SAN ILDEFONSO LINES, INC., and EDUARDO JAVIER vs.

COURT OF APPEALS
(Thirteenth Division) and PIONEER INSURANCE and SURETY CORPORATION
G.R. No.119771. 24 Apr 1998.
FACTS: At around 3:30 in the afternoon of June 24, 1991, a Toyota Lite Ace Van
being driven by its owner Annie U. Jao and a passenger bus of herein petitioner
San Ildefonso Lines, Inc. (hereafter, SILI) figured in a vehicular mishap at the
intersection of Julia Vargas Avenue and Rodriguez Lanuza Avenue in Pasig, Metro
Manila, totally wrecking the Toyota van and injuring Ms. Jao and her two (2)
passengers in the process.
A criminal case was thereafter filed with the Regional Trial Court of Pasig on
September 18, 1991 charging the driver of the bus, herein petitioner Eduardo
Javier, with reckless imprudence resulting in damage to property with multiple
physical injuries.
About four (4) months later, or on January 13, 1992, herein private respondent
Pioneer Insurance and Surety Corporation (PISC), as insurer of the van and
subrogee, filed a case for damages against petitioner SILI with the Regional Trial
Court of Manila, seeking to recover the sums it paid the assured under a motor
vehicle insurance policy as well as other damages, totaling P564,500.00
(P454,000.00 as actual/compensatory damages; P50,000.00 as exemplary
damages; P50,000.00 as attorney's fees; P10,000.00 as litigation expenses; and
P500.00 as appearance fees.)
ISSUEs: 1) If a criminal case was filed, can an independent civil action based on
quasi-delict under Article 2176 of the Civil Code be filed if no reservation was
made in the said criminal case?
2) Can a subrogee of an offended party maintain an independent civil action
during the pendency of a criminal action when no reservation of the right to file
an independent civil action was made in the criminal action and despite the fact
that the private complainant is actively participating through a private prosecutor
in the aforementioned criminal case?
RULING: WHEREFORE, premises considered, the assailed decision of the Court of

Appeals dated February 24, 1995 and the Resolution dated April 3, 1995 denying
the motion for reconsideration thereof are hereby REVERSED and SET ASIDE. The
"MANIFESTATION AND MOTION TO SUSPEND CIVIL PROCEEDINGS" filed by
petitioners is GRANTED.
RATIO: Now that the necessity of a prior reservation is the standing rule that shall
govern the institution of the independent civil actions referred to in Rule 111 of
the Rules of Court, past pronouncements that view the reservation requirement
as an "unauthorized amendment" to substantive law - i.e., the Civil Code, should
no longer be controlling. There must be a renewed adherence to the timehonored dictum that procedural rules are designed, not to defeat, but to
safeguard the ends of substantial justice. And for this noble reason, no less than
the Constitution itself has mandated this Court to promulgate rules concerning
the enforcement of rights with the end in view of providing a simplified and
inexpensive procedure for the speedy disposition of cases which should not
diminish, increase or modify substantive rights. Far from altering substantive
rights, the primary purpose of the reservation is, to borrow the words of the
Court in "Caos v. Peralta"
Clearly then, private respondent PISC, as subrogee under Article 2207 of the Civil
Code, is not exempt from the reservation requirement with respect to its
damages suit based on quasi-delict arising from the same act or omission of
petitioner Javier complained of in the criminal case. As private respondent PISC
merely stepped into the shoes of Ms. Jao (as owner of the insured Toyota van),
then it is bound to observe the procedural requirements which Ms. Jao ought to
follow had she herself instituted the civil case.

RAFAEL REYES TRUCKING CORPORATION,

Petitioner, vs.
PEOPLE OF THE PHILIPPINES and ROSARIO P.DY (for herself and on behalf of the
minors Maria Luisa, Francis Edward, Francis Mark and FrancisRafael, all
surnamed Dy),
Respondents

.
FACTS: The defendant Rafael Reyes Trucking Corporation is a domestic corporation engaged in
the business of transporting beer products for the San Miguel Corporation (SMC for short) from
the latters San Fernando, Pampangaplant to its various sales outlets in Luzon. Among its fleets of
vehicles for hire is the white truck trailer driven byRomeo Dunca y Tumol, a duly licensed driver.
Aside from the Corporations memorandum to all its drivers andhelpers to physically inspect their
vehicles before each trip, the SMCs Traffic Investigator-Inspector certified theroadworthiness of
this White Truck trailer. In addition to a professional drivers license, it also conducts a
rigidexamination of all driver applicants before they are hired.In the early morning of June 20,
1989, the White Truck driven by Dunca left Tuguegarao, Cagayan bound to SanFernando,
Pampanga loaded with 2,000 cases of empty beer "Grande" bottles. Seated at the front right seat
besidehim was Ferdinand Domingo, his truck helper ("pahinante" in Pilipino). At around 4:00
oclock that same morningwhile the truck was descending at a slight downgrade along the national
road at Tagaran, Cauayan, Isabela, itapproached a damaged portion of the road covering the full
width of the trucks right lane going south and about sixmeters in length. These made the surface
of the road uneven because the potholes were about five to six inchesdeep. The left lane parallel
to this damaged portion is smooth. As narrated by Ferdinand Domingo, beforeapproaching the
potholes, he and Dunca saw the Nissan with its headlights on coming from the opposite
direction. They used to evade this damaged road by taking the left lance but at that particular
moment, because of theincoming vehicle, they had to run over it. This caused the truck to bounce
wildly. Dunca lost control of the wheelsand the truck swerved to the left invading the lane of the
Nissan. As a result, Duncas vehicle rammed the incomingNissan dragging it to the left shoulder of
the road and climbed a ridge above said shoulder where it finally stopped. The Nissan was
severely damaged and its two passengers, namely: Feliciano Balcita and Francisco Dy, Jr.
diedinstantly from external and internal hemorrhage and multiple fractures.For the funeral
expenses of Francisco Dy, Jr. her widow spent P651,360.00. At the time of his death he was 45
yearsold. He was the President and Chairman of the Board of the Dynamic Wood Products and
Development Corporation(DWPC), a wood processing establishment, from which he was
receiving an income of P10,000.00 a month. In theArticles of Incorporation of the DWPC, the
spouses Francisco Dy, Jr. and Rosario Perez Dy appear to be stockholdersof 10,000 shares each
with par value of P100.00 per share out of its outstanding and subscribed capital stock of 60,000
shares valued at P6,000,000.00. Under its 1988 Income Tax Returns the DWPC had a taxable net
income of P78,499.30. Francisco Dy, Jr. was a La Salle University graduate in Business
Administration, past president of thePasay Jaycees, National Treasurer and President of the
Philippine Jaycees in 1971 and 1976, respectively, and WorldVice-President of Jaycees
International in 1979. He was also the recipient of numerous awards as a civic leader. Hischildren
were all studying in prestigious schools and spent about P180,000.00 for their education in 1988

