CASE DIGEST

ON
TORTS & DAMAGES
PROFESSOR: ATTY. JUN DE GRANO

Submitted by:
Thursday Class 4:30 to 7:30 P.M.

List of Cases on Torts

Assigned
to:

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Africa vs. Caltex, 16 SCRA 448

Dilig
Alfialda vs. Spouses Hisole, 85 Phil 67
Cuyco
Alitalia vs. IAC, 192 SCRA 9
Lopez
Amadora vs. CA, 160 SCRA 315
Menzon
Atlantic Gulf vs. CA, 249 SCRA 397
Bolos
Batiquin vs. CA, 258 SCRA 334
Equetan
Bonifacio vs. BLTB, 34 SCRA 618
Estanislao
Bustamante, et al., vs. CA, et al., G.R. No. 89880, 6
February 1991
Lasque
Cangco vs. The Manila Railroad Company, 38 Phil
768
Aure
Capuno, et al., vs. Pepsi Cola, et al. G.R. No. L19331, 30 April 1965
Leon
China Airlines vs. CA, G.R. NO. 45985, 18 May
1990
Estanislao
City of Manila vs. Teotico, G.R. No. L-23052, 29
January 1968
Padlan
Corliss, et al., vs. The Manila Railroad Co., 27
SCRA 674
Acosta
Cruz vs. NLRC, 203 SCRA 286
Villanueva
Cuadra vs. Monfort, G.R. No. L-24101, 30
September 1970
Lopez
Culion Ice, Fish and Electric Co., Inc. vs. Phil.
Motors Corp., 55 Phil 129
Aure
Daywalt vs. Recoletos, 39 Phil 587
Barrios
De Guzman vs. NLRC, G.R. No. 90856, 23 July
1992
Roxas
Dichoso vs. CA, 192 SCRA 169
Gumabay
EPG Construction vs. CA, 210 SCRA 230
Rodriguez
Exconde vs. Capuno, G.R. No. L-10134, 29 June
1957
Lopez
Fabre vs. CA, 259 SCRA 426
Bolos
FF Cruz vs. CA, 164 SCRA 733
Equetan
Filamer Christian College vs. CA, G.R. No. 75112,
17 August 1992
Mendoza
Filinvest vs. CA, 248 SCRA 549
Salipsip
First Malayan vs. CA, G.R. No. 91378, 9June 1992 Padlan
Fontanilla vs. Mallaman, G.R. No. L-55963, 1
December 1989
Menzon
Gatchalian vs. Delim, 203 SCRA 126
De Chavez
Gelisan vs. Alday, 154 SCRA 388
Rodriguez
Guilatco vs. City of Dagupan, G.R. No. 61516, 21
March 1989
Pador

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31 Hermosisima vs. CA, 109 Phil 628

Salipsip
Jarco Marketing vs. CA, G.R. NO. 129792, 21
32 December 1999
Gatioan
33 LBC Air Cargo vs. CA, 241 SCRA 619
Dilig
Lilius, et al. vs. The Manila Railroad Co., 59 Phil
34 758
Abad
35 Lim vs. Ponce de Leon, 66 SCRA 299
Agonoy
36 Manuel vs. CA, 227 SCRA 29
Gatioan
Mckee, et al. vs. IAC et al., G.R. No. L-68102, 16
37 July 1992
Lasque
Merritt vs. Government, G.R. No. 1-11154, 21
38 March 1916
Mendoza
39 MHP Garments vs. CA, 236 SCRA 227
Agonoy
Nakpil & Sons vs. CA, G.R. No. L-47851, 3 October
40 1986
Pador
NAPOCOR vs. CA, 161 SCRA 334, GRN L-47379
41 May 16, 1988
Dayo
NAPOCOR vs. CA, et al., G.R. Nos. 103442-45, 21
42 May 1993
Leon
Pantranco vs. Baesa, GRN 79050 November 14,
43 1989
Dacanay
44 Pecson vs. CA, 244 SCRA 407
Tejano
45 PHIMCO vs City of Cebu, 81 SCRA 99
Villanueva
Phoenix Construction, Inc. et al. vs. IAC, et al., 148
46 SCRA 353
Dayo
47 Picart vs. Smith, 37 Phil 809
Abad
48 PLDT vs. CA, 178 SCRA 94
Dacanay
49 Ponce vs. Legaspi, 208 SCRA 377
Sayo
50 Rakes vs. Atlantice Gulf, 7 Phil 359
Carlos
51 RCPI vs. CA, G.R. No. 79578, March 13, 1991
Cheng
52 Rubio vs. CA, 141 SCRA 488
Barrios
53 Salvosa vs. IAC, G.R. No. 70458,5 October 1988 Mori
54 Security Bank vs. CA, 249 SCRA 206
Tejano
55 Shookat vs. CA, 219 SCRA 115
Sayo
56 Soliman vs. Tuazon, G.R. No. 66207, 18 May 1992 Gatioan
57 Taylor vs. Manila Electric, 16 Phil 8
Cuyco
58 Umali vs. Bacani, et al., 69 SCRA 263
Acosta
59 Velayo vs. Shell, 100 Phil 186
Rodriguez
60 Vergara vs. CA, G.R. No. 77679, 30 Sept. 1987
61 Vestil vs. IAC, 179 SCRA 47
List of Cases on Damages

Cheng
Mori
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62 Air France vs. CA, GRN 76093 March 21, 1989

