LEASE

LOPEZ v FAJARDO
Verbal lease contract with rents paid on a monthly period
ARTICLE 1687. If the period of the lease has not been fixed, it is understood to be from year to year, if the rent agreed
upon is annual; from month to month, if it is monthly
It is settled that a month-to-month lease under Article 1687 is a lease with a definite period and expires after the last day
of any given thirty-day period, upon proper demand and notice by the lessor to vacate.
In the instant case, it was noted that the rentals were paid on a month-to-month basis. Thus, the lease could be
validly terminated at the end of any given month upon prior notice to that effect on the lessee. After all, when the
rentals are paid monthly, the lease is deemed to be for a definite period, i.e., it expires at the end of every
month. When petitioner then sent the August 18, 2000 letter to respondent informing her that the lease would be
terminated effective at the end of the same month, it was well within his rights.
TLC: Whether it is a termination of the lease or a ground 4 judicial ejectment case, if there is expiration of the
period, the lessee can be compelled to vacate the premises. If the lease is on a monthly basis, the contract of lease
always ends on the last of every month. Ejectment cases are always two prong, the lessee needs to vacate and at the
same time, pay the rentals. Hindi pwedeng vacate or payment lang.

MALAYAN REALTY INC. VS UY HAN YONG

Under Article 1687 of the New Civil Code if the period of a lease contract has not been specified by the parties, it is
understood to be from month to month, if the rent agreed upon is monthly. The lease contract thus expires at the end of
each month, unless prior thereto, the extension of said term has been sought by appropriate action and judgment is
eventually rendered therein granting the relief.

The 2nd paragraph of Article 1687 provides, however, that in the event that the lessee has occupied the leased
premises for over a year, the courts may fix a longer term for the lease.The Supreme Court said that the power of the
courts to establish a grace period discretionary on a case to case basis. Thus, a longer term may be granted where equities
come into play, and may be denied where none appears, always with due deference to the parties‘ freedom to contract.

TLC: So the court has the power to extend the period, even if its month to month basis. The court has the
discretion. However when the case was filed upto the judgment the lessee has not vacated the premises, so we still
need to balance the rights and the obligations of the parties. It should not prejudice the lessor.

SPOUSES MAMARIL vs THE BOY SCOUT OF THE PHILIPPINES, et al.

It has been held that the act of parking a vehicle in a garage, upon payment of a fixed amount, is a lease . Even in a
majority of American cases, it has been ruled that where a customer simply pays a fee, parks his car in any available space
in the lot, locks the car and takes the key with him, the possession and control of the car, necessary elements in bailment,
do not pass to the parking lot operator, hence, the contractual relationship between the parties is one of lease.
In relation thereto, Article 1664 of the same Code states that "the lessor is not obliged to answer for a mere act of trespass
which a third person may cause on the use of the thing leased; but the lessee shall have a direct action against the
intruder." Here, BSP was not remiss in its obligation to provide Sps. Mamaril a suitable parking space for their
jeepneys as it even hired security guards to secure the premises; hence, it should not be held liable for the loss suffered
by Sps. Mamaril.
TLC: The security agency and the 2 security guards are the one liable for the loss of the vehicle and not the BSP.
ANALITA P. INOCENCIO vs. HOSPICIO DE SAN JOSE, G.R. No. 201787, 25 September 2013
A lease contract is not essentially personal in character. Thus, the rights and obligations therein are transmissible to
the heirs. The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-interest
except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3)
provision of law. Section 6 of the lease contract provides that "this contract is nontransferable unless prior consent of the
lessor is obtained in writing." Section 6 refers to transfers inter vivos and not transmissions mortis causa. What
Section 6 seeks to avoid is for the lessee to substitute a third party in place of the lessee without the lessor’s consent. Thus,
the death of German did not terminate the lease contract executed with HDSJ, but instead continued with Ramon
as the lessee. Ramon had a right to sublease the premises since the lease contract did not contain any stipulation
forbidding subleasing.

The lease of a building includes the lease of the lot and consequently, the rentals of the building include the rentals
of the lot. When the Inocencios leased the buildings to third parties, they also "leased" to the third parties the plot
of land on which the buildings stood — either by implied transfer of the lease covering the plot of the land, or by
sublease. Either way, the Inocencios themselves must have a valid lease contract with HDSJ over the land. However,
when the lease contract with HDSJ ended, Ramon lost his status as lessee of the land, and therefore, had no authority to
transfer the lease or sublease the land. However, HDSJ should have reimbursed German (or his estate) half of the
value of the improvements. If HDSJ is not willing to reimburse the Inocencios, then the latter should be allowed to
demolish the buildings. The buildings were constructed before German’s demise, during the subsistence of a valid
contract of lease. It does not appear that HDSJ prohibited German from constructing the buildings.

TLC: We mentioned in the discussion before that the assignment of the lease should be with the consent of the lessor.
This is the one proscribed in their contract (transfer inter vivos and not mortis causa). So that when the original lessee
died, the right of lease was transferred to his wife and his son. There is no proscription with respect this bcos the
transmission is by way of succession. The problem here only arose upon the termination of the contract of lease. But take
note that the bldgs. Were constructed during the lifetime of German, there is no proscription in the contract. and these
bldgs. Increased the value of the land. What is the effect? Since hospicio consented to construction of these bldgs and later
on had to terminate the contract, the lessor has the obligation to pay ½ of the value of the bldg. assuming that hospicio
likes to appropriate the bldg.. The value should be determined at the time of the termination of the contract kasi may
depreciation na. But if the lessor does not want to appropriate, the lessee must be allowed to remove the bldg. But you
cannot compel the lessor to continue with the contract of lease bcos that is one of the attributes of ownership.

PIO Q. PATERNO, vs. COURT OF APPEALS

An implied new lease or tacita reconduccion will set in when the following requisites are found to exist:
a) the term of the original contract of lease has expired;
b) the lessor has not given the lessee a notice to vacate; and
c) the lessee continued enjoying the thing leased for fifteen days with the acquiescence of the lessor.
In the case at bar, all the requisites have been fulfilled. Petitioner did not give Lim a notice to vacate upon expiration of
their contract. The implied new lease had a definite period because rents were paid on a monthly basis
When Lim left, she relinquished her right to the apartment in question and virtually assigned her monthly lease to her
sister, herein private respondent. The assignment of lease involves a transfer of rights and obligations pertaining to
the lease and requires the consent of the lessor. In the case at bar, the Court finds that petitioner, in all likelihood,
consented to said assignment because he should have known the real lessee after more than two decades of collecting the
rent, personally or through a representative. Feigning complete lack of knowledge of Angelina Reyes as tenant, petitioner
should in fact be charged with knowledge and implied consent of said fact.
TLC: There is tacita reconduccion in this case. However there is also an assignment of lease bcos the original lessee
migrated to the US and has not come back for 22 years. Now since there is assignment, there must be a consent of the
lessor. But Paterno insists that he did not know that there is already a new lessee. But the SC said he could not feign
ignorance bcos 22 years is such a long time to know that another person is occupying the leased premises. Thus, there is
now an implied consent which resulted to tacita. However, the contract was also terminated. Now tacita reconduccion will
not be based on the period of the original lease but on the payment of rental, which in this case on a monthly basis. So the
implied new lease is also for a period of 1 month. And if it’s on a monthly basis, the contract ends on the last day of the 30
day period. So the COA here is the termination of the lease.
WHEELERS CLUB INTERNATIONAL INC. V. BONIFACIO
The case involves a sublease arrangement. In a sublease arrangement, there are two distinct leases: the principal
lease and the sublease. These two juridical relationships co-exist and are intimately related to each other but
nonetheless distinct from one another. The lessee’s rights and obligations vis-à-vis the lessor are not passed on to
the sublessee.. Therefore, the co-owners (principal lessor), except only in the instances specified in the Civil Code(use
and preservation of the property), are strangers to the Contract of Lease between BDAI and Wheelers.