alone. The trial court rendered a joint decision finding the accused Romeo Dunca y de Tumol guilty
beyond reasonabledoubt of the crime of Double Homicide through Reckless Imprudence with
violation of the Motor Vehicle Law (Rep.Act No. 4136), and appreciating in his favor the mitigating
circumstance of voluntary surrender without anyaggravating circumstance to offset the same, the
Court sentences him to suffer two (2) indeterminate penalties of four months and one day of
arresto mayor as minimum to three years, six months and twenty days as maximum; toindemnify
the Heirs of Francisco Dy. Jr. in the amount of P3,000,000.00 as compensatory damages,
P1,000,000.00as moral damages, and P1,030,000.00 as funeral expenses; Ordering the plaintiff in
Civil Case No. Br. 19-424 to paythe defendant therein actual damages in the amount of
P84,000.00; and Ordering the dismissal of the complaint inCivil Case No. Br. 19-424.Petitioner and
the accused filed a notice of appeal from the joint decision.On the other hand, private
respondentsmoved for amendment of the dispositive portion of the joint decision so as to hold
petitioner subsidiarily liable forthe damages awarded to the private respondents in the event of
insolvency of the accused. The trial court rendered a supplemental decision ordering the
defendant Reyes Trucking Corporation subsidiarilyliable for all the damages awarded to the heirs
of Francisco Dy, Jr., in the event of insolvency of the accused butdeducting therefrom the
damages of P84,000.00 awarded to said defendant.Petitioner filed with the trial court a
supplemental notice of appeal from the supplemental decision.
During thependency of the appeal, the accused jumped bail and fled to a foreign country. The
Court of Appeals dismissed theappeal of the accused in the criminal case and rendered an
amended decision affirming that of the trial court.Petitioner filed a motion for reconsideration of
the amended decision. The Court of Appeals denied petitionersmotion for reconsideration for lack
of merit. Hence, this petition for review.
ISSUES: 1. May petitioner as owner of the truck involved in the accident be held subsidiarily liable
for the damagesawarded to the offended parties in the criminal action against the truck driver
despite the filing of a separate civilaction by the offended parties against the employer of the truck
driver?2. May the Court award damages to the offended parties in the criminal case despite the
filing of a civilaction against the employer of the truck driver; and in amounts exceeding that
alleged in the information forreckless imprudence resulting in homicide and damage to
property?RULING: 1. Rafael Reyes Trucking Corporation, as employer of the accused who has
been adjudged guilty in thecriminal case for reckless imprudence, can not be held subsidiarily
liable because of the filing of the separate civilaction based on
quasi delict
against it. In view of the reservation to file, and the subsequent filing of the civil actionfor recovery
of civil liability, the same was not instituted with the criminal action. Such separate civil action was

forrecovery of damages under Article 2176 of the Civil Code, arising from the same act or omission
of the accused. Innegligence cases, the aggrieved party has the choice between (1) an action to
enforce civil liability arising fromcrime under Article 100 of the Revised Penal Code; and (2) a
separate action for
quasi delict
under Article 2176 of the Civil Code of the Philippines. Once the choice is made, the injured party
can not avail himself of any otherremedy because he may not recover damages twice for the
same negligent act or omission of the accused. This isthe rule against double recovery.In other
words, "the same act or omission can create two kinds of liability on thepart of the offender, that
is, civil liability
ex delicto
, and civil liability
quasi delicto
" either of which "may be enforcedagainst the culprit, subject to the caveat under Article 2177 of
the Civil Code that the offended party can notrecover damages under both types of liability." In
the instant case, the offended parties elected to file a separatecivil action for damages against
petitioner as employer of the accused, based on
quasi delict
, under Article 2176 of the Civil Code of the Philippines. Private respondents sued petitioner Rafael
Reyes Trucking Corporation, as theemployer of the accused, to be vicariously liable for the fault or
negligence of the latter. Under the law, thisvicarious liability of the employer is founded on at least
two specific provisions of law.The first is expressed inArticle 2176 in relation to Article 2180 of the
Civil Code, which would allow an action predicated on
quasi-delict
tobe instituted by the injured party against the employer for an act or omission of the employee
and wouldnecessitate only a preponderance of evidence to prevail. Here, the liability of the
employer for the negligentconduct of the subordinate is direct and primary, subject to the
defense of due diligence in the selection andsupervision of the employee. The enforcement of the
judgment against the employer in an action based on Article2176 does not require the employee
to be insolvent since the nature of the liability of the employer with that of theemployee, the two
being statutorily considered joint tortfeasors, is solidary. The second, predicated on Article 103of
the Revised Penal Code, provides that an employer may be held subsidiarily civilly liable for a
felony committedby his employee in the discharge of his duty. This liability attaches when the
employee is convicted of a crime donein the performance of his work and is found to be insolvent
that renders him unable to properly respond to the civilliability adjudged. Pursuant to the
provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules of CriminalProcedure, when
private respondents, as complainants in the criminal action, reserved the right to file the