Gumabay
63 Araos vs. CA, GRN 107057 June 2, 1994
Hamdain
Consolidated Plywood vs. CA, GRN 101706
64 September 23, 1992
Roxas
Country Bankers vs. CA, G.R. No. 85161
65 September 9, 1991
Agonoy
66 Davila vs. PAL, GRN L-28512 February 28,1973 Legasto
67 De Leon vs. CA, GRN L-31931 August 31, 1988 Villanueva
Eastern Shipping vs. CA, GRN 97412 July 12,
68 1994
Mangotara
Filinvest Credit vs. IAC, GRN L-65935 September
69 30, 1988
De Chavez
70 Jison vs. CA, GRN L-45349 August 15, 1988
Dacanay
71 Lao vs. CA, G.R. No. 82808 July 11,1991
Suntay
Lopez vs. Pan American World Airways, GRN L72 22415. March 30, 1966
Manlapaz
Malaysian Airline vs. CA, GRN L-78015 December
73 11, 1987
Bolos
74 Octot vs. Ibanez, GRN L-48643 January 18, 1982 Barrios
PAL vs. CA, G.R. No. 54470. May 8, 1990 (185
75 SCRA 110)
Dayo
PAL vs. CA, GRN 119641 May 17,1996 (257
76 SCRA 33)
Carlos
77 PAL vs. Miano, GRN 106664 March 8, 1995
Hamdain
78 Patricio vs. Leviste, GRN 51832 April 26, 1989
Aure
People vs. Quilaton, GRN 69666 January 23,
79 1992
Legasto
PNB vs. Utility Assurance, GRN 39215 September
80 1, 1989
Manlapaz
Reformina vs. Tomol, GRN L-59096 October 11,
81 1985
Mangotara
Zalamea vs. CA, GRN 104235 November 18,
82 1993
Suntay
Zamboanga (ZAMCELCO) vs. Buat, GRN 100514
83 March 29,1995
Gatioan

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Submitted By: Dilig, Jose Rodolfo Manuel Hugo B.

G.R. No. L-12986

March 31, 1966

THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS
OF DOMINGA ONG, petitioners-appellants,
vs.

CALTEX (PHIL.), INC., MATEO BOQUIREN and THE COURT OF APPEALS,

respondents-appellees.
Facts:
A fire broke out at the Caltex service station at the corner of Antipolo street and
Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into
the underground storage, right at the opening of the receiving tank where the nozzle of
the hose was inserted, when an unknown bystander threw a matchstick into the nozzle
after lighting a cigarette. The fire spread to and burned several neighboring houses,
including the personal properties and effects inside them. Their owners, among them
petitioners here, sued respondents Caltex (Phil.), Inc. and Mateo Boquiren, the first as
alleged owner of the station and the second as its agent in charge of operation.
Negligence on the part of both of them was attributed as the cause of the fire. The trial
court and the Court of Appeals found that petitioners failed to prove negligence and that
respondents had exercised due care in the premises and with respect to the supervision of
their employees.
Issue:
Whether or not, without proof as to the cause and origin of the fire, the doctrine of
res ipsa loquitur should apply so as to presume negligence on the part of appellees.
Held: Reversed.
The gasoline station, with all its appliances, equipment and employees, was under
the control of appellees. A fire occurred therein and spread to and burned the neighboring
houses. The persons who knew or could have known how the fire started were appellees
and their employees, but they gave no explanation thereof whatsoever. It is a fair and
reasonable inference that the incident happened because of want of care.
The report submitted by a police officer in the performance of his duties on the
basis of his own personal observation that the gasoline station being located on a thickly
populated area, a person lighting a cigarette cannot be excluded and poses as a secondary
hazard, may properly be considered as an exception to the hearsay rule. These facts,
descriptive of the location and objective circumstances surrounding the operation of the
gasoline station in question, strengthen the presumption of negligence under the doctrine
of res ipsa loquitur, since on their face they called for more stringent measures of caution
than those which would satisfy the standard of due diligence under ordinary
circumstances.
Even then, the fire possibly would not have spread to the neighboring houses were
it not for another negligent omission on the part of defendants, namely, their failure to
provide a concrete wall high enough to prevent the flames from leaping over it. As it was
the concrete wall was only 2-1/2 meters high, and beyond that height it consisted merely
of galvanized iron sheets, which would predictably crumple and melt when subjected to
intense heat. Defendants' negligence, therefore, was not only with respect to the cause of
the fire but also with respect to the spread thereof to the neighboring houses.

Submitted by: Cuyco, Kate Juris Prudence C.

Margarita Afialda v. Basilio Hisole and Francisco Hisole
G.R. No. L-2075

November 29, 1949

Facts:
This is an action for damages arising from injury caused by an animal. The
complaint alleges that the now deceased, Loreto Afialda, was employed by the defendant
spouses as caretaker of their carabaos at a fixed compensation; that while tending the
animals he was, on March 21, 1947, gored by one of them and later died as a
consequence of his injuries; that the mishap was due neither to his own fault nor to force
majeure; and that plaintiff is his elder sister and heir depending upon him for support.
Defendants moved for the dismissal of the complaint for lack of a cause of action,
and the motion having been granted by the lower court, plaintiff has taken this appeal.
Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code,
which reads:
The possessor of an animal, or the one who uses the same, is liable for any
damages it may cause, even if such animal should escape from him or stray away.
This liability shall cease only in case, the damage should arise from force majeure
or from the fault of the person who may have suffered it.
Issue:
Whether the owner of the animal is liable when damage is caused to its caretaker.
Ruling:
NO.