As such, Wheelers has no right or authority to pay the sublease rentals to the co-owners as lessors since the rentals are
payable to BDAI as lessee-sublessor. Wheelers was, therefore, under no obligation to pay Jovito or the co-owners the
rentals. Moreover, although Article 1652 of the Civil Code permits the lessor to proceed against the sublessee for rent due
from the lessee, this is only on a subsidiary liability basis. There must be a judgment cancelling the lessee’s principal
lease contract or ousting the lessee from the premises before the sub-lessee becomes subsidiarily liable.

The sub-lessee is not liable to the lessor under Article 1652 upon mere demand b y the lessor on the sub-lessee. The
sub-lessee is primarily liable to his sub-lessor and only a court order can extinguish or modify this primary liability if
the sub-lessor contests the pre-termination of the principal lease by the lessor.

TLC: The doctrine here, there are 2 separate and distinct contracts in a case of sublease agreement. As a rule, the original
lessor cannot go directly to the sublessee bcos there is no privity of contracts. The co-owners in this case cannot go
directly against Wheelers. More importantly, sublessee are only SUBSIDIARILY liable on 2 matters: 1. Use and
preservation of the thing leased and 2. The rentals due from the original lessee (only to the extent of the amt of sublease)
and only from the time of judicial demand of the original lessor from the original lessee. In this case, there is no judicial
action yet.

COLLEGE ASSURANCE PLAN VS ET. AL VS BELFRANT DEV INC.

Article 1667 of the Civil Code provides that “the lessee is responsible for the deterioration or loss of the thing
leased, unless he proves that it took place without his fault. This burden of proof on the lessee does not apply when
the destruction is due to earthquake, flood, storm or other natural calamity.” This creates the presumption that the
lessee is liable for the deterioration or loss of a thing leased. To overcome such legal presumption, the lessee must
prove that the deterioration or loss was due to a fortuitous event which took place without his fault or negligence.
In this case, the proximate cause of the fire was the fault and negligence of petitioners in using a coffee percolator in the
office stockroom on the third floor of the building and in allowing the electrical device to overheat. If the negligence or
fault of the obligor coincided with the occurrence of the fortuitous event, and caused the loss or damage or the aggravation
thereof, the fortuitous event cannot shield the obligor from liability for his negligence. The legal presumption therefore is
that petitioners were responsible for the damage.
TLC: We all know that we cannot consider fire as a fortuituous event except only if it was caused by a lightning. Yun FE
yun kasi that is an act of GOD. Again, FE is different from fore majeur. Thus, the lessee shall be presumed to be
negligent. Additionally, the principle here was res ipsa loquitur. The thing speaks for itself.

AGENCY
COSMIC LUMBER vs CA
TLC: The agent here went beyond the authority granted by the principal. She must protect the interest of the
principal. Remember, that when the authority to sell a parcel of land is granted to an agent, it must be in
WRITING, there must be an SPA. Notarized. Otherwise, the sale is void. In this case, the compromise agreement
is void despite being approved by the court. The court sided with the principal.

LIM vs. SABAN –

SABAN as agent is entitled to his commission, agency not revoked bcos he already performed his svcs by finding a buyer
of the lot.
In Macondray & Co. v. Sellner, the Court recognized the right of a broker to his commission for finding a suitable buyer
for the seller’s property even though the seller himself consummated the sale with the buyer. The Court held that it
would be in the height of injustice to permit the principal to terminate the contract of agency to the prejudice of the broker
when he had already reaped the benefits of the broker’s efforts.

In Infante v. Cunanan, et al., the Court upheld the right of the brokers to their commissions although the seller
revoked their authority to act in his behalf after they had found a buyer for his properties and negotiated the sale
directly with the buyer whom he met through the brokers’ efforts. The Court ruled that the seller’s withdrawal in bad
faith of the brokers’ authority cannot unjustly deprive the brokers of their commissions as the seller’s duly constituted
agents.

TLC: The more impt issue here is that the agent is entitled to the commission. If there is an agency to sell a property and
the broker is able to find for a potential buyer who meets with the seller, the agent is entitled to the commission even if
there would be no successful sale. To procure buyers is the most impt objective of the agency relationship in case of a
sale.

MANILA MEMORIAL vs. LINSANGAN

Baluyot was an agent of MMPCI, having represented the interest of the latter, and having been allowed by MMPCI to
represent it in her dealings with its clients/prospective buyers.

Nevertheless, MMPCI cannot be bound by the contract procured by Atty. Linsangan and solicited by Baluyot. The acts of
an agent beyond the scope of his authority do not bind the principal, unless he ratifies them, expressly or impliedly.
Only the principal can ratify; the agent cannot ratify his own unauthorized acts. Moreover, the principal must have
knowledge of the acts he is to ratify. No ratification can be implied in the instant case. Atty. Linsangan failed to show
that MMPCI had knowledge of the arrangement.
TLC: There is a different price offered by the agent in this case but he is not allowed to do that. Therefore, he acted
beyond his authority and it prejudiced Atty Linsangan, who, was actually a lawyer. He should have inquired on the auth of
the agent with MMPCI.

SPOUSES CHUA VS. MSGR. SORIANO

The strength of buyer’s inquiry on the seller’s capacity or legal authority to sell depends on the proof of capacity of
the seller. If the proof of capacity consists of a special power of attorney duly notarized, mere inspection of the face
of such public document already constitutes sufficient inquiry. If no such special power of attorney is provided or
there is one but there appear flaws in its notarial acknowledgment, mere inspection of the document will not do; the
buyer must show that his investigation went beyond the document and into the circumstances of its execution.

The Chuas were dealing with Celestino, Soriano’s attorney-in-fact, who presented Soriano’s duplicate title, a SPA dated
March 9, 1989 with Soriano’s purported signature, and tax declaration.