separatecivil action, they waived other available civil actions predicated on the same act or
omission of the accused-driver.Such civil action includes the recovery of indemnity under the
Revised Penal Code, and damages under Articles 32,33, and 34 of the Civil Code of the Philippines
arising from the same act or omission of the accused. The intention of private respondents to
proceed primarily and directly against petitioner as employer of accused truck driverbecame
clearer when they did not ask for the dismissal of the civil action against the latter based on
quasidelict.
Consequently, the Court of Appeals and the trial court erred in holding the accused civilly liable,
andpetitioner-employer of the accused subsidiarily liable for damages arising from crime (
ex delicto
) in the criminalaction as the offended parties in fact filed a separate civil action against the
employer based on
quasidelict
resulting in the waiver of the civil action
ex delicto.
It might be argued that private respondents ascomplainants in the criminal case withdrew the
reservation to file a civil action against the driver (accused) andmanifested that they would pursue
the civil liability of the driver in the criminal action. However, the withdrawal isineffective to
reverse the effect of the reservation earlier made because private respondents did not withdraw
thecivil action against petitioner based on
quasi delict.
In such a case, the provision of Rule 111, Section 1, paragraph3 of the 1985 Rules on Criminal
Procedure is clear that the reservation to file or the filing of a separate civil actionresults in a waiver
of other available civil actions arising from the same act or omission of the accused. Rule
111,Section 1, paragraph 2 enumerated what are the civil actions deemed waived upon such
reservation or filing, andone of which is the civil indemnity under the Revised Penal Code. Rule
111, Section 1, paragraph 3 of the 1985Rules on Criminal Procedure specifically provides: "A
waiver of any of the civil actions extinguishes the others. Theinstitution of, or the reservation of the
right to file, any of said civil actions separately waives the others."Therationale behind this rule is
the avoidance of multiple suits between the same litigants arising out of the same actor omission
of the offender. The restrictive phraseology of the section under consideration is meant to cover
allkinds of civil actions, regardless of their source in law, provided that the action has for its basis
the same act oromission of the offender. However, petitioner as defendant in the separate civil
action for damages filed against it,based on
quasi delict
, may be held liable thereon. Thus, the trial court grievously erred in dismissing plaintiffs
civilcomplaint. And the Court of Appeals erred in affirming the trial courts decision. Unfortunately

private respondentsdid not appeal from such dismissal and could not be granted affirmative
relief.The Court, however, in exceptionalcases has relaxed the rules "in order to promote their
objectives and assist the parties in obtaining just, speedy,and inexpensive determination of every
action or proceeding" or exempted "a particular case from the operation of the rules." Invoking
this principle, we rule that the trial court erred in awarding civil damages in the criminal caseand in
dismissing the civil action. Apparently satisfied with such award, private respondent did not appeal
from the
dismissal of the civil case. However, petitioner did appeal. Hence, this case should be remanded to
the trial court sothat it may render decision in the civil case awarding damages as may be
warranted by the evidence.2. The award of damages in the criminal case was improper because
the civil action for the recovery of civil liabilitywas waived in the criminal action by the filing of a
separate civil action against the employer. As enunciatedin
Ramos vs. Gonong,
"civil indemnity is not part of the penalty for the crime committed." The only issue broughtbefore
the trial court in the criminal action is whether accused Romeo Dunca y de Tumol is guilty of
recklessimprudence resulting in homicide and damage to property. The action for recovery of civil
liability is not includedtherein, but is covered by the separate civil action filed against the petitioner
as employer of the accused truck-driver. In this case, accused-driver jumped bail pending his
appeal from his conviction. Thus, the judgmentconvicting the accused became final and
executory, but only insofar as the penalty in the criminal action isconcerned. The damages
awarded in the criminal action was invalid because of its effective waiver. Thepronouncement
was void because the action for recovery of the civil liability arising from the crime has beenwaived
in said criminal action. With respect to the issue that the award of damages in the criminal action
exceededthe amount of damages alleged in the amended information, the issue is
de minimis.
At any rate, the trial courterred in awarding damages in the criminal case because by virtue of the
reservation of the right to bring a separatecivil action or the filing thereof, "there would be no
possibility that the employer would be held liable because insuch a case there would be no
pronouncement as to the civil liability of the accused. As a final note, the Courtreiterate that "the
policy against double recovery requires that only one action be maintained for the same act
oromission whether the action is brought against the employee or against his employer. The
injured party mustchoose which of the available causes of action for damages he will bring.

Light Rail Transit Authority v Navidad fist fight in a railway station between a
drunk passenger and security guard. Navidad, the passenger fell on the tracks and
died when he was run over by the moving train.
A common carrier, both from the nature of its business and for reasons of
public policy, is burdened with the duty of exercising utmost diligence in ensuring
the safety of passengers.
The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all circumstances.
Such duty of a common carrier to provide safety to its passengers so obligates it
not only during the course of the trip but for so long as the passengers are within
its premises and where they ought to be in pursuance to the contract of
carriage. The statutory provisions render a common carrier liable for death of or
injury to passengers:
(a) through the negligence or wilful acts of its employees or
(b) on account of wilful acts or negligence of other passengers or of strangers if
the common carriers employees through the exercise of due diligence could have
prevented or stopped the act or omission.
In case of such death or injury, a carrier is presumed to have been at fault
or been negligent, and by simple proof of injury, the passenger is relieved of the
duty to still establish the fault or negligence of the carrier or of its employees and
the burden shifts upon the carrier to prove that the injury is due to an unforeseen
event or to force majeure.
Once such fault is established, the employer can then be made liable on the
basis of the presumption juris tantum that the employer failed to exercise
diligentissimi patris families in the selection and supervision of its employees. The
liability is primary and can only be negated by showing due diligence in the
selection and supervision of the employee, a factual matter that has not been
shown.
When an act which constitutes a breach of contract would have itself
constituted the source of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been breached by tort,
thereby allowing the rules on tort to apply.

