R. No. 195031; March 28, 2014
Perez, J.

FACTS:
Private respondent Celeste Chua arrived from the United States. Her personal effects arrived in
North Harbor, Manila and were stored in a twenty-feet container van. Her belongings were unloaded from
the vessel and placed in the depot belonging to International Container Terminal Services, Inc. for
safekeeping pending the customs inspection.

In May 1997, however, fire broke in petitioner's depot, razing the container van of Chua, together with 44
others. Reports showed that 70% of the contents of the van was found to be totally burnt, while the
remaining was wet, dirty, and unusable.

Chua demanded reimbursement for the value of her goods, but this was to no avail. Insistent, she
filed the present action for damages against petitioner International Container, arguing that the fact that
petitioner stored in the depot combustible chemicals, which started the fire, and no evidence were found
as to how the fire broke out, petitioner should be liable as its act of storing flammables was the proximate
cause of the fire. She also imputed on petitioner failure to to exercise due diligence in the selection and
supervision of its employees and/or of their work. On the other hand, petitioner argued that the was due
to a fortuitous event.

The Regional Trial Court rendered a decision ordering petitioner to pay respondent actual
damages, moral damages and and attorney's fees. The Court of Appeals upheld the ruling of the trial
court stating that the RTC correctly ruled in applying the doctrine of res ipsa loquitur and that the
presumption of negligence was unsuccessfully overthrown by petitioner. Hence, the petition.

ISSUE:
Whether or not the doctrine of res ipsa loquitur applies in this case.
HELD:
YES. The doctrine of res ipsa loquitur is based on the theory that the defendant either knows the cause of
the accident or has the best opportunity of ascertaining it and the plaintiff, having no knowledge thereof, is
compelled to allege negligence in general terms. In such instance, the plaintiff relies on proof of the
happening of the accident alone to establish negligence. The doctrine, however, can be invoked when
and only when, under the circumstances involved, direct evidence is absent and not readily available.

Here, there was no evidence as to how or why the fire in the container yard of petitioner started;
hence, it was up to petitioner to satisfactorily prove that it exercised the diligence required to prevent the
fire from happening. This it failed to do. Thus, the trial court and the CA acted appropriately in applying
the principle of res ipsa loquitur to the case at bar.

The Supreme Court, echoing the CA, ruled that fire that occurred would not have happened in the
ordinary course of things if reasonable care and diligence had been exercised by petitioner.

68. VICENTE JOSEFA, Petitioner, vs. MANILA ELECTRIC COMPANY, Respondent.

G.R. No. 182705 July 18, 2014

FACTS:
As a result of a vehicular accident, a 45-foot wooden electricity post, three 75 KVA transformers, and
other electrical line attachments were damaged.5 Upon investigation, respondent Manila Electric
Company (Meralco) discovered that it was the truck with plate number PAK-874 and registered in
Josefa’s name that hit the electricity post.6 Meralco demanded from Josefa reimbursement for the
replacement cost of the electricity post and its attachments, but Josefa refused to pay. 7 Thus, on
September 28, 1993, Meralco sued Josefa and Pablo Manoco, the truck driver, for damages before the
Regional Trial Court (RTC) of Pasig City.8 In its complaint, Meralco alleged that Manoco’s (name
amended to Bautista) reckless driving resulted in damage to itsproperties. It also imputed primary liability
on Josefa for his alleged negligence in the selection and supervision of Manoco. It thus prayed for the
indemnification of the amount of P384,846.00 as actual damages, P50,000.00 as attorney’s fees,
P10,000.00 as litigation expenses, and the costs of the suit. 9 In defense, Josefa denied thatManoco was
his employee when the accident occurred. He also maintained that he exercised the diligence of a good
father of a family in the selection and supervision of all his employees. During trial, Meralco offered the
testimonies of six witnesses as well as documentary evidence to substantiate its claim for damages
against Josefa. The RTC eventually declared the case as submitted for decision without Josefa’s
evidence-in-chief due to the numerous and unreasonable delays that he incurred in the presentation of
evidence.29 RTC dismissed the complaint for insufficiency of evidence. The RTC held that Meralco failed
to establish that it was the truck that hit the electricity post. The CA reversed the RTC ruling and held that
the RTC erred in disregarding the parties’ stipulation at the pre-trial that it was the truck that hit the
electricity post. The CA also stated that the employer’s presumptive liability in quasi-delicts was anchored
on injuries caused by the employee’s negligence and that even assuming that Bautista was not Josefa’s
employee, the CA maintained that Josefa would still be liable for damages since the law presumes that
the registered owner has control of his vehicle and its driver at the time of the accident. It thus ordered
Josefa to pay Meralco.

ISSUE:
1. W/N Bautista is presumed negligent in driving the truck based on the doctrine of res ipsa loquitur
2. W/N Meralco is entitled to actual damages, attorney’s fees, and expenses of litigation

HELD:
1. Yes, for this doctrine to apply, the complainant must show that: (1) the accident is of such
character as to warrant an inference that it would not have happened except for the defendant’s
negligence; (2) the accident must have been caused by an agency or instrumentality within the
exclusive management or control of the person charged with the negligence complained of; and
(3) the accident must not have been due to any voluntary action or contribution on the part of the
person injured. The present case satisfies all the elements of res ipsa loquitur. It is very unusual
and extraordinary for the truck to hit an electricity post, an immovable and stationary object,
unless Bautista, who had the exclusive management and control of the truck, acted with fault or
negligence. We cannot also conclude that Meralco contributed to the injury since it safely and
permanently installed the electricity post beside the street. This doctrine postulates that, as a
matter of common knowledge and experience and in the absence of some explanation by the
defendant who is charged with negligence, the very nature of occurrences may justify an
inference of negligence on the part of the person who controls the instrumentality causing the
injury. In other words, res ipsa loquitur is grounded on the superior logic of ordinary human
experience that negligence may be deduced from the mere occurrence of the accident itself.

2. No, despite Josefa’s vicarious liability in this case, Meralco failed to point out the specific facts
that afford a basis for its claim for actual damages. Actual damages cannot be presumed; they
must be pleaded and proven in court in order to be recoverable. One is entitled to an adequate
compensation only for the pecuniary loss that he has adequately proved based upon competent
proof and on the best evidence obtainable by him. Nonetheless, Meralco is entitled to temperate
damages because there is no doubt that it suffered pecuniary loss as a result of Bautista and
Josefa’s negligence. When the court finds that some pecuniary loss has been suffered but the
amount cannot, from the nature of the case, be proven with certainty, the court may award
temperate damages in the exercise of its sound discretion.
Damages
 1. NEW WORLD DEVELOPERS AND MANAGEMENT, INC., VS. AMA COMPUTER LEARNING
CENTER, INC., AMA COMPUTER LEARNING CENTER, INC., PETITIONER, VS. NEW WORLD
DEVELOPERS AND MANAGEMENT, INC., RESPONDENT.
G.R. No. 187930 and G.R. No. 188250 | 2015-02-23

FIRST DIVISION
SERENO, C.J.:
Liquidated Damages

FACTS:
New World is the owner of a commercial building located at No. 1104-1118 España corner
Paredes Streets, Sampaloc, Manila. In 1998, AMA agreed to lease the entire second floor of the building
for its computer learning center, and the parties entered into a Contract of Lease covering the eight-year
period from 15 June 1998 to 14 March 2006.
The monthly rental for the first year was set at P181,500, with an annual escalation rate
equivalent to 15% for the succeeding years. It was also provided that AMA may preterminate the contract
by sending notice in writing to New World at least six months before the intended date. In case of
pretermination, AMA shall be liable for liquidated damages in an amount equivalent to six months of the
prevailing rent.
On the evening of 6 July 2004, AMA removed all its office equipment and furniture from the
leased premises. The following day, New World received a letter from AMA dated 6 July 2004[10] stating
that the former had decided to preterminate the contract effective immediately on the ground of business
losses due to a drastic decline in enrollment. AMA also demanded the refund of its advance rental and
security deposit.

ISSUE:
Whether AMA is liable for liquidated damages

HELD:
Yes.
Item No. 14 of the Contract of Lease states:
That [AMA] may pre-terminate this Contract of Lease by notice in writing to [New World] at least
six (6) months before the intended date of pre-termination, provided, however, that in such case, [AMA]
shall be liable to [New World] for an amount equivalent to six (6) months current rental as liquidated
damages;
Quite notable is the fact that AMA never denied its liability for the payment of liquidated damages
in view of its pretermination of the lease contract with New World. What it claims, however, is that it is
entitled to the reduction of the amount due to the serious business losses it suffered as a result of a
drastic decrease in its enrollment.
xxx
It is quite easy to understand the reason why a lessor would impose liquidated damages in the
event of the pretermination of a lease contract. Pretermination is effectively the breach of a contract, that
was originally intended to cover an agreed upon period of time. A definite period assures the lessor a
steady income for the duration. A pretermination would suddenly cut short what would otherwise have
been a longer profitable relationship. Along the way, the lessor is bound to incur losses until it is able to
find a new lessee, and it is this loss of income that is sought to be compensated by the payment of
liquidated damages.

2. MERALCO vs MATILDE MACABAGDAL RAMOY

GR. No. 158911; March 4, 2008

FACTS:
In the year 1987, the National Power Corporation filed with the MTC Quezon City a case for ejectment
against several persons allegedly illegally occupying its properties in Baesa, Quezon City. Among the
defendants in the ejectment case was Leoncio Ramoy, one of the plaintiffs in the case at bar. On April 28,
1989 the MTC rendered judgment for MERALCO to demolish or remove the building and structure they
built on the land of the plaintiff and to vacate the premises. On June 20, 1999 NPC wrote to MERALCO
requesting the immediate disconnection of electric power supply to all residential and commercial
establishments beneath the NPC transmission lines along Baesa, Quezon City. In a letter dated August
17, 1990 MERALCO requested NPC for a joint survey to determine all the establishments which are
considered under NPC property. In due time, the electric service connection of the plaintiffs was
disconnected. But during the ocular inspection ordered by the Court, it was found out that the residence
of the plaintiffs-spouses was outside the NPC property. RTC decided in favor of MERALCO by dismissing
herein respondents' claim for moral damages, exemplary damages and attorney's fees. However, the
RTC ordered MERALCO to restore the electric power supply of respondents. Respondents then appealed
to the CA. CA faulted MERALCO for not requiring from National Power Corporation (NPC) a writ of
execution or demolition and in not coordinating with the court sheriff or other proper officer before
complying with the NPC's request. Thus, the CA held MERALCO liable for moral and exemplary damages
and attorney's fees. MERALCO's motion for reconsideration of the Decision was denied.

ISSUES:
(1) Whether or Not the Court of Appeals gravely erred when it found MERALCO negligent when it
disconnected the subject electric service of respondents.
(2)Whether or not the Court of Appeals gravely erred when it awarded moral and exemplary damages
and attorney’s fees against MERALCO under the circumstances that the latter acted in goodfaith in the
disconnection of the electric services of the respondents.

HELD:
(1) No. The Court agrees with the CA that under the factual milieu of the present case, MERALCO failed
to exercise the utmost degree of care and diligence required of it, pursuant to Articles 1170 & 1173 of the
Civil Code. It was not enough for MERALCO to merely rely on the Decision of the MTC without
ascertaining whether it had become final and executory. Verily, only upon finality of the said Decision can
it be said with conclusiveness that respondents have no right or proper interest over the subject property,
thus, are not entitled to the services of MERALCO.
(2) No. MERALCO willfully caused injury to Leoncio Ramoy by withholding from him and his tenants the
supply of electricity to which they were entitled under the Service Contract. This is contrary to public
policy because, MERALCO, being a vital public utility, is expected to exercise utmost care and diligence
in the performance of its obligation. Thus, MERALCO’s failure to exercise utmost care and diligence in
the performance of its obligation to Leoncio Ramoy is tantamount to bad faith. Leoncio Ramoy testified
that he suffered wounded feelings because of MERALCO’s actions. Furthermore, due to the lack of
power supply, the lessees of his four apartments on subject lot left the premises. Clearly, therefore
Leoncio Ramoy is entitled to moral damages in the amount awarded by the CA. Nevertheless, Leoncio is
the sole person entitled to moral damages as he is the only who testified on the witness stand of his
wounded feelings. Pursuant to Article 2232 of the Civil Code, exemplary damages cannot be awarded as
MERALCO’s acts cannot be considered wanton, fraudulent, reckless, oppressive or malevolent. Since the
Court does not deem it proper to award exemplary damages in this case then the CA’s award of
attorney’s fees should likewise be deleted, as pursuant to Article 2208 of the Civil Code of which the
grounds were not present.

3. MINDANAO TERMINAL AND BROKERAGE SERVICE, INC. VS. PHOENIX ASSURANCE

COMPANY OF NEW YORK, MCGEE.
G.R. No. 162467 May 8, 2009

FACTS:
Del Monte Philippines, Inc. contracted petitioner Mindanao Terminal and Brokerage Service, Inc., a
stevedoring company, to load and stow a shipment of, 288 cartons of fresh green Philippine bananas
and15,202 cartons of fresh pineapples belonging to Del MonteFresh Produce International, Inc. into the
cargo hold of the vessel M/V Mistrau. The vessel was docked at the port of Davao City and the goods
were to be transported by it to the port of Inchon, Korea in favor of consignee Taegu Industries, Inc. Del
Monte Produce insured the shipment under an "open cargo policy" with private respondent Phoenix
Assurance Company of New York , a non-life insurance company, and private respondent McGee & Co.
Inc. (McGee), the underwriting manager/agent of Phoenix.
The vessel set sail from the port of Davao City and arrived at the port of Inchon, Korea. It was then
discovered upon discharge that some of the cargo was in bad condition. The Marine Cargo Damage
Surveyor of Incok Loss and Average Adjuster of Korea, through its representative Byeong Yong Ahn
(Byeong), surveyed the extent of the damage of the shipment. In a survey report, it was stated that
16,069 cartons of the banana shipment and 2,185 cartons of the pineapple shipment were so damaged
that they no longer had commercial value. Mindanao Terminal loaded and stowed the cargoes aboard the
M/V Mistrau. The vessel set sail from the port of Davao City and arrived at the port of Inchon, Korea. It
was then discovered upon discharge that some of the cargo was in bad condition.
Del Monte Produce filed a claim under the open cargo policy for the damages to its shipment. McGee’s
Marine Claims Insurance Adjuster evaluated the claim and recommended that payment in the amount of
$210,266.43 be made. Phoenix and McGee instituted an action for damages against Mindanao Terminal
After trial, the RTC held that the only participation of Mindanao Terminal was to load the cargoes on
board the
M/V Mistrau under the direction and supervision of the ship’s officers, who would not have accepted the
cargoes on board the vessel and signed the foreman’s report unless they were properly arranged and
tightly secured to withstand voyage across the open seas. Accordingly, Mindanao Terminal cannot be
held liable for whatever happened to the cargoes after it had loaded and stowed them. Moreover, citing
the survey report, it was found by the RTC that the cargoes were damaged on account of a typhoon
which M/V Mistrau had encountered during the voyage. It was further held that Phoenix and McGee had
no cause of action against Mindanao Terminal because the latter, whose services were contracted by Del
Monte, a distinct corporation from Del Monte Produce, had no contract with the assured Del Monte
Produce. The RTC dismissed the complaint and awarded the counterclaim of
Mindanao Terminal in the amount of P83,945.80 as actual damages and P100,000.00 as attorney’s fees.

ISSUE:
Whether or not Phoenix and McGee have a cause of action and whether Mindanao Terminal is liable for
not having exercised extraordinary diligence in the transport and storage of the cargo.

HELD:
No, in the present case, Mindanao Terminal, as a stevedore, was only charged with the loading and
stowing of the cargoes from the pier to the ship’s cargo hold; it was never the custodian of the shipment
of Del Monte Produce.
A stevedore is not a common carrier for it does not transport goods or passengers; it is not akin to a
warehouseman for it does not store goods for profit.
**Phoenix and McGee appealed to the Court of Appeals. The appellate court reversed and set aside the
decision The same court ordered Mindanao Terminal to pay Phoenix and McGee "the total amount of
$210,265.45 plus legal interest from the filing of the complaint until fully paid and attorney’s fees of 20%
of the claim." It sustained Phoenix’s and McGee’s argument that the damage in the cargoes was the
result of improper stowage by Mindanao Terminal.
** Mindanao Terminal filed a motion for reconsideration, which the Court of Appeals denied in its 26
February 2004 resolution. Hence, the present petition for review.

4. AIR FRANCE vs. RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS
G.R. No. L-21438 September 28, 1966

FACTS:
In March 1958, Rafael Carrascoso and several other Filipinos were tourists en route to Rome
from Manila. Carrascoso was issued a first class round trip ticket by Air France. But during a stop-over in
Bangkok, he was asked by the plane manager of Air France to vacate his seat because a white man
allegedly has a “better right” than him. Carrascoso protested but when things got heated and upon advise
of other Filipinos on board, Carrascoso gave up his seat and was transferred to the plane’s tourist class.

After their tourist trip when Carrascoso was already in the Philippines, he sued Air France for
damages for the embarrassment he suffered during his trip.
CFI Manila eventually held in favor of Carrascoso, sentencing petitioner to pay respondent P25,000.00 by
way of moral damages; P10,000.00 as exemplary damages, among other things. The decision was
affirmed by the Court of Appeals.
Air France is assailing the decision of the trial court and the CA. It avers that respondent knew
that he did not have confirmed reservations for first class on any specific flight, although he had tourist
class protection; that, accordingly, the issuance of a first class ticket to Carrascoso was not an assurance
that he will be seated in first class because allegedly in truth and in fact, that was not the true intent
between the parties.

ISSUE:
Is Respondent Carrascoso entitled to damages?

HELD:
Yes.
The manager not only prevented Carrascoso from enjoying his right to a first class seat; worse,
he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of
having to go to the tourist class compartment - just to give way to another passenger whose right thereto
has not been established. Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning
different from what is understood in law. For, "bad faith" contemplates a "state of mind affirmatively
operating with furtive design or with some motive of self-interest or will or for ulterior purpose."

For the willful malevolent act of petitioner's manager, petitioner, his employer, must
answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.

The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by the
carrier's employees with kindness, respect, courtesy and due consideration.

Although the relation of passenger and carrier is "contractual both in origin and nature"
nevertheless "the act that breaks the contract may be also a tort". The stress of Carrascoso's action
as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by the
petitioner air carrier — a case of quasi-delict. Damages are proper.

5. WILLIAM R. BAYANI vs. PANAY ELECTRIC CO., INC. (PECO)

G.R. No. 139680. April 12, 2000.

FACTS:
PECO discontinued supplying electrical services to two pension housed owned by petitioner
William Bayani on the ground that the latter had been stealing electricity in said establishments.
Subsequently, PECO filed two (2) criminal complaints against Bayani for violation of RA 7832 which was
dismissed by the City Prosecutor. Hence, PECO appealed with the Secretary of Justice who later upheld
the dismissal of the complaints.
Bayani filed an action for damages arising from malicious prosecution. The RTC also approved
his petition for the issuance of preliminary mandatory injunction ordering PECO to restore electricity to
said pension houses after putting up a surety bond. In a petition for certiorari, PECO sought, among
others, to have the civil case dismissed.
Later, CA dismissed the civil case on the ground of prematurity. Hence, this petition by Bayani.

ISSUE:
Is the civil case based on malicious prosecution?

HELD: No.
 There is malicious prosecution when a person directly insinuates or imputes to an innocent
person the commission of a crime and the maliciously accused is compelled to defend himself in court.
The scope of accusation has expanded to include unfounded civil suits instituted just to vex and humiliate
the defendant despite the absence of a cause of action or probable cause. The basis for a civil action for
damages arising from malicious prosecution is found in Articles 19, 21, 29, and 35 of the Civil Code.
The requisites for an action for damages based on malicious prosecution are: (1) the fact of the
prosecution and the further fact that the defendant was himself the prosecutor, and that the action was
finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable
cause; and (3) the prosecutor was actuated or impelled by legal malice.
Considering the facts in the case, the Court affirms the decision of the CA. The element of final
termination of the action resulting in an acquittal was absent at the time petitioner Bayani filed the civil
case.

6. WASSMER VS VELEZ
GR NO. L-20089 DECEMBER 26, 1964

FACTS:
In 1954, Francisco Velez and Beatriz Wassmer planned their marriage. They decided to schedule it on
September 4, 1954. And so Wassmer made preparations such as: making and sending wedding
invitations, bought her wedding dress and other apparels, and other wedding necessities. But 2 days
before the scheduled day of wedding, Velez sent a letter to Wassmer advising her that he will not be able
to attend the wedding because his mom was opposed to said wedding. And one day before the wedding,
he sent another message to Wassmer advising her that nothing has changed and that he will be returning
soon. However, he never returned.
This prompted Wassmer to file a civil case against Velez. Velez never filed an answer and eventually
judgment was made in favor of Wassmer. The court awarded exemplary and moral damages in favor of
Wassmer.
On appeal, Velez argued that his failure to attend the scheduled wedding was because of fortuitous
events. He further argued that he cannot be held civilly liable for breaching his promise to marry Wassmer
because there is no law upon which such an action may be grounded. He also contested the award of
exemplary and moral damages against him.

ISSUE:
Whether or not the award of damages is proper.

HELD:
Yes. The defense of fortuitous events raised by Velez is not tenable and also unsubstantiated. It is true
that a breach of promise to marry per se is not an actionable wrong. However, in this case, it was not a
simple breach of promise to marry. because of such promise, Wassmer made preparations for the
wedding. Velez’s unreasonable withdrawal from the wedding is contrary to morals, good customs or
public policy. Wassmer’s cause of action is supported under Article 21 of the Civil Code which provides in
part “any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.” And under the law, any violation of
Article 21 entitles the injured party to receive an award for moral damages as properly awarded by the
lower court in this case. Further, the award of exemplary damages is also proper. Here, the
circumstances of this case show that Velez, in breaching his promise to Wassmer, acted in wanton,
reckless, and oppressive manner – this warrants the imposition of exemplary damages against him.
 7. SANTOS VENTURA HOCORMA FOUNDATION INC. VS ERNESTO V SANTOS AND RIVERLAND
INC.
GR No. 153004 November 5, 2004
Quisumbing, J.:

FACTS:
Ernesto V. Santos and Santos Ventura Hocorma Foundation, Inc. (SVHFI) were the plaintiff and
defendant, respectively, in several civil cases filed in different courts in the Philippines. On October 26,
1990, the parties executed a Compromise Agreement which amicably ended all their pending litigations.

In compliance with the Compromise Agreement, respondent Santos moved for the dismissal of
the aforesaid civil cases. He also caused the lifting of the notices of lis pendens on the real properties
involved. For its part, petitioner SVHFI, paid P1.5 million to respondent Santos, leaving a balance of P13
million.

Subsequently, petitioner SVHFI sold to Development Exchange Livelihood Corporation two real
properties, which were previously subjects of lis pendens. Discovering the disposition made by the
petitioner, respondent Santos sent a letter to the petitioner demanding the payment of the remaining P13
million, which was ignored by the latter. Meanwhile, on September 30, 1991, the Regional Trial Court of
Makati City, Branch 62, issued a Decision approving the compromise agreement.

The Sheriff levied on the real properties of petitioner, which were formerly subjects of the lis
pendens. Petitioner, however, filed numerous motions to block the enforcement of the said writ. The
challenge of the execution of the aforesaid compromise judgment even reached the Supreme Court. All
these efforts, however, were futile. Subsequently, the properties were auctioned.

ISSUE:
Whether or not the respondents are entitled to legal interest?

HELD:
Petitioners alleged that;
1. where a compromise agreement does not provide for the payment of interest,
there can be no legal interest because there will be no basis
2. respondents are barred by res judicata from seeking legal interest on account of
waiver clause in the duly approved compromise agreement
3. since the compromise agreement did not provide for a period within which the
obligation will become due and demandable, it is incumbent upon respondent
Santos to ask for judicial intervention for purposes of fixing the period

Respondent profer that their right to damages is based on delay in the

payment of the obligation provided in the Compromise Agreement. The Compromise Agreement provides
that payment must be made within the two-year period from its execution.

The general rule is that a compromise has upon the parties the effect and authority of res
judicata, with respect to the matter definitely stated therein, or which by implication from its terms should
be deemed to have been included therein. This holds true even if the agreement has not been judicially
approved.

In the case at bar, the Compromise Agreement was entered into by the parties on October 26,
1990. It was judicially approved on September 30, 1991. Applying existing jurisprudence, the compromise
agreement as a consensual contract became binding between the parties upon its execution and not
upon its court approval. From the time a compromise is validly entered into, it becomes the source of the
rights and obligations of the parties thereto. The purpose of the compromise is precisely to replace and
terminate controverted claims.
 Delay as used in this article is synonymous to default or mora which means delay in the fulfillment
of obligations. It is the non-fulfillment of the obligation with respect to time.

In order for the debtor to be in default, it is necessary that the following requisites be present: (1)
that the obligation be demandable and already liquidated; (2) that the debtor delays performance; and (3)
that the creditor requires the performance judicially or extrajudicially.

In the case at bar, the obligation was already due and demandable after the lapse of the two-year
period from the execution of the contract. The two-year period ended on October 26, 1992. When the
respondents gave a demand letter on October 28, 1992, to the petitioner, the obligation was already due
and demandable. Furthermore, the obligation is liquidated because the debtor knows precisely how much
he is to pay and when he is to pay it.

The second requisite is also present. Petitioner delayed in the performance. It was able to fully
settle its outstanding balance only on February 8, 1995, which is more than two years after the extra-
judicial demand. Moreover, it filed several motions and elevated adverse resolutions to the appellate court
to hinder the execution of a final and executory judgment, and further delay the fulfillment of its obligation.

Third, the demand letter sent to the petitioner on October 28, 1992, was in accordance with an
extra-judicial demand contemplated by law.

Verily, the petitioner is liable for damages for the delay in the performance of its obligation. This is
provided for in Article 117025 of the New Civil Code.

8. THE METROPOLITAN BANK AND TRUST COMPANY vs. ANA GRACE ROSALES AND YO YUK
TO
G.R. No. 183204 January 13, 2014

FACTS:
Petitioner Metropolitan Bank and Trust Company is a domestic banking corporation duly organized and
existing under the laws of the Philippines. Respondent Ana Grace Rosales (Rosales) is the owner of
China Golden Bridge Travel Services, a travel agency. Respondent Yo Yuk To is the mother of
respondent Rosales.
In 2000, respondents opened a Joint Peso Account with petitioner’s Pritil-Tondo Branch. As of August 4,
2004, respondents’ Joint Peso Account showed a balance of P2,515,693.52.
In May 2002, respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese National applying
for a retiree’s visa from the Philippine Leisure and Retirement Authority (PLRA), to petitioner’s branch in
Escolta to open a savings account, as required by the PLRA. Respondents opened with petitioner’s Pritil-
Tondo Branch a Joint Dollar Account with an initial deposit of US$14,000.00.
On July 31, 2003, petitioner issued a "Hold Out" order against respondents’ accounts.
On September 3, 2003, petitioner, through its Special Audit Department Head Antonio Ivan Aguirre, filed
before the Office of the Prosecutor of Manila a criminal case for Estafa through False Pretences,
Misrepresentation, Deceit, and Use of Falsified Documents, docketed as I.S. No. 03I-25014, against
respondent Rosales. Petitioner accused respondent Rosales and an unidentified woman as the ones
responsible for the unauthorized and fraudulent withdrawal of US$75,000.00 from Liu Chiu Fang’s dollar
account with petitioner’s Escolta Branch. Petitioner alleged that on February 5, 2003, its branch in Escolta
received from the PLRA a Withdrawal Clearance for the dollar account of Liu Chiu Fang; that in the
afternoon of the same day, respondent Rosales went to petitioner’s Escolta Branch to inform its Branch
Head, Celia A. Gutierrez (Gutierrez), that Liu Chiu Fang was going to withdraw her dollar deposits in
cash; that Gutierrez told respondent Rosales to come back the following day because the bank did not
have enough dollars; that on February 6, 2003, respondent Rosales accompanied an unidentified
impostor of Liu Chiu Fang to the bank; that the impostor was able to withdraw Liu Chiu Fang’s dollar
deposit in the amount of US$75,000.00; that on March 3, 2003, respondents opened a dollar account with
petitioner; and that the bank later discovered that the serial numbers of the dollar notes deposited by
respondents in the amount of US$11,800.00 were the same as those withdrawn by the impostor.
Respondent Rosales, however, denied taking part in the fraudulent and unauthorized withdrawal from the
dollar account of Liu Chiu Fang. Respondent Rosales claimed that she did not go to the bank on
February 5, 2003. Neither did she inform Gutierrez that Liu Chiu Fang was going to close her
account. Respondent Rosales further claimed that after Liu Chiu Fang opened an account with petitioner,
she lost track of her.
On December 15, 2003, the Office of the City Prosecutor of Manila issued a Resolution dismissing the
criminal case for lack of probable cause. Unfazed, petitioner moved for reconsideration.
On September 10, 2004, respondents filed before the Regional Trial Court (RTC) of Manila a Complaint
for Breach of Obligation and Contract with Damages, docketed as Civil Case No. 04110895 and raffled to
Branch 21, against petitioner. Respondents alleged that they attempted several times to withdraw their
deposits but were unable to because petitioner had placed their accounts under "Hold Out" status. No
explanation, however, was given by petitioner as to why it issued the "Hold Out" order. Thus, they prayed
that the "Hold Out" order be lifted and that they be allowed to withdraw their deposits. They likewise
prayed for actual, moral, and exemplary damages, as well as attorney’s fees.