An examination of the assailed SPA shows that it is valid and regular on its face. It contains a notarial seal. A notarial
seal is a mark, image or impression on a document which would indicate that the notary public has officially signed it.
The long-standing rule is that documents acknowledged before a notary public have the evidentiary weight with
respect to their due execution and regularity. The assailed SPA is a notarized document and therefore, presumed to
be valid and duly executed.Thus, the reliance by the Chuas on the notarial acknowledgment found in the duly
notarized SPA presented by Celestino is sufficient evidence of good faith.

Moreover, the SPA was accepted by the Register of Deeds. The fact that Soriano's purported signature in the SPA was
declared to be a forgery does not alter the Chuas’ status as purchasers in good faith. Being purchasers in good faith, the
Chuas already acquired valid title to the property.
TLC: What I don’t understand in this case is the finding that there is forgery of Soriano’s signature but the validity of the
SPA was still upheld. Syempre di na maapela dahil SC na ang nagdecide. So the doctrine na lang is to not entrust the
owner’s duplicate copy of your TCT. The SC just said that the SPA was valid on its face. There was no erasure. The only
remedy na lang here is for the agent to indemnify the real owner of the property. Kaya kung meron kayong titulo, do not
entrust that to anybody kahit gano mo pa pinagkakatiwalaan. It may be forged.

ALVIN PATRIMONIO vs. NAPOLEON GUTIERREZ

As a general rule, a contract of agency may be oral. However, it must be written when the law requires a
specific form, for example, in a sale of a piece of land or any interest therein through an agent. Article 1878
paragraph 7 of the Civil Code expressly requires a special power of authority before an agent can loan or
borrow money in behalf of the principal. However, Article 1878 does not state that the authority be in
writing. As long as the mandate is express, such authority may be either oral or written.

The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in
Rule 138 of the Rules of Court refer to the nature of the authorization and not its form. The requirements
are met if there is a clear mandate from the principal specifically authorizing the performance of the act. We
stated that such a mandate may be either oral or written, the one vital thing being that it shall be express. And
more recently, We stated that, if the special authority is not written, then it must be duly established by
evidence
True, Patrimonio had issued several pre-signed checks to Gutierrez, one of which fell into the hands of Marasigan. This
act, however, does not constitute sufficient authority to borrow money in his behalf and neither should it be
construed as Patrimonio’s grant of consent to the parties’ loan agreement. Without any evidence to prove Gutierrez’
authority as an agent of Patrimonio, the latter’s signature in the check cannot be taken, even remotely, as sufficient
authorization, much less, consent to the contract of loan.
TLC: The relationship of parties in a contract of agency is of fiduciary. Moreso, the nature thereof is representation. In
this case, there is no representation, bcos Gutierez was not permitted by Patrimonio to enter into a contract of loan in his
behalf. Not authorized not even orally not even in writing.

BORDADOR vs LUZ
In this case, there is no showing that Luz authorized his brother to act on her behalf. The Court found that the alleged
letters wherein Luz was said to acknowledge her obligation pertained to her previous obligations, and had nothing to do
with the jewelries that her brother obtained.
The Court also said that Bordador was negligent when he entrusted the jewelries of substantial value to Luz’s brother on
several occasions without requiring a written authorization from his alleged principal. Bordador must have been diligent
to inquire the authority of the alleged agent.
TLC: You cannot just allege agency, you need to prove the same. There is no agency here.

SPS TUAZON VS HEIRS OF RAMOS

In a contract of agency, one binds oneself to render some service or to do something in representation or on behalf of
another, with the latter’s consent or authority. The following are the elements of agency:

(1) the parties’ consent, express or implied, to establish the relationship;

(2) the object, which is the execution of a juridical act in relation to a third person;
(3) the representation, by which the one who acts as an agent does so, not for oneself, but as a representative;
(4) the limitation that the agent acts within the scope of his or her authority.

As the basis of agency is representation, there must be, on the part of the principal, an actual intention to appoint, an
intention naturally inferable from the principal’s words or actions. In the same manner, there must be an intention on the
part of the agent to accept the appointment and act upon it. Absent such mutual intent, there is generally no agency. The
declarations of agents alone are generally insufficient to establish the fact or extent of their authority. The law makes no
presumption of agency; proving its existence, nature and extent is incumbent upon the person alleging it.

The Court notes that petitioners, on their own behalf, sued Evangeline Santos for collection of the amounts represented by
the bounced checks. Their filing a suit against her in their own names negates their claim that they acted as mere
agents in selling the rice obtained from Bartolome Ramos.

TLC: You really have to prove that you are the agent. It cannot be presume.

BAUTISTA-SPILLE VS. NICORP MGT. & DEV. CORP

The well-established rule is when a sale of a parcel of land or any interest therein is through an agent, the authority of the
latter shall be in writing, otherwise, the sale shall be void. Articles 1874 and 1878 of the Civil Code explicitly provide:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in
writing; otherwise, the sale shall be void.
Art. 1878. Special powers of attorney are necessary in the following cases: (5) To enter into any contract by which the
ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to
enable an appointee of an agency (couched) in general terms to sell must be one that expressly mentions a sale or
that includes a sale as a necessary ingredient of the act mentioned.
To reiterate, such authority must be conferred in writing and must express the powers of the agent in clear and
unmistakable language in order for the principal to confer the right upon an agent to sell the real property. [23] It
is a general rule that a power of attorney must be strictly construed, and courts will not infer or presume broad
powers from deeds which do not sufficiently include property or subject under which the agent is to deal.[24] Thus, when
the authority is couched in general terms, without mentioning any specific power to sell or mortgage or to do other
specific acts of strict dominion, then only acts of administration are deemed conferred.[25]
In the same vein, NICORP cannot be considered a purchaser in good faith. The well-settled rule is that a person dealing
with an assumed agent is bound to ascertain not only the fact of agency but also the nature and extent of the agent's
authority.[28] The law requires a higher degree of prudence from one who buys from a person who is not the registered
owner. He is expected to examine all factual circumstances necessary for him to determine if there are any flaws in the
title of the transferor, or in his capacity to transfer the land.

TLC: The sister only executed a general power of attorney and not an SPA. Thus it may only pertain to acts of
administration. Take note than even a lease for a period of more than 1 year already creates a real right so there must also
be a SPA. More so if the act pertains to act of disposition of a real property.

LOAN:
NACAR v GALLERY FRAMES
BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest,
as well as the accrual thereof, is imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of
interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

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. No interest,
however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but
when such certainty cannot be so reasonably established at the time the demand is made , the interest shall begin to
run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed
to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged.