[1-1]LIGA vs. ALLEGRO

1) LIGA vs. ALLEGRO RESOURCES575 SCRA 310 (Art. 1159)Facts: Ortigas &
Company, Limited Partnership entered into a

leasea g r e e m e n t w i t h L a P a z I n v e s t m e n t & R e a l t y C o r p o r a t i o n wh
erein the former leased to the latter its parcel of land
locatedi n S a n J u a n . L a P a z c o n s t r u c t e d t h e G r e e n h i l l s S h o p p i n g A
rcade and divided it into several stalls and subleased them toother people. One
of the sub-lessees was Edsel Liga (Liga),who obtained the leasehold right to
Unit No. 26, Level A of theGSA. As the lease expired, the stallholders made several
attemptsto have their leasehold rights extended. A l l e g r o R e s o u r c e s
b e c a m e t h e n e w l e s s e e . A s t h e n e w lessee, Allegro offered to
sublease Unit No. 26, Level A
toL i g a . T h e y e n t e r e d i n t o a l e a s e a g r e e m e n t
dubbed RentalI n f o r m a t i o n i n w h i c h L i g a a g r e e d t o p a y r e
n t a l o f P 4 0 K monthly. She also agreed to pay the back rentals due
Ortigas.Liga also gave P40K as one month advance rental
and another P 4 0 K a s o n e m o n t h s e c u r i t y d e p o s i t a s p r o v i d e
d i n t h e agreement. Liga failed to pay the subsequent due rent. Despite
repeateddemands from Allegro, Liga had failed to pay her rentals for
thesubleased property, as well as the back rentals from January to
August 2001 due Ortigas.Issues:1. WON Liga should pay to Ortigas back
rentals covering theperiod 1 January 2001 to 31 August 2001? NO2. WON Liga
should pay to Allegro back rentals in the amountof P40K a month starting
from 1 September 2001 until suchtime as she vacates the leased
property? YES3. WON Liga should pay to Allegro the amount of P20K
asattorney's fees and the costs of suit? YESHeld:1. (1) Ortigas is not a party to this
case, whether as plaintiff or o t h e r w i s e . I t i s b a s i c t h a t n o r e l i e f c a n
b e e x t e n d e d i n a judgment to a stranger or one who is not a party to a case.
(2)Allegro cannot justify the award as a legal representative by virtue of
a provision in its lease agreement with Ortigas. Allegrodid not aver in its
complaint that it was acting as Ortigas's legalrepresentative and seeking the
back rentals due Ortigas. (3)There is no allegation or prayer in the
complaint that Allegrowas seeking the collection of the back rentals due
Ortigas.2. The Court cannot countenance the obstinate refusal of
Ligat o p a y P 4 0 K a m o n t h t o A l l e g r o s i n c e s h e h a d a l r e a d
y acquiesced to pay such rental rate when she signed the
RentalI n f o r m a t i o n . I t i s f u n d a m e n t a l t h a t a c o n t r a c t i s t h
e l a w between the parties. Obligations arising from contracts have the
force of law between the contracting parties and should becomplied with in good
faith.

It is a general principle of law that no one may be permitted tochange his mind or
disavow and go back upon his own acts, or to proceed contrary thereto, to the
prejudice of the other party.Likewise, it is settled that if the terms of the
contract
clearlye x p r e s s t h e i n t e n t i o n o f t h e c o n t r a c t i n g p a r t i e s , t h e l i t e
r a l meaning of the stipulations would be controlling.3. Law and jurisprudence
support the award of attorney's feesand costs of suit in favor of Allegro.
Attorney's fees and costsof litigation are awarded in instances where "the
defendantacted in gross and evident bad faith in refusing to satisfy
theplaintiff's plainly valid, just and demandable claim." Havingdelivered
possession over the leased property to Liga,
Allegroh a d a l r e a d y p e r f o r m e d i t s o b l i g a t i o n u n d e r t
h e l e a s e agreement. Liga should have exercised fairness and
good j u d g m e n t i n d e a l i n g w i t h A l l e g r o b y r e l i g i o u s l y p a y i n g t h
e agreed monthly rental of P40,000.00
MAKATI STOCK EXCHANGE, INC., vs. MIGUEL V. CAMPOS,G.R. No. 138814 , April 16,
2009FACTS:Respondent Miguel V. Campos filed a petition with the Securities,
Investigation and Clearing Department(SICD) of the Securities and Exchange
Commission (SEC) against the petitioners Makati Stock Exchange, Inc. (MKSE)The
petition sought: (1) to nullify the Resolution dated 3 June 1993 of the MKSE
Board of Directors, whichallegedly deprived him of his right to participate equally
in the allocation of Initial Public Offerings (IPO) of corporations registered with
MKSE; (2) the delivery of the IPO shares he was allegedly deprived of, for which
hewould pay IPO prices;.SICD granted the issuance of a Temporary Restraining
Order to enjoin petitioners from implementing orenforcing the resolution of the
MKSE. they also issued a writ of preliminary injunction for the implementation
orenforcement of the MKSE Board Resolution in question.On March 11,1994,
petitioners filed a motion to dismiss on the following grounds: (1) Petition
becamemoot due to the cancellation of the license of the MKSE (2) The SICD had no jurisdiction
over the petition and (3)the petition failed to state a cause of action. However, the
SICD denied petitioner s motion to dismiss.ISSUE:Whether or not the petition failed to
state a cause of action.HELD:The petition filed by respondent Miguel Campos should
be dismissed for failure to state a cause of action.A cause of action is the act or omission
by which a party violates a right of another.It contains three essential elements: 1) the
legal right of the plaintiff 2) the correlative obligation of thedefendant and 3) the

act or omission of the defendant in violation of said legal right. If these elements
are absent,the complaint will be dismissed on the ground of failure to state a
cause of action. Furthermore, the petition filedby respondent failed to lay down
the source or basis of respondent s right and/or petitioner s obligation.Article
1157 of the Civil Code, provides that Obligations arise from: law, Contracts, Quasi
Contracts, Actsor omissions punished by law and quasi delicts. Therefore an
obligation imposed on a person and thecorresponding right granted to another,
must be rooted in at least one of these five sources.The mere assertion of a right
and claim of an obligation in an initiatory pleading, whether a Complaint
orPetition, without identifying the basis or source thereof, is merely a conclusion
of fact and law. A pleading shouldstate the ultimate facts essential to the rights of
action or defense asserted, as distinguished from mereconclusions of fact or
conclusions of law.The Respondent merely quoted in his Petition the MKSE Board
Resolution, passed sometime in 1989,granting him the position of Chairman
Emeritus of MKSE for life. However, there is nothing in the said Petitionfrom
which the Court can deduce that respondent, by virtue of his position as
Chairman Emeritus of MKSE, wasgranted by law, contract, or any other legal
source, the right to subscribe to the IPOs of corporations listed in thestock market
at their offering prices.
Chaves vs.Gonzales April 30, 1970[GRN L-27454 April 30, 1970]ROSENDO O. CHAVES, plaintiffappellant, vs. FRUCTUOSO GONZALES, defendant-appellee. The appealed judgment, which is
brief, is hereunder quoted in full:"In the early part of
July, 1963
, the plaintiff delivered to the defendant, who is a typewriter repairer, a portable typewriter for
routinecleaning and servicing. The defendant was not able to finish the job after some time
despite repeated reminders made by theplaintiff. The defendant merely gave assurances, but
failed to comply with the same. In October, 1963, the defendant asked fromthe plaintiff the sum
of P6.00 for the purchase of spare parts, which amount the plaintiff gave to the defendant.On
October 26, 1963, after getting exasperated with the delay of the repair of the typewriter, the
plaintiff went to the house of thedefendant and asked for the return of the typewriter. The
defendant delivered the typewriter in a wrapped package. On reachinghome, the plaintiff
examined
the typewriter returned to him by the defendant and found out that the same
was inshambles, with the interior cover and some parts and screws missing.
On October 29, 1963, the plaintiff sent a letter to thedependant formally demanding the return
missing parts, the interior cover and the sum of P6.00 (Exhibit D). The following day,