The lower court took the view that under the above-quoted provision of the Civil
Code, the owner of an animal is answerable only for damages caused to a stranger, and
that for damage caused to the caretaker of the animal the owner would be liable only if he
had been negligent or at fault under article 1902 of the same code. Claiming that the
lower court was in error, counsel for plaintiff contends that the article 1905 does not
distinguish between damage caused to the caretaker and makes the owner liable whether
or not he has been negligent or at fault.
The distinction is important. For the statute names the possessor or user of the
animal as the person liable for "any damages it may cause," and this for the obvious
reason that the possessor or user has the custody and control of the animal and is
therefore the one in a position to prevent it from causing damage.
In the present case, the animal was in custody and under the control of the
caretaker, who was paid for his work as such. Obviously, it was the caretaker's business
to try to prevent the animal from causing injury or damage to anyone, including himself.
And being injured by the animal under those circumstances, was one of the risks of the
occupation which he had voluntarily assumed and for which he must take the
consequences.
There being no reversible error in the order appealed from, the same is hereby
affirmed, but without costs in view of the financial situation of the appellant.

Submitted by: Menzon, Bradford B.

Amadora vs. Court of Appeals

160 SCRA 315
FACTS:
On April 13, 1972, Alfredo Amadora while in the Auditorium of their school,
the Colegio de San Jose-Recoletos, a classmate Pablito Daffon, fired a gun that
mortally hit Alfredo, ending all his expectations and his life as well.
The herein petitioners, as the victims parents, filed a civil action under
Article 2180 NCC against the Colegio de San Jose-Recoletos, its rector, the high
school principal, the dean of the boys, and the physics teachers together with
Daffon and two other students, through their respective parents.
The complaint against the students was later dropped. After trial the CFI of
Cebu held the remaining defendants liable to the plaintiffs. On appeal to the
respondent court, the decision was reversed and all the defendants were
completely absolved.Hence this action for review.
ISSUE:
Whether or not the defendants are liable under Article 2180 NCC.
HELD:
The rector, the high school principal and the dean of boys cannot be held
liable because none of them was the teacher in charge during the time of the
accident. Each of them was exercising only a general authority over the student
body and not the direct control and influence exerted by the teacher placed in
charge of particular classes or sections and thus immediately involved in its
discipline.
Finally, the Colegio de San Jose-Recoletos cannot be held directly liable
under the Article because only the teacher or the head of the school of arts and
trades is made responsible for the damage caused by the students of apprentice.
Neither can it be held liable to answer for the tort committed by any other private
respondents for none of them has been found to have been charged with the
custody of the offending students or has been remiss in the discharge of his
duties in connection with such custody.

Submitted by: Bolos, Maria Gracia Patricia S.

G.R. Nos. 114841-42 August 23, 1995
ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC., petitioner, vs.
COURT OF APPEALS, CARLITO D. CASTILLO, HEIRS OF CRISTETA
CASTILLO and CORNELIO CASTILLO, respondents.
REGALADO, J.:
FACTS:
Petitioner company commenced the construction of a steel fabrication
plant in the Municipality of Bauan, Batangas, necessitating dredging operations
at the Batangas Bay in an area adjacent to the real property of private
respondents.
Private respondents alleged that during the on-going construction of its
steel and fabrication yard, petitioner's personnel and heavy equipment
trespassed into the adjacent parcels of land belonging to private respondents
without their consent. These heavy equipments damaged big portions of private
respondents' property which were further used by petitioner as a depot or parking
lots without paying any rent therefor, nor does it appear from the records that
such use of their land was with the former's conformity.
Private respondents further alleged that as a result of the dredging
operation of petitioner company, the sea silt and water overflowed and were
deposited upon their land. Consequently, the said property which used to be
agricultural lands principally devoted to rice production and each averaging an
annual net harvest of 75 cavans could no longer be planted with palay as the soil
became infertile, salty, unproductive and unsuitable for agriculture.
Petitioner company denied all the allegations of private respondents and
contended that its personnel and equipment had neither intruded upon nor
occupied any portion of private respondents' landholdings. The alleged sea silt
with water, according to petitioner was due to the flood brought by the heavy
rains when typhoon "Ruping" hit and lashed the province of Batangas during that
year.
An action for damages was filed with the trial court which decided the case
ordering defendant to pay private respondents.
Petitioner company appealed to the Court of Appeals but the said court
affirmed the trial courts judgement with modifications on the amount.
Hence, this petition.

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ISSUE:
Whether or not the respondent court misapplied Article 2177 of the New
Civil Code.
HELD:
When the Court of Appeals ordered the petitioner to pay the private
respondents not only the expected total amount of profits the latter would have
derived from the expected sale of their palay harvest for 135 months or over 11
years, from the half hectare agricultural land, but also rentals on the basis of
P5.00 per square meter of their said entire landholdings it misapplied Article
2177. What Article 2177 says is that no damages can be twice from the same act
or omission.
However, the Supreme Court finds that respondent Court of Appeals
committed a reversible error of law in increasing the amount of damages
awarded to private respondents by the court a quo.
Respondent appellate court exceeded its jurisdiction when it modified the
judgment of the trial court by increasing the award of damages in favor of private
respondents who, in the first place, did not interpose an appeal therefrom. This
being the case, they are presumed to be satisfied with the adjudication made by
the lower court.
The procedural rule in this jurisdiction is that a party who has not himself
appealed cannot obtain from the appellate court any affirmative relief other than
those granted in the decision of the lower court.
The evidence on record indubitably support the findings of the trial and
appellate courts that petitioner company is liable for the destruction of the
property of herein private respondents and consequently entitle the latter to an
award of the damages prayed for.
WHEREFORE, the challenged judgment of respondent Court of Appeals
is hereby MODIFIED with regard to the amount of damages awarded to private
respondents and the awards of the trial court on this matter are hereby reinstated
for that purpose. In all other respects, the decision of respondent court is
AFFIRMED, without pronouncement as to costs.

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Submitted by: Equetan, Esteban M.