When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

TLC: From july 1 2013 onwards, we will follow the MB reso. 6% legal interest p/a will be followed regardless if it is a
forbearance of money, good or credit or a loan in money or a judgment rendered by the court. . That is the basic principle.
We do not follow now ung eastern shipping lines. The MB will now be apply.
EXC: if there is an agreement between the parties. We will follow the agreement.
EXC to the EXC: when one of them disputes the interest rate and the court will look whether the int is unconscionable,
iniquitous or shocking to the conscience.(UIS) You must ask the assistance of the court. The court will be the one to
determine.
SC cases: 3% per month int is already unconscionable. Multiply that by 12. That is big.

SUN LIFE v TAN KIT

There are two kinds of interest – monetary and compensatory.

“Monetary interest refers to the compensation set by the parties for the use or forbearance of money.” and that no
interest shall be due unless it has been expressly stipulated in writing. “On the other hand, compensatory interest
refers to the penalty or indemnity for damages imposed by law or by the court s.” In this case, there is no stipulation
in writing in the insurance policy of monetary interest and the circumstances of the case reveals that what was imposed by
the Appellate court is one of a compensatory interest but as a form of damages, compensatory interest is due only if
the obligor is proven to have failed to comply with his obligation. In this case, it is Sun life gave notice to Tan Kit that
it was rescinding the policy due to concealment, Sun Life further tendered the refund of premium.

Since Sun Life acted within its obligation as required by law thus no compensatory interest should have been
imposed. The premiums shall be return within 15d from finality of the decision and only after then, should there is
failure to return the premiums, Sun life shall be liable for 6% interest per annum until paid.

TLC: There was no delay caused by Sunlife. It immediately sent back the premium pd but it was Sanra who delayed the
receipt thereof. So there was no basis on the imposition of a compensatory interest by the court. So if there would be a
delay on the return of the premiums pd will there be an imposition of interest bcos that would already amount to
forbearance of money.

PNB v CA

Dito eastern shipping lines pa ung ginamit pero just to know what is the ruling.

NOTE: (Deemed repealed na ung ruling,)

The case at bench does not involve a loan, forbearance of money or judgment involving a loan or forbearance of
money as it arose from a contract of sale whereby Ibarrola did not receive full payment for her merchandise . When an
obligation arises "from a contract of purchase and sale and not from a contract of loan or mutuum," the applicable
rate is "6% per annum as provided in Article 2209 of the NCC and not the rate of 12% per annum as provided in
(CB) Cir. No. 416 (or 6% under the MBC)."

Therefore, the proper rate of interest referred to in the judgment under execution is only 6%. This interest shall be
computed from the time of the filing of the complaint considering that the amount adjudged (P98,691.90) can be
established with reasonable certainty. However, once the judgment becomes final and executory, the "interim
period from the finality of judgment awarding a monetary claim and until payment thereof, is deemed to be
equivalent to a forbearance of credit." Thus, the rate of 12% p.a. (now 6% under MBC) should be imposed, and to
be computed from the time the judgment became final and executory until fully satisfied. The actual base for the
computation of this interest after the judgment in this damage suit became final shall be the amount adjudged
(P98,691.90).

TLC: Sa estern shipping lines, there was a distinction made. If there is no fulfillment of an obligation, the interest is only
6% p/a. But if there is already judgment final, that would now fall under forbearance and it is 12% p/a.

YONG CHAN KIM, vs. PEOPLE OF THE PHILIPPINES (pertains to a loan/mutuum)

Liquidation simply means the settling of indebtedness. An employee who liquidates a cash advance is in fact paying
back his debt in the form of a loan of money advanced to him by his employer, as per diems and allowances.
Likewise, "if the amount of the cash advance he received is less than the amount he spent for actual travel x x x he has the
right to demand reimbursement from his employer the amount he spent coming from his personal funds." In other words,
the money advanced by either party is actually a loan to the othe r. Hence, Yong Chan Kim was under no legal
obligation to return the same cash or money, i.e., the bills or coins, which he received from SEAFDEC.
Art. 1953. - A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is
bound to pay to the creditor an equal amount of the same kind and quality."

In the case at bar, there is transfer of ownership of money to the Yong Chan Kim subject to a suspensive condition
that he liquidates the amount of cash advance upon return to station and completion of the travel. Since ownership of
the money (cash advance) was transferred to Yong Chan Kim , no fiduciary relationship was created . Absent this
fiduciary relationship between petitioner and private respondent, which is an essential element of the crime of
estafa by misappropriation or conversion, Yong Chan Kim could not have committed estafa.

TLC: Estafa here is not applicable. You can spend the money that belongs to you. If there is overpayment, you can pay it
but it does not constitute estafa bcos you are the owner thereof. You can spend the money the way you want to do so.

First Fil-Sin Lending Corp, vs. Padillo

Nowhere was it stated that the interest rates of 4.5% shall be applied on a monthly basis. If applied in monthly basis, the
same would be highly unconscionable.

As regards the penalty charges, we agree with the CA in ruling that the 1% penalty per day of delay is highly
unconscionable. Applying Article 1229 of the Civil Code, courts shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with, or if it is iniquitous or unconscionable.
TLC: It will be noted that the loan contract here is a contract of adhesion it was prepared by the lending company. In that
document it was not clear if the interest is per month or per annum. But take note that even if the contract is a COA, it is
not entirely void, it is valid also bcos you sign the same. But the agreement here which is the Contract of loan is
iniquitous. Only the interest rate will be nullified by the court but not the whole obligation bcos the principal amount was
rcvd by debtor. 4.5% per month is highly unconscionable. So here it is the legal interest that will be applied.

CONSOLIDATED BANK v CA

The contract between the bank and its depositor is governed by the provisions of the Civil Code on simple loan. Article
1980 of the Civil Code expressly provides that."savings . . . deposits of money in banks and similar institutions shall
be governed by the provisions concerning simple loan." There is a debtor-creditor relationship between the bank
and its depositor. The bank is the debtor and the depositor is the creditor. The depositor lends the bank money and
the bank agrees to pay the depositor on demand. The savings deposit agreement between the bank and the depositor
is the contract that determines the rights and obligations of the parties.

The law imposes on banks high standards in view of the fiduciary nature of banking. ("RA 8791"), 18 which took
effect on 13 June 2000, declares that the State recognizes the "fiduciary nature of banking that requires high
standards of integrity and performance." 19 This fiduciary relationship means that the bank’s obligation to observe
"high standards of integrity and performance" is deemed written into every deposit agreement between a bank
and its depositor. The fiduciary nature of banking requires banks to assume a degree of diligence higher than that of a
good father of a family.

However, the fiduciary nature of a bank-depositor relationship does not convert the contract between the bank and
its depositors from a simple loan to a trust agreement , whether express or implied. Failure by the bank to pay the
depositor is failure to pay a simple loan, and not a breach of trust. The law simply imposes on the bank a higher
standard of integrity and performance in complying with its obligations under the contract of simple loan, beyond
those required of non-bank debtors under a similar contract of simple loan.
TLC: Although we use the word deposit, take note that the relationship here is not depositor and not depositary. It is
not a contract of deposit. It is a contract of loan that is created bet the bank and the depositor. The relationship here is
debtor-creditor relationship. In deposit, GR is that the thing cannot be used by the depositary unless allowed by the
depositor, but in savings deposit like in this case, the bank-debtor can use the money to invest the same so that it can
interest. Take note of the diligence required by the bank wc is more than that of DOGFOAF bcos of its fiduciary nature
and the business is imbued with public interest.