thedefendant returned to the plaintiff some of the missing parts, the interior
cover and the P6.00
."On August 29, 1964, the plaintiff had his typewriter repaired by Freixas Business Machines, and
the repair job cost him a total of
P89.85
, including labor and materials (Exhibit C)."On August 23, 1965, the plaintiff commenced this action
before the City Court of Manila,demanding from the defendant thepayment of P90.00 as actual
and compensatory damages, P100.00 for temperate damages, P500.00 for moral damages, and
P500.00as attorney's fees."In his answer as well as in his testimony given before this court, the
defendant made no denilas of the facts narrated above, exceptthe claim of the plaintiff that the
typewriter was delivered to the defendant through a certain Julio Bocalin, which the
defendantdenied allegedly because the typewriter was delivered to him personally by the
plaintiff."The repair done on the typewriter by Freixas Business Machines with the total cost of
P89.85 should not, however, be fullychargeable against the defendant. The repair invoice, Exhibit
C, shows that the missing parts had a total value of only P31.10."WHEREFORE, judgment is hereby
rendered ordering the defendant to pay the plaintiff the sum of P31.10, and the costs of suit."SO
ORDERED." The error of the court a quo, according to the plaintiff-appellant, Rosendo O. Chaves,
is that
it awarded only the value of themissing parts of the typewriter, instead of
the whole cost of labor and material that went into the repair of themachine, as
provided for in Article 1167 of the Civil Code, reading as follows
:"Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his
cost."This same rule shall be observed if he does it in contravention of the tenor of the
obligation. Furthermore, it may be decreed thatwhat has been poorly done be undone."(so sabi
nung may ari nung typewriter dapat daw di lang yung binayad nya sa missing parts (P31.10), dapat
daw yung buong costnung labor + damages pa)On the other hand, the position of the defendantappellee, Fructuoso Gonzales, is that he is not liable at all, not even for the sum of P31.10
because his contract with plaintiff-appellant did not contain a period, so that
plaintiff appellant did not containa period, so that plaintiff-appellant should
have first filed a petition for the court to fix the period, under Article 1197of the
Civil Code, within which the defendant-appellee could be held liable for breach
of contract.
(lah naman daw timeperiod so lah pa breach)Because the plaintiff appealed directly to the
Supreme Court and the appellee did not interpose any appeal, the facts, as found by thetrial court,
are now conclusive and non reviewable.1(Summary ng facts from trial court: kasi daw direct
action xa to the SC so what has been presented to the trial court would be usedby the SC as
basis) The appealed judgment states that the "plaintiff delevered to the defendant . . .

a portable typewriter for routine cleaning andservicing

"; that the "defendant was not able to finish the job after some time despite repeated reminders
made by the plaintiff";that the "defendant merely gave assurances, but failed to comply with the
same"; and that "after getting exasperated with the delayof the repair of the typewriter," the
plaintiff went to the house of the defendant and asked for its return, which was
done. Theinferences derivable from these findings of fact are that
the appellant and the appellee had a perfected contract for cleaningand
servicing a typewriter;that, they intended that the defendant was to finish it at
some future time, although suchtime was not specified; and that such time
had, passed without the work having been accomplished,for thedefendant
returned the typewriter cannibalized and unrepaired, which in itself is a breach
of his obligation, withoutdemanding that he should be given more time to finish
the job, or compensation for the work he had already done.The time for
compliance having evidently expired, andthere being a breach of contract by
non-performance, it wasacademic for the plaintiff to have first petitioned the
court to fix a period for the performance of the contract beforefiling his
complaint in this case. Defendant cannot invoke Article 1197 of the Civil Code
for he virtually admittednonperformance by returning the typewriter that he
was obliged to repair in a non-working condition, with essentialparts
missing. The fixing of a period would thus be a mere formality and would serve
no purpose that to delay
(cf. Tiglao, et al. v. Manila Railroad Co., 98 Phil. 181). (So sabi ng courts there ws a perfected
contract between the 2 parties and thatthere was a breach of contract by nonperformance, and it
was unnecessary to fix the time)It is clear that the defendant-appellee contravened the tenor of
his obligation because
he not only did not repair the typewriter but returned it "in shambles,"
according to the appealed decision. For such contravention, as appellant contends, he is
liableunder Article 1167 of the Civil Code, jam quot, for the cost of executing the obligation in a
proper manner.
The cost of theexecution of the obligation in this case should be the cost of the
labor or service expended in teh repair of thetypewriter, which is in the amount
of P58.75, because the obligation or contract was to repair it
. (so contravention of thetenor in the case, aside from non-performance, is the returning of the
typewriter in shambles. Cost dapat na singilin sa tagagawa ngtypewriter e ung cost ng labor since
un ung pinapagawa sa kanya na di naman nya ginawa)In addition,
the defendant-appellee is likewise liable, under Article 1170 of the Code , for
the cost of the missing parts,in the amount P31.10, for in his obligaiton to repair