ISSUES:
(1) Whether petitioner breached its contract with respondents, and
(2) if so, whether it is liable for damages

HELD:
The Petition is bereft of merit.
In view of the foregoing, we find that petitioner is guilty of breach of contract when it unjustifiably refused
to release respondents’ deposit despite demand. Having breached its contract with respondents,
petitioner is liable for damages.
Respondents are entitled to moral and exemplary damages and attorney’s fees.
In cases of breach of contract, moral damages may be recovered only if the defendant acted fraudulently
or in bad faith, or is "guilty of gross negligence amounting to bad faith, or in wanton disregard of his
contractual obligations."
In this case, a review of the circumstances surrounding the issuance of the "Hold Out" order reveals that
petitioner issued the "Hold Out" order in bad faith. First of all, the order was issued without any legal
basis. Second, petitioner did not inform respondents of the reason for the "Hold Out." Third, the order was
issued prior to the filing of the criminal complaint. Records show that the "Hold Out" order was issued on
July 31, 2003, while the criminal complaint was filed only on September 3, 2003. All these taken together
lead us to conclude that petitioner acted in bad faith when it breached its contract with respondents. As
we see it then, respondents are entitled to moral damages.
As to the award of exemplary damages, Article 2229 of the Civil Code provides that exemplary damages
may be imposed "by way of example or correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages." They are awarded only if the guilty party acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.
In this case, we find that petitioner indeed acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner when it refused to release the deposits of respondents without any legal basis. We
need not belabor the fact that the banking industry is impressed with public interest. As such, "the highest
degree of diligence is expected, and high standards of integrity and performance are even required of
it." It must therefore "treat the accounts of its depositors with meticulous care and always to have in mind
the fiduciary nature of its relationship with them." For failing to do this, an award of exemplary damages is
justified to set an example.
The award of attorney's fees is likewise proper pursuant to paragraph 1, Article 2208 of the Civil Code.
In closing, it must be stressed that while we recognize that petitioner has the right to protect itself from
fraud or suspicions of fraud, the exercise of his right should be done within the bounds of the law and in
accordance with due process, and not in bad faith or in a wanton disregard of its contractual obligation to
respondents.
WHEREFORE, the Petition is hereby DENIED. The assailed April 2, 2008 Decision and the May 30, 2008
Resolution of the Court of Appeals in CA-G.R. CV No. 89086 are hereby AFFIRMED. SO ORDERED.
 9. SEVEN BROTHERS SHIPPING CORPORATION, Petitioner, vs. DMC-CONSTRUCTION
RESOURCES, INC., Respondent.
G.R. No. 193914 November 26, 2014

FACTS:
On 23 February 1996, the cargo ship M/V "Diamond Rabbit" (the Vessel) owned and operated by
defendant Seven Brothers Shipping Corporation (Seven Brothers),was at the PICOP Pier in Mangagoy,
Bislig, Surigao del Sur to dock there. According to the record, the weather that day was windy with a wind
force of 10 to 20 knots, and the sea condition was rough, with waves 6 to 8 feet high.
According to the report of the Master, it heaved its anchor and left the causeway in order to dock at the
PICOP Pier. A lifeboat pulled the vessel towards the Pier with a heaving line attached to the vessel’s
astern mooring rope, when suddenly, the heaving line broke loose, causing the astern mooring rope to
drift freely. The mooring rope got entangled in the vessel’s propeller, thereby choking and disabling it, and
preventing the further use of its main engine for maneuvering.
In order to stop the vessel from further drifting and swinging, its Master dropped her starboard anchor. To
help secure the vessel, its forward mooring rope was sent ashore and secured at the mooring fender.
However, because of the strong winds and rough seas, the vessel’s anchor and the mooring rope could
not hold the vessel.
Under the influence of the wind and current, the dead weight of the vessel caused it to swung from side to
side until the fender, where the mooring rope was attached, collapsed. The uncontrollable and
unmaneuverable vessel drifted and dragged its anchor until it hit several structures at the Pier, including
the coal conveyor facility owned by DMC Construction Equipment Resources, Inc. (DMC).
Respondent filed with the RTC a Complaint for damages against respondent on 23 March 1998. On 18
January 2001, the RTC issued a Decision ordering defendant to pay plaintiff:
(a) Actual damages in the amount of P3,523,175.92 plus legal interest of 6% per annum from the date of
the filing of this complaint until the same is fully paid; and
(b) Costs of suit.
The appeal was dismissed by the CA. The CA affirmed the RTC’s Decision with respect to the finding of
negligence on the part of the vessel’s captain. However, the appellate court modified the nature of
damages awarded (from actual to nominal), on the premise that actual damages had not been proved.

ISSUE:
Did the CA erred in awarding nominal damages to respondent after having ruled that the actual damages
awarded by the RTC was unfounded?

HELD:
Yes. We rule that temperate, and not nominal, damages should be awarded to respondent in the amount
of P3,523,175.92. To resolve the issue at hand, we must first determine whether there was indeed a
violation of petitioner’s right. Two facts have been established by the appellate and trial courts: that
respondent suffered a loss caused by petitioner; and that respondent failed to sufficiently establish the
amount due to him, as no actual receipt was presented.
Temperate or moderate damages may be recovered when the court finds that some pecuniary loss has
been suffered but its amount cannot, from the nature of the case, be provided with certainty.
Under the Civil Code, when an injury has been sustained, actual damages may be awarded under the
following condition: Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is
referred to as actual or compensatory damages. (Emphasis ours)
As we have stated in Dee Hua Liong Electrical Equipment Corp., v. Reyes, 31 "[a]ctual or compensatory
damages cannot be presumed, but must be duly proved, and proved with a reasonable degree of
certainty. A court cannot rely on speculation, conjecture or guess work as to the fact and amount of
damages, but must depend upon competent proof that they have suffered and on evidence of the actual
amount thereof. If the proof is flimsy and unsubstantial, no damages will be awarded."
Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or
exemplary damages, may be adjudicated. The assessment of such damages, except liquidated ones, is
left to the discretion of the court, according to the circumstances of each case.
Under Article 2221 of the Civil Code, nominal damages may be awarded in order that the plaintiff’s right,
which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered. We have laid down the concept of nominal
damages in the following wise: Nominal damages are ‘recoverable where a legal right is technically
violated and must be vindicated against an invasion that has produced no actual present loss of any kind
or where there has been a breach of contract and no substantial injury or actual damages whatsoever
have been or can be shown.
The Code Commission, in explaining the concept of temperate damages under Article 2224, makes the
following comment: In some States of the American Union, temperate damages are allowed. There are
cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the
court is convinced that there has been such loss. For instance, injury to one's commercial credit or to the
goodwill of a business firm is often hard to show with certainty in terms of money. Should damages be
denied for that reason? The judge should be empowered to calculate moderate damages in such cases,
rather than that the plaintiff should suffer, without redress from the defendant's wrongful act.
Given these findings, we are of the belief that temperate and not nominal damages should have been
awarded, considering that it has been established that respondent herein suffered a loss, even if the
amount thereof cannot be proven with certainty.

10. PEOPLE OF THE PHILIPPINES VS. SHIRLEY A. CASIO

G.R. No. 211465, December 3, 2014

FACTS:
International Justice Mission (IJM) coordinated with the police in order to entrap persons engaged in
human trafficking in Cebu City. A team of police operatives were designated as decoys, pretending to be
tour guides looking for girls to entertain their guests. The team went to Queensland Motel and rented
Rooms 24 and 25. These rooms were adjacent to each other. Room 24 was designated for the
transaction while Room 25 was for the rest of the police team. The team proceeded
to D. Jakosalem Street in Barangay Kamagayan, Cebu City’s red light district. Shirley Casio noticed them
and called their attention by saying “Chicks mo dong?” (Do you like girls, guys?). The police operatives
told Casio that they have a guests waiting in the hotel. After a few minutes, accused returned with AAA
and BBB The team convinced Casio to come with them to Queensland Motel and was soon arrested by
police operatives. The trial court found Casio guilty of violating R.A. 9208, otherwise known as the “Anti-
Trafficking in Persons Act of 2003.”
Casio argues that there was no valid entrapment. Instead, she was instigated into committing the crime.
The police did not conduct prior surveillance and did not even know who their subject was. She denied
being a pimp and asserted that she was a laundrywoman. In addition, AAA admitted that she worked as a
prostitute. Thus, it was her decision to display herself to solicit customers.

ISSUES:
1. Is the entrapment of Casio valid?
2. Is Casio liable under of R.A. 9208?

RULING:
There is a valid entrapment
There is entrapment when law officers employ ruses and schemes to ensure
the apprehension of the criminal while in the actual commission of the crime. There is instigation when
the accused is induced to commit the crime. The difference in the nature of the two lies in the origin of the
criminal intent. In entrapment, the mens rea originates from the mind of the criminal. The idea and the
resolve to commit the crime come from him. In instigation, the law officer conceives the commission of the
crime and suggests to the accused who adopts the idea and carries it into execution. As testified by the
police operatives, Casio called out their attention by saying “Chicks mo dong?” If accused had no
predisposition to commit the offense, then she most likely would not have asked the police operatives if
they wanted girls.
Casio is liable under R.A. No. 9208
Knowledge or consent of the minor is not a defense under Republic Act No. 9208. Trafficking in persons
can still be committed even if the victim gives consent. Under Section 3(a) of Republic Act No. 9208
wherein it is stated that trafficking in persons refers to the recruitment, transportation, transfer or
harboring, or receipt of persons with or without the victim's consent or knowledge.

11. TELEFAST COMMUNICATIONS vs. CASTRO

GR 73867 Feb 29, 1988

FACTS:
Sofia Crouch was in the Philippines for vacation when her mother died. Onthat same day, she
adddressed a telegramannouncing her mother’s death to Ignacio Castro, Sr at 685, Wanda, Scottsburg,
Indiana, USA. The defendants, after receiving the required fees and charges, accepted the telegram for
transmission.
The husband and the children of the deceased who were all residing in the US never received the
telegram. Sofia Crouch was the only one present during the internment.
Sofia and the other plaintiffs then filed an action to recover damages arising from the breach of contract
against the defendants. The only defense of the defendants was that, the failure was due to “the technical
and atmospheric factors beyond its control”. However no evidence appeared on record that the defendant
ever make any attempt to advise Sofia as to why they could not transmit the telegram.

ISSUE:
Whether or not the petitioner are liable for damages for their failure to transmit the telegram.
Whether or not the petitioners should only liable for actual or quantified damages.

RULING:
Yes, they are liable. The defendant Sofia Crouch and the plaintiffs entered into a contract whereby the
plaintiffs shall send the respondents message overseas by telegram, after paying the required fees. The
defendant has performed her part in the obligation. However, the plaintiffs failed to do their part. Petitoner
therefore was guilty of contravening its obligation and is liable for damages pursuant to the provisions of
Art 1170 and Art. 2176 of the Civil Code.
No, their liability is not limited to actual or quantified damages.Pursuant to Art. 2217 of the Civil
Code, the petitioners are liable to indmenify the respondents for the moral damages they had suffered.
The petitioners act or omissionwas the precise cause of the sufferings that the respondents have to
undergo. Respondents Sofia Crouch shall be awarded with P16 000 as compensatory damages. Each of
the respondents shall be awarded with P10 000 as moral damages and P1 000 as exemplary damages.

12. BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. COURT OF APPEALS, ANNABELLE A.
SALAZAR, and JULIO R. TEMPLONUEVO, respondents.

FACTS:
A.A. Salazar Construction and Engineering Services filed an action for a sum of money with
damages against herein petitioner Bank of the Philippine Islands (BPI). The complaint was later amended
by substituting the name of Annabelle A. Salazar as the real party in interest in place of A.A. Salazar
Construction and Engineering Services. Private respondent Salazar prayed for the recovery of the
amount of P267,707.70 debited by petitioner BPI from her account. She likewise prayed for damages and
attorney's fees. Petitioner BPI, in its answer, alleged that Julio R. Templonuevo, private respondent,
demanded from the former payment representing the aggregate value of three (3) checks, which were
allegedly payable to him, but which were deposited with the petitioner bank to private respondent
Salazar's account (Account No. 0203-1187-67) without his knowledge and corresponding endorsement.
Accepting that Templonuevo's claim was a valid one, petitioner BPI froze Account 0201-0588-48 of A.A.
Salazar and Construction and Engineering Services, instead of Account No. 0203-1187-67 where the
checks were deposited, since this account was already closed by private respondent Salazar or had an
insufficient balance. Private respondent Salazar was advised to settle the matter with Templonuevo but
they did not arrive at any settlement. As it appeared that private respondent Salazar was not entitled to
the funds represented by the checks which were deposited and accepted for deposit, petitioner BPI
decided to debit amount of P267,707.70 from her Account No. 0201-0588-48 and the sum of
P267,692.50 was paid to Templonuevo by means of a cashier's check. n the answer to the third-party
complaint, private respondent Templonuevo admitted payment to him of P267,692.50 and argued that
said payment was to correct the malicious deposit made by private respondent Salazar to her private
account, and that petitioner bank's negligence and tolerance regarding the matter was violative of the
primary and ordinary rules of banking. RTC rendered a decision n favor of the plaintiff [private respondent
Salazar] and against the defendant [petitioner BPI] On appeal, the Court of Appeals (CA) affirmed the
decision of the RTC and held that respondent Salazar was entitled to the proceeds of the three (3)
checks.

ISSUE:
Does a collecting bank, over the objections of its depositor, have the authority to withdraw unilaterally
from such depositor's account the amount it had previously paid upon certain unendorsed order
instruments deposited by the depositor to another account that she later closed?

HELD:
As businesses affected with public interest, and because of the nature of their functions, banks are under
obligation to treat the accounts of their depositors with meticulous care, always having in mind the
fiduciary nature of their relationship. In this regard, petitioner was clearly remiss in its duty to private
respondent Salazar as its depositor. More importantly, however, solely upon the prompting of
Templonuevo, and with full knowledge of the brewing dispute between Salazar and Templonuevo,
petitioner debited the account held in the name of the sole proprietorship of Salazar without even serving
due notice upon her. This ran contrary to petitioner's assurances to private respondent Salazar that the
account would remain untouched, pending the resolution of the controversy between her and
Templonuevo.
These checks, it must be emphasized, were subsequently dishonored, thereby causing private
respondent Salazar undue embarrassment and inflicting damage to her standing in the business
community. Under the circumstances, she was clearly not given the opportunity to protect her interest
when petitioner unilaterally withdrew the above amount from her account without informing her that it had
already done so. the Court finds no reason to disturb the award of damages granted by the CA against
petitioner. This whole incident would have been avoided had petitioner adhered to the standard of
diligence expected of one engaged in the banking business. A depositor has the right to recover
reasonable moral damages even if the bank's negligence may not have been attended with malice and
bad faith, if the former suffered mental anguish, serious anxiety, embarrassment and humiliation. Moral
damages are not meant to enrich a complainant at the expense of defendant. It is only intended to
alleviate the moral suffering she has undergone. The award of exemplary damages is justified, on the
other hand, when the acts of the bank are attended by malice, bad faith or gross negligence. The award
of reasonable attorney's fees is proper where exemplary damages are awarded. It is proper where
depositors are compelled to litigate to protect their interest.

13. S.V. MORE PHARMA CORPORATION AND ALBERTO A. SANTILLANA VS. DRUGMAKERS
LABORATORIES, INC. AND ELIEZER DEL MUNDO
GR No. 200408 and 200416 November 12, 2014

FACTS:
Eliezer, Evangeline C. Del Mundo, and Atty. Quirico T. Carag (Atty. Carag) (Del Mundo Group) are the
registered owners of fifty percent (50%) (i.e., 250,000 shares of stock) of E.A. Northam Pharma
Corporation (E.A. Northam), a domestic corporation which exclusively distributes and markets 28 various
pharmaceutical products that are exclusively manufactured by Drugmakers, a domestic corporation under
the control of Eliezer. The remaining fifty percent (50%) in E.A. Northam are owned by Alberto and Nilo S.
Valente (Santillana Group). In an Agreement dated May 31, 1993, the Del Mundo Group agreed to cede
all their rights and interests in E.A. Northam in favor of the Santillana Group for a consideration of
4,200,000.00. However, it was agreed therein that: (a) the said pharmaceutical products shall remain
jointly owned by Eliezer/Drugmakers and Alberto; (b) the products shall be exclusively manufactured by
Drugmakers as long as Eliezer maintains majority ownership and control of the said company; and (c) the
products will be sold, conveyed, and transferred to S.V. More, provided that Alberto remains its chief
executive officer with majority ownership and control thereof.
On even date, E.A. Northam entered into a Deed of Sale/Assignment with S.V. More, whereby E.A.
Northam agreed to convey, transfer, and assign all its rights over 28 pharmaceutical products in favor of
S.V. More which shall then have the right to have them sold, distributed, and marketed in the latter’s
name, subject to the condition that such pharmaceutical products will be exclusively manufactured by
Drugmakers based on their existing Contract Manufacturing Agreement (CMA) set to expire in October
1993.
In September 1993, or a month prior to the expiration of the CMA, Drugmakers proposed a new
manufacturing agreement which S.V. More found unacceptable. In a letter dated October 20, 1993, S.V.
More, for the purpose of renewing its License to Operate with the Bureau of Food and Drug (BFAD),
requested a copy of the existing CMA from Drugmakers, but to no avail.16 Hence, on October 23, 1993,
S.V. More entered into a Contract to Manufacture Pharmaceutical Products (CMPP) with Hizon
Laboratories, Inc. (Hizon Laboratories), and, thereafter, caused the latter to manufacture some of the
pharmaceutical products covered by the Deed of Sale/Assignment.19 Meanwhile, the BFAD issued the
corresponding Certificates of Product Registration (CPR) therefor, with S.V. More as distributor, and
Hizon Laboratories as manufacturer. On February 23, 1995, and after their protest on the new registration
went unheeded, Drugmakers and Eliezer (respondents) filed a Complaint for Breach of Contract,
Damages, and Injunction with Prayer for the Issuance of a Writ of Preliminary Injunction and/or
Temporary Restraining Order against S.V. More and Alberto (petitioners), and Hizon Laboratories, and its
President, Rafael H. Hizon, Jr. (Rafael).

ISSUE:
WON the CA correctly affirmed petitioners' liability for breach of contract.

HELD:
The consolidated petitions are partly meritorious.
These provisions notwithstanding, records disclose that petitioner S.V. More, through the CMPP and
absent the prior written consent of respondent Drugmakers, as represented by its President, respondent
Eliezer, contracted the services of Hizon Laboratories to manufacture some of the pharmaceutical
products covered by the said contracts. Thus, since the CMPP with Hizon Laboratories was executed on
October 23, 1993, 54 or seven (7) days prior to the expiration of the CMA on October 30, 1993, it is clear
that S.V. More, as well as its President, petitioner Alberto, who authorized the foregoing, breached the
obligation to recognize Drugmakers as exclusive manufacturer, thereby causing prejudice to the latter.
Nevertheless, considering that respondents palpably suffered some form of pecuniary loss resulting from
petitioners' breach of contract, the Court deems it proper to, instead, award in their favor the sum of
PhP100,000.00 in the form of temperate damages. This course of action is hinged on Article 2224 of the
Civil Code which states that "temperate or moderate damages, which are more than nominal but less
than compensatory damages, may be recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be proved with certainty," as in this case. As
a final matter, the Court resolves that the CA did not gravely abuse its discretion in awarding respondents'
attorney's fees, it appearing that the latter were compelled to litigate in order to protect their rights and
interests in this case, hence, justifying the same. WHEREFORE, the consolidated petitions are
PARTIALLY GRANTED. The Decision dated August 5, 2011 and the Resolution dated January 27, 2012
of the Court of Appeals (CA) in CA-G.R. CV No. 81812 are hereby AFFIRMED with MODIFICATION in
that the award of actual damages is DELETED for lack of sufficient basis, and, in its stead, petitioners
S.V. More Pharma Corporation and Alberto A. Santillana are ORDERED to pay respondents Drugmakers
Laboratories, Inc. and Eliezer Del Mundo the amount of P100,000.00 as temperate damages. The rest of
the assailed CA Decision STANDS. SO ORDERED.

14. ALEJANDRO ALMENDRAS JR. VS ALEXIS ALMENDRAS

GR# 179491

FACTS:
Alejandro Almendras allegedly sent defamatory letters aimed to tarnish the reputation of Alexis
Almendras to House Speaker Jose De Venecia Jr. and Dr. Nemesio Prudente. Alexis Almendras, upon
being informed of the contents of the said latter, filed an action for damages against Alejandro Almendras
arising from libel and defamation in the Regional Trial Court of Digos City. RTC ruled in favor of Alexis
Almendras awarding him P5M for moral damages, P100T for exemplary damages, P10T for litigation
expenses and attorney’s fees in the amount of 25% of the amount to be received by the plaintiff for the
judgement. The motion for reconsideration and new trial were denied by the RTC so the case was
elevated to the CA which affirmed the RTC’s decision.

ISSUE:
Whether or not respondent is actually entitled to receive the awarded damages.

HELD:
Not all. The moral and exemplary damages are proper because respondent successfully justified his
claim for the abovementioned damages. However, the award on attorney’s fees and litigation expenses
are not proper since he failed to justify his claims and both the trial and appellate courts failed to explicitly
state in their respective decisions the rationale for the award. It is an accepted doctrine that the award
thereof as an item of damages is the exception rather than the rule, and counsel’s fees are not to be
awarded every time a party wins a suit. The power of the court to award attorney’s fees under Article
2208 of the Civil Code demands factual, legal and equitable justification, without which the award is a
conclusion without a premise, its basis being improperly left to speculation and conjecture. In all events,
the court must explicitly state in the text of the decision, and not only in the decretal portion thereof, the
legal reason for the award of attorney’s fees.
The petition is hereby denied.

15. LITO CORPUZ VS PEOPLE OF THE PHILIPPINES

G.R. No. 180016

FACTS:
Accused Corpuz received from complainant Tangcoy pieces of jewelry with an obligation to sell the same
and remit the proceeds of the sale or to return the same if not sold, after the expiration of 30 days. The
period expired without Corpuz remitting anything to Tangcoy. When Corpuz and Tangcoy met, Corpuz
promised that he will pay, but to no avail. Tangcoy filed a case for estafa with abuse of confidence against
Corpuz. Corpuz argued as follows:
a. The proof submitted by Tangcoy (receipt) is inadmissible for being a mere photocopy.
b. The information was defective because the date when the jewelry should be returned and the date
when crime occurred is different from the one testified to by Tangcoy.
c. Fourth element of estafa or demand is not proved.
d. Sole testimony of Tangcoy is not sufficient for conviction

ISSUE:
Whether or not there was negligence on the conviction

HELD:
Yes. The established doctrine is that when a party failed to interpose a timely objection to evidence at the
time they were offered in evidence, such objection shall be considered as waived. Here, Corpuz never
objected to the admissibility of the said evidence at the time it was identified, marked and testified upon in
court by Tangcoy. Corpuz also failed to raise an objection in his Comment to the prosecution’s formal
offer of evidence and even admitted having signed the said receipt.
Is the date of occurrence of time material in estafa cases with abuse of confidence?

No. It is true that the gravamen of the crime of estafa with abuse of confidence under Article 315,
paragraph 1, subparagraph (b) of the RPC is the appropriation or conversion of money or property
received to the prejudice of the owner and that the time of occurrence is not a material ingredient of the
crime. Hence, the exclusion of the period and the wrong date of the occurrence of the crime, as reflected
in the Information, do not make the latter fatally defective.
Further, the following satisfies the sufficiency of information:
1. The designation of the offense by the statute;
2. The acts or omissions complained of as constituting the offense;
3. The name of the offended party; and
4. The approximate time of the commission of the offense, and the place wherein the offense was
committed.
The 4th element is satisfied. Even though the information indicates that the time of offense was
committed “on or about the 5th of July 1991,” such is not fatal to the prosecution’s cause considering that
Section 11 of the same Rule requires a statement of the precise time only when the same is a material
ingredient of the offense.

What is the form of demand required in estafa with abuse of confidence?

Note first that the elements of estafa with abuse of confidence are as follows:
(a) that money, goods or other personal property is received by the offender in trust, or on commission, or
for administration, or under any other obligation involving the duty to make delivery of, or to return the
same;
(b) that there be misappropriation or conversion of such money or property by the offender or denial on
his part of such receipt;
(c) that such misappropriation or conversion or denial is to the prejudice of another; and
(d) that there is a demand made by the offended party on the offender.
No specific type of proof is required to show that there was demand. Demand need not even be formal; it
may be verbal. The specific word “demand” need not even be used to show that it has indeed been made
upon the person charged, since even a mere query as to the whereabouts of the money [in this case,
property], would be tantamount to a demand.
In Tubb v. People, where the complainant merely verbally inquired about the money entrusted to the
accused, the query was tantamount to a demand.

The assessment by the trial court is even conclusive and binding if not tainted with arbitrariness or
oversight of some fact or circumstance of weight and influence, especially when such finding is affirmed
by the CA. Truth is established not by the number of witnesses, but by the quality of their testimonies, for
in determining the value and credibility of evidence, the witnesses are to be weighed not numbered.

16. NOW MOUNTAIN DAIRY CORPORATION, Petitioner, vs. GMA VETERANS FORCE, INC.,
Respondent.

FACTS:

On March 11, 2005, petitioner and respondent GMA Veterans Force, Inc. entered into a security
service agreement where the parties agreed among others, that:

13. This contract shall begin on JANUARY 3, 2005 and shall end on JANUARY 3, 2006. The contract
may be renewed subject to the mutual agreement of the parties unless sooner revoked or terminated for
just cause by giving the other party prior notice of termination date of contract;

14. Both parties hereby agreed on the provision of this contract – that only grave violation thereof could
warrant its termination upon a 30 day notice to other party.

On April 13, 2005, petitioner, through its President Teodoro T. Po, wrote a letter to respondent's
General Manager, Domingo de Guzman, informing the latter of the former's decision to replace the
security personnel effective April 15, 2005.

Respondent, through its counsel, wrote petitioner a Letter reiterating that their service agreement
was good for one year, which could only be terminated for a just cause and a 30-day prior notice; that the
termination of the security contract even in the absence of just cause and the lack of due notice may only
be accepted provided that petitioner would pay the remaining contract period of 8-1/2 months equivalent
to P952,833.00; and that they were open to amicable settlement at just and reasonable terms.

ISSUE:
Petitioner contends that to be entitled to the claim of actual or compensatory damages,
respondent must have presented evidence proving that it had incurred true damage, i.e., actual and true
losses
RATIO:

Art. 2199 of the Civil Code provides:

Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only
for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as
actual or compensatory damages.

Thus, actual or compensatory damages are those awarded in satisfaction of, or in recompense
for, loss or injury sustained. They are made to compensate for the injury inflicted and not to impose a
penalty. Actual damages are not presumed. The claimant must prove the actual amount of loss with a
reasonable degree of certainty premised upon competent proof and on the best evidence obtainable. The
award of actual damages cannot be simply based on the mere allegation of a witness.

The RTC awarded P952,833.50 actual or compensatory damages representing the unserved
portion of the contract. The CA affirmed such award saying that it represented that which respondent
failed to receive as benefit which would have pertained to it had the service contract not been pre-
terminated illegally by petitioner. Notably, the amount awarded was based on the contracted amount of
P16,014.00 per security guard per month, multiplied by 7 security guards and multiplied by the unserved
portion of the contract. However, the contracted amount of P16,014,00 per guard would not totally pertain
to respondent as the same would cover the wage of the security guard and only the remaining portion of
the contracted amount, i.e., after deducting the guard's salary, would go to respondent. In this case,
respondent had not shown that the security guards were not assigned to another employer, and that it
was compelled to pay the guards despite the pre-termination of the security agreement to be entitled to
the amount of P16,014.00 per month. Indeed, no evidence was presented by respondent establishing the
actual amount of loss suffered by reason of the pretermination. It is elementary that to recover damages,
there must be pleading and proof of actual damages suffered.

Undeniably, however, respondent suffered pecuniary loss because of the pre-termination of its
services without any valid cause. But since there was no proof capable of ascertaining the actual loss, we
refer to Article 2224 of the Civil Code which provides: Article 2224. Temperate or moderate damages,
which are more than nominal but less than compensatory damages may be recovered when the court
finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty. Temperate damages may be allowed in cases where from the nature of the case,
definite proof of pecuniary loss cannot be adduced, although the court is convinced that the aggrieved
party suffered some pecuniary loss. We also take into consideration that respondent certainly spent for
the security guard's training, firearms with ammunitions, uniforms and other necessary things before their
deployment to petitioner.

17. LOADSTAR SHIPPING COMPANY, INC. and LOADSTAR INTERNATIONAL SHIPPING

COMPANY, INC. vs. MALAYAN INSURANCE COMPANY, INC.
G.R. No. 185565, November 26, 2014

FACTS:
Loadstar International Shipping, Inc.(Loadstar Shipping) and Philippine Associated Smelting and Refining
Corporation (PASAR) entered into a Contract of Affreightment for domestic bulk transport of the latter’s
copper concentrates were loaded in Cargo Hold Nos. 1 and 2 of MV "Bobcat", a marine vessel owned by
Loadstar International Shipping Co., Inc. (Loadstar International) and operated by Loadstar Shipping
under a charter party agreement. The cargo was insured with Malayan Insurance Company, Inc.
(Malayan). MV "Bobcat" sailed from Poro Point, San Fernando, La Union bound for Isabel, Leyte. While in
the vicinity of Cresta de Gallo, the vessel’s chief officer on routine inspection found a crack on starboard
side of the main deck which caused seawater to enter and wet the cargo inside Cargo Hold No. 2
forward/aft. Immediately after the vessel arrived at Isabel, Leyte anchorage area, PASAR and Philex’s
representatives boarded and inspected the vessel and undertook sampling of the copper concentrates. In
its preliminary report, the Elite Adjusters and Surveyor, Inc. (Elite Surveyor) confirmed that samples of
copper concentrates from Cargo Hold No. 2 were contaminated by seawater. Consequently, PASAR
rejected 750 MT of the 2,300 MT cargo discharged from Cargo Hold No. 2.PASAR sent a formal notice of
claim in the amount of P37,477,361.31 to Loadstar Shipping. In its final report, the Elite Surveyor
recommended payment to the assured the amount of P32,351,102.32 as adjusted and was paid by
Malayan. Malayan then informed Loadstar Shipping of a prospective buyer for the damaged copper
concentrates and the opportunity to nominate/refer other salvage buyers to PASAR. Thereafter, Malayan
wrote Loadstar Shipping informing the latter of the acceptance of PASAR’s proposal to take the damaged
copper concentrates at a residual value of US$90,000.00. Loadstar Shipping wrote Malayan requesting
for the reversal of its decision to accept PASAR’s proposal and the conduct of a public bidding to allow
Loadstar Shipping to match or top PASAR’s bid by 10%.PASAR then signed a subrogation receipt in
favor of Malayan. To recover the amount paid and in the exercise of its right of subrogation, Malayan
demanded reimbursement from Loadstar Shipping, which refused to comply. Consequently, Malayan
instituted with the RTC a complaint for damages. The complaint was later amended to include Loadstar
International as party defendant.

ISSUE:
Whether such contamination resulted to damage, and the costs thereof, if any, incurred by the insured
PASAR.