HEIRS OF ESPIRITU vs. SPOUSES LANDRITO

In enacting Republic Act No. 3765, known as the "Truth in Lending Act," the State seeks to protect its citizens
from a lack of awareness of the true cost of credit by assuring the full disclosure of such costs. Section 4, in
connection with Section 3(3) of the said law, gives a detailed enumeration of the specific information required to be
disclosed, among which are the interest and other charges incident to the extension of credit. Section 6 of the same
law imposes on anyone who willfully violates these provisions, sanctions which include civil liability, and a fine and/or
imprisonment.
In addition, the Civil Code clearly provides that:

Article 1956. No interest shall be due unless it has been stipulated in writing.

Under Article 1409 of the Civil Code, stipulations authorizing iniquitous or unconscionable interests are inexistent
and void from the beginning.

The omission of the Spouses Espiritu in specifying in the contract the interest rate which was actually imposed, in
contravention of the law, manifested bad faith. Interest and charges found to be excessive, iniquitous and
unconscionable are void.

6.39% per month interest - excessive

TLC: Take note what loan sharks do is they usually deduct already the interest on the principal amount of money. As a
debtor, u are entitled to receive the whole amount of loan. E dapat mag-run muna ung period before mag deduct ng
interest. In this case, cinapitalized pa ung interest kaya nag balloon. The interest here is shocking to the moral senses of a
man.

DEPOSIT
CA AGRO-INDUSTRIAL DEVELOPMENT CORP. v. CA
The contractual relation between a commercial bank and another party in the contract of rent of a safety deposit box
is one of bailor and bailee. Based on American Jurisprudence, the prevailing rule is that the relation between a bank
renting out safe-deposit boxes and its customer with respect to the contents of the box is that of a bailor or bailee, the
bailment being for hire and mutual benefit.

The contract in the case at bar is a special kind of deposit. It cannot be characterized as an ordinary contract of lease
under Article 1643 because the full and absolute possession and control of the safety deposit box was not given to the
joint renters — the petitioner and the Pugaos.
TLC: There is a renting of a safety box. The renters were given their key, and also the bank has its key. In this case, the
TCT in the safety deposit box was lost. The lost cannot be explained by the parties. But the SC held that this is a case of
special deposit, and not a contract of lease. Bcos in a lease, the possession and control of the property is temporarily
passed upon the lesse. In this case, there is no full transfer of the possession to the lessee, bcos the bank also has its
key. The renters cannot go to the safety deposit box if not allowed by the bank.
GR: the purpose of deposit is safe keeping. The most impt here is the liability of the bank with respect to the lost of the
TCT. The nature of the agreement also between the bank and the renters is impt. Moreover, you are paying for the rental
of the safety deposit box. Hindi libre ito. The stipulation that the bank should not be considered as a depositary and
could not be held liable is VOID. May liability and bank. However in this case petitioners were not able to prove the
negligence of the bank. Nevertheless, SC said that the bank is still liable bcos the contents are within the premises of the
bank. The TCT are within the possession of the bank. The bank here is negligent.

YHT REALTY vs.CA (This is a more negligent case than the prior one. This involves necessary deposit in a hotel.)
Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable
for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility
of the former as set forth in Articles 1998 to 2001 is suppressed or diminished shall be void.
Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to apply to situations
such as that presented in this case. The hotel business like the common carrier's business is imbued with public
interest. Catering to the public, hotelkeepers are bound to provide not only lodging for hotel guests and security to their
persons and belongings. The twin duty constitutes the essence of the business. The law in turn does not allow such duty to
the public to be negated or diluted by any contrary stipulation in so-called "undertakings" that ordinarily appear in
prepared forms imposed by hotel keepers on guests for their signature.
TLC: The depositor in this case cannot just open the DB by the use of his key alone bcos there are 2 keys. One of which
was held by the management. It was not Mcloughlin who opened the DB but it was Tan who opened the same, at the wee
hours of the morning while Mcloughlin was asleep and Tan was allowed by the mngt. The allegation that Tan was the
wife of the australian was not given by the foreigner but only came from Tan herself. Plus, the latter was not staying in the
hotel. It would be hard to presume that Tan was the wife of the Australian. The stipulation between the parties freeing
the hotel from liability is null and void. As depositary, they are liable for the lost of personal effects delivered to them
for safekeeping.

QUASI-CONTRACT – SOLUTION INDEBITI

BPI v. SARMIENTO

There is solutio indebiti where: (1) payment is made when there exists no binding relation between the payor, who has
no duty to pay, and the person who received the payment; and (2) the payment is made through mistake, and not
through liberality or some other cause. x x x The quasi-contract of solutio indebiti is based on the ancient principle that
no one shall enrich himself unjustly at the expense of another.

Both elements are lacking in the present case. Mr. Cascarro, the Head of the Branches Division Investigation Unit, had
categorically stated that respondent was only terminated from service on August 26, 1988. Respondent was not
suspended from office. Consequently, during the period in question, there still existed an employer-employee
relationship between petitioner and respondent which entitled respondent to the payment of her salary during the
said period. Thus, there can be no mistaken payment in this case. Moreover, it has been shown that the payment of
respondent's salary was with the knowledge and approval of respondent's immediate superior officers. Hence, the
principle of solutio indebiti finds no application in this case.
TLC: The respondent here is a managerial ee in the bank. She was investigated, so the usual rule is to suspend the ee
involved so that she can be removed from the premisesd. There is no unjust enrichment here bcos aside from er-ee
relationship, she was receiving her salary for the interim period that she was told not to report.

QUASI-DELICT
MERALCO v ATTY CASTILLO

In order for the discovery of a tampered, broken or fake seal on the meter to constitute prima facie evidence of illegal use
of electricity by the person who benefits from such illegal use, the discovery thereof must have been personally
witnessed and attested to by an officer of the law or a duly authorized representative of the ERB. Besides, even if
there is prima facie evidence of illegal use of electricity, Section 4, RA 7832 requires due notice to the person benefited
before disconnection of electricity can be affected. Thus, even when the consumer, or someone acting in his behalf, is
caught in flagrante delicto or in the act of doing any of the acts enumerated in Section 4 of RA 7832, petitioner may not
immediately disconnect electricity without serving a written notice or warning to the owner of the house or
establishment concerned.

TLC: If Meralco wants to test if your meter, there must be another person not just the representative of meralco. But in
this case, there was no representative as required by the procedure. E for all we know the meralco rep may do the same
thing they may tamper your meter. Kaya nung pinalitan mas bumilis ung meter. There was injury to the private
respondents here so there is quasi-delict.