the typewriter he was bound, but failed or neglected, to return itin the same
condition it was when he received it.
(kelangan rin bayad yung P31.10 kasi he breached his contract by notpreserving the thing which is
asked for him to perform on kumbaga he failed in preserving the thing which he is supposed to
deliver) Appellant's claims for moral and temperate damages and attorney's fees were, however
correctly rejected by the trial court, for thesewere not alleged in his complaint (Record on Appeal,
pages 105).
Claims for damages and attorney's fees must be pleaded,and the existence of,
the actual basis thereof must be proved
.2 (so ung ibang damages dapat alleged in the complaint to berecognized by the courts) The
appealed judgment thus made no findings on these claims, nor on the fraud or malice charged to
the appellee. As no findings of fact were made on damages and attorney's fees, there is no factual
basis upon which to make an award therefor. Appellant is boundby such judgment of the court, a
quo, by reason of his having resorted directly to the Supreme Court on questions of law.IN VIEW
OF THE FOREGOING REASONS, the appealed judgment is hereby modified, by ordering the
defendants-appellee to pay, as heis hereby ordered to pay, the plaintiff-appellant the sum of
P89.85, with interest at the legal rate from the filing of the complaint.Costs in all instances against
appellee Fructuoso Gonzales.Concepcion, C.J., Dizon, Makalintal, Zaldivar, Ruiz Castro, Fernando,
Teehankee and Villamor, JJ., concur.Barredo J., did not take part. Judgment modified.So ang ruling
sa Chavez v. Gonzales, they granted the plea of the owner of the typewriter that the whole cost of
repair (labor + spareparts) be paid by the typewriter mechanic who damaged the typewriter aside
from not cleaning and fixing it, therefore theperformance of the supposed function of the
mechanic was performed on his costs)

PANTALEON v AMERICAN EXPRESS INTERNATIONAL, INC

Ponente: Tinga, J.Date: May 8, 2009
RATIO DECIDENDI:
Moral damages avail in cases of breach of contract where thedefendant acted
fraudulently or in bad faith.
QUICK FACTS:
Petitioner purchased items when he was in the States using his AmExcredit card. During
three particular instances, clearance of his purchase took too longand under
those circumstances caused him moral shock, mental anguish, seriousanxiety,
wounded feelings and social humiliation.
FACTS:

Name of Offended party (petitioner): Polo S. PantaleonName of respondent:

American Express International, Inc.-The petitioner, lawyer Polo Pantaleon, his
wife, daughter and son joined an escortedtour of Western Europe organized by
Trafalgar Tours of Europe, Ltd., in October of 1991. -The tour group arrived in
Amsterdam in the afternoon of 25 October 1991, thesecond to the last day of the
tour. As the group had arrived late in the city, theyfailed to engage in any sightseeing so they agreed that they would start early thenext day to see the entire
city before ending the tour.-The following day, the last day of the tour, the group
arrived at the Coster DiamondHouse. The group had agreed that the visit to
Coster should end by 9:30 a.m. toallow enough time to take in a guided city tour
of Amsterdam.- While in the diamond house, led to the stores showroom
to allow them to selectitems for purchase. Mrs. Pantaleon decided to buy a 2.5
karat diamond brilliant cut,and she found a diamond close enough in
approximation. Mrs. Pantaleon alsoselected for purchase a pendant and a chain,
all of which totaled U.S. $13,826.00.-Pantaleon presented his American Express
credit card together with his passport tothe Coster sales clerk. This occurred at
around 9:15 a.m., or 15 minutes before thetour group was slated to depart
from the store. The sales clerk took the cardsimprint, and asked Pantaleon to sign
the charge slip. The charge purchase was thenreferred electronically
to respondents Amsterdam office at 9:20 a.m.-clearance took too long. At
9:40am, Pantaleon asked the store clerk to cancel thesale to avoid further
delaying and inconveniencing the tour group. At around 10:00a.m, 30 minutes
after the tour group was supposed to have left the store, Costerdecided to
release the items even without respondents approval of the purchase.-due to
the delay, the city tour of Amsterdam was to be canceled due to lack of remaining
time. The spouses Pantaleon allegedly offered their apologies but weremet
by their tourmates with stony silence and visible irritation. Mrs. Pantaleon
endedup weeping, while her husband had to take a tranquilizer to calm his
nerves.-two instances similar to the Castor incident happened.

purchased golf equipment amounting to US $1,475.00 using his AmEx card,but he

cancelled his credit card purchase and borrowed money instead from afriend,
after more than 30 minutes had transpired without the purchasehaving been
approved
used the card to purchase childrens shoes worth $87.00 at a store in Boston,and
it took 20 minutes before this transaction was approved by respondent.
Petitioners:

after coming back to Manila, sent a letter

demanding an apology for the"inconvenience, humiliation and embarrassment he
and his family thereby suffered"for respondents refusal to provide credit
authorization for the aforementionedpurchases.
Respondent:
refused to give an apology, sent a letter stating among others that thedelay in
authorizing the purchase from Coster was attributable to the circumstancethat
the charged purchase of US $13,826.00 "was out of the usual charge
purchasepattern established."
RTC
: petitioner instituted an action for damages. Petitioner won.

Court awarded P
500,000.00 as moral damages, P
300,000.00 as exemplarydamages, P
100,000.00 as attorneys fees, and P
85,233.01 as expenses of litigation.

normal approval time for purchases was "a matter of seconds." Based on
thatstandard, respondent had been in clear delay with respect to the three
subjecttransactions.
CA:
reversed the award of damages in favor of Pantaleon, holding that respondenthad
not breached its obligations to petitioner.

delay was not attended by bad faith, malice, or gross negligence.

respondent "had exercised diligent efforts to effect the approval" of

thepurchases, which were "not in accordance with the charge pattern"
petitionerhad established for himself
ISSUE:

1)WON has committed a breach of its obligations.2)WON respondent

is liable for damages.
DECISION:
Petition granted. CA decision set aside.
HELD:
1 ) T h e r e w a s a b r e a c h . -Notwithstanding the popular notion that
credit card purchases are approved "withinseconds," there really is no strict,
legally determinative point of demarcation on howlong must it take for a credit
card company to approve or disapprove a customerspurchase, much less one
specifically contracted upon by the parties. Yet this is one of those instances when
"youd know it when youd see it," and one hour appears to bean awfully long,
patently unreasonable length of time to approve or disapprove acredit card
purchase.-the respondent has the right, if not the obligation, to verify whether
the credit it isextending upon on a particular purchase was indeed contracted by
the cardholder,and that the cardholder is within his means to make such
transaction. The culpablefailure of respondent herein is not the failure to timely
approve petitioners purchase,but the more elemental failure to timely act on the
same, whether favorably orunfavorably.