HELD:
The sum of P32,315,312.32 represents damages for the total loss of that portion of the cargo which were
contaminated with seawater and not merely the depreciation in its value. Strangely though, after claiming
damages for the total loss of that portion, PASAR bought back the contaminated copper concentrates
from Malayan at the price of US$90,000.00. The fact of repurchase is enough to conclude that the
contamination of the copper concentrates cannot be considered as total loss on the part of PASAR.
Malayan, as the insurer of PASAR, neither stated nor proved that the goods are rendered useless or unfit
for the purpose intended by PASAR due to contamination with seawater. Hence, there is no basis for the
goods’ rejection under Article 365 of the Code of Commerce. Clearly, it is erroneous for Malayan to
reimburse PASAR as though the latter suffered from total loss of goods in the absence of proof that
PASAR sustained such kind of loss. Otherwise, there will be no difference in the indemnification of goods
which were not delivered at all; or delivered but rendered useless, compared against those which were
delivered albeit, there is diminution in value. Malayan also failed to establish the legal basis of its decision
to sell back the rejected copper concentrates to PASAR. It cannot be ascertained how and when Malayan
deemed itself as the owner of the rejected copper concentrates to have these validly disposed of. If the
goods were rejected, it only means there was no acceptance on the part of PASAR from the carrier.
Furthermore, PASAR and Malayan simply agreed on the purchase price of US$90,000.00 without any
allegation or proof that the said price was the depreciated value based on the appraisal of experts as
provided under Article 364 of the Code of Commerce.

18. VELASCO V. MERALCO

GR NO. L018390

FACTS:
Velasco bought three (3) adjoining lots. He sold two (2) of these to Meralco and maintained the last one
as his residence. Meralco constructed on their lots a sub-station at a distance of 10-20 meters away from
appellant’s house. The company also built a concrete wall at the sides along the streets but put up only
an interlink wire fence (previously a sawali wall) on the boundary with appellant. An unceasing sound
emanates from the substation, caused by transformers. Such, appellent contends, constitute a nuisance
which has worsened his health condition and has lowered the value of his property. Several witnesses
came forth but their testimonies were vague and imprecise. Resort was made to a sound level meter. The
audible sound from different areas in Velaso’s property was measured in terms of decibels. It was found
that the sound exceeded the average intensity levels of residences.

ISSUE:
Is the respondent liable for damages because of the nuisance?
RULING:
ART. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the
natural and probable consequences of the act or omission complained of. It is not necessary that such
damages have been foreseen or could have reasonably been foreseen by the defendant.

19. ARCO PULP AND PAPER CO VS DAN T. LIM

G.R. No. 206806, June 25, 2015

FACTS:
Dan T. Lim works in the business of supplying scrap papers, cartons, and other raw materials,under the
name Quality Paper and Plastic Products, Enterprises, to factories engaged in the papermill business.
From February 2007 to March 2007, he delivered scrap papers worth 7,220,968.31 to Arco Pulp and
Paper Company, Inc. (Arco Pulp and Paper) through its Chief Executive Officer and President, Candida
A. Santos. The parties allegedly agreed that Arco Pulp and Paper would either pay Dan T. Lim the value
of the raw materials or deliver to him their finished products of equivalent value.Dan T. Lim alleged that
when he delivered the raw materials, Arco Pulp and Paper issued a post-dated check dated April 18,
2007 in the amount of 1,487,766.68 as partial payment, with the assurance that the check would not
bounce. When he deposited the check on April 18, 2007, it was dishonored for being drawn against a
closed account.On the same day, Arco Pulp and Paper and a certain Eric Sy executed a memorandum of
agreement where Arco Pulp and Paper bound themselves to deliver their finished products to Megapack
Container Corporation, owned by Eric Sy, for his account. According to the memorandum,the raw
materials would be supplied by Dan T. Lim, through his company, Quality Paper and Plastic Products.
The memorandum of agreement reads as follows:Per meeting held at ARCO, April 18, 2007, it has been
mutually agreed between Mrs. Candida A. Santos and Mr. Eric Sy that ARCO will deliver 600 tons Test
Liner 150/175 GSM, full width 76
inches at the price of P18.50 per kg. to Megapack Container for Mr. Eric Sy’s account.
It has been agreed further that the Local OCC materials to be used for the production of the above Test
Liners will be supplied by Quality Paper & Plastic Products Ent., total of 600 Metric Ton sat P6.50 per kg.
(price subject to change per advance notice). Quantity of Local OCC delivery will be based on the
quantity of Test Liner delivered to Megapack Container Corp. based on the above production
schedule.On May 5, 2007, Dan T.Lim sent a letter to Arco Pulp and Paper demanding payment of the
amount of 7,220,968.31, but no payment was made to him.

ISSUE:
Whether or not there was novation.

HELD:
Novation is a mode of extinguishing an obligation by changing its objects or principal
obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the
rights of the creditor. Article 1293 of the Civil Code defines novation as follows: "Art. 1293. Novation
which consists in substituting a new debtor in the place of the original one, may be made even without the
knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new
debtor gives him rights mentioned in articles 1236 and 1237." In general, there are two modes of
substituting the person of the debtor: (1) expromision and (2) delegacion. In expromision, the initiative for
the change does not come from — and may even be
made without the knowledge of — the debtor, since it consists of a third person’s assumption of the
obligation. As such, it logically requires the consent of the third person and the creditor. In delegacion, the
debtor offers, and the creditor accepts, a third person who consents to the substitution and assumes the
obligation; thus, the consent of these three persons are necessary. Both modes of substitution by the
debtor require the consent of the creditor. Novation may also be extinctive or modificatory. It is extinctive
when an old obligation is terminated by the creation of a new one that takes the place of the former. It is
merely modificatory when the old obligation subsists to the extent that it remains compatible with the
amendatory agreement. Whether extinctive or modificatory, novation is made either by changing the
object or the principal conditions, referred to as objective or real novation; or by substituting the person of
the debtor
or subrogating a third person to the rights of the creditor, an act known as subjective or personal
novation. For novation to take place, the following requisites must concur:
1) There must be a previous valid obligation.
2) The parties concerned must agree to a new contract.
3) The old contract must be extinguished.
4) There must be a valid new contract.

Novation may also be express or implied. It is express when the new obligation declares in unequivocal
terms that the old obligation is extinguished. It is implied when the new obligation is incompatible with the
old one on every point. The test of incompatibility is whether the two obligations can stand together, each
one with its own independent existence. Because novation requires that it be clear and unequivocal, it is
never presumed, thus: In the civil law setting, novation is literally construed as to make new. So it is
deeply rooted in the Roman Law jurisprudence, the principle — novation non praesumitur —that novation
is never presumed. At bottom, for novation tobe a jural reality, its animus must be ever present, debitum
pro debito — basically extinguishing the old obligation for the new one. There is nothing in the
memorandum of agreement that states that with its execution, the obligation of petitioner Arco Pulp and
Paper to
respondent would be extinguished.

20. WPM INTERNATIONAL TRADING, INC. V. LABAYEN

G.R. No. 182770. September 17, 2014.

FACTS:
WPM entered into a management agreement with the Labayen, by virtue of which the respondent was
authorized to operate, manage and rehabilitate Quickbite, a restaurant owned and operated by WPM. As
part of her tasks, the respondent looked for a contractor who would renovate the two existing Quickbite
outlets. Quickbite-Divisoria's renovation was finally completed, and its possession was delivered to the
respondent. However, out of the P432,876.02 renovation cost, only the amount of P320,000.00 was paid
to CLN, leaving a balance of P112,876.02. CLN filed a complaint for sum of money and damages before
the RTC against the respondent and its president Manlapaz. The RTC, in its decision, found the
respondent liable to pay CLN actual damages.
The respondent instituted a complaint for damages against the petitioners, WPM and Manlapaz. The
respondent alleged that she was adjudged liable for a contract that she entered into for and in behalf of
the petitioners, to which she should be entitled to reimbursement; that her participation in the
management agreement was limited only to introducing Manlapaz to Engineer Neri, CLN's general
manager; that it was actually Manlapaz and Neri who agreed on the terms and conditions of the
agreement; that when the complaint for damages was filed against her, she was abroad; and that she did
not know of the case until she returned to the Philippines and received a copy of the decision of the RTC.
The RTC held that the respondent is entitled to indemnity from Manlapaz. The CA affirmed, with
modification on the award of attorney's fees, the decision of the RTC. The petitioners submit that the CA
gravely erred in sustaining the RTC's application of the principle of piercing the veil of corporate fiction.

ISSUE:
Whether Manlapaz is jointly and severally liable with WPM to the respondent for reimbursement,
damages and interest.

HELD: YES
On the award of moral damages, we find the same in order in view of WPM's unjustified refusal to pay a
just debt. Under Article 2220 of the New Civil Code, moral damages may be awarded in cases of a
breach of contract where the defendant acted fraudulently or in bad faith or was guilty of gross negligence
amounting to bad faith.
In the present case, when payment for the balance of the renovation cost was demanded, W PM, instead
of complying with its obligation, denied having authorized the respondent to contract in its behalf and
accordingly refused to pay. Such cold refusal to pay a just debt amounts to a breach of contract in bad
faith, as contemplated by Article 2220. Hence, the CA's order to pay moral damages was in order.
 21. FIL – ESTATE PROPERTIES, INC. et al. VS. SPOUSES RONQUILLO
G.R. NO. 185798 January 13, 2014
J. BRION

FACTS:
Petitioner Fil-Estate Properties, Inc. is the owner and developer of the Central Park Place
Tower while co-petitioner Fil-Estate Network, Inc. is its authorized marketing agent. Respondent Spouses
Conrado and Maria Victoria Ronquillo purchased from petitioners an 82-square meter condominium unit
for a pre-selling contract price of P5,174,000.00. On 29 August 1997, respondents executed and signed a
Reservation Application Agreement wherein they deposited P200,000.00 as reservation fee. As agreed
upon, respondents paid the full down payment of P1,552,200.00 and had been paying the P63,363.33
monthly amortizations until September 1998.
Upon learning that construction works had stopped, respondents likewise stopped paying their
monthly amortization. Claiming to have paid a total of P2,198,949.96 to petitioners, respondents through
two (2) successive letters, demanded a full refund of their payment with interest. When their demands
went unheeded, respondents were constrained to file a Complaint for Refund and Damages before the
Housing and Land Use Regulatory Board (HLURB). Respondents prayed for reimbursement/refund of
P2,198,949.96 representing the total amortization payments, P200,000.00 as and by way of moral
damages, attorney’s fees and other litigation expenses.
On 13 June 2002, the HLURB decided in favor of herein respondents. The Arbiter considered
petitioners’ failure to develop the condominium project as a substantial breach of their obligation which
entitles respondents to seek for rescission with payment of damages. The Arbiter also stated that mere
economic hardship is not an excuse for contractual and legal delay.

ISSUES:
1. Whether or not the Asian financial crisis constitute a fortuitous event which would justify delay by
petitioners in the performance of their contractual obligation;
2. Assuming that petitioners are liable, whether or not 12% interest was correctly imposed on the
judgment award

HELD:
FIRST ISSUE: NO
The Supreme Court held that the Asian financial crisis is not a fortuitous event that would
excuse petitioners from performing their contractual obligation.
The Court ruled that “we cannot generalize that the Asian financial crisis in 1997 was
unforeseeable and beyond the control of a business corporation. It is unfortunate that petitioner
apparently met with considerable difficulty e.g. increase cost of materials and labor, even before the
scheduled commencement of its real estate project as early as 1995. However, a real estate enterprise
engaged in the pre-selling of condominium units is concededly a master in projections on commodities
and currency movements and business risks. The fluctuating movement of the Philippine peso in the
foreign exchange market is an everyday occurrence, and fluctuations in currency exchange rates happen
every day, thus, not an instance of caso fortuito.”

SECOND ISSUE: NO
The Court held that 6% is the proper legal interest rate.
The resulting modification of the award of legal interest is, also, in line with our recent ruling in
Nacar v. Gallery Frames, embodying the amendment introduced by the Bangko Sentral ng Pilipinas
Monetary Board in BSP-MB Circular No. 799 which pegged the interest rate at 6% regardless of the
source of obligation.
FALLO:
WHEREFORE, the petition is PARTLY GRANTED. The appealed Decision is AFFIRMED with
the MODIFICATION that the legal interest to be paid is SIX PERCENT (6%) on the amount due computed
from the time of respondents’ demand for refund on 8 October 1998.
 22. SPOUSES ROLANDO VS SPOUSES ROGELIO
G.R. NO. 198656 SEPTEMBER 8, 2014

FACTS:
Spouses Rabaja learned that spouses Salvador were looking for a buyer for a certain property
owned by the latter spouses. Petitioner then introduced Gonzales to them as an administrator of the
property and even handed to Gonzales the owner’s duplicate certificate of title over the subject property.
Spouses Rabaja then made initial payments to Gonzales. Gonzales then presented and SPA, executed
by spouses Salvador. Spouses Rabaja then made several payments which were received by Gonzales.
Sometime however, spouses Salvador complained that they did not receive any payment from Gonzales
which prompted Spouses Rabaja to suspend further payment of the purchase price. Spouses Salvador
then instituted an action for ejectment against spouses Rabaja. In turn Spouses rabaja filed an action for
recission of contract and praying that damages be awarded due to the contractual breach committed by
Spouses Salvador. In the complaint for recission the trial court ruled in Favor of Spouses Rabaja and
awarded in their favor moral and exemplary damages as well as attorneys’ fees. The decision was
appealed on the ground that there was no factual and legal bases for the award of damages.

ISSUE:
Whether or not Spouses Rabaja are entitled to damages?
HELD:
NO. The award of damages to Spouses Rabaja cannot be sustained. The filing alone of a civil
action should not be a ground for an award of moral damages in the same way that a clearly unfounded
civil action is not among the grounds for moral damages. Article 2220 of the New Civil Code provides that
to award moral damages in a breach of contract, the defendant must act fraudulently or in bad faith. In
this case, Spouses Rabaja failed to sufficiently show that Spouses Salvador acted in a fraudulent manner
or with bad faith when it breached the contract of sale. Thus, the award of moral damages cannot be
warranted.

As to the award of exemplary damages, Article 2229 of the New Civil Code provides that exemplary
damages may be imposed by way of example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages. The claimant must first establish his right to moral,
temperate, liquidated or compensatory damages. In this case, considering that Spouses Rabaja failed to
prove moral or compensatory damages, then there could be no award of exemplary damages.

With regard to attorney’s fees, neither Spouses Rabaja nor Gonzales is entitled to the award. The settled
rule is that no premium should be placed on the right to litigate and that not every winning party is entitled
to an automatic grant of attorney’s fees.

23. MONTINOLA vs. PHILIPPINE AIRLINES

FACTS:
Petitioner Nancy S. Montinola was employed as a flight attendant of Philippine Airlines (PAL) since 1996.
Montinola and other flight crew members were subjected to custom searches in Honolulu, Hawaii, USA.
Items from the airline were recovered from the flight crew by customs officials.

PAL conducted an investigation. Montinola was among those implicated because she was mentioned in
Graham’s email.

PAL found Montinola guilty of 11 Violations of the company’s Code of Discipline and Government
Regulation. She was meted with suspension for 1 year without pay.

Montinola brought the matter before the Labor Arbiter. The Labor Arbiter found her suspension illegal,
finding that PAL never presented evidence that showed Montinola as the one responsible for any of the
illegally taken airline items. The Labor Arbiter ordered Montinola’s reinstatement with backwages,
inclusive of allowances and benefits amounting to P378,630.00. In addition, the Labor Arbiter awarded
moral damages in the amount of P100,000.00 and exemplary damages amounting to P100,000.00. The
Labor Arbiter also awarded attorney’s fees to Montinola because she was "forced to litigate and incur
expenses to protect [her] rights."

The National Labor Relations Commission affirmed the decision of the Labor Arbiter.

The Court of Appeals affirmed the decisions of the Labor Arbiter and National Labor Relations
Commission in finding the suspension illegal. However, the Court of Appeals modified the award in that
the award of moral and exemplary damages and attorney’s fees to private respondent are deleted.

ISSUE:
Whether or not Montinola’s illegal suspension entitled her to an award of moral and exemplary damages

HELD:
Yes. Montinola is entitled to moral and exemplary damages.

PAL’s actions in implicating Montinola and penalizing her for no clear reason show bad faith. PAL’s denial
of her request to clarify the charges against her shows its intent to do a wrongful act for moral obliquity.
Montinola was found by PAL to be guilty of all the charges against her. It is not clear how she could
violate all the prestations in the long list of rules she allegedly violated. There is also no clear explanation
why termination would be the proper penalty to impose. This act of PAL is contrary to morals, good
customs, and public policy. PAL was willing to deprive Montinola of the wages she would have earned
during her year of suspension even if there was no substantial evidence that she was involved in the
pilferage. Moral damages are, thus, appropriate. Unemployment "brings untold hardships and sorrows on
those dependent on the wage-earner." This is also true for the case of suspension. Suspension is
temporary unemployment. During the year of her suspension, Montinola and her family had to survive
without her usual salary. The deprivation of economic compensation caused mental anguish, fright,
serious anxiety, besmirched reputation, and wounded feelings. All these are grounds for an award of
moral damages under the Civil Code.

In labor cases, the court may award exemplary damages "if the dismissal was effected in a wanton,
oppressive or malevolent manner." It is socially deleterious for PAL to suspend Montinola without just
cause in the manner suffered by her. Hence, exemplary damages are necessary to deter future
employers from committing the same acts.

24.BPI EXPRESS CARD CORPORATION vs. MA. ANTONIA R. ARMOVIT

G.R. No. 163654 October 8, 2014

FACTS:
Armovit, a depositor of BPI, was issued by BPI Express Credit with a credit limit of ₱20,000.00 that was to
expire atthe end of March 1993. Sometime thereafter, she treated her friends to lunch at a Restaurant. As
the host, she handed to the waiter her credit card to settle the bill, but the waiter soon returned to inform
her that her credit card had been cancelled upon verification with BPI Express Credit and would not be
honored. Inasmuch as she was relying on her credit card because she did not then carry enough cash
that day, her guests were made to share the bill to her extreme embarrassment. Outraged, Armovit called
BPI Express Credit to verify the status of her credit card. She learned that her credit card had been
summarily cancelled for failure to pay her outstanding obligations. She vehemently denied having
defaulted on her payments. BPI Express Credit claimed that it had sent Armovit a telegraphic message
requesting her to pay her arrears for three consecutive months, and that she did not comply with the
request, causing it to temporarily suspend her credit card. It further claimed that she had been notified of
the suspension and cautioned to refrain from using the credit card to avoid inconvenience or
embarrassment; and that while the obligation was settled by April, 1992, she failed to submit the required
application form in order to reactivate her credit card privileges.

ISSUE:
Whether Armovit is entitled to damages.
RULING:
The relationship between the card issuer and the card holder is a contractual one that is
governed by the terms and conditions found in the agreement. Such terms and conditions constitute the
law between the parties. In case of their breach, moral damages may be recovered where the defendant
is shown to have acted fraudulently or in bad faith. Malice or bad faith implies a conscious and intentional
design to do a wrongful actfor a dishonest purpose or moral obliquity. However, a conscious or intentional
design need not always be present because negligence may occasionally be so gross as to amount to
malice or bad faith. Yet, a review of such terms and conditions did not reveal that Armovit needed to
submit her new application as condition for her credit card to be taken out from the list suspended cards.
BPI acted in wanton disregard of its contractual obligations with her. BPI Express Credit’s negligence was
even confirmed by the telegraphic message it had addressed and sent to Armovit apologizing for the
inconvenience caused in inadvertently including her credit card in the caution list. It was of no
consequence that the telegraphic message could have been intended for another client, as BPI Express
Credit apparently sought to convey subsequently, because the tenor ofthe apology included its admission
of negligence in dealing with its clients.

25. JOSE ESPINELI VS PEOPLE OF THE PHILIPPINES

G.R. No. 179535 June 9, 2014

FACTS:
An information charging petitioner with the crime of murder was filed before the RTC.
Petitioner was arrested on July 1, 1997 and when arraigned on July 7, 1997 with the assistance of
counsel, entered a plea of not guilty.
The facts show that in the early evening of December 15, 1996, Alberto Berbon y Downie(Alberto), a 49-
year old Senior Desk Coordinator of the radio station DZMM, was shot in the head and different parts of
the body in front of his house in Imus, Cavite by unidentified malefactors who immediately fled the crime
scene on board a waiting car.
The Respondent then presented three testimonies that will show proof that the Petitioner is guilty of
committing the crime of Murder

Petitioner, on the other hand, did not adduce evidence for his defense. Instead, he filed a Demurrer to
Evidence without leave of court. As no action whatsoever was taken thereon by the trial court, petitioner
just moved that the case be deemed submitted for decision.
With this, the RTC ruled in favor of the respondent and found that Espineli was found guilty beyond
reasonable doubt of committing the crime of murder.
Of course, the petitioner appealed his conviction before the CA where the decision of RTC was affirmed
with modification and rationalized that none of the witnesses saw how the killing was made hence hence
the qualifying circumstance of superior strength cannot be appreciated nor the aggravating circumstance
of nighttime as it was not alleged in the information. In view thereof, the CA found the petitioner guilty of
homicide and not murder.
Dissatisfied, the petitioner filed for a Motion for Reconsideration which the CA denied in its resolution.

ISSUE:
Whether or not the petitioner is guilty given that the prosecution failed to prove his guilt beyond
reasonable doubt.

HELD:
The Supreme Court ruled that “direct evidence of the commission of a crime is not the only basis from
which a court may draw its finding of guilt. The rules of evidence allow a trial court to rely on
circumstantial evidence to support its conclusion of guilt. Circumstantial evidence is that evidence “which
indirectly proves a fact in issue through an inference which the fact-finder draws from the evidence
established.” Under Section 4, Rule 133 of the Rules of Court, circumstantial evidence would be sufficient
to convict the offender “if i) there is more than one circumstance; ii) the facts from which the inference is
derived are proven; and iii) the combination of all circumstances is such as to produce a conviction
beyond reasonable doubt.” All the circumstances must be consistent with one another, consistent with the
hypothesis that the accused is guilty and at the same time inconsistent with the hypothesis that he is
innocent. Thus, conviction based on circumstantial evidence can be upheld provided that the
circumstances proved constitute an unbroken chain which leads to one fair and reasonable conclusion
that points to the accused, to the exclusion of all others as the guilty person.
The Court agrees with the CA that petitioner is guilty only of the crime of homicide in view of the
prosecution’s failure to prove any of the alleged attendant circumstances of abuse of superior strength
and nighttime. As aptly observed by the appellate court:
“The circumstance of abuse of superior strength is present whenever there is inequality of forces between
the victim and the aggressor, assuming a situation of superiority of strength notoriously advantageous for
the aggressor, and the latter takes advantage of it in the commission of the crime. However, as none of
the prosecution witnesses saw how the killing was perpetrated, abuse of superior strength cannot be
appreciated in this case. Neither can nighttime serve as an aggravating circumstance, the time of the
commission of the crime was not even alleged in the Information.”
The Supreme Court denied the petition of the petitioner and affirm with modifications that petitioner is
further ordered to pay the heirs of the victim P50,500.00 as moral damages as well as interest on all the
damages assessed at the legal rate of 6% per annum from the date of finality of this judgment until fully
paid.

26. BANK OF THE PHILIPPINE ISLANDS vs COURT OF APPEALS, ANNABELLE A. SALAZAR, and
JULIO R. TEMPLONUEVO

FACTS:
Private respondent Salazar, filed an action against BPI for a sum of money amounting to P267,707,70. In
its answer, Petitioner BPI alleged that Templonuevo, a third-party defendant, demanded from it the
payment of P267,692.50, representing the aggregate value of 3 checks, which were allegedly payable to
him, but which were deposited with the petitioner bank to Salazar’s account, without his knowledge and
corresponding endorsement. BPI complied with Templonuevo’s demand by paying him the amount and
freezing Salazar’s account. They debited the amount from Salazar’s account later on. The checks Salazar
had possession of, as found by the court, were payable to the order of JRT Construction and Trading,
which was the name of Templonuevo’s business.

ISSUE/S:
(1). Did BPI have the authority to unilaterally withdraw from Salazar’s account the amount it has
previously paid upon certain endorsed order instrument?
(2) Did BPI act judiciously in debiting Salazar’s account?

HELD:
(1) Yes. Records show that no prior arrangement existed between Salazar and Templonuevo regarding
the transfer of ownership of the checks. This fact is crucial as Salazar’s entitlement to the value of the
instruments is based on the assumption that she is a transferee within the contemplation of Section 49 of
the NIL. Section 49 of the NIL contemplates a situation where the payee or endorsee delivers a
negotiable instrument for value without endorsing it. The underlying premise of this provision, however, is
that a valid transfer of ownership of the negotiable instrument in question has taken place. Transferees in
this situation do not enjoy the presumption of ownership in favor of holders since they are neither payees
nor endorsees of such instruments. Mere possession of a negotiable instrument does not in itself
conclusively establish either the right of the possessor to receive payment, or of the right of one who has
made payment to be discharged from liability. Something more than mere possession is necessary to
authorize payment to such possessor.

(2) No. Solely upon the prompting of Templonuevo, BPI debited the account of Salazar without even
serving due notice upon her. Consequently, this caused damage to Salazar such as having checks she
issued dishonored because she was not given prior notice of the deduction from her account. As such,
the award of damages must be sustained.
 27. VILLA REY TRANSIT, INC. v. THE COURT OF APPEALS
G.R. No. L-25499; February 18, 1970
Concepcion, C. J.

FACTS:
In March 1960, Policronio Quintos, Jr. rode a passenger bus owned and operated by petitioner Villa Rey
Transit, Inc. and bound from Pangasinan to Manila.
At about 4:55 a.m., the bus hit the rear side of a bullcart filled with hay. As a result, the end of a
bamboo pole placed on top of the hayload and tied to the cart to hold it in place, hit the right side of the
windshield of the bus. The protruding end of the bamboo pole penetrated through the glass windshield
and landed Policronio's face hitting his left eye and the bone of the left side of his face.
He suffered other multiple wounds and was rendered unconscious due, among others to severe
cerebral concussion. He was then brought to the provincial hospital of Pampanga where he died in the
afternoon due to traumatic shock due to cerebral injuries. At the time of Policronio's death, he is receiving
P2,184 a year, which is the annual salary.
Private respondents Trinidad, Prima and Julita, all surnamed Quintos, the sisters and only
surviving heirs of Policronio, instituted a civil case against petitioner Villa Rey.
After trial of the case, it was found that the accident and the death of Policronio had been due to
the negligence of the bus driver, not fortuitious event. The RTC ordered Villa Rey to pay as damages the
amount of P63,750 for breach of contract of carriage. The Court of Appeals affirmed the trial court's
ruling.

ISSUE:
Whether or not the amount of damages recoverable by private respondents is correct.

HELD:
NO. Damages consist, not of the full amount of a deceased's earnings, but of the support, the living heirs
received or would have received from him had he not died. In fixing the amount of that support, the
"necessary expenses of his own living" should be deducted from his earnings. Thus, it has been
consistently held that earning capacity, as an element of damages to one's estate for his death by
wrongful act, is necessarily his net earning capacity or his capacity to acquire money "less the necessary
expense for his own living."
The amount recoverable is not loss of the entire earning, but rather the loss of that portion of the
earnings which the beneficiary would have received. In other words, only net earnings, not gross earning,
are to be considered that is, the total of the earnings less expenses necessary in the creation of such
earnings or income and less living and other incidental expenses.
All things considered, the Court ruled that it is fair and reasonable to fix the deductible living and
other expenses of Policronio at P1,184 a year, or about P100 a month, and that, consequently, the loss
sustained by his sisters may be roughly estimated at P1,000 a year or P33,333.33 for the 33-1/3 years of
his life expectancy. To this sum of P33,333.33, the following should be added: (a) P12,000, pursuant to
Arts. 104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed
and applied by this Court; (b) P1,727.95, actually spent by private respondents for medical and burial
expenses; and (c) attorney's fee, which was fixed by the trial court, at P500.00, but which, in view of the
appeal taken by petitioner herein, first to the Court of Appeals and later to this Supreme Court, should be
increased to P2,500. In other words, the amount adjudged in the decision appealed from should be
reduced to P49,561.28 from P63,750.

28. THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
GUMERCINDO QUILATON y EBAROLA, defendant-appellant.

G.R. No. L-69666 January 23, 1992

FACTS:
Appellant was a laborer in the Bureau of Forest Development assigned at the PROFEM Nursery in San
Agustin, San Simon, Pampanga until 3 June 1983 when his services were terminated. While still a laborer
and occasionally after his termination, appellant would spend the night in one of the rooms of the
PROFEM office. Rolando Manahan, then officer-in-charge of the PROFEM, came out of his office and
proceeded to admonish appellant to discontinue his practice of sleeping inside the office. Rolando
Manahan decided to follow appellant, apparently to make certain that appellant would in fact leave the
premises of the Nursery. Lamberto Abugan, who had noticed Rolando Manahan leave the office, also
went out to look after them. Lamberto Abugan caught up with the two (2) at the provincial road where he
saw; the heated altercation between the two (2) continued. Moments later, appellant pulled a fan knife
(balisong) from his right hip and told Rolando Manahan: "this time I am going to kill you, I shall not forgive
you." Rolando Manahan started to run away; appellant chased him. Lamberto Abugan also ran from the
scene to seek help. He proceeded to the police headquarters in San Simon, Pampanga and from there
returned to the provincial road aboard a tricycle in the company of Pfc. Nicolas Yambao. They saw
Rolando Manahan lying on the road, already dead. Appellant, upon the other hand, was found in
Sampaloc, Apalit, Pampanga where he was arrested and searched. A fan knife and a bloodstained shirt
were recovered from the possession of appellant. Appellant submitted a different version of the facts
stating that as Rolando Manahan came nearer, appellant ran away only to be stopped in a fenced area.
Rolando Manahan there attacked him with a bladed weapon but appellant was able to wrest possession
of the bladed weapon. Appellant then instinctively stabbed Rolando Manahan until the latter died.
Appellant claims that after the incident, he walked towards Apalit, Pampanga to surrender as he did not
know where the municipal building of San Simon, Pampanga was. He was on his way to surrender when
the police authorities arrested him. 6 The evidence of appellant on his claim of self-defense consisted
solely of his own testimony.
The trial court rejected that testimony, firstly, because it was not supported by convincing corroborative
evidence and, secondly, because the trial court had perceived appellant to be a liar. The trial court
instead gave credence to the testimony of Lamberto Abugan. RTC further sentences him to indemnify the
heirs of Rolando S. Manahan the sum of One Hundred Thousand (P100,000.00) Pesos, Philippine
Currency, for the death of Rolando S. Manahan, the sum of Twenty Six Thousand Four Hundred Forty
Five (P26,445.00) Pesos, Philippine Currency, for actual damages incurred for burial and other expenses
of the deceased, the sum of Two Hundred Fifty Thousand (P250,000.00) Pesos, Philippine Currency, for
moral damages. The Court further orders the accused to pay the costs.