TORTS AND DAMAGES

CAPILI V CARDANA
The probability that the branches of a dead and rotting tree could fall and harm someone is clearly a danger that is
foreseeable. In every tort case filed under Article 2176 of the Civil Code, plaintiff has to prove by a preponderance of
evidence:
1. the damages suffered by the plaintiff;
2. the fault or negligence of the defendant or some other person for whose act he must respond; and
3. the connection of cause and effect between the fault or negligence and the damages incurred

The fact that Jasmin died as a result of the dead and rotting tree within the school’s premises shows that the tree was
indeed an obvious danger to anyone passing by and calls for application of the principle of res ipsa loquitur.

The doctrine of res ipsa loquitur applies where

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.

As school principal, Capili is expected to oversee the safety of the school’s premises. The fact that she failed to see the
immediate danger posed by the dead and rotting tree shows she failed to exercise the responsibility demanded by her
position.
As to moral damages, However, the person claiming moral damages must prove the existence of bad faith by clear and
convincing evidence for the law always presumes good faith. It is not enough that one merely suffered sleepless nights,
mental anguish, and serious anxiety as the result of the actuations of the other party. Invariably, such action must be
shown to have been willfully done in bad faith or with ill motive. Under the circumstances, petitioner was not
motivated by bad faith or ill motive vis-à-vis respondents’ daughter’s death. The award of moral damages is therefore not
proper.
TLC: The principal was negligent in this case. The kaimito tree was very near her office. As a principla you go around the
premises of school. She could definitely see the same. She was negligent in failing to oversee all the situation in the
school.

ORIX v DIZON
Orix as the operator on record of the Fuso truck is liable to the heirs of the victims of the mishap
Orix cannot point fingers at the alleged real owner to exculpate itself from vicarious liability under Article 2180[47] of the
Civil Code. Regardless of whoever Orix claims to be the actual owner of the Fuso by reason of a contract of sale, it is...
nevertheless primarily liable for the damages or injury the truck registered under it have caused.
Besides, the registered owners have a right to be indemnified by the real or actual owner of the amount that they may be
required to pay as damage for the injury caused to the plaintiff,[49] which Orix rightfully acknowledged by filing a third-
party... complaint against the owner of the Fuso, Manuel.
TLC: There was really a negligence on the part of drivers. What are the damages awarded to the victim? Actual
damages – wc consist of funeral expenses, lost of earning capacity, death indemnity. Support also was given and moral
damages for mental anguish suffered by relatives of the victim.
Registered owner rule is still a good rule. Just look at the registered owner in the ORCR, that person, pwede mo
idemanda na.This is beneficial on the part of the victim to just look at the registration, wag ka na maghanap pa. It would
be prejudicial on the part of the victim to still look for the true owner. If the reg owner is really not the owner na, the
remedy of the registered owner is a cross-claim. Bahala na kayo later on. But as a rule, it is the registered owner who is
liable.

JARCO MARKETING v CA
An accident pertains to an unforeseen event in which no fault or negligence attaches to the defendant. It is "a
fortuitous circumstance, event or happening; an event happening without any human agency, or if happening wholly or
partly through human agency, an event which under the circumstances is unusual or unexpected by the person to whom it
happens."
On the other hand, 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. Negligence 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."

Accident and negligence are intrinsically contradictory; one cannot exist with the other. Accident occurs when the
person concerned is exercising ordinary care, which is not caused by fault of any person and which could not have been
prevented by any means suggested by common prudence. Here, the tragedy which befell ZHIENETH was no accident
and that ZHIENETH's death could only be attributed to negligence.

Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that favors children below nine (9)
years old in that they are incapable of contributory negligence. CRISELDA too, should be absolved from any
contributory negligence. Initially, ZHIENETH held on to CRISELDA's waist. later to the latter's hand. CRISELDA
momentarily released the child's hand from her clutch when she signed her credit card slip. At this precise moment, it was
reasonable and usual for CRISELDA to let go of her child. Further, at the time ZHIENETH was pinned down by the
counter, she was just a foot away from her mother

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ

Both provisions under 2180 apply to employers: the fourth paragraph, to owners and managers of an establishment or
enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any business or industry.
The fourth paragraph covers negligent acts of employees committed either in the service of the branches or on the
occasion of their functions, while the fifth paragraph encompasses negligent acts of employees acting within the scope of
their assigned task. The latter is an expansion of the former in both employer coverage and acts include
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for
the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-
employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was
acting within the scope of his assigned task when the tort complained of was committed. It is only then that the
employer may find it necessary to interpose the defense of due diligence in the selection and supervision of the
employee.
It has been held that an employee who uses his employer's vehicle in going from his work to a place where he intends to
eat or in returning to work from a meal is not ordinarily acting within the scope of his employment in the absence of
evidence of some special business benefit to the employer
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal purpose not in line
with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m. of 28 August 1988, way beyond
the normal working hours. ABAD's working day had ended; his overtime work had already been completed. His being at
a place which, as petitioner put it, was known as a "haven for prostitutes, pimps, and drug pushers and addicts," had no
connection to petitioner's business; neither had it any relation to his duties as a manager. Rather, using his service vehicle
even for personal purposes was a form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him,
petitioner CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing
ABAD with a service vehicle.

PROFESSIONAL SVC v AGANA

SC applied captain of the ship doctrine against Dr Ampil. Dr. Ampil did not inform Natividad about the missing two
pieces of gauze. Worse, he even misled her that the pain she was experiencing was the ordinary consequence of her
operation. Had he been more candid, Natividad could have taken the immediate and appropriate medical remedy to
remove the gauzes from her body. To our mind, what was initially an act of negligence by Dr. Ampil has ripened into a
deliberate wrongful act of deceiving his patient.
This is a clear case of medical malpractice or more appropriately, medical negligence. Dr, Ampil, as the lead surgeon, had
the duty to remove all foreign objects, such as gauzes, from Natividad’s body before closure of the incision. When he
failed to do so, it was his duty to inform Natividad about it. Dr. Ampil breached both dutie
PSI is also solidarily liable with Dr Ampil

Its liability is anchored upon the agency principle of apparent authority or agency by estoppel and the doctrine of
corporate negligence which have gained acceptance in the determination of a hospital’s liability for negligent acts of
health professionals.