BATIQUIN VS COURT OF APPEALS
258 SCRA 334
GR No. 118231 July 5, 1996
Facts:
Dr. Batiquin was a resident Physician at the Negros Oriental
Provincial Hospital, Dumaguete City, performed a simple caesarian
section on Mrs. Flotilde Villegas on the latters first child. Days after the
operation Mrs. Villegas checked out on the said hospital and paid the
amount of One Thousand Five Hundred Pesos (P1,500.00) as Dr.
Batiquins professional fee thru the latters secretary.
Soon after leaving the hospital Mrs. Villegas begun to suffer
abdominal pains, so she consulted Dr. Batiquin, who prescribed her
certain medicines. And in the meantime Mrs. Villegas was given a
medical certificate by Dr. Batiquin to report for work.
Mrs. Villegas reported for work at the Rural Bank of Ayungon,
Negros Oriental but the pain kept on recurring prompting Mrs. Villegas
to consult Dr. Ma. Salud Kho.
When Dr. Ma. Salud Kho opened the abdomen of Mrs. Villegas,
she found a piece of rubber material which she described a foreign
body.
Mrs. Villegas sued Dr. Batiquin for damages.
Issue:
Wether the Doctrine of Res Ipsa Loquitur applies.
Held:
Yes The Doctrine of Res Ipsa Loquitur applies as the entire
operation proceedings was under exclusive control of Dr. Batiquin;
aside from the caesarian operation Mrs. Villegas underwent no other
operation which could have introduced the rubber; and Dr. Batiquin, in
this regard, failed to overcome the presumption of negligence arising
from resort to the Doctrine of Res Ipsa Loquitur.

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Submitted by: Estanislao, Rizalino jr

Bonifacio vs BLT Bus Co., Inc.
Facts:
Jovito Bonifacio Sr. and his wife, together with their neighbors were on
their way to Los Banos, Laguna. The spouses Mercedes Benz was driven by
Alberto Concepcion, a duly licensed driver.
They began to travel at 4am and around 5:20am Concepcion noticed a
cargo truck parked on the left portion of the highway without any parking light.
Concepcion was running the Benz only at the speed of 30 miles per hour
because it was drizzling. He also noticed a bus on the left side of the highway
which was going the opposite direction as they were. Since the benz was on the
correct lane Concepcion continued the route. Just as he was about to pass the
parked truck, the bus swrved to the lane of the benz and collided with the latter.
This caused Jovito to be thrown out of the car and die. Others were seriously
injured.
Issue: who among the drivers is at fault? Is the employer of the guilty driver
liable?
Held: De Luna, the driver of the BLT bus was at fault. Concepcion was not at
fault.
De lunas defense that he did not know that anyone else was using the
highway was no excuse to his negligent operation of the vehicle, since he should
be especially be watchful in anticipation of others who may be using the highway;
his failure to keep a proper lookout for persons and objects in the line to be
traversed constitutes negligence.
Concepcion on the other hand, did not have sufficient time to evade the
sudden swerve of the bus. He was on his proper lane and the speed of the Benz
was not a cause of the mishp.
On the second issue, BLTB company contends that they excercised due
diligence in selection of employees because their drivers underwent proficiency
tests and issued service manuals to employees. However, due diligence in
selection will not help if it is proved that there was no diligence of a good father in
the supervision of such employees.
It was proven that: (a) brake linings were changed more than 30 days prior
to the incident when linings last 30 day only, (b) De Luna was at the wheel for
more than 11 hours already when the accident happened, (c) De Luna had 31
infractions prior to the mishap but received warnings only, (d) the overhauling of
the bus was overdue by 6 months.
Therefore, BLTB co. inc. is liable as employer due to its negligence in
supervision.

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Submitted by: Lasque, Mervin N.

BUSTAMANTE, ET AL., VS. CA, ET AL.,
G.R. NO. 89880, 6 FEBRUARY 1991.
FACTS:
Six thirty in the morning, a collision occurred between a gravel and sand
truck and a passenger bus. The front left side portion (barandilla) of the body of
the truck sideswiped the left side wall of the passenger bus, ripping off the said
wall from the driver's seat to the last rear seat. Due to the impact, several
passengers of the bus were thrown out and died as a result of the injuries they
sustained. During the incident, the cargo truck was driven by defendant
Montesiano and owned by defendant Del Pilar. The passenger bus was driven by
defendant Susulin. The vehicle was registered in the name of defendant Novelo
but was owned jointly by Magtibay and Serrado.
Immediately before the collision, the cargo truck and the passenger bus
were approaching each other, coming from the opposite directions of the
highway. While the truck was still about 30 meters away, Susulin, the bus driver,
saw the front wheels of the vehicle wiggling. He also observed that the truck was
heading towards his lane. Not minding this circumstance due to his belief that the
driver of the truck was merely joking, Susulin shifted from fourth to third gear in
order to give more power and speed to the bus, which was ascending the
inclined part of the road, in order to overtake or pass a Kubota hand tractor being
pushed by a person along the shoulder of the highway. While the bus was in the
process of overtaking or passing the hand tractor and the truck was approaching
the bus, the two vehicles sideswiped each other at each other's left side. After the
impact, the truck skidded towards the other side of the road and landed on a
nearby residential lot, hitting a coconut tree and felling it. CA reversed and set
aside the trial courts decision, and dismissed the complaint insofar as del Pilar
and Montesino are concerned. SC reversed and set aside the judgment of the
CA reinstated that of the lower court, with the modification on the indemnity for
death of each of the victims which increased to P 50, 000.00 each (lasque,
mervins digest).
ISSUE:
Is the doctrine of last clear chance applicable in a suit brought by the
heirs of the deceased passengers against the owners and drivers of the colliding
vehicles?
RULING:

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The Appellate erred in applying the doctrine of last clear chance as

between defendants because the case at bar is not a suit between the owners
and drivers of the colliding vehicles. Therefore, it erred in absolving the owner
and driver of the cargo truck from liability. Furthermore, because as between
defendants, the doctrine cannot be extended into the field of joint tortfeasors as a
test of whether only one of them should be held liable of the injured person by
reason of his discovery of the laters peril, and it cannot defend by pleading that
another had negligently failed to take action which could have avoided the injury.