ISSUE:
1. W/N RTC erred in finding Quilaton guilty of murder
2. W/N damages awarded was correct

HELD:
1. Yes, This Court agrees with the Solicitor General that appellant should be convicted of homicide
only. The information here filed specified treachery and evident premeditation as qualifying
circumstances. Treachery cannot be appreciated in the absence of evidence of the mode of
attack; it cannot be presumed but must be proven positively. The testimony of Lamberto Abugan
offers no sufficient basis for reasonably inferring that treachery attended the commission of the
crime. On the contrary, considering that the attack was preceded by a heated argument, it cannot
be fairly regarded as sudden and unexpected. The tense and hostile atmosphere should have
sufficiently put Rolando Manahan on guard against physical violence; Rolando Manahan should
have been aware that he was in effect inviting trouble in following appellant into the provincial
road and kicking the latter's shoes that had fallen to the ground.

1. The amount of P100,000.00 awarded to the heirs of Rolando Manahan as indemnity for death
must, however, be reduced to P50,000.00 conformably with prevailing jurisprudence on the
matter. 15 The propriety of the award of P250,000.00 by the trial court in concept of moral
damages needs some analysis.
The monetary liabilities of a person accused and convicted of a crime are specified in Article 2206 of the
Civil Code:
Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there may have been mitigating circumstances. In
addition:
 (1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be
assessed and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the
recipient who is not an heir called to the decedent's inheritance by the law of testate or
intestate succession, may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;
(3) The spouses, legitimate and illegitimate descendants and ascendants may demand moral
damages for mental anguish by reason of the death of the deceased. (Emphasis supplied)
Aside, therefore, from the ordinary indemnity for death which is currently set by case law at P50,000.00,
appellant is obliged: (1) to compensate the heirs of Rolando Manahan for the latter's loss of earning
capacity; (2) to give support in the form of expenses for education to the sisters of Rolando Manahan who
had been dependent on him therefor; and (3) to pay the heirs of Rolando Manahan moral damages for
the mental anguish suffered by them. 16 In the instant case, the trial court lumped these monetary
obligations into what it called "moral damages."
WHEREFORE, the Decision of the Regional Trial Court, Branch 54, Macabebe, Pampanga is hereby SET
ASIDE; the Court instead finds appellant Gumercindo Quilaton guilty of HOMICIDE. Applying the
Indeterminate Sentence Law, appellant is hereby SENTENCED to suffer imprisonment for an
indeterminate period ranging from ten (10) years as minimum to seventeen (17) years and four (4)
months as maximum. Appellant is ORDERED to pay the heirs of Rolando Manahan the following
amounts:
1. P50,000.00 as indemnity for death;
2. P26,445.00 as actual damages;
3. P114,000.00 by way of lost earnings;
4. P10,000.00 by way of educational assistance to Rolando Manahan's two (2) sisters; and
5. P20,000.00 as moral damages.
Costs against appellant.
SO ORDERED.

29. EDUARDO M. COJUANGCO, JR., petitioner, vs. COURT OF APPEALS, THE PHILIPPINE
CHARITY SWEEPSTAKES OFFICE and FERNANDO O. CARRASCOSO, JR., respondent.

DOCTRINE: To hold public officers personally liable for moral and exemplary damages and for attorney’s
fees for acts done in the performance of official functions, the plaintiff must prove that these officers
exhibited acts characterized by evident bad faith, malice, or gross negligence. But even if their acts had
not been so tainted, public officers may still be held liable for nominal damages if they had violated the
plaintiff’s constitutional rights.

FACTS:

Petitioner Eduardo Cojuangco Jr. filed a Petition for Review under Rule 45 of the ROC seeking to set
aside CA’s decision, after it reversed a favorable decision of the RTC that ordered the private
respondents to pay him moral and exemplary damages, attorney’s fees and costs of the suit, and denied
his Motion for Reconsideration.

Cojuangco, a known businessman-sportsman owned several racehorses which he entered in

sweepstakes races. Several of his horses won the races on various dates, and won prizes together with
the 30% due for trainer/grooms. He sent letters of demand for the collection of the prizes due him but
private respondents PCSO and its then chairman Fernando Carrascoso Jr. consistently replied that the
demanded prizes are being withheld on advice of PCGG. Consequently, Cojuangco filed this case before
the Manila RTC but before the receipt summons, PCGG advised private respondents that “it poses no
more objection to its remittance of the prized winnings”. This was immediately communicated to
petitioner’s counsel Estelito Mendoza by Carrascoso but the former refused to accept the prizes at this
point, reasoning that the matter had already been brought to court.
The trial court ruled that the private respondents had no authority to withhold the subject racehorse
winnings since no writ of sequestration was issued by PCGG. Ordering the private respondents to pay in
solidum the claimed winnings, the trial court further held that, by not paying the winnings, Carrascoso had
acted in bad faith amounting to the persecution and harassment of petitioner and his family. While the
case was pending with the CA, the petitioner moved for partial execution pending appeal to which the
private respondents posed no objection to.

CA reversed the trial court’s finding of bad faith, holding that the former PCSO chairman was merely
carrying out the instruction of the PCGG. It likewise noted that Carrascoso’s acts of promptly replying to
demands and not objecting to partial execution negated bad faith.

ISSUE:
W/N the award for damages against respondent Carrascoso is warranted by evidence the law

HELD:
YES AND NO. Petitioner is only entitled to nominal damages.

Bad faith does not simply connote bad judgment or simple negligence. It imports a dishonest purpose or
some moral obliquity and conscious doing of a wrong, a breach of a known duty due to some motive or
interest of ill will that partakes of the nature of fraud. There is sufficient evidence on record to support
Respondent Court’s conclusion that Carrascoso did not act in bad faith. His letters to PCGG indicated his
uncertainties as to the extent of the sequestration against the properties of the plaintiff. There is also
denying that plaintiff is a very close political and business associate of the former President Marcos.
Sequestration was also a novel remedy. Under these equivocalities, Carrascoso could not be faulted in
asking further instructions from the PCGG, on what to do and more so, to obey the instructions given.
Besides, EO2 has just been issued by President Aquino, “freezing all assets and properties in the
Philippines (of) former President Marcos and/or his wife…their close friends, subordinates, business
associates…”

The extant rule is that public officers shall not be liable by way of moral and exemplary damages for acts
done in the performance of official duties, unless there is a clear showing of bad faith, malice or gross
negligence. Attorney’s fees and expenses of litigation cannot be imposed either, in the absence of clear
showing of any of the grounds provided therefor under the Civil Code. The trial court’s award of these
kinds of damages must perforce be deleted.

Nevertheless, this Court agrees with the petitioner and the trial that Respondent Carrascoso may still be
held liable under Article 32 of the Civil Code, which provides:

Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstruct,
defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another
person shall be liable to the latter for damages:

xxx xxx xxx

(6) The rights against deprivation of property without due process of law;

Under the aforecited article, it is not necessary that the public officer acted with malice or bad faith. To be
liable, it is enough that there was a violation of the constitutional rights of petitioner, even on the pretext of
justifiable motives or good faith in the performance of one’s duties.

We hold that petitioner’s right to the use of his property was unduly impeded. While Respondent
Carrascoso may have relied upon the PCGG’s instructions, he could have further sought the specific
legal basis therefor. A little exercise of prudence would have disclosed that there was no writ issued
specifically for the sequestration of the racehorse winnings of petitioner. There was apparently no record
of any such writ covering his racehorses either. The issuance of a sequestration order requires the
showing of a prima facie case and due regard for the requirements of due process. The withholding of the
prize winnings of petitioner without a properly issued sequestration order clearly spoke of a violation of his
property rights without due process of law.

Art. 2221 of the Civil Code authorizes the award of nominal damages to a plaintiff whose right has been
violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered

30. S.V. MORE PHARMA CORP. AND ALBERTO SANTILLANA VS DRUGMAKERS

LABORATORIES, INC
GR. No. 200408; GR. No. 200416; November 12, 2014

FACTS:
Eliezer, Evangeline C. Del Mundo, and Atty. Quirico T. Carag re the registered owners of fifty percentof
E.A. Northam Pharma Corporation a domestic corporation which exclusively distributes and markets 28
various pharmaceutical products that are exclusively manufactured by Drugmakers, a domestic
corporation under the control of Eliezer. The remaining fifty percent in E.A. Northam are owned by Alberto
and Nilo S. Valente (Santillana Group). In an Agreement, he Del Mundo Group agreed to cede all their
rights and interests in E.A. Northam in favor of the Santillana Group for a consideration of P4,200,000.00.
However, it was agreed therein that: (a) the said pharmaceutical products shall remain jointly owned by
Eliezer/Drugmakers and Alberto; (b) the products shall be exclusively manufactured by Drugmakers as
long as Eliezer maintains majority ownership and control of the said company; and (c) the products will be
sold, conveyed, and transferred to S.V. More, provided that Alberto remains its chief executive officer with
majority ownership and control thereof. On even date, E.A. Northam entered into a Deed of
Sale/Assignment with S.V. More, whereby E.A. Northam agreed to convey, transfer, and assign all its
rights over 28 pharmaceutical products in favor of S.V. More which shall then have the right to havethem
sold, distributed, and marketed in the latter’s name, subject to the condition that such pharmaceutical
products will be exclusively manufactured by Drugmakers based on their existing Contract Manufacturing
Agreement set to expire in October 1993. A month prior to the expiration of the CMA, Drugmakers
proposed a new manufacturing agreement which S.V. More found unacceptable. S.V. More, for the
purpose of renewing its License to Operate with the Bureau of Food and Dru, requested a copy of the
existing CMA from Drugmakers, but to no avail. Hence, on October 23, 1993, S.V. More entered into a
Contract to Manufacture Pharmaceutical Products with Hizon Laboratories, Inc., and, thereafter, caused
the latter to manufacture some of the pharmaceutical products covered by the Deed of Sale/Assignment.
Meanwhile, the BFAD issued the corresponding Certificates of Product Registration therefor, with S.V.
More as distributor, and Hizon Laboratories as manufacturer. On February 23, 1995, and after
respondents protest on the new registration went unheeded, Drugmakers and Eliezer filed a Complaint
for Breach of Contract, Damages, and Injunction with Prayer for the Issuance of a Writ of Preliminary
Injunction and/or Temporary Restraining Order against S.V. More and Alberto (petitioners), and Hizon
Laboratories, and its President, Rafael H. Hizon, Jr. RTC ruled in favor of respondents, and accordingly
ordered petitioners, Hizon Laboratories and Rafael, to jointly and severally pay Drugmakers, it also
denied petitioners’ motion for reconsideration. CA affirmed the RTC Ruling with modifications in that: (a) it
deleted the award for moral and exemplary damages; and (b) it absolved Rafael and Hizon Laboratories
from any liability.

ISSUE:
Whether or not petitioners are liability for breach of contract?

HELD:
The Court ruled that Defendants were held liable. “The existence of contractual breach in this case
revolves around the exclusive status of Drugmakers as the manufacturer of the subject pharmaceutical
products which was stipulated and, hence, recognized under the following contracts: (a) the CMA dated
October 30, 1992 between Drugmakers, as manufacturer, and S.V. More, as the holder of the CPR
covering the pharmaceutical products; (b) the Agreement dated May 31, 1993 covering the change in
ownership in E.A. Northam, or the distributor of the pharmaceutical products manufactured by
Drugmakers and covered by S.V. More’s CPR; and (c) the Deed of Sale/Assignment of even date
between E.A. Northam and S.V. More, whereby the former’s distributorship rights were transferred to the
latter. “In particular, the CMA states that Drugmakers, being the exclusive manufacturer of the subject
pharmaceutical products, had to first give its written consent before S.V. More could contract the services
of another manufacturer… In the May 31, 1993 Agreement, the new ownership of E.A. Northam, or the
initial distributor of the same pharmaceutical products, equally recognized Drugmakers’s status as
exclusive manufacturer… The same was echoed in the Deed of Sale/Assignment, wherein S.V. More,
being the transferee of E.A. Northam’s distributorship rights. “These provisions notwithstanding, records
disclose that petitioner S.V More, through the CMPP and absent the prior written consent of respondent
Drugmakers, as represented by its President, respondent Eliezer, contracted the services of Hizon
Laboratories to manufacture some of the pharmaceutical products covered by the said contracts. Thus,
since the CMPP with Hizon Laboratories was executed on October 23, 1993, or seven (7) days prior to
the expiration of the CMA on October 30, 1993, it is clear that S.V. More, as well as its President,
petitioner Alberto, who authorized the foregoing, breached the obligation to recognize Drugmakers as
exclusive manufacturer, thereby causing prejudice to the latter.” Nonetheless, the appellate court’s award
of P6,000,000,000.00 based on supposed loss of profits was erroneous. “Records reveal that in their
attempt to prove their claim for loss of profits corresponding to the aforesaid amount, respondents based
their computation thereof on a Sales Projection Form for the period November 1993 to February 1995.
However, it is readily observable that the breach occurred only for a period of seven (7) days, or from
October 23, 1993 until October 30, 1993 – that is, the date when the CMA expired. Notably, the CMA –
from which stems S.V. More’s obligation to recognize Drugmakers’s status as the exclusive manufacturer
of the subject pharmaceutical products and which was only carried over in the other two (2) above-
discussed contracts – was never renewed by the parties, nor contained an automatic renewal clause,
rendering the breach and its concomitant effect, i.e., loss of profits on the part of Drugmakers, only extant
for the limited period of, as mentioned, seven (7) days.” Further, “it is also evident that only six (6) of the
28 pharmaceutical products were caused by petitioners to be manufactured by Hizon Laboratories.” As
required by law, “the amount of loss warranting the grant of actual or compensatory damages must be
proved with a reasonable degree of certainty, based on competent proof and the best evidence
obtainable by the injured party.” “Nevertheless, considering that respondents palpably suffered some form
of pecuniary loss resulting from petitioners’ breach of contract, the Court deems it proper to, instead,
award in their favor the sum of 100,000.00 in the form of temperate damages. This course of action is
hinged on Article 2224 of the Civil Code which states that ‘temperate or moderate damages, which are
more than nominal but less than compensatory damages, may be recovered when the court finds that
some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved
with certainty,’ as in this case.”

31. PLENO VS. COURT OF APPEALS

G.R. No. L-56505 May 9, 1988

FACTS:
Florante de Luna was driving a delivery truck owned by Philippine Paper Products Inc. at great speed
along South Super Highway in Taguig when he bumped the van which was being driven by Maximo
Pleno.
The bump caused Pleno’s van to swerve to the right and crash into a parked truck.
As a result, Pleno was hospitalized and his van was wrecked.
Pleno sued and was awarded actual, temperate, moral, exemplary damages and attorney’s fees by the
trial court. However, the CA reduced the amount of temperate and moral damages givenbecause they
were ‘too high’.

ISSUES:
W/N the CA erred in reducing the amount of temperate damages awarded?

HELD:
CA erred in reducing the award of temperate damages.
Temperate damages are included within the context of compensatory damages. In arriving at a
reasonable level of temperate damages to be awarded, trial courts are guided by our ruling that there are
cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the
court is convinced that there has been such loss. For instance, injury to one's commercial credit or to the
goodwill of a business firm is often hard to show certainty in terms of money. Should damages be denied
for that reason? The judge should be empowered to calculate moderate damages in such cases, rather
than that the plaintiff should suffer, without redress from the defendant's wrongful act. As to the loss or
impairment of earning capacity, there is no doubt that Pleno is an entrepreneur and the founder of his
own corporation, the Mayon Ceramics Corporation.It appears also that he is an industrious and
resourceful person with several projects inline and were it not for the incident, might have pushed them
through. His actual income however has not been sufficiently established so that this Court cannot award
actual damages, but, an award of temperate or moderate damages may still be made on loss or
impairment of earning capacity. That Pleno sustained a permanent deformity due to a shortened left leg
and that he also suffers from double vision in his left eye is also established. Because of this, he suffers
from some inferiority complex and is no longer active in business as well as in social life.
Nominal Damages
 1. ONE NETWORK RURAL BANK, INC vs. DANILO G. BARIC
G.R. No. 193684 March 5, 2014

FACTS:
Jaime Palado (Palado) was the registered owner of real property with a building containing
commercial spaces for lease (subject property) in Davao City. Respondent Danilo G. Baric (Baric) was a
lessee therein, operating a barber shop on one of the commercial spaces. In December 2000, Baric
received a written notice from Palado demanding the return of the leased commercial space within 40
days.

Baric took the matter to the office of the barangay Lupong Tagapamayapa (Lupon). However, on the
scheduled dates of conciliation/mediation hearing, Baric failed to attend, which prompted the Barangay
Chairman to issue a Certificate to Bar Action.

Baric filed a case for forcible entry with prayer for injunctive relief against Palado and herein petitioner
One Network Rural Bank, Inc.

Baric’s Amended Complaint was prompted by Network Bank’s subsequent purchase on April 25, 2001 of
the subject property from Palado, whereupon TCT 231531 was cancelled and TCT T-338511 was issued
in the bank’s name. It then constructed a new building on the lot.

In its Answer, Network Bank essentially claimed that as a buyer in good faith and new owner of the
subject property, it should not be made liable; that it had no participation in the dispute between Baric and
Palado. It prayed that the Amended Complaint be dismissed for lack of merit.

Palado, on the other hand, claimed that Baric had no cause of action against him; that Baric complained
before the Lupon, but on the scheduled January 19 and 24, 2001 conciliation hearings, he failed to
attend; that the Lupon thus issued a certification barring Baric from filing a court action

MTCC dismissed Baric’s Complaint for forcible entry.

RTC affirmed in toto the Decision of the MTCC.

The CA however, reversed the decisions of the lower courts and finding that Baric be awarded
P50,000.00 in nominal damages for which One Network and Palado are solidarily liable. Palado – for
forcible entry in that while Palado’s notice to vacate required Baric to vacate the premises within 40 days,
the latter was granted, under their lease agreement the right to at least four months advance notice, and
failure to provide that Baric ‘voluntarily’ vacated the premises and prompting its demolition.

One Network – for since having ownership transferred to it; and that by building anew on the property, it
has become impracticable to restore Baric in his possession. Instead, his case has become one for
vindication of right; thus, the CA opted to award Baric nominal damages in the amount of P50,000.00.

ISSUE:
Whether it is correct that One Network be solidarily liable with Palado for payment of nominal
damages.

HELD:
No. It is evident that the CA gravely erred in holding Network Bank solidarily liable with Palado for
the payment of nominal damages.
"Nominal damages are recoverable where a legal right is technically violated and must be
vindicated against an invasion that has produced no actual present loss of any kind or where there has
been a breach of contract and no substantial injury or actual damages whatsoever have been or can be
shown.
Under Article 2221 of the Civil Code, nominal damages may be awarded to a plaintiff whose right has
been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered.” "Nominal damages are not for indemnification of loss
suffered but for the vindication or recognition of a right violated or invaded."

Network Bank did not violate any of Baric's rights; it was merely a purchaser or transferee of the property.
Surely, it is not prohibited from acquiring the property even while the forcible entry case was pending,
because as the registered owner of the subject property, Palado may transfer his title at any time and the
lease merely follows the property as a lien or encumbrance.

Any invasion or violation of Baric's rights as lessee was committed solely by Palado, and Network Bank
may not be implicated or found guilty unless it actually took part in the commission of illegal acts, which
does not appear to be so from the evidence on record. On the contrary, it appears that Barie was ousted
through Palado's acts even before Network Bank acquired the subject property or came into the picture.
Thus, it was error to hold the bank liable for nominal damages.

2. LIBCAP MARKETING CORP., JOHANNA J. CELIZ, and and MA. LUCIA G. MONDRAGON vs.
LANNY JEAN B. BAQUIAL
G.R. No. 192011. June 30, 2014.

FACTS:
In 2003, an audit of Libcap’s Super Express branch in Cagayan de Oro City was conducted. The
resulting audit report showed that respondent Baquial made a double reporting of a single deposit made
on April 2, 2001. Baquial was required to explain in writing why the cash sales for March 31, 2001 and
April 1, 2001 were covered by a single April 2, 2001 validated bank deposit slip for only P1,437.00. In her
written reply, Baquial claimed that she deposited two separate amounts of P1,437.00 each but that it
seemed that both separate deposits were covered by a single bank validation. However, Libcap
discovered that only one deposit was made on April 2, 2001 with verification from the bank.
The amount of P1,437.00 was deducted form Baquial’s salary each payday on a staggered basis.
On July 2003, Baquial received a Notice of Administrative investigation but was unable to attend due to
lack of financial resources. Two days after, she received a Second Notice of Administrative Investigation
but, again, she failed to attend. Baquial was then placed on preventive suspension. On August 2003, she
received a Notice of Termination for dishonesty, embezzlement, inefficiency, and for commission of acts
inconsistent with Libcap’s work standards.
The Labor Arbiter held that Baquial was dismissed for just cause but she was deprived of
procedural due process. Baquial was awarded back wages. On appeal, the NLRC affirmed the decision.
However, the CA affirmed the decision but deleted the award of back wages and entitled Baquial to
nominal damages of P100,000.00 instead.

ISSUE:
Did the CA erred in awarding nominal damages amounting to P100,000.00 without any justifiable,
compelling circumstances?

HELD: Yes.
Nominal damages are awarded for the purpose of vindicating or recognizing a right and not for
indemnifying a loss. Hence, the CA should have limited the justification of the award of nominal damages
to petitioner Libcap’s violation of respondent Baquial’s right to due process in effecting her termination. It
should not have considered the claimed unpaid overtime pay which had been already denied by the
Labor Arbiter. The Court finds it necessary to reduce the amount of nominal damages form P100,000.00
to P30,000.00.

3. AREOLA VS CA & PRUDENTIAL GUARANTEE AND ASSURANCE INC.

GR NO. 95641 SEPTEMBER 22, 1994

FACTS:
Petitioner Santos Areola is a policy holder of the respondent PRUDENTIAL GUARANTEE AND
ASSURANCE INC. a corporation engaged in insurance business. Petitioner contracted with respondent
for a Personal Accident Insurance Policy with its Baguio City Branch covering the period of November
28,1984 - November 28, 1985. Terms were P1609.85 which includes premium, documentary stamp and
premium tax. Its statement of account had the following stipulations 1.) The SOA must not be considered
a receipt, an Official Receipt is to be issued upon payment of this account 2.) If payment is for a
representative, demand for provisional receipt. If our official receipt is not received within 7 days please
notify us 3.) if payment is made to our office, demand an official receipt. 7 months after its issuance, the
policy was unilaterally cancelled for failure to pay of premiums.The insured confronted Carlito Ang, agent
of respondent and demanded the issuance of an official receipt wherein he replied that there was a
mistake in the cancellation and see its rectification. However, no official receipt was given. Petitioner then
demanded that he be insured under the same terms and that if it is not satisfied, will sue for damages. An
investigation was then made wherein the branch manager Malapit has misappropriated the premiums and
that the respondent’s AVP stated that since no official receipt was issued, there was reason to believe
that no payment has been made. Apologizing for the inconvenience, He informed petitioner that the
respondent is amenable to extending the policy up to December 17 1985 or one year from the date when
payment was received or December 17, 1984. However, on August 3, 1985 the Areola spouses had filed
a complaint for breach of contract with damages before the lower court. RTC ruled in favor of petitioner
awarding 1,703.65 as actual damages; 200,000 as moral damages; 50,000 as exemplary; attys fees
10,000.00 and costs. Upon appeal, the decision was reversed.

ISSUE:
Does the erroneous act of cancelling the policy entitle petitioner to damages and if the subsequent act of
reinstating the wrongfully cancelled policy release the respondent from its liability for damages

HELD:
YES. The court ruled that Malapit’s fraudulent act of misappropriating the premiums paid is beyond doubt
directly imputable to respondent insurance company. A corporation acts solely through its
agents/employees and that their acts are considered as its own for which it can be held to account. He
was the manager of its Baguio branch and beyond doubt represented its interest and acted in its behalf in
receiving the premiums. Art 1910 of the NCC provides that the principal must comply with all the
obligations which the agent may have contracted within the scope of his authority. As for any obligation
wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly
or tacitly. The failure to remit the premiums received cannot be a defense for the respondent and does
not free the same from its obligation to the petitioner. A banking corporation is liable to innocent third
persons where representation is made in the course of its business by an agent acting within its scope.
Even if the agent was secretly abusing his authority and doing fraud upon his principal for his own benefit.
The earlier act of reinstating does not obliterate the injury inflicted on the petitioner. A contract of
insurance creates reciprocal obligations for both parties as reciprocal obligations arise from the same
cause and in which each party is both a debtor creditor of the other such that the obligation of one is
dependent on the obligation of the other. 2 nd par of Art 1191 provides that an injured party is given a
choice between fulfillment or rescission in case one of the obligors fails to comply with what is incumbent
upon him. It entitles the injured party to payment of damages in either case. Such reinstatement being
equivalent to fulfillment of an obligation divests petitioner of claim to damages and has no basis or
support on laws of obligations and contracts. An erroneous cancellation of the insurance policy
constitutes a breach of contract. However, the respondent within a reasonable time took steps to rectify
the wrong committed by reinstating the policy. Moreover, no actual or substantial damage or injury was
inflicted at the time policy was cancelled. Hence, Nominal damages are recoverable where a legal right is
technically violated and must be vindicated against an invasion that has produced no actual present loss
of any kind or where there has been a breach of contract and no substantial injury or actual damages
whatsoever was shown. The SC modified RTC’s ruling and modified the damages to nominal damages of
30,000.00 with legal rate of interest from date of filing.
Attorney’s Fees
 1. WILLAWARE PRODUCTS CO. VS JESICHRIS MANUFACTURING CO.
GR No. 195549 Sept. 3, 2014
Perlta, J.:

FACTS:

Respondent filed this present complaint for damages for unfair competition with prayer for
permanent injunction to enjoin petitioner from manufacturing and distributing plastic-made automotive
parts similar to those of respondent.

Respondent alleged that it is a duly registered partnership engaged in the manufacture and
distribution of plastic and metal products, with principal office at No. 100 Mithi Street, Sampalukan,
Caloocan City. Since its registration in 1992, respondent has been manufacturing in its Caloocan plant
and distributing throughout the Philippines plastic-made automotive parts. Petitioner, on the other hand,
which is engaged in the manufacture and distribution of kitchenware items made of plastic and metal has
its office near that of respondent. Respondent further alleged that in view of the physical proximity of
petitioner’s office to respondent’s office, and in view of the fact that some of the respondent’s employees
had transferred to petitioner, petitioner had developed familiarity with respondent’s products, especially its
plastic-made automotive parts.

After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner clearly
invaded the rights or interest of respondent by deliberately copying and performing acts amounting to
unfair competition. The RTC further opined that under the circumstances, in order for respondent’s
property rights to be preserved, petitioner’s acts of manufacturing similar plastic-made automotive parts
such as those of respondent’s and the selling of the same products to respondent’s customers, which it
cultivated over the years, will have to be enjoined.

ISSUE:

Whether or not petitioner committed acts amounting to unfair competition under Article 28 of the
Civil Code?

HELD:

Yes. The concept of "unfair competition" under Article 28 is very much broader than that covered
by intellectual property laws. Under the present article, which follows the extended concept of "unfair
competition" in American jurisdictions, the term cover seven cases of discovery of trade secrets of a
competitor, bribery of his employees, misrepresentation of all kinds, interference with the fulfillment of a
competitor’s contracts, or any malicious interference with the latter’s business.

Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any other
unjust, oppressive or high-handed method shall give rise to a right of action by the person who thereby
suffers damage."

From the foregoing, it is clear that what is being sought to be prevented is not competition per se
but the use of unjust, oppressive or high- handed methods which may deprive others of a fair chance to
engage in business or to earn a living. Plainly, what the law prohibits is unfair competition and not
competition where the means use dare fair and legitimate.

In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve
an injury to a competitor or trade rival, and (2) it must involve acts which are characterized as "contrary to
good conscience," or "shocking to judicial sensibilities," or otherwise unlawful; in the language of our law,
these include force, intimidation, deceit, machination or any other unjust, oppressive or high-handed
method. The public injury or interest is a minor factor; the essence of the matter appears to be a private
wrong perpetrated by unconscionable means.

Thus, it is evident that petitioner is engaged in unfair competition as shown by his act of suddenly
shifting his business from manufacturing kitchenware to plastic-made automotive parts; his luring the
employees of the respondent to transfer to his employ and trying to discover the trade secrets of the
respondent.

Moreover, when a person starts an opposing place of business, not for the sake of profit to
himself, but regardless of loss and for the sole purpose of driving his competitor out of business so that
later on he can take advantage of the effects of his malevolent purpose, he is guilty of wanton wrong. As
aptly observed by the court a quo, the testimony of petitioner’s witnesses indicate that it acted in bad faith
in competing with the business of respondent, to wit: Petitioner, thru its General Manager, William
Salinas, Jr., admitted that it was never engaged in the business of plastic-made automotive parts until
recently, year 2000.

2. RICARDO A. DALUSONG v. EAGLE CLARC SHIPPING PHILIPPINES

GR No. 204233 Sep 03, 2014

FACTS:
Private respondents hired petitioner as Able Seaman on board their vessel MV Malene Ostervold with a
basic salary of US$800 per month. The duration of the contract of employment was for 2½ months.[5]
Petitioner boarded the vessel on 18 November 2009. On 13 December 2009, while petitioner was drilling
to attach an overboard safety equipment on the vessel, a sudden swell caused some movement of the
vessel. As a result, one of the crew fell directly on petitioner, inflicting injury on petitioner's right foot.
Petitioner was brought to the St. Joseph Medical Center in Houston, Texas, where he was diagnosed with
fractured ankle and his foot was placed in cast. On 23 December 2009, petitioner was repatriated to the
Philippines for further examination and medical treatment.

Upon arrival in Manila, petitioner was referred by private respondents to the NGC Medical Specialist
Clinic, Inc. where his cast was removed after a month. Petitioner then underwent physical therapy until
April 2010. On 14 May 2010, Dr. Nicomedes Cruz, the company-designated doctor, gave petitioner an
interim disability grading based on the Philippine Overseas Employment Administration (POEA) schedule
of disability of "grade 8 that is moderate rigidity or one third loss of motion or lifting power of the trunk."[6]
Upon further rehabilitation, petitioner's condition improved. On 27 July 2010, the company-designated
doctor issued a final disability grading under the POEA schedule of disability of "grade 11 - complete
immobility of an ankle joint in normal position."[7] Petitioner disagreed with the disability assessment and
consulted Dr. Nicanor Escutin, a physician of his own choice. In his Disability Report[8] dated 2 October
2010, Dr. Escutin found petitioner to be suffering from "PARTIAL PERMANENT DISABILITY." Dr. Escutin
concluded that petitioner is "unfit for seaduty in whatever capacity as seaman."