Apparent authority, or what is sometimes referred to as the "holding out" theory, or doctrine of ostensible agency or
agency by estoppel has its origin from the law of agency. It imposes liability, not as the result of the reality of a
contractual relationship, but rather because of the actions of a principal or an employer in somehow misleading the
public into believing that the relationship or the authority exists . The concept is essentially one of estoppel and has
been explained in this manner:"The principal is bound by the acts of his agent with the apparent authority which he
knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. The question in
every case is whether the principal has by his voluntary act placed the agent in such a situation that a person of
ordinary prudence, conversant with business usages and the nature of the particular business, is justified in
presuming that such agent has authority to perform the particular act in question.31
In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and specializations of the
physicians associated or accredited by it, including those of Dr. Ampil and Dr. Fuentes. Hence, it "is now estopped from
passing all the blame to the physicians whose names it proudly paraded in the

As to corporate negligence, recent years have seen the doctrine of corporate negligence as the judicial answer to the
problem of allocating hospital’s liability for the negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation proceeds from the judiciary’s acknowledgment
that in these modern times, the duty of providing quality medical service is no longer the sole prerogative and
responsibility of the physician. The modern hospitals have changed structure. Hospitals now tend to organize a
highly professional medical staff whose competence and performance need to be monitored by the hospitals
commensurate with their inherent responsibility to provide quality medical care. In the present case, it was duly
established that PSI operates the Medical City Hospital for the purpose and under the concept of providing comprehensive
medical services to the public. Accordingly, it has the duty to exercise reasonable care to protect from harm all
patients admitted into its facility for medical treatment. Unfortunately, PSI failed to perform such duty. The findings
of the trial court are convincing.

Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let it be emphasized that PSI,
apart from a general denial of its responsibility, failed to adduce evidence showing that it exercised the diligence of a
good father of a family in the accreditation and supervision of the latter.

TLC: PRO HAC VICE ruling. It only applies to this particular case. CAPTAIN of the ship was applied in this case. Dr
Ampil as the head surgeon is liable. The owner of the hospital is also liable for negligence. The accreditation in the
directory of the hospital are relied upon by the patients so the hospital cannot argue that the medical specialist is not their
own specialist.

MERCURY DRUG V HENRY HUANG

First is actual damages. Art. 2199 of the Civil Code provides that "[E]xcept 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 x x x."
In the instant case, we uphold the finding that the actual damages claimed by respondents were supported by receipts.

Second, petitioners are also liable for all damages which are the natural and probable consequences of the act or
omission complained of.16 Due to the accident, Stephen will need continuous rehabilitation and therapy to prevent further
complications for the rest of his life.
Third is moral damages." The award of moral damages is aimed at a restoration, within the limits of the possible, of
the spiritual status quo ante."20 Moral damages are designed to compensate and alleviate in some way the physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury unjustly caused a person. Amount of the award bears no relation whatsoever with the
wealth or means of the offender.
Fourth –exemplary damages, Art. 2231 of the Civil Code provides that in cases of quasi-delicts, exemplary damages
may be granted if the defendant acted with gross negligence. The records show that at the time of the accident,
petitioner Del Rosario was driving without a license because he was previously ticketed for reckless driving. The evidence
also shows that he failed to step on his brakes immediately after the impact. Had petitioner Del Rosario done so, the
injuries which respondent Stephen sustained could have been greatly reduced
Lastly –fees to respondents. In addition, attorney’s fees may be granted when a party is compelled to litigate or incur
expenses to protect his interest by reason of an unjustified act of the other party.24

TLC: All damages were awarded by the court to sps Huang.

DR ALANO VS LOGMAO
TLC: Case dismissed. Dr Alano as the medical dir. Stated in its letter its letter stated that All reasonable efforts must be
exerted first to look for the relatives of the patients before the organs of the patient should be harvested. And this was
done. Plus, time is of the essence bcos if the patient will die before the organs are harvested, the organs will also be of no
use.

PNR v GRUNTY
Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he
has suffered, which falls below the standard to which he is required to conform for his own protection .59 To hold a
person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries
in disregard of warning or signs of an impending danger to health and body.60 To prove contributory negligence, it
is still necessary to establish a causal link, although not proximate, between the negligence of the party and the
succeeding injury.
The proximate cause of the injury having been established to be the negligence of PNR, the last clear chance finds no
application in the instant case.
Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he suffered.
They arise out of a sense of natural justice, aimed at repairing the wrong done. To be recoverable, they must be duly
proved with a reasonable degree of certainty. A court cannot rely on speculation, conjecture, or guesswork 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.64 Respondents, however, failed to present evidence for such damages; hence, the award of actual
damages cannot be sustained.
However, as the heirs of Rhonda Brunty undeniably incurred expenses for the wake and burial of the latter, we
deem it proper to award temperate damages in the amount of ₱25,000.00 pursuant to prevailing jurisprudence.65 This
is in lieu of actual damages as it would be unfair for the victim’s heirs to get nothing, despite the death of their kin, for the
reason alone that they cannot produce receipts.66

The SC deleted the award of actual damages, and in lieu thereof, temperate damages of 25,000 is awarded to the
heirs of Rhonda and reduced the award of moral damages to 500,000.
TLC: The SC did not anymore consider the principle last clear chance and the contributory negligence of the driver. Bcos
the proximate cause as evidence was really the negligence of the PNR. There was no any sign that there is a railrod
crossing ahead.

CANTE v SPS GO
In cases involving medical negligence, the doctrine of res ipsa loquitur allows the mere existence of an injury to
justify a presumption of negligence on the part of the person who controls the instrument causing the injury,
provided that the following requisites concur:
1. The accident is of a kind which ordinarily does not occur in the absence of someone’s negligence;
2. It is caused by an instrumentality within the exclusive control of the defendant or defendants; and
3. The possibility of contributing conduct which would make the plaintiff responsible is eliminated

As to the first requirement, the gaping wound on Nora’s arm is certainly not an ordinary occurrence in the act of
delivering a baby. Second, whether the injury was caused by the droplight or by the blood pressure cuff is of no moment.
Both instruments are deemed within the exclusive control of the physician in charge under the "captain of the
ship" doctrine. This doctrine holds the surgeon in charge of an operation liable for the negligence of his assistants
during the time when those assistants are under the surgeon’s control Third, the gaping wound on Nora’s left arm, by
its very nature and considering her condition, could only be caused by something external to her and outside her control as
she was unconscious while in hypovolemic shock.
TLC: The court again invoke the captain of the ship doctrine so she should be the one liable for the negligence of
everybody inside the operating room and the place where the patient stays. Sya may kasalanan dito.

PNCC vs CA

PASUDECO's negligence in transporting sugarcanes without proper harness/straps, and that of PNCC in removing the
emergency warning devices, were two successive negligent acts which were the direct and proximate cause of Latagan's
injuries. As such, PASUDECO and PNCC are jointly... and severally liable.
Where several causes producing an injury are concurrent and each is an efficient cause without which the injury
would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against
any or all of the... responsible persons although under the circumstances of the case, it may appear that one of them
was more culpable, and that the duty owed by them to the injured person was not the same. No actor's negligence ceases
to be a proximate cause merely because it does not exceed the... negligence of other actors. Each wrongdoer is
responsible for the entire result and is liable as though his acts were the sole cause of the injury.
Where the concurrent or successive negligent acts or omissions of two or more persons, although acting
independently, are in combination with 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. Where their concurring negligence resulted in injury or damage to a third... party, they become joint
tortfeasors and are solidarily liable for the resulting damage under Article 2194 of the Civil Code.