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Submitted by: Leon, David Martin L.

CAPUNO VS. PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES
GR. No. L-19331 / April 30,1965
FACTS:
The case arose from a vehicular collision which occurred on January 3,
1953 in Apalit, Pampanga. Involved were a Pepsi-Cola delivery truck driven by
Jon Elordi and a private car driven by Capuno. The collision proved fatal to the
latter as well as to his passengers, the spouses Florencio Buan and Rizalina
Paras. Elordi was charged with triple homicide through reckless imprudence in
the CFI. The information was subsequently amended to include claims for
damages by the heirs of the three victims. While the criminal case was pending,
the Intestate Estate of the Buan spouses and their heirs filed a civil action, also
for damages, in the CFI of Tarlac against the Pepsi. At that time the criminal case
was still pending; judgment was rendered only on April 15, 1959, wherein the
accused Elordi was acquitted of the charges against him. Prior thereto, or on
September 26, 1958, however, herein appellants commenced a civil action for
damages against the Pepsi-Cola. This is the action which, upon appellees'
motion, was dismissed by the Court a quo in its, from which order the present
appeal has been taken. The grounds upon which appellees based their motion
for dismissal is that the action had already prescribed.
ISSUE:
Whether or not the action filed by petitioners based on quasi-delict is
barred by prescription.
HELD:
The action filed is barred by prescription.
There can be no doubt that the present action is one for recovery of
damages based on a quasi-delict, which action must be instituted within four (4)
years (Article 1146, Civil Code). When they commenced the civil action on
September 26, 1958 the criminal case was still pending, showing that appellants
then chose to pursue the remedy afforded by the Civil Code, for otherwise that
action would have been premature and in any event would have been concluded
by the subsequent judgment of acquittal in the criminal case.
The term "physical injuries" in Article 33 includes bodily injuries causing
death. In other words the civil action for damages could have been commenced

16

by appellants immediately upon the death of their decedent. But the complaint
here was filed only on after the lapse of more than five years.
An action based on a quasi-delict is governed by Article 1150
of the Civil Code as to the question of when the prescriptive period of four
years shall begin to run, that is, "from the day (the action) maybe brought"
which means from the day the quasi-delict occurred or was committed. The
institution of a criminal action cannot have the effect of interrupting the
institution of a civil action based on a quasi-delict.

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Submitted by: Estanislao, Rizalino jr.

China Air Lines, Ltd. vs Court of Appeals
GR 45985. May 18, 1990
Facts:
Jose Pagsibigan bought a Manila-Taipei-Hong Kong-Manila ticket from
Transaire Travel Agency. The latter contacted Philippine Air Lines who was then a
ticketing agent of China Airlines. PAL ticketing clerk Roberto Espiritu issued a
CAL ticket of the desired flight with a departure time 5:20pm.
Pagsibigan arrived at the airport one hour before the mentioned departure
time only to be informed that the flight he was supposed to take had already left
for Taipei 10:20 in the morning of that day.
Pagsibigan filed for damages.
Issue:Who may be held liable?
Held:
Espiritu and Philippine Air Lines are liable, China Air Lines is not.
It is important to recognize that the contractual relations of PAL between
CAL is one of Agency. However, this action premised on the negligence of the
employee and the complainant seeks recovery for the resulting damages from
both PAL and Espiritu without qualification, what is sought to be imposed is the
direct and primary liability of PAL as an employee under Art. 2180 of the new civil
code.
When an injury is caused by the negligence of an employee, there
instantly arises a presumption of law that there was negligence on the part of the
employer in the selection or in the supervision of its employees. Such
presumption is rebuttable by clear showing of the exercise of care and diligence
of a good father of the family by the employer.
In the case at bar however, PAL failed to adduce evidence sufficient to
overcome the presumption of negligence against it. Its main defense that it is
only an agent and may not be held liable to third persons when duly acting is
untenable. A case for damages against the agent arising from torts is an admitted
exception to the rule invoked by PAL.
Therefore, Espiritu is primarily liable under Art. 2176 while PAL is liable
under 2180.

18

Submitted by: Padlan, Jay Vincent S.

City of Manila vs. Teotico 22SCRA267
Facts:
On January 27, 1958, at about 8:00 pm, Genaro N. Teotico was at the
corner of the Old Luneta and P. Burgos Avenue, Manila, within a loading and
unloading zone, waiting for a jeepney to take him down town. After about five
minutes, he managed to hail a jeepney that came along to stop. As he stepped
down from the curb to board the jeepney, and took a few steps, he fell inside an
uncovered and unlighted manhole on P. Burgos Avenue. Due to the fall, his head
hit the rim of the manhole breaking his eyeglasses and causing broken pieces
thereof to pierce his left eyelid. In addition to the eye injury he suffered, Teotico
also had several injuries in his body which necessitated medical treatment.
As a consequence of the foregoing occurrence, Teotico filed with the court
a civil case for damages against the City of Manila as provided by Article 2189 of
the Civil Code of the Philippines, which provides:
Provinces, cities and municipalities shall be liable for damages for death
of, or injuries suffered by, any person by reason of defective conditions of roads,
streets, bridges, public buildings, and other public works under their control or
supervision.
The City of Manila, on the other hand, contended that P. Burgos is a
national highway, which meant that it did not belong to the City of Manila and
thus could not be held liable.
Issue:
Whehter or not the City of Manila is liable for the damages caused by the
defective road to Teotico
Held:
Yes, the City of Manila is liable.
In Article 2189 of the Civil Code, it is not necessary that the defective road
or street belongs to the province, city or municipality from which responsibility is
exacted. What said article requires is that the province, city or municipality have
either control or supervision over said street or road.