Petitioner filed with the NLRC a complaint against private respondents, claiming disability benefits, sick
wages, damages, and attorney's fees. Petitioner maintained that he is entitled to full disability benefits of
US$80,000, while private respondents insisted that petitioner is only entitled to US$12,551 based on the
disability assessment of the company-designated doctor.

ISSUE:
Whether or not respondents had not acted in bad faith as to warrant the award of attorney's fees.

HELD:
We find the petition without merit.
In this case, the company-designated doctor gave petitioner a final disability grading under the POEA
schedule of disabilities of "Grade 11- complete immobility of an ankle joint in normal position." Petitioner
disagreed with this assessment and consulted a physician of his own choice, Dr. Nicanor Escutin, who
found petitioner to be suffering from "PARTIAL PERMANENT DISABILITY," and "is UNFIT FOR
SEADUTY in whatever capacity as seaman." Based on Dr. Escutin's assessment, petitioner then claimed
that he is entitled to full disability benefits of US$80,000, while private respondents insisted that petitioner
is only entitled to US$12,551 based on the disability assessment of the company-designated doctor.
We agree with the Court of Appeals' ruling, giving more credence to the medical findings of the company-
designated doctor. Contrary to the ruling of the NLRC, petitioner's doctor did not categorically give
petitioner a grade 1 disability rating which is equivalent to total and permanent disability. Petitioner's
physician found petitioner to be suffering from "PARTIAL PERMANENT DISABILITY," and "is UNFIT
FOR SEADUTY in whatever capacity as seaman." Aside from this seemingly inconsistent assessment by
petitioner's doctor, there was no evidence submitted of medical procedures, examinations or tests which
would support his conclusion that petitioner is unfit for sea duty in whatever capacity as a seaman. In
contrast, the company-designated doctor gave petitioner a final disability grading under the POEA
schedule of disabilities of "grade 11- complete immobility of an ankle joint in normal position," only after
petitioner had undergone a series of medical tests and examinations, and physical therapy over a period
of six months, during which the company-designated doctor issued periodic medical reports. As the Court
aptly stated in Philman Marine Agency, Inc. (now DOHLE-PHILMAN Manning Agency, Inc.) v. Cabanban,
"the doctor who have had a personal knowledge of the actual medical condition, having closely,
meticulously and regularly monitored and actually treated the seafarer's illness, is more qualified to
assess the seafarer's disability." Based on the Disability Report of petitioner's doctor, it appears that he
only conducted a physical examination on petitioner before issuing his final diagnosis and disability rating
on petitioner's condition. Clearly, the findings of the company-designated doctor, who, with his team of
specialists which included an orthopedic surgeon and a physical therapist, periodically treated petitioner
for months and monitored his condition, deserve greater evidentiary weight than the single medical report
of petitioner's doctor, who appeared to have examined petitioner only once.
We likewise agree with the Court of Appeals in deleting the award of attorney's fees. Private respondents
were justified in insisting that petitioner is only entitled to US$12,551 compensation for his grade 11
disability. There was no bad faith on the part of private respondents which would warrant the award of
attorney's fees.
WHEREFORE, we DENY the petition. We AFFIRM the 29 June 2012 Decision and the 26 September
2012 Resolution of the Court of Appeals in CA-G.R. SP No. 123767.

3. AUGUSTO M. AQUINO, Petitioner,

vs.
HON. ISMAEL P. CASABAR, as Presiding Judge Regional Trial Court-Guimba, Nueva Ecija,
Branch 33 and MA. ALA F. DOMINGO and MARGARITA IRENE F. DOMINGO, substituting Heirs of
the deceased ANGEL T. DOMINGO, Respondents.
G.R. No. 191470 January 26, 2015

FACTS:
On June 27, 2002, Atty. Angel T. Domingo (now deceased) verbally contracted petitioner to represent him
in Agrarian Case No. 1217-G on a contingency fee basis. The case was for the determination of the just
compensation for the expropriation and taking of Atty. Domingo's ricelands consisting of 60.5348
hectares, situated in Guimba, Nueva Ecija, by the Department of Agrarian Reform (DAR). The DAR and
the Land Bank of the Philippines (Land Bank) initially valued Atty. Domingo's property at P484,236.27 or
P7,999.30 per hectare, which the latter, through petitioner-counsel, opposed in courts. Eventually, the
RTC, acting as Special Agrarian Court (RTC/SAC) issued a Decision dated April 12, 2004 fixing the just
compensation for Atty. Domingo's property at P2,459,319.70 or P40,626.54 per hectare, or an increase of
P1,975,083.43 over the initial DAR and the Land Bank valuation. Land Bank moved for reconsideration,
but was denied, thus, it filed a petition for review with the CA. However, the appellate court affirmed in
toto the SAC Decision. Land Bank moved for reconsideration anew, but was denied. Land Bank assailed
the appellate court's decision and resolution before the Supreme Court via a petition for review on
certiorari. However, the Court denied the same. Subsequently, the Court denied with finality Land Bank's
motion for reconsideration.
Petitioner then requested Ma. Ala F. Domingo to inform the Land Bank of the segregation of petitioner's
thirty percent (30%) contingent attorney's fees out of the increase of the just compensation for the subject
property, or thirty percent (30%) of the total increase amounting to Php1,975,983.43. Petitioner claimed
never to have received a reply from private respondent.
On August 12, 2009, petitioner filed a Motion for Approval of Charging Attorney's Lien and for the Order of
Payment. Petitioner further executed an Affidavit dated August 10, 2009, attesting to the circumstances
surrounding the legal services he has rendered for the deceased Atty. Domingo and the successful
prosecution of the Agrarian case from the RTC/SAC through the appellate court and the Supreme Court.
On January 11, 2010, public respondent Judge Casabar issued the disputed Order denying petitioner's
motion for approval of attorney's lien.

ISSUE:
Did the trial court committed a reversible error in denying the motion to approve attorney's lien and order
of payment on the ground that it lost jurisdiction over the case since judgment in the case has already
become final and executory?

HELD:
Yes. In the instant case, the attorney’s fees being claimed by the petitioner is the compensation for
professional services rendered, and not an indemnity for damages. Petitioner is claiming payment from
private respondents for the successful outcome of the agrarian case which he represented. We see no
valid reason why public respondent cannot pass upon a proper petition to determine attorney's fees
considering that it is already familiar with the nature and the extent of petitioner's legal services. If we are
to follow the rule against multiplicity of suits, then with more reason that petitioner's motion should not be
dismissed as the same is in effect incidental to the main case.
Petitioner's failure to pay the docket fees pertinent to his motion should not be considered as having
divested the court a quo's jurisdiction. We note that, in this case, there was no showing that petitioner
intended to evade the payment of docket fees as in fact he manifested willingness to pay the same
should it be necessary. Likewise, pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion,
should there be unpaid docket fees, the same should be considered as a lien on the judgment.
With regards to how attorney’s fees for professional services can be recovered, and when an action for
attorney’s fees for professional services can be filed, it is well settled that a claim for attorney’s fees may
be asserted either in the very action in which the services of a lawyer had been rendered or in a separate
action.
With respect to the first situation, the remedy for recovering attorney’s fees as an incident of the main
action may be availed of only when something is due to the client. Attorney’s fees cannot be determined
until after the main litigation has been decided and the subject of the recovery is at the disposition of the
court. The issue over attorney’s fees only arises when something has been recovered from which the fee
is to be paid.
Petitioner filed his claim as an incident of the main action, as in fact, his motion was for the court's
approval of charging attorney's lien and the prayer thereto was to direct the entry into the case records
the attorney's fees he is claiming. Needless to say, petitioner's motion for approval of charging attorney's
lien and order of payment was not intended to be filed as a separate action. Nevertheless, it is within
petitioner's right to wait for the finality of the judgment, instead of filing it ahead of the court's resolution,
since precisely the basis of the determination of the attorney's fees is the final disposition of the case, that
is, the just compensation to be awarded to the private respondents.
Moreover, the RTC/SAC decision became final and executory on March 3, 2009, and petitioner filed his
Motion to Determine Attorney’s Fees on August 10, 2009, or only about four (4) months from the finality of
the RTC/SAC decision. Considering that petitioner and Atty. Domingo’s agreement was contracted
verbally, Article 1145 of the Civil Code allows petitioner a period of six (6) years within which to file an
action to recover professional fees for services rendered. Thus, the disputed motion to approve the
charging of attorney's lien and the order of payment was seasonably filed.

4.ALEJANDRO C. ALMENDRAS VS. ALEXIS C. ALMENDRAS

G.R. No. 179491, January 14, 2015

FACTS:
Alejandro C. Almendras sent letters to House Speaker Jose De Venecia, Jr. and Dr.
Nemesio Prudente, President of Oil Carriers, Inc. These letters were allegedly printed,
distributed, circulated and published by Alejandro Almendras, Jr. in Davao Del Sur and Quezon
City, with evident bad faith and manifest malice to destroy Alexis C. Almendras’ good name.
Hence, the latter filed an action for damages arising from libel and defamation againts petitioner
in RTC, Digos City.
RTC granted the complaint, awarding Alexis P5M as moral damages, P100T as
exemplary damages, P10T for litigation expenses and attorney’s fees in the amount of 25% of
whatever amounts actually received by plaintff for this judgment. After the denial of Motion for
Reconsideration and/or new trial, the case was elevated to CA.
CA affirmed the decision of RTC.

ISSUES:
1. Whether or not petitioner was deprived due process.
2. Whether or not the letters are libelous in nature.
3. Whether of not the letters fall within the purview of privileged communication; and
4. Whether or not respondent is entitled to moral and exemplary damages, attorney’s fees
and litigation expenses.

RULING:
1. Petitioner was given several opportunities to present his evidence or to clarify his medical
constraints in court, but he did not do so, despite knowing fully well that he had a
pending case in court. In keeping the normal course of events, he should have taken the
initiative “of making the proper inquiries from his counsel and the trial court as to the
status of his case.” For his failure to do so, he has only himself to blame. The Court
cannot allow petitioner the exception to the general rule just because his counsel admitted
having no knowledge of his medical condition. To do so will sit a dangerous precedent of
never ending suits, so long as lawyers could allege their own fault or negligence to
support the client’s case and obtain remedies and reliefs already lost by the operation of
law.
2. For imputation to be libelous under Art. 353 of the Revised Penal Code, the following
requisites must be present: a) it must be defamatory; b)it must be malicious; c) it must be
given publicity; and d) the victim must be identifiable. Consequently, under Art. 354,
every defamatory imputation is presumed to be malicious, even if true, if no good
intention and justifiable motive is shown. In the instant case, the letters tag respondent as
a “reknown black mailer” a vengeful family member who filed cases againts his mother
and siblings, and with nefarious designs. Even impartial mind reading these descriptions
would be led to entertain doubts on the person’s character thereby affecting that person’s
reputation.
3. A written letter containing libelous matter cannot be classified as privileged when it is
published and circulated among the public. His intention is clearly stated on the letter,
when he requested the assistance of the office of the recipient to circulate the information
to concerned officials and secretariat employees of the House of the Representatives. The
publication brought discredit and shame to respondent’s reputation.
4. Considering that the respondent sufficiently justified his claim for damages, he is entitled
to moral and exemplary damages. The award on attorney’s fees and litigation expenses
are not proper because the respondent failed to justify satisfactorily his claim.

5.RENATO L. DELFINO, SR vs. AVELINO K. ANASAO

G.R. No. 197486 September 10, 2014

FACTS:
Delfino owns several parcels of land. A portion thereof is being tilled by Anasao. Said portions
were placed under Operation Land Transfer. After Anasao had paid his amortizations he was issued
Emancipation Patents. Delfino applied for a Retention with the DAR Regional Director for all the parcels
of land. DAR-RD denied the application over those covered by the OLT, but granted retention over those
not covered. Delfino appealed to the DAR Secretary, the latter set aside the decision of DAR-RD and
granted Delfino retentention over all the parcels of land. Delfino then sold several portions to SM
Primeholdings, included among them were the portions covered by the OLT. Delfino also applied for the
cancellation of the EPs over his land covered by OLT. PARAD approved the cancellation of the EPs.
Anasao argued that the implementation of the February 28, 1995 Order will have the effect of cancelling
the EPs and consequently deprive them of ownership of the landholdings they acquired pursuant to PD
27.Anasao pointed out that Delfino acted in bad faith when he sold a portion of the OLT-covered land
infavor of SM Prime Holdings, Inc. without the required DAR clearance.

ISSUE:
Whether the inclusion of the twohectare portion sold to SM Prime Holdings, Inc. in Delfino’s
retention area was in derogation of Section 6 of Republic Act No. 6657.

RULING:
The right of retention can be exercised over tenanted land and even where CLOAs or EPs have been
issued to tenant-farmers provided that the right of tenants under Section 6 of RA 6657 is similarly
protected. For as long as the area to be retained is compact or contiguous and it does not exceed the
retention ceiling of five (5) hectares, a landowner’s choice of the area to be retained, must
prevail.Moreover, Administrative Order No. 4, series of 1991, which supplies the details for the exercise of
a landowner’s retention rights, likewise recognizes no limit to the prerogative of the landowner, although
he is persuaded to retain other lands instead to avoid dislocation of farmers. Without doubt, this right of
retention may be exercised over tenanted land despite even the issuance of Certificate of Land Transfer
(CLT) to farmer-beneficiaries. What must be protected, however, is the right of the tenants toopt to either
stay on the land chosen to be retained by the landowner or be a beneficiary in another agricultural land
with similar or comparable features.

6. JUAN P. CABRERA, petitioner, vs. HENRY YSAAC, respondent.

G.R. No. 166790. November 19, 2014.

FACTS:
The heirs of Luis and Matilde Ysaac co-owned a 5,517-square- meter parcel of land located in Sabang,
Naga City. One of the co-owners is respondent, Henry Ysaac. Henry Ysaac leased out portions of the
property to several lessees. Juan Cabrera, one of the lessees, leased a 95-square-meter portion of the
land. Henry Ysaac needed money and offered to sell the 95-square- meter piece of land to Juan Cabrera.
He told Henry Ysaac that the land was too small for his needs because there was no parking space for
his vehicle. Henry Ysaac expanded his offer to include the two adjoining lands that Henry Ysaac was then
leasing to the Borbe family and the Espiritu family. Those three parcels of land have a combined area of
439-square-meters. However, Henry Ysaac warned Juan Cabrera that the sale for those two parcels
could only proceed if the two families agree to it. Juan Cabrera accepted the new offer. Henry Ysaac and
Juan Cabrera settled on the price of P250.00 per square meter, but Juan Cabrera stated that he could
only pay in full after his retirement Henry Ysaac agreed but demanded for an initial payment of P1,500.00,
which Juan Cabrera paid. According to Juan Cabrera, Henry Ysaac informed him that the Borbe family
and the Espiritu family were no longer interested in purchasing the properties they were leasing. Since
Mamerta Espiritu of the Espiritu family initially considered purchasing the property and had made an initial
deposit for it, Juan Cabrera agreed to reimburse this earlier payment. n June 9, 1990, Juan Cabrera paid
the amount of P6,100.00.Henry Ysaac issued a receipt for this amount. P3,100.00 of the amount paid
was reimbursed to Mamerta Espiritu and, in turn, she gave Juan Cabrera the receipts issued to her by
Henry Ysaac. Sometime in September 1993, Juan Cabrera alleged that Henry Ysaac approached him,
requesting to reduce the area of the land subject of their transaction. Part of the 439-square-meter land
was going to be made into a barangay walkway, and another part was being occupied by a family that
was difficult to eject. Juan Cabrera agreed to the proposal. The land was surveyed again. Cabrera
intended to show the sketch plan and pay the amount due for the payment of the lot. However, on that
day, Henry Ysaac was in Manila. Once more, Henry Ysaac's wife refused to receive the payment
because of lack of authority from her husband. Henry Ysaac's counsel, Atty. Luis Ruben General, wrote a
letter addressed to Atty. Leoncio Clemente, Juan Cabrera's counsel formally rescinding the contract of
sale because Juan Cabrera failed to pay the balance of the purchase price of the land. Cabrera's initial
payment of P1,500.00 and the subsequent payment of P6,100.00 were going to be applied as payment
for overdue rent of the parcel of land Juan Cabrera was leasing from Henry Ysaac. The letter also denied
the allegation of Juan Cabrera that Henry Ysaac agreed to shoulder the costs of the resurveying of the
property. Henry Ysaac told Juan Cabrera that he could no longer sell the property because the new
administrator of the property was his brother, Franklin Ysaac. Due to Juan Cabrera's inability to enforce
the contract of sale between him and Henry Ysaac, he decided to file a civil case for specific
performance. In counterclaim, Henry Ysaac prayed for the dismissal of Juan Cabrera's complaint. He also
prayed for compensation in the form of moral damages, attorney's fees, and incidental litigation
expenses. Before the Regional Trial Court decided the case, the heirs of Luis and Matilde Ysaac, under
the administration of Franklin Ysaac, sold their property to the local government of Naga City. Regional
Trial Court of Naga City ruled that the contract of sale between Juan Cabrera and Henry Ysaac was duly
rescinded when the former failed to pay the balance of the purchase price in the period agreed upon. The
Court of Appeals agreed with the Regional Trial Court that there was a perfected contract of sale between
Juan Cabrera and Henry Ysaac. The Court of Appeals also ruled that the contract of sale between Juan
Cabrera and Henry Ysaac was not validly rescinded. For the rescission to be valid under Article 1592 of
the Civil Code, it should have been done through a judicial or notarial act and not merely through a letter.
However, due to the sale of the entire property of the Ysaac family in favor of the local government of
Naga City, the Court of Appeals ruled that the verbal contract between Juan Cabrera and Henry Ysaac
cannot be subject to the remedy of specific performance. The only recourse the Court of Appeals could
do is to order Henry Ysaac to return the initial payment of the purchase price and payment for the
surveying expenses as payment of actual damages. The Court of Appeals likewise awarded attorney's
fees and litigation costs.

ISSUE:
Whether petitioner is entitled to actual damages, attorney's fees, and costs of litigation

HELD:
The Supreme Court rule that petitioner is entitled to the return of the amount of money because he paid it
as consideration for ownership of the land. Since the ownership of the land could not be transferred to
him, the money he paid for that purpose must be returned to him. Otherwise, respondent will be unjustly
enriched. Respondent's claim for rent in arrears is a separate cause of action from this case. For
petitioner's earnest money payment to be considered payment for his rent liabilities, the rules of
compensation under Article 1279 of the Civil Code must be followed. It was not proven during trial if
petitioner's rental liability to respondent is due, or if it is already liquidated and demandable. Hence, this
court is limited to uphold the ruling of the Court of Appeals, but such payment could be subject to the rule
on compensation.
However, petitioner is not entitled to attorney's fees and the costs of litigation. The Court of Appeals
awarded attorney's fees to petitioner "just to protect his right [because petitioner] reached this court to
seek justice for himself."
Contrary to the Court of Appeals' ruling, we find that petitioner did not have a clear right over the property
in question. The Court of Appeals aw awarded attorney's fees and litigation costs on the premise that the
contract between petitioner and respondent was perfected. Without a valid contract that stipulates his
rights, petitioner risked litigation in order to determine if he has rights, and not to protect rights that he
currently has. Hence, the award of attorney's fees and litigation costs was not properly justified.

7. BANK OF THE PHILIPPINE ISLANDS V. AMADOR DOMINGO

GR No. 169407 March 25, 2015

FACTS:
Respondent Amador Domingo and his wife, the late Mercy Maryden Domingo executed a Promissory
Note in favor of Makati Auto Center, Inc. payable in 48 successive monthly installments. They
simultaneously executed a Deed of Chattel Mortgage over a 1993 Mazda 323 to secure the payment of
their Promissory Note. Makati Auto Center, Inc. then assigned all its rights and interests over the said
Promissory Note and chattel mortgage to Far East Bank and Trust Company (FEBTC).
On April 7, 2000 FEBTC and BPI merged with BPI as the surviving corporation, FEBTC the absorbed
corporation. By virtue of said merger, all the assets and liabilities of FEBTC were transferred to and
absorbed by BPI.
The spouses Domingo failed to pay 21 monthly installments from January 15, 1996 to September 15,
1997. BPI, being the surviving corporation after the merger, demanded that the spouses Domingo pay the
balance of the Promissory Note including accrued late payment charges/interests or to return the
possession of the subject vehicle for the purpose of foreclosure in accordance with the undertaking stated
in the chattel mortgage. When the spouses Domingo still failed to comply with its demands, BPI filed on
November 14, 2000 a Complaint for Replevin and Damages. BPI included a John Doe as defendant
because at the time of filing of the Complaint, BPI was already aware that the subject vehicle was in the
possession of a third person but did not yet know the identity of said person.
MeTC rendered a Decision in favor of BPI as the bank was able to establish by preponderance of
evidence a valid cause of action against the spouses Domingo. According to the MeTC, novation is
never presumed and must be clearly shown by express agreement or by acts of equal import. To effect a
subjective novation by a change in the person of the debtor, it is necessary that the old debtor be
released expressly from the obligation and the third person or new debtor assumes his place. Without
such release, there is no novation and the third person who assumes the debtor's obligation merely
becomes a co-debtor or surety.
On appeal the RTC held that in novation, consent of the creditor to the substitution of the debtor need not
be by express agreement, it can be merely implied.

ISSUE:
Whether or not, there is novation on the loan obligation of the spouses Domingo to BPI that would release
the obligation and for Carmelita to be substituted as a debtor?

HELD:
NO. Article 1293 of the New Civil Code provides:
Novation which consists in substituting a new debtor in the place of the original one, may be made even
without the knowledge or against the will of the latter, but not without the consent of the creditor.

Under this provision, there are two forms of novation by substituting the person of the debtor, and they
are: (1) expromision and (2) delegacion. In the former, the initiative for the change does not come from
the debtor and may even be made without his knowledge, since it consists in a third person assuming the
obligation. As such, it logically requires the consent of the third person and the creditor. In the latter, the
debtor offers and the creditor accepts a third person who consents to the substitution and assumes the
obligation, so that the intervention and the consent of these three persons are necessary. In these two
modes of substitution, the consent of the creditor is an indispensable requirement. Both the RTC and the
Court of Appeals found that there was novation by delegacion in the case at bar. The Deed of Sale with
Assumption of Mortgage was executed between Mercy and Carmelita, thus, their consent to the
substitution as debtors and third person, respectively, are deemed undisputed.
It should be noted that in order to give novation its legal effect, the law requires that the creditor should
consent to the substitution of a new debtor. This consent must be given expressly for the reason that,
since novation extinguishes the personality of the first debtor who is to be substituted by a new one, it
implies on the part of the creditor a waiver of the right that he had before the novation, which waiver must
be express under the principle that renuntiatio non praesumitor, recognized by the law in declaring that a
waiver of right may not be performed unless the will to waive is indisputably shown by him who holds the
right.
In Ruiz v. Court of Appeals, 38 the Court equitably reduced the interest rate of 3% per month or 36% per
annum stipulated in the promissory notes therein to 1% per month or 12% per annum, based on the
following ratiocination: We affirm the ruling of the appellate court, striking down as invalid the 10%
compounded monthly interest, the 10% surcharge per month stipulated in the promissory notes dated
May 23, 1995 and December 1, 1995, and the 1% compounded monthly interest stipulated in the
promissory note dated April 21, 1995. The legal rate of interest of 12% per annum shall apply after the
maturity dates of the notes until full payment of the entire amount due. Also, the only permissible rate of
surcharge is 1% per month, without compounding. We also uphold the award of the appellate court of
attorney's fees, the amount of which having been reasonably reduced from the stipulated 25% (in the
March 22, 1995 promissory note) and 10% (in the other three promissory notes) of the entire amount due,
to a fixed amount of P50,000.00. However, we equitably reduce the 3% per month or 36% per annum
interest present in all four (4) promissory notes to 1% per month or 12% per annum interest. The
foregoing rates of interests and surcharges are in accord with Medel vs. Court of Appeals, Garcia vs.
Court of Appeals, Bautista vs. Pilar Development Corporation, and the recent case of Spouses Solangon
vs. Salazar. This Court invalidated a stipulated 5.5% per month or 66% per annum interest on a
P500,000.00 loan in Medel and a 6% per month or 72% per annum interest on a P60,000.00 loan in
Solangon for being excessive, iniquitous, unconscionable and exorbitant. In both cases, we reduced the
interest rate to 12% per annum. We held that while the Usury Law has been suspended by Central Bank
Circular No. 905, s. 1982, effective on January 1, 1983, and parties to a loan agreement have been given
wide latitude to agree on any interest rate, still stipulated interest rates are illegal if they are
unconscionable. Nothing in the said circular grants lenders carte blanche authority to raise interest rates
to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets. On the other
hand, in Bautista vs. Pilar Development Corp., this Court upheld the validity of a 21% per annum interest
on a P142,326.43 loan, and in Garcia vs. Court of Appeals, sustained the agreement of the parties to a
24% per annum interest on an P8,649,250.00 loan. It is on the basis of these cases that we reduce the
36% per annum interest to 12%. An interest of 12% per annum is deemed fair and reasonable. While it is
true that this Court invalidated a much higher interest rate of 66% per annum in Medel and 72% in
Solangon it has sustained the validity of a much lower interest rate of 21% in Bautista and 24% in Garcia.
We still find the 36% per annum interest rate in the case at bar to be substantially greater than those
upheld by this Court in the two (2) aforecited cases. (Citations omitted.)
On the strength of the foregoing jurisprudence, the Court likewise finds the interest rate of 3% per month
or 36% per annum stipulated in the Promissory Note herein for the balance of P275,562.00 as excessive,
iniquitous, unconscionable, and exorbitant. Following the guidelines set forth in Eastern Shipping Lines,
Inc. v. Court of Appeals and Nacar v. Gallery Frames, the Court imposes instead legal interest in the
following rates: (1) legal interest of 12% per annum from date of extrajudicial demand on January 29,
1997 until June 30, 2013; and (2) legal interest of 6% per annum from July 1, 2013 until fully paid.
Incidentally, Amador passed away on June 5, 2010 during the pendency of the instant petition, and is
survived by his children, namely: Joann D. Moya, Annabelle G. Domingo, Cristina G. Domingo, Amador
G. Domingo, Jr., Gloria Maryden D. Macatangay, Dante Amador G. Domingo, Gregory Amador A.
Domingo, and Ina Joy A. Domingo. 41 To prevent future litigation in the enforcement of the award, the
Court clarifies that Amador's heirs are not personally responsible for the debts of their predecessor. The
extent of liability of Amador's heirs to BPI is limited to the value of the estate which they inherited from
Amador. In this jurisdiction, "it is the estate or mass of the property left by the decedent, instead of the
heirs directly, that becomes vested and charged with his rights and obligations which survive after his
death." To rule otherwise would unduly deprive Amador's heirs of their properties.
WHEREFORE, in view of the foregoing, the Petition is GRANTED. The Decision dated July 11, 2005 and
Resolution dated August 19, 2005 of the Court of Appeals in CA-G.R. SP No. 88836, affirming with
modification the Decision dated February 10, 2005 of the RTC of Manila, Branch 26 in Civil Case No. 04-
111100, is REVERSED and SET ASIDE. The Decision dated June 10, 2004 and Order dated September
6, 2004 of the MeTC of Manila, Branch 9 in Civil Case No. 168949-CV, is REINSTATED with
MODIFICATIONS. The heirs of respondent Amador Domingo are ORDERED to pay petitioner Bank of
the Philippine Islands the following: (1) the P275,562.00 balance on the Promissory Note, plus legal
interest of 12% from January 29, 1997 to June 30, 2013 and 6% from July 1, 2013 until fully paid; (2)
attorney's fees of 10%; and (3) costs of suit. However, the liability of Amador Domingo's heirs is limited to
the value of the inheritance they received from the deceased.SO ORDERED.

8. ALEJANDRO ALMENDRAS JR. VS ALEXIS ALMENDRAS

GR# 179491

FACTS:
Alejandro Almendras allegedly sent defamatory letters aimed to tarnish the reputation of Alexis
Almendras to House Speaker Jose De Venecia Jr. and Dr. Nemesio Prudente. Alexis Almendras, upon
being informed of the contents of the said latter, filed an action for damages against Alejandro Almendras
arising from libel and defamation in the Regional Trial Court of Digos City. RTC ruled in favor of Alexis
Almendras awarding him P5M for moral damages, P100T for exemplary damages, P10T for litigation
expenses and attorney’s fees in the amount of 25% of the amount to be received by the plaintiff for the
judgement. The motion for reconsideration and new trial were denied by the RTC so the case was
elevated to the CA which affirmed the RTC’s decision.
ISSUE:
Whether or not respondent is actually entitled to receive the awarded damages.

HELD:
Not all. The moral and exemplary damages are proper because respondent successfully justified his
claim for the abovementioned damages. However, the award on attorney’s fees and litigation expenses
are not proper since he failed to justify his claims and both the trial and appellate courts failed to explicitly
state in their respective decisions the rationale for the award. It is an accepted doctrine that the award
thereof as an item of damages is the exception rather than the rule, and counsel’s fees are not to be
awarded every time a party wins a suit. The power of the court to award attorney’s fees under Article
2208 of the Civil Code demands factual, legal and equitable justification, without which the award is a
conclusion without a premise, its basis being improperly left to speculation and conjecture. In all events,
the court must explicitly state in the text of the decision, and not only in the decretal portion thereof, the
legal reason for the award of attorney’s fees.
The petition is hereby denied.