Respondent should have promptly informed petitioner the reason for the
delay, and duly advised him that resolving the same could take some time sothat
petitioners will know WON to continue with the purchases2 ) Y E S . Moral damages avail in cases of breach of contract where the defendant
actedfraudulently or in bad faith, and the court should find that under the
circumstances,such damages are due.-in this case, there was bad faith and unjustified
neglect of respondent, attributablein particular to the "dilly-dallying"
of respondents Manila credit authorizer, Edgardo Jaurique. This, to the Courts
mind, amounts to a wanton and deliberate refusal tocomply with its contractual
obligations, or at least abuse of its rights, under thecontract.-The delay
committed by defendant was clearly attended by unjustified neglect andbad faith,
since it alleges to have consumed more than one hour to simply go overplaintiffs
past credit history with defendant, his payment record and his credit andbank
references, when all such data are already stored and readily available from
itscomputer and the fact that there were no delinquencies in the plaintiffs
account

-It should be emphasized that the reason why petitioner is entitled todamages
is not simply because respondent incurred delay, but because thedelay, for
which culpability lies under Article 1170, led to the particularinjuries under
Article 2217 of the Civil Code for which moral damages areremunerative.
In this case, it was sufficiently shown that the incident gave rise tothe moral
shock, mental anguish, serious anxiety, wounded feelings and socialhumiliation to
the petitioner.

Amount should be commensurate to the loss or injury suffered. Petitionersoriginal

prayer for P
5,000,000.00 for moral damages is excessive under thecircumstances, and the
amount awarded by the trial court of P
500,000.00 inmoral damages more seemly.
1avvphi1
-Likewise, we deem exemplary damages available under the circumstances, and theamount of
P
300,000.00 appropriate. There is similarly no cause though to disturb
thedetermined award of P
100,000.00 as attorneys fees, and P
85,233.01 as expenses of litigation

ANGELES VS. CALASANZ

135 SCRA 323FACTS:On December 19, 1957, defendants-appellants Ursula Torres
Calasanz and plaintiffs-appelleesBuenaventura Angeles and Teofila Juani entered
into a contract to sell a piece of land located in Cainta,Rizal for the amount of
P3,920.00 plus 7% interest per annum. The plaintiffs-appellees made a
downpayment of P392.00 upon the execution of the contract. They promised to
pay the balance in monthlyinstalments of P41.20 until fully paid, the instalment
being due and payable on the 19th day of eachmonth. The plaintiffs-appellees
paid the monthly instalments until July 1966, when their aggregatepayment
already amounted to P4,533.38.On December 7, 1966, the defendants-appellants

wrote the plaintiffs-appellees a letter requesting theremittance of past due

accounts. On January 28, 1967, the defendants-appellants cancelled the said
contract because the plaintiffs failed to meet subsequent payments. The plaintiffs letter with their
plea
for reconsideration of the said cancellation was denied by the defendants.The
plaintiffs-appellees filed a case before the Court of First Instance to compel
the defendant toexecute in their favour the final deed of sale alleging inter alia
that after computing all subsequentpayments for the land in question, they found
out that they have already paid the total amountincluding interests, realty taxes
and incidental expenses. The defendants alleged in their answer that theplaintiffs
violated par. 6 of the contract to sell when they failed and refused to pay and/or
offer to paymonthly instalments corresponding to the month of August, 1966 for
more than 5 months, therebyconstraining the defendants to cancel the said
contract.The Court of First Instance rendered judgment in favour of the plaintiffs,
hence this appeal.ISSUE:Has the Contract to Sell been automatically and validly
cancelled by the defendants-appellants?RULING:No. While it is true that par.2 of
the contract obligated the plaintiffs-appellees to pay the defendants the
um of P3,920 plus 7% interest per annum, it is likewise true that under par 12 the
seller is obligated totransfer the title to the buyer upon payment of the said
price.The contract to sell, being a contract of adhesion, must be construed against
the party causing it. TheSupreme Court agree with the observation of the
plaintiffs-appellees to the effect that the terms of acontract must be interpreted
against the party who drafted the same, especially where suchinterpretation will
help effect justice to buyers who, after having invested a big amount of
money, arenow sought to be deprived of the same thru the prayed application of
a contract clever in itsphraseology, condemnable in its lopsidedness and injurious
in its effect which, in essence, and itsentirety is most unfair to the buyers.Thus,
since the principal obligation under the contract is only P3,920.00 and the
plaintiffs-appellees havealready paid an aggregate amount of P4,533.38, the
courts should only order the payment of the fewremaining instalments but not
uphold the cancellation of the contract. Upon payment of the balance of P671.67
without any interest thereon, the defendant must immediately execute the final
deed of sale infavour of the plaintiffs and execute the necessary transfer of
documents, as provided in par.12 of the contract.