19

In the case at bar, even if P. Burgos Avenue were, therefore a national

highway, this circumstance would not necessarily detract from its control or
supervision by the City of Manila, as provided for by Section 18 of Republic Act
409.
Submitted by: Acosta, Voltaire S.
CORLISS vs. MANILA RAILROAD COMPANY
G.R. # L-21291, March 28, 1969
Facts:
Preciolita V. Corliss whose husband, the late Ralph W. Corliss, was, at
the tender age of twenty-one, the victim of a grim tragedy, when the jeep he was
driving collided with a locomotive of defendant-appellee Manila Railroad
Company, close to midnight on the evening of Febuary 21, 1957, at the railroad
crossing in Balibago, Angeles, Pampanga.
Ronald J. Ennis, a witness of the plaintiff, substantially declared in his deposition,
that at the time of the accident, he also awaiting transportation at the entrance of
Clark Field, which was about 40 to 50 yards away from the tracks and that while
there he saw the jeep coming towards the Base. He said that said jeep slowed
down before reaching the crossing, that it made a brief stop but that it did not
stop dead stop. Elaborating, he declared that while it was slowing down, Corliss
Jr. shifted into first gear and that was what he meant by a brief stop. He also
testified that he could see the train coming from the direction of San Fernando
and that he heard a warning but that it was not sufficient enough to avoid the
accident. Virgilio de la Paz, another witness of the plaintiff, testified that on the
night of February 21, 1957, he was at the Balibago checkpoint and saw the train
coming from Angeles and a jeep going towards the direction of Clark Field. He
stated that he heard the whistle of the locomotive and saw the collision. The jeep,
which caught fire, was pushed forward. He stated that he saw the jeep running
fast and heard the tooting of the horn. It did not stop at the railroad crossing,
according to him.
Issue:
Whether the plaintiff can recover damages from defendant
Held:
The accident was caused by the negligence of Ralph Corliss. The latter
was sufficiently warned in advance that defendants train was coming because of
the siren and signal of the train, and besides, the victim knew about the setup of
the checkpoint, and the existence of the trucks. Under the circumstances, the
victim should have stopped completely before the crossing and should have

20

allowed the train to go through its course. Having failed to do this, the victim is
considered negligent, and plaintiff was not allowed to recover damages.

Submitted by: VILLANUEVA, Vincent Irving P.

CRUZ vs. NLRC
G.R. No. 98273 October 28, 1991
FACTS:
Clarita V. Cruz went abroad pursuant to an employment contract that she
hoped would improve her future. Although a high school graduate, she agreed to
work as a domestic helper in Kuwait in consideration of an attractive salary and
vacation leave benefits she could not expect to earn in this country. But her
foreign adventure proved to be a bitter disappointment. On March 18, 1988, after
completing her two-year engagement, she was back home in the Philippines with
her dead dreams and an angry grievance.
On March 23, 1988, she filed a complaint against EMS Manpower and
Placement Services (Phil.) and its foreign principal, Abdul Karim Al Yahya
In its answer and position paper, the private respondent raised the
principal defense of settlement as evidenced by the Affidavit of Desistance
executed by the complainant
NLRC dismissed the complaint by the petitioner. Hence, the present
petition.
ISSUE:
Whether or not the affidavit of desistance signed by the complainant is a
valid waiver of her right to collect for compensation against private respondents.
HELD:
No.
The Court is convinced that the petitioner was not fully aware of the import
and consequences of the Affidavit of Desistance when she executed it, allegedly
with the assistance of counsel.

21

This decision demonstrates once again the tenderness of the Court

toward the worker subjected to the lawless exploitation and impositions of his
employer. The protection of our overseas workers is especially necessary
because of the inconveniences and even risks they have to undergo in their
quest for a better life in a foreign land away from their loved ones and their own
government.
Submitted by: Lopez, John
MARIA TERESA Y. CUADRA, ET AL. vs. ALFONSO MONFORT
G.R. No. L-24101
September 30, 1970
Facts:
Cuadra,12, and Monfort,13, were classmates in grade six at the Mabini
Elementary School in Bacolod City. On July 9, 1962, they were assigned to weed
the grass in the school premises. While performing the assigned task, Monfort
found a plastic headband. Jokingly she said that she had found an earthworm,
and as a prank to frighten Cuadra threw the headband towards her. At that
precise moment, Monfort turned to face her friend, and the headband thus hit her
right eye, injuring it. Cuadra treated it with some powder. The next day, the eye
began to swell, and the parents thus took her to a doctor where she had to
undergo surgery, despite that, she eventually lost sight in that eye, as a result of
the said injury.
The parents of Ciuadra sued for damages, based on article 2176 and
2180 of the civil code,
ART. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by provisions of this Chapter.
ART 2180. The obligation imposed by Article 2176 is demandable not only
for one's own acts or omissions, but also for those of persons for whom one is
responsible.
Issue:
Whether or not the parents of Maria Teressa Cuadra may be held liable for
the acts of their minor childs tortuous act?
Held:

22

The act of throwing the head band was deemed to be a childish prank,
and was in fact not an act contemplated by 2176 of the civil code. Being a
childish prank, the court declared that there was no way that any parent could
ever anticipate such prank. The said act also did not reveal any mischievous
propensity, or indeed any trait in the child's character which would reflect
unfavorably on her upbringing and for which the blame could be attributed to her
parents.

Submitted by: Aure, Gary C.