9. RICARDO C. HONRADO VS GMA NETWORK FILMS INC.

G.R. No. 204702, January 14, 2015

FACTS:
GMA Films entered into a TV rights agreement with Honrado, a licensor of 36 films, for the exclusive right
to telecast of the films, for a fee of Php60.75 million ($1.4 million) for a period of three years. Under the
said Agreement, the parties agreed that “all betacam copies of the films should pass through broadcast
quality test conducted by GMA-7”. GMA-7 is the television station affiliated with GMA Films. In paragraph
4 of the Agreement, the parties agreed to submit the films for review by the Movie and Television Review
and Classification Board (MTRCB) and stipulated on the remedies in the event that MTRCB bans the
telecasting of any of the films, as follows:
The PROGRAMME TITLES listed above shall be subject to approval by the Movie and Television Review
and Classification Board (MTRCB) and, in the event of disapproval, LICENSOR [Petitioner] will either
replace the censored PROGRAMME TITLES with another tile which is mutually acceptable to both parties
and, failure to do such, a proportionate reduction from the total price shall either be deducted or refunded
whichever is the case by the LICENSOR OR LICENSEE [GMA FILMS].
Two of the films covered by the agreement were Evangeline Katorse and Bubot for which GMA Films
paid Honrado Php1.5 million each. In 2003, GMA sued Honrado to collect Php1.6 million representing the
fee it paid for Evangeline Katorse and a proportion of what it paid for Bubot. Evangeline Katorse was
rejected by GMA Films because “its running time was too short for telecast”. GMA Films sought a refund
from Honrado of Php350,000 since Honrado only remitted Php900 to the owner of Bubot. GMA Films
theorized that the Agreement obliged Honrado to give to the film owner the entire amount he received
from it and that his failure to do so gave rise to an implied trust in favour of GMA Films.
For his part, Honrado claimed that when GMA Films rejected Evangeline Katorse, he replaced it with
another film, Winasak na Pangarap, which GMA Films had accepted as evidenced by the certification of
GMA Network attesting to the good broadcast quality of the film. The Regional Trial Court (RTC)
dismissed GMA’s complaint. On appeal, the Court of Appeals reversed the RTC decision and ruled in
favour of GMA Films. The Supreme Court, however, reversed the Court of Appeals and reinstated the
RTC decision, ruling the GMA Film’s complaint is without merit.

ISSUE:
Whether or not the contract was ambiguous as to create confusion between the parties that led to a
breach of contract.

HELD:
Under this stipulation, what triggers the rejection and replacement of any film listed in the Agreement is
the "disapproval" of its telecasting by MTRCB.

Nor is there any dispute that GMA Films rejected Evangeline Katorse not because it was disapproved by
MTRCB but because the film's total running time was too short for telecast (undertime). Instead of
rejecting GMA Films' demand for falling outside of the terms of Paragraph 4, petitioner voluntarily
acceded to it and replaced such film with Winasak na Pangarap. What is disputed is whether GMA Films
accepted the replacement film offered by petitioner.

Petitioner maintains that the Film Certification issued by GMA Network attesting to the "good broadcast
quality" of Winasak na Pangarap amounted to GMA Films' acceptance of such film. On the other hand,
GMA Films insists that such clearance pertained only to the technical quality of the film but not to its
content which it rejected because it found the film as "bomba" (bold). The CA, working under the
assumption that the ground GMA Films invoked to reject Winasak na Pangarap was sanctioned under the
Agreement, found merit in the latter's claim. We hold that regardless of the import of the Film Certification,
GMA Films' rejection of Winasak na Pangarapfinds no basis in the Agreement.

In terms devoid of any ambiguity, Paragraph 4 of the Agreement requires the intervention of MTRCB, the
state censor, before GMA Films can reject a film and require its replacement. Specifically, Paragraph 4
requires that MTRCB, after reviewing a film listed in the Agreement, disapprove or X-rate it for telecasting.
GMA Films does not allege, and we find no proof on record indicating, that MTRCB reviewed Winasak na
Pangarap and X-rated it. Indeed, GMA Films' own witness, Jose Marie Abacan (Abacan), then Vice-
President for Program Management of GMA Network, testified during trial that it was GMA Network which
rejected Winasak na Pangarap because the latter considered the film "bomba." In doing so, GMA
Network went beyond its assigned role under the Agreement of screening films to test their broadcast
quality and assumed the function of MTRCB to evaluate the films for the propriety of their content. This
runs counter to the clear terms of Paragraphs 3 and 4 of the Agreement.
Interest/ Computation
 1. DPWH VS. SORIANO

FACTS:
On October 20, 2010, petitioner Republic of the Philippines, represented by the Department of Public
Works and Highways (DPWH), filed a Complaint for expropriation against respondent Arlene R. Soriano,
the registered owner of a parcel of land situated at Gen. T De Leon, Valenzuela City. The property sought
to be expropriated shall be used in implementing the construction of the North Luzon Expressway (NLEX)

Petitioner duly deposited to the Acting Branch Clerk of Court the amount of P420,000.00 representing
100% of the zonal value of the subject property. Consequently, in an Order dated May 27, 2011, the RTC
ordered the issuance of a Writ of Possession and a Writ of Expropriation for failure of respondent, or any
of her representatives, to appear despite notice during the hearing called for the purpose.

According to the RTC, the records of the case reveal that petitioner adduced evidence to show that the
total amount deposited is just, fair, and equitable. Specifically, in its Position Paper, petitioner alleged that
pursuant to a Certification issued by the Bureau of Internal Revenue (BIR), Revenue Region No. 5, the
zonal value of the subject property in the amount of P2,100.00 per square meter is reasonable, fair, and
just to compensate the defendant for the taking of her property in the total area of 200 square meters.
Accordingly, the RTC considered respondent to have waived her right to adduce evidence and to object
to the evidence submitted by petitioner for her continued absence despite being given several notices to
do so.

Records of this case show that the Land Bank Manager’s Check Nos. 0000016913 dated January 21,
2011 in the amount of Php400,000.00 and 0000017263 dated April 28, 2011 in the amount of
Php20,000.00 issued by the Department of Public Works and Highways (DPWH) are already stale. Thus,
the said Office is hereby directed to issue another Manager’s Check in the total amount Php420,000.00.

Petitioner filed a Motion for Reconsideration maintaining that pursuant to Bangko Sentral ng Pilipinas
(BSP) Circular No. 799, Series of 2013, which took effect on July 1, 2013, the interest rate imposed by
the RTC on just compensation should be lowered to 6% for the instant case falls under a loan or
forbearance of money. In its Order dated March 10, 2014, the RTC reduced the interest rate to 6% per
annum not on the basis of the aforementioned Circular, but on Article 2209 of the Civil Code.

However, the case of National Power Corporation v. Honorable Zain B. Angas is instructive.
In the aforementioned case law, which is similar to the instant case, the Supreme Court had the occasion
to rule that it is well-settled that the aforequoted provision of Bangko Sentral ng Pilipinas Circular applies
only to a loan or forbearance of money, goods or credits. However, the term "judgments" as used in
Section 1 of the Usury Law and the previous Central Bank Circular No. 416, should be interpreted to
mean only judgments involving loan or forbearance of money, goods or credits, following the principle of
ejusdem generis. And applying said rule on statutory construction, the general term "judgments" can refer
only to judgments in cases involving loans or forbearance of any money, goods, or credits. Thus, the High
Court held that, Art. 2209 of the Civil Code, and not the Central Bank Circular, is the law applicable.

ISSUE:
Petitioner maintains that if property is taken for public use before compensation is deposited with the
court having jurisdiction over the case, the final compensation must include interests on its just value
computed from the time the property is taken up to the time when compensation is actually paid or
deposited with the court. Thus, legal interest applies only when the property was taken prior to the deposit
of payment with the court and only to the extent that there is delay in payment. In the instant case,
petitioner posits that since it was able to deposit with the court the amount representing the zonal value of
the property before its taking, it cannot be said to be in delay, and thus, there can be no interest due on
the payment of just compensation. Moreover, petitioner alleges that since the entire subject property was
expropriated and not merely a portion thereof, it did not suffer an impairment or decrease in value,
rendering the award of consequential damages nugatory.
RATIO:
The petition is partly meritorious.

At the outset, it must be noted that the RTC’s reliance on National Power Corporation v. Angasis
misplaced for the same has already been overturned by our more recent ruling in Republic v. Court of
Appeals, wherein we held that the payment of just compensation for the expropriated property amounts
to an effective forbearance on the part of the State, to wit:

In Republic, the Court recognized that the just compensation due to the landowners for their expropriated
property amounted to an effective forbearance on the part of the State. Applying the Eastern Shipping
Lines ruling, the Court fixed the applicable interest rate at 12% per annum, computed from the time the
property was taken until the full amount of just compensation was paid, in order to eliminate the issue of
the constant fluctuation and inflation of the value of the currency over time.

We subsequently upheld Republic’s 12% per annum interest rate on the unpaid expropriation
compensation in the following cases: Reyes v. National Housing Authority, Land Bank of the Philippines
v. Wycoco, Republic v. Court of Appeals, Land Bank of the Philippines v. Imperial, Philippine Ports
Authority v. Rosales-Bondoc, and Curata v. Philippine Ports Authority.Effectively, therefore, the debt
incurred by the government on account of the taking of the property subject of an expropriation
constitutes a forbearance which runs contrary to the trial court’s opinion that the same is in the nature of
indemnity for damages calling for the application of Article 2209 of the Civil Code. Nevertheless, in line
with the recent circular of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP-MB) No. 799,
Series of 2013, effective July 1, 2013, the prevailing rate of interest for loans or forbearance of money is
six percent (6%) per annum, in the absence of an express contract as to such rate of interest.

Notwithstanding the foregoing, We find that the imposition of interest in this case is unwarranted in view
of the fact that as evidenced by the acknowledgment receipt signed by the Branch Clerk of Court,
petitioner was able to deposit with the trial court the amount representing the zonal value of the property
before its taking. As often ruled by this Court, the award of interest is imposed in the nature of damages
for delay in payment which, in effect, makes the obligation on the part of the government one of
forbearance to ensure prompt payment of the value of the land and limit the opportunity loss of the owner.
However, when there is no delay in the payment of just compensation, We have not hesitated in deleting
the imposition of interest thereon for the same is justified only in cases where delay has been sufficiently
established

The records of this case reveal that petitioner did not delay in its payment of just compensation as it had
deposited the pertinent amount in full due to respondent on January 24, 2011, or four (4) months before
the taking thereof, which was when the RTC ordered the issuance of a Writ of Possession and a Writ of
Expropriation on May 27, 2011. The amount deposited was deemed by the trial court to be just, fair, and
equitable, taking into account the well-established factors in assessing the value of land. Considering,
therefore, the prompt payment by the petitioner of the full amount of just compensation as determined by
the RTC, We find that the imposition of interest thereon is unjustified and should be deleted.
Similarly, the award of consequential damages should likewise be deleted in view of the fact that the
entire area of the subject property is being expropriated, and not merely a portion thereof, wherein such
remaining portion suffers an impairment or decrease in value, as enunciated in Republic of the
Philippines v. Bank of the Philippine Islands,thus:

x x x The general rule is that the just compensation to which the owner of the condemned property is
entitled to is the market value. Market value is that sum of money which a person desirous but not
compelled to buy, and an owner willing but not compelled to sell, would agree on as a price to be paid by
the buyer and received by the seller. The general rule, however, is modified where only a part of a certain
property is expropriated. In such a case, the owner is not restricted to compensation for the portion
actually taken, he is also entitled to recover the consequential damage, if any, to the remaining part of the
property.
Considering that the subject property is being expropriated in its entirety, there is no remaining portion
which may suffer an impairment or decrease in value as a result of the expropriation. Hence, the award of
consequential damages is improper.

2. FAJ CONSTRUCTION & DEVELOPMENT CORPORATION vs. SUSAN M. SAULOG

G.R. No. 200759, March 25, 2015

FACTS:
On June 15, 1999, petitioner FAJ Construction and Development Corporation and respondent Susan
Saulog entered into an Agreement (construction agreement) for the construction of a residential building
in San Lorenzo Village, Makati City for a contract price of P12,500,000.00. Payment to petitioner
contractor shall be on a progress billing basis, after inspection of the work by respondent.Construction of
the building commenced, and respondent made a corresponding total payment to petitioner in the amount
of P10,592,194.80. However, for the October 31 and November 6, 2000 progress billing statements sent
by petitioner in the total amount of P851,601.58, respondent refused to pay. After performing additional
work, petitioner made another request for payment, but respondent again refused to pay, prompting
petitioner to terminate the construction contract pursuant to Article 27(b) of the Uniform General
Conditions of Contract for Private Construction (or Document 102) of the Construction Industry Authority
of the Philippines, Department of Trade and Industry. Petitioner then sent demand letters to respondent
and inn reply, respondent claimed that petitioner’s work was defective, and that it should instead be made
liable thereon.Petitioner thus filed with the RTC of Quezon City a civil case for collection of a sum of
money with damages against respondent. In all scheduled hearings, petitioner and its counsel failed to
appear on said hearings prompting the trial court upon the motion of the respondent to dismissed the
case. The RTC then ordered petitioner to pay respondent actual damages, lost rentals, moral damages,
exemplary damages, penalties for delay, attorney’s fees and 6% interest commencing from the date of
the filing of the complaint. Upon appeal, the Court of Appeals (CA) affirmed the decision with modification,
deleting the award of lost rentals, mental damages, exemplary damages, and attorney’s fees.

ISSUE:
WON the CA gravely erred when it concluded that petitioner is liable for actual damages, and in imposing
the penalty for delay and awarding interest on all amounts due.

HELD:
No. The Supreme Court find no reason to disturb the identical pronouncements of the trial court and the
CA. The same holds true with respect to the issue of damages raised by petitioner; it requires an inquiry
into the facts, which is no longer this Court’s realm.Petitioner endeavors to convince us to determine, yet
again, the weight, credence, and probative value of the evidence presented. This cannot be done in this
petition for review on certiorari under Rule 45 of the Rules of Court where only questions of law may be
raised by the parties and passed upon by us.
Since respondent suffered damages as a result of petitioner’s defective and delayed work and unjustified
abandonment of the project, the principle of damnum absque injuria cannot apply. The principle cannot
apply when there is an abuse of a person’s right.
Finally, the imposition of 6% interest per annum is proper. Indeed, as correctly held by the CA, when an
obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum, from the
filing of the complaint until its full satisfaction.

3. PEOPLE OF THE PHILIPPINES V. VINTULAN

GR NO. 212565

FACTS:
Two (2) criminal Informations were filed before the RTC charging Casas of the Murder of Joel Tabiley
Gulla (Joel)and the Frustrated Murder of Eligio Ruiz y Ricardo (Eligio), the pertinent portions of which
respectively read:
Crim. Case No. 136842

That, on or about the 24th day of December, 2007, in the City of San Juan, a place within the jurisdiction
of this Honorable Court, the above-named accused, in conspiracy with another person, whose true
identity and present whereabouts are unknown, with the use of a bladed weapon, a deadly weapon, with
intent to kill and by means of the qualifying circumstance treachery (sic), evident premeditation and abuse
of superior strength, did, then and there willfully, unlawfully and feloniously attack, assault and stab one
Joel Tabiley Gulla, thereby inflicting upon the latter several stab wounds on the different parts of his body,
which directly caused his death.

CONTRARY TO LAW.[7]

Crim. Case No. 136843

That, on or about the 24th day of December, 2007, in the City of San Juan, a place within the jurisdiction
of this Honorable Court, the above-named accused, in conspiracy with another person, whose true
identity and present whereabouts are unknown, with intent to kill and by means of the qualifying
circumstance treachery, evident premeditation and abuse of superior strength, which qualifies the crime
to frustrated murder, with the use of a bladed weapon, a deadly weapon, did, then and there willfully,
unlawfully and feloniously attack, assault and stab one Elegio Ruiz y Ricardo, thereby inflicting upon the
latter several stab wounds on the different parts of his body, which ordinarily would have caused his
death, thus, performing all the acts of execution which would produce the crime of murder as a
consequence but which nevertheless, did not produce it by reason of causes independent of the will of
the accused, that is, due to the timely medical assistance rendered unto said Elegio Ruiz y Ricardo,
which prevented his death.

CONTRARY TO LAW.

During arraignment, Casas entered a plea of not guilty. After which, joint trial on the merits ensued.
RTC sentencing him to suffer the penalty of reclusion perpetua, with all the concomitant accessory
penalties, and ordering him to pay the amounts of P50,000.00 in civil indemnity, P12,500.00 in actual
damages, P37,200.00 in loss of earning capacity, P30,000.00 in moral damages, P30,000.00 in
exemplary damages, and costs; and

ISSUE:
Whether or not Casas is liable for the civil damages
RULING:
The court ruled that there can be no self defense when there is no unlawful aggression in the first place.
The formula for the computation of loss of earning capacity is as follows:

Net earning capacity = Life Expectancy x [Gross Annual Income - Living Expenses (50% of gross annual
income)], where life expectancy = 2/3 (80 - the age of the deceased).

Thus, operating under the established facts as found by the RTC that Joel was 22 when he was killed by
Casas, and that he had monthly salary of P1,000.00 to P1,500.00 as a utility man, the loss of earning
capacity is computed as such:

Net earning capacity = [2/3(80-22)] x [(1500 x 12) - ((1,500 x 12) x 50%)]

= [2/3(58)]x [P18,000.00 - P9,000.00]

=P348,000.00

Accordingly, the award of loss of earning capacity is increased from P37,200.00 to P348,000.00as above-
computed.Meanwhile, the civil indemnity award of P75,000.00 stands.

In similar light, the Court modifies the award of moral damages in Crim. Case No. 136843 from
P10,000.00 to P20,000.00 to conform with recent jurisprudence.

Finally, interest at the rate of six percent (6%) per annum shall be imposed on all damages awarded,in
both Crim. Case Nos. 136842 and 136843, from the date of finality of judgment until fully paid
Civil Liability
 1. ANTONIO M. GARCIA VS FERRO CHEMICALS, INC.
G.R. No. 172505, October 1, 2014

FACTS:
Before this court is a petition for review on certiorari assailing the decision of the Court of Appeals dated
August 11, 2005 and its· resolution dated April 27, 2006, denying petitioner Antonio Garcia's motion for
reconsideration.

Antonio Garcia, as seller, and Ferro Chemicals, Inc., through Ramon Garcia, as buyer, entered into a
deed of absolute· sale and purchase of shares of stock on July 15, 1988. The deed was for the sale and
purchase of shares of stock from various corporations, including one class "A" share in Alabang Country
Club, Inc. and one proprietary membership in the Manila Polo Club, Inc. These shares of stock were in
the name of Antonio Garcia. The contract was allegedly entered into to prevent these shares of stock
from being sold at public auction to pay the outstanding obligations of Antonio Garcia.

On March 3, 1989, a deed of right of repurchase over the same shares of stock subject of the deed of
absolute sale and purchase of shares of stock was entered into between Antonio Garcia and Ferro
Chemicals, Inc. Under the deed of right of repurchase, Antonio Garcia can redeem the properties sold
within 180 days from the signing of the agreement.

Before the end of the 180-day period, Antonio Garcia exercised his right to repurchase the properties.
However, Ferro Chemicals, Inc. did not agree to the repurchase of the shares of stock. Thus, Antonio
Garcia filed an action for specific performance and annulment of transfer of shares.

On September 6, 1989, the class "A" share in Alabang Country Club, Inc. and proprietary membership in
the Manila Polo Club, Inc., which were included in the contracts entered into between Antonio Garcia and
Ferro Chemicals, Inc., were sold at public auction to Philippine Investment System Organization.

On September 3, 1990, the information based on the complaint of Ferro Chemicals, Inc. was filed against
Antonio Garcia before the Regional Trial Court. He was charged with estafa under Article 318 (Other
Deceits) of the Revised Penal Code for allegedly misrepresenting to Ferro Chemicals, Inc. that the shares
subject of the contracts entered into were free from all liens and encumbrances.

Issue:

Whether Ferro Chemicals, Inc. was entitled to the awards given as civil liability ex delicto

Held:

The civil liability arising from the offense or ex delicto is based on the acts or omissions that constitute the
criminal offense; hence, its trial is inherently intertwined with the criminal action.For this reason, the civil
liability ex delicto is impliedly instituted with the criminal offense. If the action for the civil liability ex delicto
is instituted prior to or subsequent to the filing of the criminal action, its proceedings are suspended until
the final outcome of the criminal action. The civil liability based on delict is extinguished when the court
hearing the criminal action declares that ‘the act or omission from which the civil liability may arise did not
exist’.

When the trial court’s decision was appealed as to its criminal aspect in the petition for certiorari before
this court, the civil aspect thereof is deemed included in the appeal. Thus, the relief prayed for by Ferro
Chemicals, Inc., that is, recovery of civil liability ex delicto, is asserted in both actions before this court and
the Court of Appeals.
Other Laws Excluded From The Syllabus
 1. NIEVES vs. DULDULAO
G.R. No. 190276. April 2, 2014

FACTS:
Petitioner is the owner of a piece of agricultural rice land. Ernesto and Felipe (respondents) are tenants
and cultivators of the subject land who are obligated to each pay leasehold rentals of 45 cavans of palay
for each cropping season. Claiming that Ernesto and Felipe failed to pay their leasehold rentals since
1985 which had accumulated to 446.5 and 327 cavans of palay. Petitioner filed a petition before the
DARAB Office of the Provincial Adjudicator (PARAD), seeking the ejectment of respondents from the
subject land for non-payment of rentals.
Prior to the filing of the case, a mediation was conducted where respondents admitted being in default in
the payment of leasehold rentals and promised to pay the same. However, Ernesto claimed that he
merely inherited a portion of the back leasehold rentals from his deceased father. On the other hand,
Felipe denied incurring any back leasehold rentals. Both respondents manifested their lack of intention to
renege on their obligations to pay the leasehold rentals due, explaining that the supervening calamities,
such as the flashfloods and typhoons that affected the area prevented them from complying.
PARAD declared that the tenancy relations between the parties had been severed by respondents' failure
to pay their back leasehold rentals, thereby ordering them to vacate the subject land and fulfill their rent
obligations. With respect to Ernesto, the PARAD held that upon the death of the leaseholder, the
leasehold relationship continues between the agricultural lessor and the surviving spouse or next of kin of
the deceased as provided by law; hence, the leasehold rent obligations subsist and should be paid. As for
Felipe, the PARAD found that his unpaid leasehold rentals and that his refusal to pay was willful and
deliberate, warranting his ejectment from the subject land. Respondents elevated the case on appeal.
The DARAB issued a Decision affirming the findings of the PARAD. Respondents elevated the matter to
the CA. The CA Ruling reversed the ruling of the DARAB terminating the tenancy relations of the parties.
CA then concluded that respondents substantially complied with their obligation to pay leasehold rentals,
and, hence, could not be ejected from the subject land despite their failure to meet their rent obligations
as they became due. Aggrieved, petitioner filed a motion for reconsideration which was, however, denied
by the CA in a Resolution.

ISSUE:
Whether or not the CA correctly reversed the DARAB's ruling ejecting respondents from the subject land.

HELD: YES.
Agricultural lessees, being entitled to security of tenure, may be ejected from their landholding only on the
grounds provided by law. To eject the agricultural lessee for failure to pay the leasehold rentals,
jurisprudence instructs that the same must be willful and deliberate in order to warrant the agricultural
lessee's dispossession of the land that he tills.
In the present case, petitioner seeks the dispossession of respondents from the subject land on the
ground of non-payment of leasehold rentals based on item 6, Section 36 of RA 3844. While respondents
indeed admit that they failed to pay the full amount of their respective leasehold rentals as they become
due, they claim that their default was on account of the debilitating effects of calamities like flashfloods
and typhoons. This latter assertion is a defense provided under the same provision which, if successfully
established, allows the agricultural lessee to retain possession of his landholding.
Respondents' failure to pay leasehold rentals to the landowner also appears to have been willful and
deliberate. They, in fact, do not deny — and therefore admit — the landowner's assertion that their rental
arrearages have accumulated over a considerable length of time but rely on the fortuitous event defense,
which as above- mentioned, cannot herein be sustained.
 2. CHARLES BUMAGAT ET AL. VS. REGALADO ARRIBAY
G.R. NO. 194818 June 9, 2014
J. DEL CASTILLO

FACTS:
Bumagat and others are the registered owners, successors-in-interest, or possessors of agricultural land
of about eight hectares of agricultural land. They filed a complaint for forcible entry against Arribay before
the MCTC alleging that with the aid of armed goons and through the use of intimidation and threats of
physical harm, the respondent entered the petitioners’ parcels of land and ousted them from their lawful
possession. Also, that respondent then took over the physical possession and cultivation of these parcels
of land; and that petitioners incurred losses and injuries by way of lost harvests and other damages.
Petitioners thus prayed for injunctive relief, actual damages in the amount of not less than P40,000.00 for
each cropping season lost, P30,000.00 attorney's fees, and costs. Arribay sought for the dismissal of the
complaint, claiming that the subject properties are agricultural lands – which renders the dispute an
agrarian matter and subject to the exclusive jurisdiction of Department of Agrarian Reform Adjudication
Board (DARAB). The Municipal Agrarian Reform Office (MARO) denied the motion for failure to show the
existence of a tenancy or agrarian relationship between the parties. The Municipal Circuit Trial Court
(MCTC) found that no tenancy or other agrarian relationship existed between the parties. The Regional
Trial Court (RTC) affirmed. The Court of Appeals (CA) reversed the RTC and agreed that the dispute fell
under the jurisdiction of the DARAB.

ISSUE:
Whether the dispute is within the jurisdiction of DARAB?

HELD:
NO. The CA failed to realize the fact that as between the parties, there is no tenurial arrangement, not
even an implied one. For the DARAB to acquire jurisdiction over the case, there must exist a tenancy
relation between the parties. “In order for a tenancy agreement to take hold over a dispute, it is essential
to establish all its indispensable elements, to wit: 1) that the parties are the landowner and the tenant of
agricultural lessee; 2) that the subject matter of the relationship is an agricultural land; 3) that there is
consent between the parties to the relationship; 4) that the purpose of the relationship is to bring about
agricultural production; 5) that there is personal cultivation on the part of the tenant or agricultural lessee;
and 6) that the harvest is shared between the landowner and the tenant or agricultural lessee. In the
present case, it is quite evident that not all of these conditions are present. For one, there is no tenant, as
both parties claim ownership over the property.
A case involving agricultural land does not immediately qualify it as an agrarian dispute. The mere fact
that the land is agricultural does not ipso facto make the possessor an agricultural lessee or tenant; there
are conditions or requisites before he can qualify as an agricultural lessee or tenant, and the subject
matter being agricultural land constitutes simply one condition. In order to qualify as an agrarian dispute,
there must likewise exist a tenancy relation between the parties. Thus, when farmer-beneficiaries of PD
27 who are registered owners of agricultural lands filed a complaint for forcible entry against a person
whose claim of ownership over the same parcels of land emanates from a donation by the heirs of the
original owner, it is a civil case within the jurisdiction of the ordinary courts, as all the elements for an
agrarian dispute are not present.
Regarding the award of actual damages, which respondent prominently questioned all throughout the
proceedings, this Court finds that there is sufficient basis for the MCTC to award petitioners the total
amount of P598,679.00 by way of actual damages. The trial court's findings on this score are based on
the evidence presented by the petitioners and the respective statements of their witnesses, who
themselves are farmers cultivating lands adjacent to the subject property.
 3.MARIANO JOSE VS ERNESTO NOVIDA
G.R. NO 177374 JULY 2, 2014

FACTS:
Respondents were granted as farmer beneficiaries Emancipation patents and certificate of title
over a parcel of land. Petitioners then filed before the DAR a petition for the reinvestigation and
cancellation of the emancipation against respondents and claiming that they are the bona fide and actual
tenants of the property. DAR issued an order in favor of the petitioners. Respondents then filed a
complaint for recovery of possession before the DARAB claiming that the property had already been
abandoned by petitioner and that they were merely ousted from the premises using force, stealth, threats
and intimidation when petitioner returned from being a naturalized citizen of the US. DARAB Urdaneta
ruled that respondents as the proper beneficiaries of the land and that there was abandonment over the
land by the petitioner. Meanwhile the DAR Secretary issued and order affirming the order of the DAR for
the cancellation and reinvestigation of the Eps filed by petitioner. As for the DARAB decision petitioners
appeald the same before the DARAB of Quezon city based on the ground that DARAB Urdaneta erred in
taking cognizance of the case which is under the exclusive jurisdiction of the Secretary of Agrarian
Reform. The court affirmed the decision of DARAB Urdaneta.

ISSUE:
Whether or not DARAB Urdaneta had exclusive jurisdiction to hear the case?
HELD:
Yes. When petitioners filed their petition for the reinvestigation and cancellation of the
Emancipation Patents before the DAR, certificates of title had already been issued to respondents. Thus
the DARAB- and not the DAR of the DAR secretary has exclusive jurisdiction over the case, pursuant to
the 1994 DARAB Rules of Procedure.
The above pronouncement was reiterated in this ponente’s ruling in Heirs of Lazaro Gallardo v. Soliman:
"the DARAB has exclusive jurisdiction over cases involving the cancellation of registered EPs; the DAR
Secretary, on the other hand, has exclusive jurisdiction over the issuance, recall or cancellation of [Ps or
Certificates of Land Ownership Awards that are not yet registered with the Register of Deeds."
Thus, since certificates of title have been issued in the respective names of the respondents as early as
in 1990, the DAR Region I Director had no jurisdiction to cancel their titles; the same is true with respect
to the DAR Secretary.

4. LAND BANK OF THE PHILIPPINES vs. LAJOM

FACTS:

Jose T. Lajom and his mother Vicenta Vda. De Lajom were the registered owners of several parcels of
land with an aggregate area of 27 hectares (ha.) located at Alua, San Isidro, Nueva Ecija.

A 24-ha. portion of the subject land was placed under the government's Operation Land Transfer
Program pursuant to Presidential Decree No. 27 (Tenants Emancipation Decree, as amended). The
Department of Agrarian Reform (DAR), through the Land Bank of the Philippines (LBP), offered to pay
Lajom just compensation for the constitutive areas of the subject portion. Records show, however, that
despite non-payment of the offered just compensation, DAR granted twelve (12) Emancipation Patents
between 1994 and 1998 in favor of the farmer-beneficiaries.

Lajom rejected the DAR valuation and, instead, filed an amended Petition for determination of just
compensation and cancellation of land transfers against the DAR, the LBP, and the said farmer-
beneficiaries. He alleged that in computing the amount of just compensation, the DAR erroneously
applied the provisions of PD 27 and Executive Order No. 228, Series of 1997, that have been repealed by
Section 17 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988). Thus, he asserted
that the value of the subject portion should be computed based on the provisions of RA 6657, and not of
PD 27 and/or EO 228. He likewise claimed that the Barrio Committee on Land Production (BCLP)
resolution – which fixed the average gross production (AGP) per ha. per year at 120 cavans of palay, and
which the DAR used in arriving at its valuation – was falsified and therefore cannot validly serve as basis
for determining the value of the land. In sum, Lajom stressed that the DAR valuation was arrived at
without due process, highly prejudicial and inimical to his and his heirs’ property rights.

The LBP agreed with the DAR valuation and insisted that PD 27 and EO 228, on which the DAR valuation
was based, were never abrogated by the passage of RA 6657,contrary to Lajom’s stance.