ROQUE VS. LAPUS96 SCRA 741FACTS:Sometime in 1964, plaintiff and defendant

entered into an agreement of sale covering Lots 1, 2 and 9, Block 1, of said
property, payable in 120 equal monthly installments atthe rate of P16.00, P15.00
per square meter, respectively. In accordance with said agreement, defendant
paid to plaintiff the sum of P150.00 as deposit and the further sumof P740.56 to
complete the payment of four monthly installments covering the months of July,
August, September, and October, 1954 On January 24, 1955, defendant
requested plaintiff that he be allowed to abandon and substitute Lots 1, 2 and 9,
the subject with Lots 4 and 12, Block 2 of the RockvilleSubdivision, which are
corner lots, to which request plaintiff graciously acceded. The evidence discloses
that defendant proposed to plaintiff modification of their previouscontract to sell
because he found it quite difficult to pay the monthly installments on the three
lots, and besides the two lots he had chosen were better lots, being cornerlots. In
addition, it was agreed that the purchase price of these two lots would be at the
uniform rate of P17.00 per square meter payable in 120 equal monthly
installments,with interest at 8% annually on the balance unpaid. Pursuant to this
new agreement, defendant occupied and possessed Lots 4 and 12, and enclosed
them, including theportion where his house now stands, with barbed wires and
adobe walls. However, aside from the deposit of P150.00 and the amount of
P740.56, which were paid undertheir previous agreement, defendant failed to
make any further payment on account of the agreed monthly installments for the
two lots in dispute, under the new contractto sell. Plaintiff demanded upon
defendant not only to pay the stipulated monthly installments in arrears, but also
to make up-to-date his payments, but defendant refusedto comply with plaintiff's
demands.On or about November 3, 1957, plaintiff demanded upon defendant to
vacate the lots in question and to pay the reasonable rentals thereon at the rate
of P60.00 per monthfrom August, 1955. On January 22, 1960, petitioner Felipe C,
Roque filed the complaint against defendant NicanorLapuz for rescission and
cancellation of the agreement of sale between them involving the two lots in
question and prayed that judgment be rendered ordering the rescission and
cancellation of the agreement of sale, thedefendant to vacate the two parcels of
land and remove his house therefrom and to pay to the plaintiff the reasonable
rental thereof at the rate of P60.00 a month fromAugust 1955 until such time as
he shall have vacated the premises, and to pay the sum of P2,000.00 as attorney's
fees, costs of the suit and award such other relief orremedy as may be deemed
just and equitable in the premises.The Court of Appeals rendered its decision that
the defendant NicanorLapuz is granted a period of ninety (90) days from entry

hereof within which to pay the balance.Hence, this appeal.ISSUE:Can private

respondent be entitled to the Benefits of the third paragraph of Article 1191, New
Civil Code, for the fixing of periodRULING:No. Respondent as obligor is not
entitled to the benefits of paragraph 3 of Art. 1191, NCC Having been in default
and acted in bad faith, he is not entitled to the new periodof 90 days from entry
of judgment within which to pay petitioner the balance of P11,434.44 with
interest due on the purchase price of P12,325.00 for the two lots. To allowand
grant respondent an additional period for him to pay the balance of the purchase
price, which balance is about 92% of the agreed price, would be tantamount
toexcusing his bad faith and sanctioning the deliberate infringement of a
contractual obligation that is repugnant and contrary to the stability, security and
obligatory force of contracts. Moreover, respondent's failure to pay the
succeeding 116 monthly installments after paying only 4 monthly installments is a
substantial and material breach onhis part, not merely casual, which takes the
case out of the application of the benefits of pa paragraph 3, Art. 1191,
N.C.C.Pursuant to Art. 1191, New Civil Code, petitioner is entitled to rescission
with payment of damages which the trial court and the appellate court, in the
latter's originaldecision, granted in the form of rental at the rate of P60.00
per month from August, 1955 until respondent shall have actually vacated the
premises, plus P2,000.00 asattorney's fees. The Court affirmed the same to be fair
and reasonable. The Court also sustained the right of the petitioner to the
possession of the land, ordering therebyrespondent to vacate the same and
remove his house therefrom.

AYSON-SIMON VS. ADAMOS 131 SCRA 439

AYSON-SIMON VS. ADAMOS AND FERIA
G.R. NO. L-39378 AUGUST 28, 1984
FACTS:
Defendants, Nicolas Adamos and Vicente Feria,
purchased two lots forming part of the Piedad Estate in
Quezon City, from Juan Porciuncula. Thereafter, the
successors-in-interest of the latter filed Civil Case No. 174
for annulment of the sale and the cancellation of TCT No.
69475, which had been issued to defendants-appellants by

virtue of the disputed sale. The Court rendered a Decision

annulling the saleThe said judgment was affirmed by the
Appellate Court and had attained finality.
Meanwhile, during the pendency of the case above,
defendants sold the said two lots to Petitioner Generosa
Ayson-Simon for Php3,800.00 plus Php800.00 for
facilitating the issuance of the new titles in favor of
petitioner. Due to the failure of the defendants to deliver
the said lots, petitioner filed a civil case for specific
performance. The trial court rendered judgment to
petitioners favor. However, defendants could not deliver
the said lots because the CA had already annulled the sale
of the two lots in Civil Case No. 174. Thus, petitioner filed
another civil case for the rescission of the contract.
Defendants were contending that petitioner cannot choose
to rescind the contract since petitioner chose for specific
performance of the obligation. Also, even though
petitioner can choose to rescind the contract, it would not
be possible, because it has already prescribed.
ISSUES:
1. Can petitioner choose to rescind the contract even after choosing for the
specific performance of the obligation?
2. Had the option to rescind the contract prescribed?
RULING:
1. Yes. The rule that the injured party can
only choose between fulfillment and rescission of the
obligation, and cannot have both, applies when the
obligation is possible of fulfillment. If, as in this case, the
fulfillment has become impossible, Article 1191 allows the injured party to seek
rescission even after he has chosen
fulfillment.
2. No. Article 1191 of the Civil Code provides

that the injured party may also seek rescission, if the

fulfillment should become impossible. The cause of action
to claim rescission arises when the fulfillment of the
obligation became impossible when the Court of First
Instance of Quezon City in Civil Case No. 174 declared the
sale of the land to defendants by Juan Porciuncula a
complete nullity and ordered the cancellation of Transfer
Certificate of Title No. 69475 issued to them. Since the two
lots sold to plaintiff by defendants form part of the land
involved in Civil Case No. 174, it became impossible for
defendants to secure and deliver the titles to and the
possession of the lots to plaintiff. But plaintiff had to wait
for the finality of the decision in Civil Case No. 174,
According to the certification of the clerk of the Court of
First Instance of Quezon City (Exhibit "E-2"), the decision
in Civil Case No. 174 became final and executory "as per
entry of Judgment dated May 3, 1967 of the Court of
Appeals." The action for rescission must be commenced
within four years from that date, May 3, 1967. Since the
complaint for rescission was filed on August 16, 1968, the
four year period within which the action must be
commenced had not expired.