CULION ICE, FISH,ETC. vs. PHILIPPINE MOTORS

Facts:
The manager of defendant corporation accepted the job of changing the gasoline
engine of plaintiffs boat. After installing a new fuel tank and a new carburetor, the boat
was taken out for trial. During this period, a backfire occurred in the cylinder of the
engine. The boat was ultimately destroyed. Plaintiff filed an action to recover the value
of the boat from the defendant.
Issue:
Whether or not there is negligence on the part of Philippine motors and
was the accident avoidable?
Held:

The burning of the boat resulted from an accident but this accident
was in no sense an unavoidable accident. It should not have occurred if
he observed the care and skill of one ordinarily skilled in the particular
work which he attempts to do. When a person holds himself out as being
competent to do things, he will be held liable for negligence if he fails to
exhibit the care and skill of one ordinarily skilled in the particular work,
which he attempts to do. The defendant was held liable for the value of the
vessel.

23

Submitted by: Barrios, Noelle Ann E.

DAYWALT vs. RECOLETOS, ET AL.
G.R. No. L-13505
February 4, 1919
FACTS:
In 1902, Teodorica Endencia executed a contract whereby she obligated
herself to convey to Geo. W. Daywalt, a tract of land upon the issuance of a title
to the land and a Torrens certificate. A second contract was executed in the form
of a deed of conveyance. The stipulated price was fixed at P4,000, and the area
of the land enclosed in the boundaries defined in the contract was stated to be
452 hectares and a fraction.
In 1908, the parties entered into still another agreement, superseding the
old. Later on, the Torrens certificate was in time issued to Teodorica Endencia,
but in the course of the proceedings, it was found by official survey that the area
of the tract was about 1.248 hectares instead of 452 hectares. In view of this
development Teodorica Endencia became reluctant to transfer the whole tract to
the purchaser, asserting that she never intended to sell so large an amount of
land and that she had been misinformed as to its area.
The defendant, La Corporacion de los Padres Recoletos, is a religious
corporation whose representative, Father Isidro Sanz
had long been well
acquainted with Teodorica Endencia and exerted over her an influence and
ascendancy. Teodorica appears to be a woman of little personal force, easily
subject to influence, and upon all the important matters of business including the
tract in issue, was accustomed to seek, and was given, the advice of father Sanz
and other members of his order with whom she came in contact.
As Teodorica still retained possession of said property Father Sanz
entered into an arrangement with her whereby large numbers of cattle belonging
to the defendant corporation were pastured upon said land.

24

Litigation prospered due to Endencias change of mind and refusal to

comply with her agreement with Daywalt despite order of the court for specific
performance.
ISSUE:
Whether or not the inducement made by Father Sanz to Endencia
constitutes actionable interference in the contract
Whether or not the defendant corporation made itself a co-participant with
Endencia in the breach of the contract due to the alleged unlawful intervention.
HELD:
No. As preliminary to a consideration of the first of these questions, we
deem it well it dispose of the contention that the members of the defendants
corporation, in advising and prompting Teodorica Endencia not to comply with the
contract of sale, were actuated by improper and malicious motives. The trial court
found that this contention was not sustained, observing that while it was true that
the circumstances pointed to an entire sympathy on the part of the defendant
corporation with the efforts of Teodorica Endencia to defeat the plaintiff's claim to
the land, the fact that its officials may have advised her not to carry the contract
into effect would not constitute actionable interference with such contract. It may
be added that when one considers the hardship that the ultimate performance of
that contract entailed on the vendor, and the doubt in which the issue was
involved to the extent that the decision of the Court of the First Instance was
unfavorable to the plaintiff and the Supreme Court itself was divided the attitude
of the defendant corporation, as exhibited in the conduct of its procurador, Juan
Labarga, and other members of the order of the Recollect Fathers, is not difficult
to understand. To our mind a fair conclusion on this feature of the case is that
father Juan Labarga and his associates believed in good faith that the contract
cold not be enforced and that Teodorica would be wronged if it should be carried
into effect. Any advice or assistance which they may have given was, therefore,
prompted by no mean or improper motive. It is not, in our opinion, to be denied
that Teodorica would have surrendered the documents of title and given
possession of the land but for the influence and promptings of members of the
defendants corporation. But we do not credit the idea that they were in any
degree influenced to the giving of such advice by the desire to secure to
themselves the paltry privilege of grazing their cattle upon the land in question to
the prejudice of the just rights of the plaintiff.
Whatever may be the character of the liability which a stranger to a
contract may incur by advising or assisting one of the parties to evade
performance, there is one proposition upon which all must agree. This is, that the
stranger cannot become more extensively liable in damages for the

25

nonperformance of the contract than the party in whose behalf he intermeddles.

To hold the stranger liable for damages in excess of those that could be
recovered against the immediate party to the contract would lead to results at
once grotesque and unjust. In the case at bar, as Teodorica Endencia was the
party directly bound by the contract, it is obvious that the liability of the defendant
corporation, even admitting that it has made itself coparticipant in the breach of
the contract, can in no even exceed hers. This leads us to consider at this point
the extent of the liability of Teodorica Endencia to the plaintiff by reason of her
failure to surrender the certificate of title and to place the plaintiff in possession.

Submitted by: Roxas, Thomas Joseff Mari M.