ISSUE:
Whether or not the CA committed reversible error in imposing interest at the rate of 12% p.a. on the just
compensation award in the nature of damages from March 11, 2004 until full payment

HELD:
Yes. With respect to the commonly raised issue on interest, the RTC may impose the same on the just
compensation award as may be justified by the circumstances of the case and in accordance with
prevailing jurisprudence. The Court has previously allowed the grant of legal interest in expropriation
cases where there was delay in the payment of just compensation, deeming the same to be an effective
forbearance on the part of the State. To clarify, this incremental interest is not granted on the computed
just compensation; rather, it is a penalty imposed for damages incurred by the landowner due to the delay
in its payment. Thus, legal interest shall be pegged at the rate of 12% p.a. from the time of taking until
June 30, 2013. Thereafter, or beginning July 1, 2013, until fully paid, just compensation shall earn interest
at the new legal rate of 6% p.a., conformably with the modification on the rules respecting interest rates
introduced by Bangko Sentral ng Pilipinas Monetary Board Circular No. 799, Series of 2013.

While the agrarian reform program was undertaken primarily for the benefit of our landless farmers, this
undertaking should, however, not result in the oppression of landowners by pegging the cheapest value
for their lands. Indeed, although the taking of properties for agrarian reform purposes is a revolutionary
kind of expropriation, it should not be carried out at the undue expense of landowners who are also
entitled to protection under the Constitution and agrarian reform laws.

5. RENATO L. DELFINO, SR vs. AVELINO K. ANASAO

G.R. No. 197486 September 10, 2014

FACTS:
Delfino owns several parcels of land. A portion thereof is being tilled by Anasao. Said portions
were placed under Operation Land Transfer. After Anasao had paid his amortizations he was issued
Emancipation Patents. Delfino applied for a Retention with the DAR Regional Director for all the parcels
of land. DAR-RD denied the application over those covered by the OLT, but granted retention over those
not covered. Delfino appealed to the DAR Secretary, the latter set aside the decision of DAR-RD and
granted Delfino retentention over all the parcels of land. Delfino then sold several portions to SM
Primeholdings, included among them were the portions covered by the OLT. Delfino also applied for the
cancellation of the EPs over his land covered by OLT. PARAD approved the cancellation of the EPs.
Anasao argued that the implementation of the February 28, 1995 Order will have the effect of cancelling
the EPs and consequently deprive them of ownership of the landholdings they acquired pursuant to PD
27.Anasao pointed out that Delfino acted in bad faith when he sold a portion of the OLT-covered land
infavor of SM Prime Holdings, Inc. without the required DAR clearance.

ISSUE:
Whether the inclusion of the twohectare portion sold to SM Prime Holdings, Inc. in Delfino’s
retention area was in derogation of Section 6 of Republic Act No. 6657.

RULING:
The right of retention can be exercised over tenanted land and even where CLOAs or EPs have been
issued to tenant-farmers provided that the right of tenants under Section 6 of RA 6657 is similarly
protected. For as long as the area to be retained is compact or contiguous and it does not exceed the
retention ceiling of five (5) hectares, a landowner’s choice of the area to be retained, must
prevail.Moreover, Administrative Order No. 4, series of 1991, which supplies the details for the exercise of
a landowner’s retention rights, likewise recognizes no limit to the prerogative of the landowner, although
he is persuaded to retain other lands instead to avoid dislocation of farmers. Without doubt, this right of
retention may be exercised over tenanted land despite even the issuance of Certificate of Land Transfer
(CLT) to farmer-beneficiaries. What must be protected, however, is the right of the tenants toopt to either
stay on the land chosen to be retained by the landowner or be a beneficiary in another agricultural land
with similar or comparable features.

6. AUTOMAT REALTY v. SPS. MARCIANO DELA CRUZ

GR No. 192026, Oct 01, 2014

FACTS:
Petitioner Automat Realty and Development Corporation (Automat) is the registered owner of two parcels
of land located in Barangay Malitlit, Sta. Rosa, Laguna, covered by TCT Nos. T-210027 and T-209077.
Automat acquired the 49,503-square-meter parcel of land covered by TCT No. T-209077 from El Sol
Realty and Development Corporation in 1990. In the same year, Automat also acquired the 24,562-
square-meter parcel of land covered by TCT No. T-210027 from Ofelia Carpo.

Petitioner Leonor Lim (petitioner Lim) was the real estate broker behind Automat's purchase of the
property. Respondent spouses sometimes referred to petitioner Lim some Sta. Rosa real estate
properties available for sale. They received a share in the broker's fees either from the seller or buyer.

The land was not occupied in 1990 when it was purchased by Automat. Respondent Ofelia dela Cruz
volunteered her services to petitioner Lim as caretaker to prevent informal settlers from entering the
property. Automat agreed, through its authorized administrator, petitioner Lim, on the condition that the
caretaker would voluntarily vacate the premises upon Automat's demand.

Respondent spouses' family stayed in the property as rent-paying tenants. They cultivated and improved
the land. They shared the produced palay with Automat through its authorized agent, petitioner Lito
Cecilia (petitioner Cecilia). He also remitted the rentals paid by respondent Ofelia Dela Cruz to petitioner
Lim in Makati and to Automat's office in Quezon City.

Sometime in August 2000, Automat asked respondent spouses to vacate the premises as it was
preparing the groundwork for developing the property.

Respondent spouses refused to vacate unless they were paid compensation. They claimed "they were
agricultural tenants [who] enjoyed security of tenure under the law."

On October 19, 2000, respondent spouses filed a petition for maintenance of peaceful possession with
prayer for preliminary mandatory injunction and/or temporary restraining order against Automat before the
PARAD for Laguna.

Automat had recovered possession of the property before respondent spouses filed their petition, and it
continues to have possession at present.

ISSUE:
Whether an agricultural tenancy relationship exists between Automat and respondent spouses

HELD:
The elements to constitute a tenancy relationship are the following: "(1) the parties are the landowner and
the tenant or agricultural lessee; (2) the subject matter of the relationship is agricultural land; (3) there is
consent between the parties to the relationship; (4) the purpose of the relationship is to bring about
agricultural production; (5) there is personal cultivation on the part of the tenant or agricultural lessee; and
(6) the harvest is shared between the landowner and the tenant or agricultural lessee."

There must be substantial evidence on the presence of all these requisites; otherwise, there is no de jure
tenant. Only those who have established de jure tenant status are entitled to security of tenure and
coverage under tenancy laws.
Well-settled is the rule that he who alleges must prove.[42] Respondent spouses filed the petition before
the PARAD, praying to be maintained in peaceful possession of the property. They were the ones
claiming they had a tenancy relationship with Automat. Thus, they had the burden of proof to show that
such relationship existed.

7. ESPIRITU VS. DEL ROSARIO

G.R. No. 204964

FACTS:
In 1978, the City Council of Angeles City, Pampanga, enacted Zoning Ordinance No. 13, Series
of 1978, classifying areas in Barangay Margot and Barangay Sapang Bato, Angeles City, as agricultural
land. Pursuant to this ordinance, Lutgarda Torres del Rosario (del Rosario) allegedly requested the City
Zoning Administrator to exempt from the zoning classification Lot Nos. 854 and 855 located in Barangay
Margot and Barangay Sapang Bato, Angeles City.The land is covered by Transfer Certificate of Title No.
T-11809 with an area of 164.7605 hectares. The request was allegedly approved on March 7, 1980 by
Engineer Roque L. Dungca, Angeles City Development Coordinator/Zoning Administrator, and the lots
were allegedly reclassified as non-agricultural or industrial lots. On October 10, 2000, del Rosario,
through her representative Sylvia R. Asperilla (Asperilla), led an application for exemption with the
Department of Agrarian Reform, seeking to exempt Lot Nos. 854 and 855 from the Comprehensive
Agrarian Reform Program (CARP) coverage. On March 26, 2004, farmers in del Rosario's landholdings,
led by Remigio Espiritu (Espiritu), led a motion for reconsideration of the order. They argued that under
Zoning Ordinance No. 13, Series of 1978, Housing and Land Use Regulatory Board Resolution No. 705,
Series of 2001, and Angeles City Council Resolution No. 3300, Series of 2001, the landholdings were
classified as agricultural, not industrial. They argued that as per certifications by the Housing and Land
Use Regulatory Board dated June 1, 2001, May 28, 2001, and November 24, 2003, the landholdings
were within the agricultural zone, and there was no zoning ordinance passed that reclassified the area
into other land uses. The motion was given due course by the Department of Agrarian Reform, this time
headed by Secretary Nasser C. Pangandaman (Secretary Pangandaman). Hence, on June 15, 2006,
then Secretary Pangandaman issued an order granting the motion for reconsideration and revoking the
earlier order of then Secretary of Agrarian Reform Pagdanganan. Del Rosario contended that this order
was sent to her through Clarita Montgomery in Barangay Margot, Sapang Bato, Angeles City, and not at
Asperilla's address in Cubao, Quezon City, which was her address on record. Del Rosario alleged that
she only came to know of the order on January 26, 2007, when the Provincial Agrarian Reform Officer of
Pampanga handed her a copy of the order. She then led her motion for reconsideration of the order dated
June 15, 2006. The motion was dated February 9, 2007. Del Rosario led a petition for review before the
Court of Appeals arguing (1)
that she was denied due process when the order of Secretary Pangandaman was "erroneously sent to
another address”. On September 28, 2012, the Court of Appeals rendered a decision granting the
petition. The Court of Appeals stated that del Rosario was indeed prevented from participating in the
proceedings that led to the issuance of Secretary Pangandaman's order when the notices were sent to
her other address on record. petitioners, namely Remigio Espiritu and Noel Agustin, now come before
this court via a petition for review on certiorari, seeking to set aside the ruling of the Court of Appeals.
In particular, petitioners argue that respondent was not denied due process as she was able to actively
participate in the proceedings before the Department of Agrarian Reform and the Office of the President.

ISSUE:
Whether or not De Rosario was deprived in due process

HELD:
The Court of Appeals, however, did not take into consideration that respondent was stillable to file a
motion for reconsideration of Secretary Pangandaman's order, albeit beyond the allowable period to file.
In Department of Agrarian Reform Administrative Order No. 06, Series of 2000:
RULE III
Commencement, Investigation and Resolution of Cases
xxx xxx xxx
SECTION 21. Motion for Reconsideration. — In case any of the parties disagrees
with the decision or resolution, the affected party may file a written motion for reconsideration within
fifteen (15) days from receipt of the order, furnishing a
copy thereof to the adverse party. The filing of the motion for reconsideration
shall suspend the running of the period to appeal.
Any party shall be allowed only one (1) motion for reconsideration. Thereafter, the
RD or approving authority shall rule on the said motion within fifteen (15) days
from receipt thereof. In the event that the motion is denied, the adverse party has
the right to perfect his appeal within the remainder of the period to appeal,
reckoned from receipt of the resolution of denial. If the decision is reversed on
reconsideration, the aggrieved party shall have fifteen (15) days from receipt of
the resolution of reversal within which to perfect his appeal.

8. SPOUSES JAIME SEBASTIAN AND EVANGELINE SEBASTIAN VS. BPI FAMILY BANK, INC.,
CARMELITA ITAPO AND BENJAMIN HAO
GR No. 160107 October 22, 2014

FACTS:
Petitioners Jaime and Evangeline Sebastian were employees of BPI Family Bank, Inc., both branch
manager and bank teller respectively.
In October 1987, they availed themselves of a housing loan from BPI Family as one of the
benefits extended to its employees. Their loan amounted to P273,000, and was covered by a Loan
Agreement. To secure the payment of the loan, they executed a real estate mortgage in favor of BPI
Family over the property.
Apart from the mortgage, Jaime signed an undated letter-memorandum addressed to BPI Family,
stating that in the even that he is terminated from the bank, the outstanding principal amount and the
interest "become entirely due and demandable on the effective date of such . . . termination."
In December 1989, Jaime was however terminated from employment due to loss of trust and
confidence resulting from his wilful non-observance of standard operating procedures and banking laws.
Evangeline was also terminated. Both notices contained a demand for the full payment of their
outstanding loans from BPI Family on the housing loan.
Petitioners filed a complaint for illegal dismissal against BPI Family at the National Labor
Relations Commission (NLRC).
About a year after their termination, petitioners received a demand letter requiring them to pay
their outstanding obligation P221,534.50.12. The demand letter stated that their entire outstanding
balance had become due and demandable upon their separation from BPI Family.
BPI Family instituted a petition for the foreclosure of the real estate mortgage. To prevent the
foreclosure of their property, the petitioners filed against the respondent bank their complaint for
injunction and action for damages with application for preliminary injunction and restraining order in the
Regional Trial Court (RTC).

Petitioner spouses asserted that under Republic Act No. 6552 (Maceda Law), they have special
protections under the law.
The RTC ruled that the Maceda Law is not applicable in the case at bar because the transaction
protected by the special law is a sale transaction, different from the loan transaction entered into between
the spouses as borrower and BPI Family as lender. On appeal, the CA upheld the ruling of the RTC on
the validity of the foreclosure, hence, the damages sought by petitioners do not lie. Hence, the petition.

ISSUE:
Whether or not petitioners should be granted damages over the foreclosure of the mortgage over the
house and lot.

HELD:
NO. The Supreme Court laid down the doctrine that a person does not stand to receive any damages
over valid foreclosure of mortgage. This principle is an offshoot of a well-settled rule that foreclosure is
valid only when the debtor is in default in the payment of his obligation.
 In the case at bar, the Court echoed the ruling of the CA which found that there was basis to
declare the petitioners’ entire outstanding loan obligation mature as to warrant the foreclosure of their
mortgage.
The petitioners cannot challenge the foreclosure conducted by private respondent on the mere
possibility that if the decision of the NLRC will be in their favor, part of the reliefs prayed for would be
reinstatement without loss of seniority and other privilege. Such argument is highly speculative.
Also, petitioner spouses admitted that they were in arrears when they made the late payments in
March, 1991.
Too, the Court did not accept appellants’ argument that appellee refused to accept the
subsequent payments made by them. Assuming, arguendo, that appellee bank indeed refused to accept
the subsequent payment from appellants, they could have consigned the same before the Court. They
failed to do so.
The Court also gave weight to the undated letter-memorandum which Jaime signed for BPI
Family.
Eventually, the Labor Arbiter ruled that Jaime’s dismissal was valid and legal. Such ruling
affirmed the legality of the termination of Jaime. Under the circumstances, the entire unpaid balance of
the housing loan extended to him by BPI Family became due and demandable upon such termination in
accordance with Jaime’s express and written commitment to BPI Family.
The foreclosure of a mortgage is but the necessary consequence of the non-payment of an
obligation secured by the mortgage. Where the parties have stipulated in their agreement, mortgage
contract and promissory note that the mortgagee is authorized to foreclose the mortgage upon the
mortgagor’s default, the mortgagee has a clear right to the foreclosure in case of the mortgagor’s default.

9. MONCAYO INTEGRATED SMALL-SCALE MINERS ASSOCIATION, INC. [MISSMA], Petitioner,

vs.
SOUTHEAST MINDANAO GOLD MINING CORP., JB. MGT. MINING CORP., PICOP RESOURCES,
INC., MT. DIWATA UPPER ULIP MANDAYA TRIBAL COUNCIL, INC. AND BALITE INTEGRATED
SMALL-SCALE MINING CORP., (BISSMICO), Respondents.
G.R. No. 149638 December 10, 2014
x-----------------------x
G.R. No. 149916
HON. ANTONIO H. CERILLES, IN HIS CAPACITY AS SECRETARY OF DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, Petitioner,
vs.
SOUTHEAST MINDANAO GOLD MINING CORPORATION (SMGMC) AND BALITE INTEGRATED
SMALL-SCALE MINING CORP., (BISSMICO), Respondents.

FACTS:
On July 1, 1985, the Bureau of Forest Development issued to Marcopper Mining Corporation (Marcopper)
a prospecting permit (Permit to Prospect No. 755-123185) covering 4,941 hectares within the
AgusanDavao-Surigao Forest Reserve. Thisforest reserve was instituted by Proclamation No. 369 issued
by then Governor General Dwight F. Davis on February 27, 1931. On March 10, 1986, the Bureau of
Mines and Geo-Sciences issued to Marcopper a permit to explore (EP 133) covering the same area. On
February 16, 1994, Marcopper assigned EP 133 to Southeast Mindanao Gold Mining Corporation
(SMGMC). On December 19, 1995, the Mines and Geo-Sciences Bureau director ordered the publication
of SMGMC’s application for Mineral Production Sharing Agreement (MPSA No. 128) for the 4,941
hectares covered by EP 133. MISSMA et al filed adverse claims against MPSA No. 128 anchored on
DENR Administrative Order No. 669 (DAO No. 66) issued on December 27, 1991, declaring 729 hectares
of the Agusan-Davao-Surigao Forest Reserve as forest land open for smallscale mining purposes,
subject to existing and valid private rights. The panel of arbitrators, in its decision dated June 13, 1997,
reiterated the validity of EP 133 and dismissed all adverse claims against MPSA No. 128. The adverse
claimants appealed to the Mines Adjudication Board. The Mines Adjudication Board (MAB), in its decision
dated January 6, 1998, vacated the decision of the panel of arbitrators. The Provincial Mining Regulatory
Board (PMRB), in its decision dated March 30, 1999, dismissed the oppositions for lack of merit, then
segregated and declared the 729-hectare gold rush area as People's Small Scale Mining Area. Then
DENR Secretary Antonio H. Cerilles, in his decision dated September 20, 1999, affirmed with modification
the Provincial Mining and Regulatory Board decision. The Court of Appeals, in its amended decision
dated August 27, 2001, granted the motions for reconsideration and, consequently, set aside and
annulled the DENR Secretary's decision for having been issued with grave abuse of discretion in excess
of his jurisdiction. The Court of Appeals limited its discussion on the propriety of the DENR Secretary’s
decision.
Petitioner MISSMA argues that the Court of Appeals should not have amended its decision considering it
already found SMGMC guilty of forum shopping and litis pendencia. Petitioner Hon. Antonio H. Cerilles,
in his capacity as then DENR Secretary, similarly argues that the Court of Appeals should have
maintained its earlier decision dismissing the case due to forum shopping andlitis pendencia. Respondent
SMGMC counters that no forum shopping or litis pendencia exists as the present petitions "emanated
from the decision of the PMRB declaring the 729 hectares of timberland as People’s Small-Scale Mining
Area, while G.R. No. 132475 emanated from the decision of the MAB on the MPSA Application of
[SMGMC]." Records also show that the case docketed as G.R. No. 132475 was made known to this
court. Petitioner DENR Secretary raised that the petitions were mooted by (a) then President Macapagal-
Arroyo’s issuance of Proclamation No. 297, excluding an area from Proclamation No. 369 and declaring
this area as a mineral reservation and asan environmentally critical area, and (b) this court’s decision
dated June 23, 2006 in G.R. Nos. 152613, 152628, 152619-20, and 152870-71 declaring DAO No. 66 as
void, declaring EP 133 as expired, and underscoring the Executive’s power of supervision and control
over the exploration, development, and utilization of the country’s mineral resources.

ISSUE:
W/N CA erred in its amended decision

HELD:
We do not need to decide on whether there was forum shopping or litis pendencia. Apex Mining v.
SMGMC mooted these petitions. This court denied the motions for reconsiderations, among others, in its
2009 resolution. Since this court declared that EP 133 expired and its transfer to SMGMC is void,
respondent SMGMC has no more basis to claim any right over the disputed 729 hectares in the Diwalwal
gold rush area excluded from its MPSA. Furthermore, since this court has declared that the DENR
Secretary had no authority to issue DAO No. 66 declaring 729 hectares of the Agusan Davao-Surigao
Forest Reserve as forest land open for small-scale mining purposes subject to existing and valid private
rights, both the PMRB decision, and the DENR Secretary’s decision affirming it with modification, are
consequently overturned for lack ofbasis in delineating the 729 hectares from the MPSA. Then President
Macapagal-Arroyo issued Executive Order No. 217 dated June 17, 2003, creating the National Task
Force Diwalwal to address the situation in the Diwalwal gold rush area.
On June 23, 2006, this court promulgated Apex Mining v. SMGMC, ruling on the petitions for review by
Apex, Balite, and the MAB. This court declared that EP 133 expired on July 7, 1994, and that its
subsequent transfer to SMGMC on February 16, 1994 was void. This court also affirmed the Court of
Appeals’ decision declaring DAO No. 66 as illegal for having been issued in excess of the DENR
Secretary’s authority
On November 20, 2009, this court En Banc denied reconsideration in Apex Mining v. SMGMC for lack of
merit.This court reiterated that Marcopper’s assignment of EP 133 to SMGMC violated Section 97 of
Presidential Decree No. 463 and the terms and conditions in the permit

10. IRENE D. OFILADA, petitioner, vs. SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL,
respondents.
G.R. No. 192270. January 26, 2015.

FACTS:
Irene, together with her husband, Carlos, brought from the heirs of Teresita Liwag a parcel of land
with fruit bearing plants located in Quezon and the sale was evidenced by an Extra-Judicial
Settlement of Estate with Absolute Sale wherein Miraflor Andal,m who brokered the sale of the
property signed as tenant.
Apparently, ten days prior to the sale, Miraflor appeared before Anastacio Lajara (Anastacio), the
then Barangay Agrarian Reform Council (BARC) Chairman of Barangay Puri, San Antonio, and executed
aPagpapatunay 9 stating that:
 Sa kinauukulan:
Ito ay pagpapatunay na si Miraflor Andal ay kusang[-]loob na dumulog sa aking
tanggapan upang ipagbigay[-]alam na ang lupa na pag-aari ni TERESITA LIWAG . . .
ay walang "tenant" o magtatrabaho at hiniling niya na ang nasabing lupa ay mapalipat
sa pangalan ng mga bumili na walang iba kundi sina Carlos at Irene Ofilada.
Pinagtitibay nya na wala na siyang paghahabol na ano man laban sa may-ari o kahalili
nito sa karapatan sapagkat siya ay tumanggap na ng kaukulang halaga hinggil sa
naging pagtatrabaho niya sa nasabing lupa at gayon din ang kanyang mga magulang.
SA KATUNAYAN NG LAHAT NG ITO ay ako ay nagbibigay ng pahintulot na ang
nasabing lupa ay mapagbili na at mapatala sa bagong may-ari na ligtas sa ano mang
pananagutan.

Two weeks after the sale, Miraflor, with the consent of her husband, respondent Ruben Andal (Ruben),
executed a Sinumpaang Salaysay wherein she acknowledged Irene and Carlos as the new owners of the
property. While it was stated therein that she will continue to take care of the property, she nevertheless
waived any tenancy rights that she and her husband might have over the land. Eventually, the land was
registered in the names of Irene and Carlos. Eight years later or in October 2005, Irene filed against the
spouses Andal a Complaint for Ejectment and Damages before the MTC of San Antonio, Quezon. She
averred that For humanitarian reasons, she acceded to the spouses Andal's request to take care of her
two parcels of land, provided that they would not be considered as tenants. To stress the fact that neither
she nor the spouses Andal intended that the latter be deemed as tenants, Irene pointed to the following:
(1) the condition for her purchase of the property in Tiaong that the same should not have any tenants;
and (2) Miraflor's execution of a Sinumpaang Salaysay wherein she waived any tenancy rights that she
and her husband might have over the said property. In their Answer, 15 the spouses Andal denied Irene's
allegations and claimed that they were tenants of Irene's predecessor-in-interest and continued to be
such despite the transfer of ownership of the properties to Irene. They likewise contended that since the
suit is an action to dispossess them as tenants, it is not the MTC which has jurisdiction over the complaint
but the Department of Agrarian Reform Adjudication Board (DARAB). Rejecting the tenancy claim, Irene
averred in her Memorandum that her real properties are not covered by agrarian reform laws as they are
within the retention limit allowed by law. She again stressed that the spouses Andal had already
voluntarily surrendered their rights as tenants way back in 1997 as evidenced by the Pagpapatunay and
the Sinumpaang Salaysay. She added the said spouses voluntarily waived their rights and received P1.1
million as commission for brokering the sale of the Tiaong property to her. This was after Irene made
clear that the sale would not materialize and, consequently spouses Andal would not get the commission,
if the property has tenants. Irene averred that the spouses Andal's receipt of the said amount of money,
being advantageous to them, is a valid ground for termination of tenancy relations.
MTC: Spouses Andal failed to adduce proof that they are tenants. It gave weight to
the Pagpapatunay issued by Anastacio in 1997 as against the affidavit he executed in 2005 which it found
ambivalent as to whether spouses Andal are working as tenants on the lands of Irene. The MTC did not
also accord any evidentiary weight to the copy of the Affidavit of Landholding presented by spouses
Andal because of the doubtful insertion. Hence, it concluded that the spouses Andal were in possession
of the properties by mere tolerance of Irene.
RTC: Affirmed
CA: The CA, on the other hand, took a different view of the case. In its assailed Decision of July 13, 2009,
the CA ratiocinated that since the existence of tenancy relations between the previous owners of the
properties and the spouses Andal is undisputed, the question of whether the said spouses may be
dispossessed therefrom constitutes an agrarian dispute despite the severance of such relations. This is
considering that severance of the tenurial arrangement does not render the action beyond the ambit of an
agrarian dispute and, hence, jurisdiction over the same remains with the DARAB.

ISSUES:
1. Whether tenancy relationship between Irene and the spouses Andal exists as to strip off the MTC of its
jurisdiction over Irene’s suit for unlawful detainer
2. Whether a new tenancy relationship between Irene and the spouses Andal was subsequently formed.
HELD:
1) Indeed, while a tenancy relationship cannot be extinguished by the sale, alienation, or transfer of
the legal possession of the landholding, the same may nevertheless be terminated due to
circumstances more advantageous to the tenant and his/her family. Here, records show that
Miraflor, who brokered the sale between the heirs of Teresita and Irene, voluntarily executed,
days prior to the Extrajudicial Settlement of Estate with Absolute Sale, her Pagpapatunay before
the BARC Chairman stating that she and her parents have already received a 'sufficient
consideration' for her to release her former landlord and the purchaser of the lot from liability. As
later disclosed by Irene during trial, such 'sufficient consideration' amounted to P1.1 million by
way of disturbance compensation, a factual allegation which was again never refuted by the
spouses Andal before the lower court and was found to be an uncontroverted fact by the CA. To
the Court, the said amount is adequate enough for the spouses Andal to relinquish their rights as
tenants. In fine, it can be reasonably concluded that the tenancy relationship between the
previous owners and the spouses Andal had already been severed.
The fact alone of working on another's landholding does not raise a presumption of the existence of
agricultural tenancy. For tenancy to be proven, all indispensable elements must be established, the
absence of one or more requisites will not make the alleged tenant a de facto one. These are: 1) the
parties are the landowner and the tenant; 2) the subject is agricultural land; 3) there is consent by the
landowner; 4) the purpose is agricultural production; 5) there is personal cultivation; and 6) there is
sharing of the harvests. The Pagpapatunay and the Sinumpaang Salaysay both support Irene's claim that
she purchased the landholdings only on the condition that there will be no tenants. Her refusal to give her
consent to any tenancy relationship is glaring. On the other hand, the spouses Andal, in their attempt to
prove tenancy, submitted their copy of the February 27, 1997 Affidavit of Landholding, which contains an
inserted statement that Irene and Carlos agree "that the same tenant Miraflor Andal, will continue as
tenant, over the said parcel of land." However, serious doubt is cast on the authenticity of said inserted
statement considering that it does not bear the respective initials/signatures of Carlos and Irene attesting
their conformity thereto. More importantly, Irene's copy of the said document does not contain the same
insertion.

11. RICARDO QUINTOS vs DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD

GR. No. 185838; February 10, 2014

FACTS:
Golden Country Farms, Incorporated is a domestic corporation organized for the purpose of engaging in
poultry and livestock production, processing, and trading. Petitioner Ricardo V. Quintos is the majority
stockholder of GCFI who managed its properties until 1975 when management was taken over by
Armando Romualdez. Under Romualdez’s management, GCFI contracted substantial loans with the
Philippine National Bank and the Development Bank of the Philippines which were secured by several
real estate mortgages over GCFI properties, including the subject property. In 1981, Romualdez
abandoned the management of the GCFI properties, afterwhich DBP took over. Sometime during the
same year, certain people started to plant palay on the subject property, eventually covering the riceland.
After the EDSA revolution, the possession and management of the GCFI properties were returned to
GCFI. PNB and DBP transferred their financial claims against GCFI to the Asset Privatization Trust. For
GCFI’s continuous failure to pay its loans, PNB and DBP initiated extra-judicial foreclosure proceedings
against the GCFI properties. In 1989, APT Officer-in-Charge Cesar entered into a verbal agreement with
53 members of private respondent Kanlurang Mindoro Farmers’ Cooperative, Inc. allowing the latter to
tend the standing mango trees, induce their flowering, and gather the fruits, the payment of which was to
be remitted to Quintos. Subsequently, Quintos reacquired the possession and management of the GCFI
properties, including the subject property, through a Memorandum of Agreement between him and APT,
which was further approved by the RTC. Thereafter, Quintos was informed by APT of the notice from the
Department of Agrarian Reform placing the riceland under compulsory acquisition pursuant to the
Comprehensive Agrarian Reform Program of the government. This prompted Quintos to file a petition for
exemption before the Office of the DAR Secretary. Quintos cited the Court’s ruling in Luz Farms v.
Secretary of the Department of Agrarian Reform but DAR Secretary ruled that the exemption enumerated
in Luz Farms applies only to poultry, livestock, or swine farms. Meanwhile, KAMIFCI filed an action for the
peaceful possession and enjoyment of the subject property against Quintos before the Office of the
Provincial Adjudicator asserting its rights under an agricultural leasehold tenancy agreement it
purportedly entered into with Lacuesta. In his answer, Quintos denied the personality of KAMIFCI as a
registered cooperative as well as the existence of any tenancy agreement covering the subject property.
PARAD rendered a Decision holding that there was a verbal lease tenancy agreement entered into by
Lacuesta with the 53 KAMIFCI members with respect to the mango orchard, and such was binding upon
APT and GCFI. As such, the PARAD directed the reinstatement of the 53 KAMIFCI members previously
tending the mango trees during the 1990 to 1991 and 1991 to 1992 seasons, and ordered them to pay
the corresponding consideration of P300.00 per mango tree per season. Meanwhile, the Office of the
President rendered a Decision in the exemption case, ruling that the cessation of poultry and livestock
activities on the GCFI properties, including the subject property, a month prior to the effectivity of RA
6657, does not a priori convert the properties to agricultural lands. In this relation, the OP concluded that
the act of the DAR in declaring the said properties as covered by the CARP without affording GCFI the
opportunity to contest the supposed conversion was arbitrary and confiscatory. On March 20, 1997, the
DARAB rendered a Decision in the tenancy case, respecting the findings and conclusions made in the
February 21, 1995 OP Decision. It also (a) declared that the farmers in the "palayan area" covering 355
has. may qualify as farmer-beneficiaries in the mango orchard as may be determined by the Municipal
Agrarian Reform Officer; (b) held that Certificates of Land Ownership Award should be generated
immediately and distributed to qualified farmer-beneficiaries; and (c) affirmed the directive for Quintos not
to disturb the peaceful possession and cultivation of the farmers in the mango orchard. Dissatisfied,
Quintos appealed to the CA, claiming that GCFI never consented to any tenancy relationship with the
KAMIFCI members. CA rendered a Decision, holding that the tenancy agreement entered by APT with
the 53 KAMIFCI members on the mango orchard was binding upon GCFI since all its business concerns
and transactions were coursed through APT at that time. It, however, declared as premature the
generation of CLOAs in favor of the farmer-beneficiaries pending exercise of the landowner’s right of
retention and absent payment of just compensation.