TLC: So u know the meaning of joint and several. So here the party can choose who among the 2 will he demand the
payment of the damages and amt incurred. Hindi pwedeng ½ ½. So dapat entire obligation must be pd by any creditor.

VICTORY LINER vs GAMMAD – Walang digest

IMPORTANT RULING IN DAMAGES MORAL vs EXEMPLARY DAMAGES

TLC: Let me emphasize again and again that the amt of damages will be basaed primarily on the sound discretion of the
court and the evidence that will prove such damages. So even if you are the complainant or the heirs, u cannot demand the
amt of damages the way you see it. It is discretionary on the court and based on the evidence. It must be substantiated.

LAMBERT v CASTILLON

The amount of P9,672.00, however, appears unrealistic, and constitutes only 30.34% of the gross earnings. It even
includes expenses for cigarettes which by no means can be classified as a necessary expense.
The awards of P33,215.00 as funeral and burial expenses being supported with receipts; P50,000.00 as death indemnity;
and P50,000.00 as moral damages shall be sustained. However, the award of P20,000.00 as attorney’s fees must be
deleted for lack of basis.

ART. 2206 provided that the amount of damages for death caused by a crime or quasi-delict shall be at least 3,000, even
though there may have been mitigating circumstances. However, the amount has been gradually increased through the
years. At present, prevailing jurisprudence fixes the amount at P50,000.00.

The award of moral damages is aimed at a restoration, within the limits possible, of the spiritual status quo ante; and
therefore, it must be proportionate to the suffering inflicted . The intensity of the pain experienced by the relatives of
the victim is proportionate to the intensity of affection for him and bears no relation whatsoever with the wealth or means
of the offender.

With respect to attorney’s fees, it is well settled that the same should not be awarded in the absence of stipulation
except under the instances enumerated in Article 2208 of the Civil Code. "Article 2208 of the Civil Code allows
attorney’s fees to be awarded by a court when its claimant is compelled to litigate with third persons or to incur
expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought.
While judicial discretion is here extant, an award thereof demands, nevertheless, a factual, legal or equitable justification.
The matter cannot and should not be left to speculation and conjecture

TLC: Generally we do not give premium for filing a case, for going to courts. Although that is the right given to
you as complainant.
SOLIDBANK v ARRIETA – no digest!
A bank's gross negligence in dishonoring a well-funded check, aggravated by its unreasonable delay in repairing
the error, calls for an award of moral and exemplary damages. The resulting injury to the check writer's reputation
and peace of mind needs to be recognized and compensated.
The fact that another check Carmen had issued was previously dishonored does not necessarily imply that the dishonor
of a succeeding check can no longer cause moral injury and personal hurt for which the aggrieved party may claim
damages. Such prior occurrence does not prove that respondent does not have a good reputation that can be
besmirched
Conditions for the award of moral damages:
(1) there is an injury -- whether physical, mental or psychological -- clearly sustained by the claimant;
(2) the culpable act or omission is factually established;
(3) the wrongful act or omission of the defendant is the Proximate Cause of the injury sustained by the claimant; and
(4) the award of damages is predicated on any of the cases stated in Article 2219 [11] of the Civil Code.
Proximate Cause has been defined as "any cause which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the result complained of and without which would not have occurred x x
x."[12] It is determined from the facts of each case upon combined considerations of logic, common sense, policy and
precedent.[13] Clearly, had the bank accepted and honored the check, Carmen would not have had to face the
questions of -- and explain her predicament to -- her office mates, her daughters, and the leaders and members of
her church.
Petitioner's negligence here was so gross as to amount to a wilful injury to Respondent Carmen. Article 21 of the
Civil Code states that "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." Further, Article 2219 provides
for the recovery of moral damages for acts referred to in the aforementioned Article 21. Hence, the bank is liable for
moral damages to respondent.[17]
The foregoing notwithstanding, we find the sum of P150,000 awarded by the lower courts excessive. Moral damages are
not intended to enrich the complainant at the expense of the defendant. [18] Rather, these are awarded only to enable
the injured party to obtain "means, diversions or amusements" that will serve to alleviate the moral suffering that resulted
by reason of the defendant's culpable action. [19] The purpose of such damages is essentially indemnity or reparation,
not punishment or correction.[20] In other words, the award thereof is aimed at a restoration within the limits of the
possible, of the spiritual status quo ante;[21] therefore, it must always reasonably approximate the extent of injury and
be proportional to the wrong committed.
The law allows the grant of exemplary damages to set an example for the public good. [24] The business of a bank is
affected with public interest; thus, it makes a sworn profession of diligence and meticulousness in giving irreproachable
service.[25] For this reason, the bank should guard against injury attributable to negligence or bad faith on its part. [26] The
banking sector must at all times maintain a high level of meticulousness. The grant of exemplary damages is
justified[27] by the initial carelessness of petitioner, aggravated by its lack of promptness in repairing its error.
The award of attorney's fees in the amount of P20,000 is proper, for respondents were compelled to litigate to protect
their rights.
TLC:

PRUDENTIAL BANK v CA
Petitioner bank had committed a mistake. It misposted private respondent’s check deposit to another account and delayed
the posting of the same to the proper account of the private respondent. Even if malice or bad faith was not sufficiently
proved in the instant case, the fact remains that petitioner has committed a serious mistake. The bank’s negligence
was the result of lack of due care and caution required of managers and employees of a firm engaged in so sensitive
and demanding business as banking. Accordingly, the award of moral damages by the respondent CA could not be said
to be in error nor in grave abuse of its discretion.

There is no hard-and-fast rule in the determination of what would be a fair amount of moral damages since each
case must be governed by its own peculiar facts. The yardstick should be that it is not palpably and scandalously
excessive. In our view, the award of P100k is reasonable, considering the reputation and social standing of private
respondent.

The law allows the grant of exemplary damages by way of example for the public good. The public relies on the
banks’ sworn profession of diligence and meticulousness in giving irreproachable service. The level of
meticulousness must be maintained at all times by the banking sector. Hence, the CA did not err in awarding exemplary
damages. In the Court’s view, however, the reduced amount of P20k is more appropriate. The award of attorney’s fees is
also proper when exemplary damages are awarded and since private respondent was compelled to engage the
services of a lawyer and incurred expenses to protect her interest.

TLC:
DR RODRIGUEZ vs CA
The RTC then declared that “the fire was not caused by an instrumentality within the exclusive control of defendants,”
which is one of the requisites for the application of the doctrine of res ipsa loquitur in the law of negligence. The Court
emphasized that this doctrine 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 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 or not readily available.

The elements of res ipsa loquitur are: (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.
TLC: There was no clear evidence that there is negligence on the part of the respondent so no award of damages is
proper.