ISSUE:
Whether or not the CA correctly sustained the validity of the tenancy agreement purported in this case?

HELD:
The Court ruled that the petition is meritorious. Tenancy is a legal relationship established by the
existence of particular facts as required by law. For a tenancy relationship to exist between the parties,
the following essential elements must be shown: (a) the parties are the landowner and the tenant; (b) the
subject matter is agricultural land; (c) there is consent between the parties; (d) the purpose is agricultural
production; (e) there is personal cultivation by the tenant; and (f) there is sharing of the harvests between
the parties. All the above elements must concur in order to create a tenancy relationship. Thus, the
absence of one does not make an occupant of a parcel of land, a cultivator or a planter thereon, a de jure
tenant entitled to security of tenure under existing tenancy laws.
The burden of proof rests on the one claiming to be a tenant to prove his affirmative allegation by
substantial evidence. His failure to show in a satisfactory manner the facts upon which he bases his claim
would put the opposite party under no obligation to prove his exception or defense. The rule applies to
civil and administrative cases.
In this relation, it bears stressing that the right to hire a tenant is basically a personal right of a landowner,
except as may be provided by law. Hence, the consent of the landowner should be secured prior to the
installation of tenants.
In the present case, the PARAD, the DARAB and the CA all held that a tenancy relationship exists
between GCFI and the 53 KAMIFCI members who were allegedly installed as tenants by APT, the "legal
possessor" of the mango orchard at that time. Records are, however, bereft of any showing that APT was
authorized by the property’s landowner, GCFI, to install tenants thereon. To be sure, APT only assumed
the rights of the original mortgagees in this case, i.e., PNB and DBP, which, however, have yet to
exercise their right to foreclose the mortgaged properties due to the RTC’s order enjoining the same. It is
settled that a mortgagee does not become the owner of the mortgaged property until he has foreclosed
the mortgage and, thereafter, purchased the property at the foreclosure sale. With the foreclosure
proceedings having been enjoined, APT could not have been regarded as the "landowner" of the subject
property. Thus, since the consent of the standing landowner, GCFI, had not been secured by APT in this
case, it had no authority to enter into any tenancy agreement with the KAMIFCI members.
WHEREFORE, the petition is GRANTED. The Decision and Resolution of the Court of Appeals are
REVERSED and SET ASIDE since no valid tenancy agreement exists over the mango orchard subject of
this case.

12. DEPARTMENT OF AGRARIAN REFORM, now represented by OIC-SEC. NASSER

PANGANDAMAN, Petitioner,
vs.
TRINIDAD VALLEY REALTY & DEVELOPMENT CORPORATION, / GRACE B. FUA, in her capacity
as the PROVINCIAL AGRARIAN REFORM OFFICER OF NEGROS ORIENTAL, JOSELIDO S.
DAYOHA, JESUS S. DAYOHA and RODRIGO S. LICANDA, Petitioners,
vs.
TRINIDAD VALLEY RE TRINIDAD VALLEY REALTY & DEVELOPMENT CORPORATION, FRANNIE
GREENMEADOWS PASTURES, INC., ISABEL GREENLAND AGRI-BASED RESOURCES, INC.,
ISABEL GREENMEADOWS QUALITY PRODUCTS, INC., ERNESTO BARICUATRO,CLAUDIO VILLO
and EFREN NUEVO, Petitioners,
vs.
THE REPUBLIC OF THE PHILIPPINES and THE LAND REGISTRATION AUTHORITYALTY AND
DEVELOPMENT CORPORATION,/

G.R. No. 173386

G.R. No. 174162
G.R. No.183191

FACTS:
The consolidated petitions before us raise intertwined issues of jurisdiction over cases involving the
implementation of Republic Act No. 6657, otherwise known as the "Comprehensive Agrarian Reform Law
of 1988" (hereinafter, RA 6657). The petitions likewise question whether a regional trial court may
exercise jurisdiction if the case also assails the constitutionality of administrative orders, regulations and
other related issuances implementing the said law.
The following facts are common to the three cases under consolidation:
Trinidad Valley Realty and Development Corporation, Frannie Greenmeadows Pastures, Inc., Isabel
Greenland Agri-based Resources, Inc., Isabel Evergreen Plantations, Inc., Michelle Farms, Inc., Isabel
Greenmeadows Quality Products, Inc., Ernesto Baricuatro, Claudio Villo, and Efren Nuevo (hereinafter,
Trinidad Valley Realty and Development Corporation, et al.) are the registered owners of a parcel of land
in Vallehermoso, Negros Oriental. The landholding consists of a total area of 641. 7895 hectares - about
200 hectares thereof are devoted to the cultivation of sugar cane. The Department of Agrarian Reform
(DAR) placed 479.8905 hectares of the said landholding under the coverage of RA 6657 between March
1995 and July 2000. Certificates of Land Ownership Award (CLOAs) and Transfer Certificates of Title
(TCTs) were subsequently issued in favor of the agrarian reform beneficiaries.
On June 10, 2004, Trinidad Valley Realty and Development Corporation, et al. filed before the Regional
Trial Court (RTC), Branch 64, Guihulngan, Negros Oriental, a Petition for Declaration of
Unconstitutionality Through Certiorari, Prohibition and Mandamus with Prayer for Preliminary Prohibitory
Injunction and Restraining Order against the Land Registration Authority (LRA), the DAR, and the
beneficiaries under the Comprehensive Agrarian Reform Program (CARP), docketed as Special Civil
Action No. 04-02-V. In their Petition, Trinidad Valley Realty and Development Corporation, et al. made the
following main allegations:
1. That the DAR committed grave abuse of discretion amounting to lack of jurisdiction when it
committed the following acts: it passed Administrative Order No. 12, Series of 1989 and other
related issuances which allowed the DAR to unilaterally choose beneficiaries other than those
intended by the Constitution as beneficiaries; it subjected Trinidad Valley Realty and
Development Corporation, et al.' s properties to compulsory acquisition, when it ordered the Land
Bank to determine the valuation of Trinidad Valley Realty and Development Corporation, et al.' s
land without any judicial pronouncement on just compensation; and, it unilaterally ordered the
 cancellation of petitioner's title without court intervention when it issued final CLOAs to
beneficiaries who are not yet owners of the land and without any court proceeding.
2. The valuation by Land Bank is not just compensation.
3. The Register of Deeds cannot cancel Trinidad Valley Realty and Development Corporation, et
al.'s title without a court order.
4. The Land Bank, the LRA and the Register of Deeds also committed grave abuse of discretion
when they cooperated to commit the aforementioned acts.
The DAR filed its Answer asserting that (a) jurisdiction over all agrarian reform matters is exclusively
vested in the DAR; (b) the Department of Agrarian Reform Adjudication Board (DARAB) Rules provides
that the power to cancel or annul CLOAs is vested in the DARAB; and the jurisdiction of the R TC in
agrarian reform matters is limited only to the determination of just compensation and prosecution of all
criminal offenses under RA 6657; (c) the RTC has no jurisdiction over petitions for certiorari, prohibition
and mandamus in agrarian reform cases, which is vested by Section 54 of RA 6657, in the Court of
Appeals (CA); (d) the transfer of ownership and physical installation of the beneficiaries is authorized by
RA 6657 as laid down in Association of Small Landowners in the Phils., Inc. v. Hon. Secretary of Agrarian
Reform; (e) the petition is defective in form and substance; and (f) the CLOAs partake of the nature of a
Torrens Title and their validity cannot be collaterally attacked.
Subsequently, Trinidad Valley Realty and Development Corporation, et al. filed a Motion for Leave to
Amend Petition and for Admission of the Amended Petition in order to change the nature of the action
from a special civil action of certiorari, prohibition and mandamus to an ordinary action of annulment of
land titles. The DAR, et al. opposed the motion in its Opposition dated July 28, 2004.

In an Urgent Omnibus Motion1 dated December 2, 2004, LRA, et al. moved for reconsideration on the
ground of lack of merit and jurisdiction. The DAR similarly filed a Motion for Reconsideration dated
December 8, 2004 on the same ground of lack of jurisdiction. Both motions were denied by the RTC in its
Order dated January 7, 2005.
In a petition for certiorari filed with the CA, the Republic of the Philippines, represented by the Solicitor
General, and the LRA sought to annul the subject Order of the R TC on the following grounds: (1) the
RTC does not have jurisdiction over the petition and amended petition of Trinidad Valley Realty and
Development Corporation, et al. in view of Section 54 of RA 6657; (2) the RTC committed grave abuse of
discretion in admitting the amended petition; and (3) the R TC did not acquire jurisdiction over the
amended petition as the correct docket and other legal fees had not been paid.

The CA ratiocinated that the R TC did not have jurisdiction over both the petition and amended petition
filed by Trinidad Valley Realty and Development Corporation, et al. in view of Section 54 of RA 6657
which clearly provides that it is the CA, and not the RTC, which has jurisdiction over the case. The CA
also reiterated the ruling of this Court in the landmark case of Association of Small Landowners in the
Phils., Inc. v. Hon. Secretary of Agrarian Reform declaring the "Comprehensive Agrarian Reform Law"
constitutional. Quoting the following portion of the landmark decision, the CA stressed that the ruling
therein has, in effect, foreclosed any possible attack on the constitutionality of the law, viz.:
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program
are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the past and from his own
feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on
which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff
of life but also the joy of living. And where once it bred for him only deep despair, now can he see in it the
fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of earth his
insecurities and dark resentments and 'rebuild in it the music and the dream.'
On the issue of whether the RTC committed grave abuse of discretion in admitting the amended petition,
the CA declared that while the Rules of Court allow amendments which substantially alter the nature of
the cause of action in order to serve the higher interest of substantial justice, prevent delay and promote
the objective of the Rules to secure a just, speedy and inexpensive disposition of every action and
proceeding, the admission by the RTC of the amended petition was not proper and should have been
denied. Prescinding from its ruling that the RTC did not have jurisdiction over the original petition, the CA
held that the RTC consequently did not have authority to order the admission of Trinidad Valley Realty
and Development Corporation, et al.' s amended complaint in order for it to acquire jurisdiction over the
subject matter. In view of these dispositions, the CA deemed it unnecessary to discuss the third issue.

ISSUES:
Hence, the Petitions for Review on Certiorari filed in G.R. Nos. 173386 and 174162 posing the same
intersecting jurisdictional question in these consolidated cases: Whether the RTC had jurisdiction over
the original and amended petitions filed by Trinidad Valley Realty and Development Corporation,
et al.?

HELD:
It is a cardinal principle in remedial law that the law in force determines the jurisdiction of a court over the
subject matter of an action at the time of the filing of the complaint and the allegations of the complaint.
Jurisdiction is determined exclusively by the Constitution and the law and cannot be conferred by the
voluntary act or agreement of the parties. It cannot also be acquired through or waived, enlarged or
diminished by their act or omission, nor conferred by the acquiescence of the court. It is neither for the
court nor the parties to violate or disregard the rule, this matter being legislative in character. The nature
of an action, as well as which court or body has jurisdiction over it, is determined based on the allegations
contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. The averments in the complaint and the character of the
relief sought are the ones to be consulted. Once vested by the allegations in the complaint, jurisdiction
also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of
the claims asserted therein.

The legal recourse undertaken by Trinidad Valley Realty and Development Corporation, et al. is on all-
fours with the remedy adopted by the private respondents in Cuenca. In this case, Trinidad Valley Realty
and Development Corporation, et al. cloaked the issue as a constitutional question - assailing the
constitutionality of administrative issuances promulgated to implement the agrarian reform law - in order
to annul the titles issued therein. In Cuenca, private respondents assailed the constitutionality of EO 45 in
order to annul the Notice of Coverage issued therein. The only difference is that in Cuenca, private
respondents directly filed with the R TC their complaint to obtain the aforesaid reliefs while in this case,
Trinidad Valley Realty and Development Corporation, et al. filed their original petition for certiorari with the
R TC after the protest of Trinidad Valley Realty and Development Corporation against the coverage of its
landholding under CARP was dismissed by the DAR Regional Director and such dismissal was affirmed
by DAR OIC Secretary Jose Mari B. Ponce. But in both cases, it is evident that the constitutional angle
was an attempt to exclude the cases from the ambit of the jurisdictional prescriptions under RA 6657.
The Court further stated in Cuenca that "in case of doubt, the jurisprudential trend is for courts to refrain
from resolving a controversy involving matters that demand the special competence of administrative
agencies, 'even if the question[s] involved [are] also judicial in character."' In the instant case, however,
there is hardly any doubt that the RTC had no jurisdiction over the subject matter of the case.
Consequently, it did not have authority to perform any of the following: order the admission of the
amended petition of Trinidad Valley Realty and Development Corporation, et al., decide the amended
petition on the merits, or issue a permanent prohibitory injunction. In any case, such injunction issued by
the RTC is a nullity in view of the express prohibitory provisions of the CARP and this Court's
Administrative Circular Nos. 29-2002 and 38-2002 enjoining all trial judges to strictly observe Section 68
of RA 6657, viz.:
SECTION 68. Immunity of Government Agencies from Undue Interference. - No injunction, restraining
order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian
Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural
Resources (DENR), and the Department of Justice (DOJ) in their implementation of the program.
Given our ruling that the R TC lacked jurisdiction over the instant case, we find no necessity
to address the other issues raised in the three consolidated petitions.

WHEREFORE, the Petition in G.R. No. 183191 is DENIED for lack of merit. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 88512 dated June 28, 2007 and May 21, 2008,
respectively, are hereby AFFIRMED. The Petitions in G.R. Nos. 173386 and 174162 are hereby
GRANTED. The challenged Order in Special Civil Action No. 04-02-V, entitled Trinidad Valley Realty and
Development Corporation, et al. v. Jose Mari B. Ponce, in his capacity as Secretary of DAR, et al. dated
October 26, 2004 and the Decision in Civil Case No. 04-013-V, entitled Trinidad Valley Realty and
Development Corporation, et al. v. The Honorable Rene Villa, in his capacity as Secretary of DAR, et al.
dated October 1 7, 2005 of the Regional Trial Court, Branch 64, Guihulngan, Negros Oriental are hereby
ANNULLED and SET ASIDE for lack of jurisdiction. The Regional Trial Court, Branch 64, Guihulngan,
Negros Oriental is likewise ordered to DISMISS herein Special Civil Action No. 04-02-V and Civil Case
No. 04-013-V for lack of jurisdiction. The Writ of Permanent Prohibitory Injunction dated April 18, 2006
issued by the said court by virtue of its Order on even date is hereby LIFTED and SET ASIDE.

13. ALEJANDRO ALMENDRAS JR. VS ALEXIS ALMENDRAS

GR# 179491

FACTS:
Alejandro Almendras allegedly sent defamatory letters aimed to tarnish the reputation of Alexis
Almendras to House Speaker Jose De Venecia Jr. and Dr. Nemesio Prudente. Alexis Almendras, upon
being informed of the contents of the said latter, filed an action for damages against Alejandro Almendras
arising from libel and defamation in the Regional Trial Court of Digos City. RTC ruled in favor of Alexis
Almendras awarding him P5M for moral damages, P100T for exemplary damages, P10T for litigation
expenses and attorney’s fees in the amount of 25% of the amount to be received by the plaintiff for the
judgement. The motion for reconsideration and new trial were denied by the RTC so the case was
elevated to the CA which affirmed the RTC’s decision.

ISSUE:
Whether or not respondent is actually entitled to receive the awarded damages.

HELD:
Not all. The moral and exemplary damages are proper because respondent successfully justified his
claim for the abovementioned damages. However, the award on attorney’s fees and litigation expenses
are not proper since he failed to justify his claims and both the trial and appellate courts failed to explicitly
state in their respective decisions the rationale for the award. It is an accepted doctrine that the award
thereof as an item of damages is the exception rather than the rule, and counsel’s fees are not to be
awarded every time a party wins a suit. The power of the court to award attorney’s fees under Article
2208 of the Civil Code demands factual, legal and equitable justification, without which the award is a
conclusion without a premise, its basis being improperly left to speculation and conjecture. In all events,
the court must explicitly state in the text of the decision, and not only in the decretal portion thereof, the
legal reason for the award of attorney’s fees.
The petition is hereby denied.

14. SPOUSES EDUARDO and LYDIA SILOS vs. PHILIPPINE NATIONAL BANK (PNB)
G.R. No. 181045. July 2, 2014.

FACTS:
Spouses Silos secured a revolving credit line with PNB through a real estate mortgage as a
security. After two years, the credit line increased. The Spouses then signed a Credit Agreement, which
was also amended two years lates, and several Promissory Notes (PN) as regard to their Credit
Agreements with PNB. The said loan was initially subjected to a 19.5% interest rate per annum. In the
Credit Agreements, Spouses Silos bound themselves to the power of PNB to modify the interest rate
depending on whatever policy that PNB may adopt in the future, without the need of notice upon them.
Thus, the said interest rates played from 16% to as high as 32% per annum. Spouses Silos
acceded to the policy by pre-signing a total of 26 PNs, leaving the individual applicable interest rates
blank since it would be subject to modification by PNB. Spouses regularly renewed and made good on
their PNs, religiously paid the interests without objection or fail.
However, during the 1997 Asian Financial Crisis, Spouses Silos faltered when the interest rates
soared. Spouses Silos’ 26th PN became past due and, despite repeated demands by PNB, they failed to
make good on the note. Thus, PNB foreclosed and auctioned the involved security for the mortgage.
 Spouses Silos instituted an action to annul the foreclosure sale on the ground that the succeeding
interest rates used in their loan agreements was left to the sole will of PNB, the same fixed by the latter
without their prior consent and thus, void.
The RTC ruled that such stipulation authorizing both the increase and decrease of interest rates
as may be applicable is valid. The CA affirmed the RTC decision.

ISSUE:
(1) May the bank modify the interest rate in a loan agreement without violating the mutuality of
contracts?
(2) Is the respondent bank not entitled to any interest except the legal rate from date of demand?

HELD:
(1) No.
Any modification in the contract, such as interest rates, must be made with the consent of
the parties. The minds of all parties must meet as to the proposed modification, especially when it affects
an important aspect of the agreement. In the case of loan agreements, the rate of the interests is a
principal condition.
(2) No.
With regard to interest, the Court finds that since the escalation clause is annulled, the
principal amount of the loan is subject to the original or stipulated rate of interest, and upon
maturity, the amount due shall be subject to legal interest at the rate of 12% per annum. The
interests paid by petitioners should be applied first to the payment of the stipulated or legal and unpaid
interest, as the case may be, and later, to the capital or principal. Respondent should then refund the
excess amount of interest that it has illegally imposed upon petitioners.
Thus, the parties’ original agreement stipulated the payment of 19.5% interest was intended to
apply only to the first promissory note which expired on November 21, 1989 and was paid by petitioners;
it was not intended to apply to the whole duration of the loan. Subsequent higher interest rates have
been declared illegal; but, the obligation to pay interest subsists, the same to be fixed at the legal
rate of 12% per annum. However, the 12% interest shall apply only until June 30, 2013. Starting July1,
2013, the prevailing rate of interest shall be 6% per annum pursuant to the ruling in Nacar v. Gallery
Frames (2013) and Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799.

15. BIGNAY EX-IM PHILIPPINES v. UNION BANK OF PHILIPPINES

GR No. 171590, Feb 12, 2014

FACTS:
In 1984, Alfonso de Leon (Alfonso) mortgaged in favor of Union Bank of the Philippines (Union Bank) real
property situated at Esteban Abada, Loyola Heights, Quezon City, which was registered in his and his
wife Rosario's name and covered by Transfer Certificate of Title (TCT) No. 286130 (TCT 286130).

The property was foreclosed and sold at auction to Union Bank. After the redemption period expired, the
bank consolidated its ownership, whereupon TCT 362405 was issued in its name in 1987.

In 1988, Rosario filed against Alfonso and Union Bank, Civil Case No. Q-52702 for annulment of the 1984
mortgage, claiming that Alfonso mortgaged the property without her consent, and for reconveyance.

In a September 6, 1989 Letter-Proposal, Bignay Ex-Im Philippines, Inc. (Bignay), through its President,
Milagros Ong Siy (Siy), offered to purchase the property. The written offer stated, among others, that

The property is the subject of a pending litigation between Rosario de Leon and Union Bank for
nullification of the foreclosure before the Regional Trial Court of Quezon City. Should this offer be
approved by your management, we suggest that instead of the usual conditional sale, a deed of absolute
sale be executed to document the transaction in our favor subject to a mortgage in favor of the bank to
secure the balance.
This documentation is intended to isolate the property from any lis pendens that the former owner may
annotate on the title and to allow immediate reconstitution thereof since the original Torrens title was
burned in 1988 when the City Hall housing the Register of Deeds of Quezon City was gutted by fire.
On December 20, 1989, a Deed of Absolute Sale was executed by and between Union Bank and Bignay
whereby the property was conveyed to Bignay for P4 million. The deed of sale was executed by the
parties through Bignay's Siy and Union Bank's Senior Vice President Anthony Robles (Robles). One of
the terms of the deed of sale is quoted below:

Section 1. The VENDEE hereby recognizes that the Parcel/s of Land with improvements thereon is
acquired through foreclosure proceedings and agrees to buy the Parcel/s of Land with improvement[s]
thereon in its present state and condition. The VENDOR therefore does not make any x x x
representations or warranty with respect to the Parcel/s of Land but that it will defend its title to the
Parcel/s of Land with improvement[s] thereon against the claims of any person whomsoever.
On December 27, 1989, Bignay mortgaged the property to Union Bank, presumably to secure a loan
obtained from the latter.

On December 12, 1991, a Decision was rendered in Civil Case No. Q-52702, decreeing as follows:

WHEREFORE, premises above considered, finding that defendant Alfonso de Leon, Jr. had alone
executed the mortgage (Exh. 7) on their conjugal property with T.C.T. No. 286130 (Exh. L) upon a forged
signature (Exh. M-1) of his wife plaintiff Rosario T. de Leon, the Court hereby declares NULL and VOID
the following documents:

1. Said Mortgage Contract dated April 11, 1984 (Exh. 7) executed by and between
defendants Alfonso de Leon, Jr. alone and Union Bank of the Philippines;

2. Sheriff's Sale dated June 12, 1985 (Exh. F);

3. T.C.T. No. 362405 (Exh. O) issued in the name of defendant Union Bank on June 10,
1987 which replaced the said T.C.T. No. 286130;

4. Sale and mortgage by and between Union Bank and Bignay Ex-Im Phil. Inc. on
December 27, 1989 over the subject conjugal property as annotated on T.C.T. No.
362405 (Exh. O).

Further, the Court hereby declares plaintiff Rosario T. de Leon the owner still of the undivided ONE HALF
(1/2) of the subject property covered by T.C.T. No. 286130.

The order dated February 2, 1988 granting a writ of possession in favor of Union Bank is hereby SET
ASIDE and QUASHED.

Defendant Alfonso de Leon, Jr. is hereby ordered to pay his co-defendant Union Bank of the Philippines
the sum of his P1M loan with interest from the time the same was extended to him which is hereby
charged against his other undivided share of ONE HALF (½) of the subject property with T.C.T. No.
286130.

No damages is [sic], however, adjudicated against defendant Union Bank of the Philippines there being
no substantial evidence that it is in complicity with defendant Alfonso de Leon, Jr. in the presentation of
the forged signature of his wife plaintiff on the Special Power of Attorney (Exh. M).

Without cost, except for the professional fee, if any, for the examination of the forged signature (Exh. M-1)
which shall be paid by defendant Alfonso de Leon, Jr.

SO ORDERED.
Union Bank appealed the above Decision with the CA. It likewise sought a new trial of the case, which the
trial court denied. The CA appeal was dismissed for failure to file appellant's brief; the ensuing Petition for
Review with this Court was similarly denied for late filing and payment of legal fees.

Union Bank next filed with the CA an action to annul the trial court's December 12, 1991 judgment. In a
September 9, 1993 Resolution, however, the CA again dismissed the Petition [12] for failure to comply with
Supreme Court Circular No. 28-91. The bank's Motion for Reconsideration was once more denied.

This time, Bignay filed a Petition for annulment of the December 12, 1991 Decision, docketed as CA-G.R.
SP No. 33901. In a July 15, 1994 Decision, the CA dismissed the Petition. Bignay's resultant Petition
for Certiorari with this Court suffered the same fate.

Meanwhile, as a result of the December 12, 1991 Decision in Civil Case No. Q-52702, Bignay was
evicted from the property; by then, it had demolished the existing structure on the lot and begun
construction of a new building.

ISSUE:
When should the docket fees be paid to enable the trial court to acquire jurisdiction over the case?

HELD:
The Court finds for Bignay.

Indeed, this Court is convinced from an examination of the evidence and by the concurring opinions of the
courts below that Bignay purchased the property without knowledge of the pending Civil Case No. Q-
52702. Union Bank is therefore answerable for its express undertaking under the December 20, 1989
deed of sale to "defend its title to the Parcel/s of Land with improvement thereon against the claims of any
person whatsoever." By this warranty, Union Bank represented to Bignay that it had title to the property,
and by assuming the obligation to defend such title, it promised to do so at least in good faith and with
sufficient prudence, if not to the best of its abilities.

The record reveals, however, that Union Bank was grossly negligent in the handling and prosecution of
Civil Case No. Q-52702. Its appeal of the December 12, 1991 Decision in said case was dismissed by the
CA for failure to file the required appellant's brief. Next, the ensuing Petition for Review on Certiorari filed
with this Court was likewise denied due to late filing and payment of legal fees. Finally, the bank sought
the annulment of the December 12, 1991 judgment, yet again, the CA dismissed the petition for its failure
to comply with Supreme Court Circular No. 28-91. As a result, the December 12, 1991 Decision became
final and executory, and Bignay was evicted from the property. Such negligence in the handling of the
case is far from coincidental; it is decidedly glaring, and amounts to bad faith. "[N]egligence may be
occasionally so gross as to amount to malice [or bad faith]." Indeed, in culpa contractual or breach of
contract, gross negligence of a party amounting to bad faith is a ground for the recovery of damages by
the injured party.
Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act
imputable to the vendor, the vendee is deprived of the whole or of a part of the thing purchased. In case
eviction occurs, the vendee shall have the right to demand of the vendor, among others, the return of the
value which the thing sold had at the time of the eviction, be it greater or less than the price of the sale;
the expenses of the contract, if the vendee has paid them; and the damages and interests, and
ornamental expenses, if the sale was made in bad faith. There appears to be no dispute as to the value of
the building constructed on the property by Bignay; the only issue raised by Union Bank in these Petitions
is the propriety of the award of damages, and the amount thereof is not in issue. The award in favor of
Bignay of P4 million, or the consideration or cost of the property, and P20 million the value of the building
it erected thereon is no longer in issue and is thus in order.
 16. EX M. TUPAL VS JUDGE REMEGIO V ROJO ETC.
AM No. MTJ-14-1842 Feb 24, 2014
Leonen, J.:

FACTS:

Municipal trial court judges cannot notarize affidavits of cohabitation of parties whose marriage
they will solemnize.

Rex M. Tupal filed with the Office of the Court Administrator a complaint against Judge Remegio
V. Rojo for violating the Code of Judicial Conduct and for gross ignorance of the law.

Judge Remegio V. Rojo presides Municipal Trial Court in Cities, Branch 5, Bacolod City, Negros
Occidental. Judge Rojo allegedly solemnized marriages without the required marriage license. He instead
notarized affidavits of cohabitation and issued them to the contracting parties. He notarized these
affidavits on the day of the parties’ marriage. These "package marriages" are allegedly common in
Bacolod City.

Judge Rojo did not deny notarizing the affidavits of cohabitation. He argued that notarizing
affidavits of cohabitation was connected with his official functions and duties as a judge.

ISSUE:

Whether or not Judge Rojo is guilty of violating the New Code of Judicial Conduct and of gross
ignorance of the law?

HELD:

Yes. Judge Rojo guilty of violating the New Code of Judicial Conduct and of gross ignorance of
the law. Judge Rojo violated Circular No. 1-90 and the 2004 Rules on Notarial Practice.

Section 5 of the Guidelines on the Solemnization of Marriage by the Members of the Judiciary also
provides:

Sec. 5. Other duties of solemnizing officer before the solemnization of the marriage in legal
ratification of cohabitation. — In the case of a marriage effecting legal ratification of cohabitation, the
solemnizing officer shall (a) personally interview the contracting parties to determine their qualifications to
marry; (b) personally examine the affidavit of the contracting parties as to the fact of having lived together
as husband and wife for at least five [5] years and the absence of any legal impediments to marry each
other; and (c) execute a sworn statement showing compliance with (a) and (b) and that the solemnizing
officer found no legal impediment to the marriage.

Based on law and the Guidelines on the Solemnization of Marriage by the Members of the
Judiciary, the person who notarizes the contracting parties’ affidavit of cohabitation cannot be the judge
who will solemnize the parties’ marriage.

Since Judge Rojo notarized affidavits of cohabitation, which were not connected with his official
function and duty to solemnize marriages, he violated Circular No. 1-90.

Also, Judge Rojo notarized affidavits of cohabitation without certifying that lawyers or notaries
public are lacking in Bacolod City. Failure to certify that lawyers or notaries public are lacking in the
municipality or circuit of the judge’s court constitutes violation of Circular No. 1-90.

If the law involved is basic, ignorance constitutes "lack of integrity." Violating basic legal principles
and procedure nine times is gross ignorance of the law.