DE GUZMAN vs. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 90856 July 23, 1992
FACTS:
Arturo de Guzman was the general manager of the Manila office of the
Affiliated Machineries Agency, Ltd., which was based in Hongkong. On June 30,
1986, he received a telex message from Leo A. Fialla, managing director of
AMAL in its main office, advising him of the closure of the company due to
financial reverses. This message triggered the series of events that are the
subject of this litigation.
Immediately upon receipt of the advise, De Guzman notified all the
personnel of the Manila office. The employees then sent a letter to AMAL
accepting its decision to close, subject to the payment to them of their current
salaries, severance pay, and other statutory benefits. De Guzman joined them in
these representations.
These requests were, however, not heeded. Consequently, the
employees, now herein private respondents, lodged a complaint with the NLRC
against AMAL, through Leo A. Fialla and Arturo de Guzman, for illegal dismissal,
unpaid wages or commissions, separation pay, sick and vacation leave benefits,
13th month pay, and bonus.
For his part, the petitioner began selling some of AMAL's assets and
applied the proceeds thereof, as well as the remaining assets, to the payment of
his claims against the company. He also organized Susarco, Inc., with himself as

26

its president and his wife as one of the incorporators and a member of the board
of directors. This company is engaged in the same line of business and has the
same clients as that of the dissolved AMAL.
NLRC held petitioner jointly and severally liable with AMAL
ISSUE:
Whether or not de Guzman can be held jointly and severally liable with
AMAL.
RULING:
In the case at bar, the petitioner, while admittedly the highest ranking local
representative of AMAL in the Philippines, is nevertheless not a stockholder and
much less a member of the board of directors or an officer thereof. He is at most
only a managerial employee.
Petitioner cannot be held directly responsible for the decision to close the
business that resulted in his separation and that of the private respondents. That
decision came directly and exclusively from AMAL. The petitioner's participation
was limited to the enforcement of this decision in line with his duties as general
manager of the company.
We hold that although the petitioner cannot be made solidarily liable with
AMAL for the monetary demand of its employees, he is nevertheless directly
liable to them for his questionable conduct in attempting to deprive them of their
just share in the assets of AMAL.
Article 19 of the Civil Code which provides:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.
This is supplemented by Article 21 of the same Code thus:
Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
Although the question of damages arising from the petitioner's bad faith
has not directly sprung from the illegal dismissal, it is clearly intertwined
therewith. The predicament of the private respondents caused by their dismissal
was aggravated by the petitioner's act in the arrogating to himself all of AMAL's
assets to the exclusion of its other creditors, including its employees. The issue

27

of bad faith is incidental to the main action for illegal dismissal and is thus
properly cognizable by the Labor Arbiter.
It is stressed that the petitioner's liability to the private respondents is a
direct liability in the form of moral and exemplary damages and not a solidary
liability with AMAL for the claims of its employees against the company. He is
being held liable not because he is the general manager of AMAL but because he
took advantage of his position by applying the properties of AMAL to the payment
exclusively of his own claims to the detriment of other employees.

Submitted by: Gumabay, Ma. Nina Katrina M.

Dichoso vs. CA
GR No. 55613 December 10, 1990
Facts:
Spouses Gaspar Prila and Maria Beldad owned a parcel of land at
Cagmanaba, Ocampo, Camarines Sur surveyed in the name of Gaspar. Upon
the death of Maria in 1925, the eastern half was given to their only daughter,
Vivencia, and when Gaspar died, the portion pertaining to him was divided into
three: a third was given to Vivencia, another third to Asuncion Pacamara, and the
last third to Custodia Parcia. The terms of said settlement were agreed to by the
three parties and the deeds were duly registered at the Register of Deeds. This
was further confirmed judicially by the CFI of Camarines Sur. In 1955 Vivencia
sold her portion to petitioner Dichoso who has been, ever since, in actual
possession thereof, exercising various acts of ownership thereof. On the other
hand, Asuncion sold to wife of private respondent Teodolfo Ramos her share but
the deed mentions the area to be in excess of her share. Hence, said property
which Ramos claims to have possessed is now the land in question.
Respondent Ramos took possession of the contested Riceland upon its
purchase. It yielded an average harvest of 20 sacks of palay per planting whish
was twice a year. One-third of the harvest went to Ramos and the remaining twothirds was the tenants share. Dichoso, meanwhile, claims that the disputed land

28

was inside his property. Sometime in 1962 Ramos, with a constabulary soldier
and two policemen, allegedly seized the produce of the land consisting of 50
cavans of palay from petitioners tenant. In retaliation, petitioner brought with him
a constabulary soldier and appropriated 6 cavans of the produce.
On December 1967, respondent filed a complaint for quieting of title over
the Riceland before the CFI of Camarines SUr. It rendered a decision in favor of
respondent. On appeal, the CA affirmed the trial courts decision.
Issue:
WON the CA erred in requiring petitioner to deliver 40 cavans annually to
respondent despite its finding that only 1/3 of the produce went to Ramos.
Ruling:
YES. Petitioner alleged that since respondents share of the harvest is
only 1/3, only the 1/3 of the annual harvest must be awarded to him. Ramos
contention that his tenant will be deprived of his share if only 1/3 was awarded to
him. Actual or compensatory damages cannot be presumed, but must be duly
proved, and proved with 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. In view of his dispossession from 1964 and the fact
that his tenant has vacated the land the same year, he cannot allege that his
tenant is entitled to his 2/3 share.

29

Submitted by: Rodriguez, Christian Patrick S.

EPG Construction Company vs. Court of Appeals

210 SCRA 230
Facts:
Herein petitioner EPG Construction Company, Inc. and herein private
respondent University of the Philippines (UP) entered into a contract for the
construction of the UP Law Library for the stipulated price of P7,545,000.00.
Upon completion, the building was formally turned over by the petitioner to UP;
the latter issued a Certification of Acceptance. Sometime later, UP complained to
the petitioner that six air-conditioning units in the building were not cooling
properly. The latter agreed to shoulder the expenses for their repair, which was,
however, never undertaken. UP was forced to contract with another company
which repaired the units for P190,000.00. UP then demanded reimbursement of
the said amount plus liquidated damages from the petitioner, which the latter
rejected. UP then filed an action against the petitioner. After the trial, the trial
court ruled in favor of UP and ordered the petitioner to pay actual and liquidated
damages. Said decision was later affirmed by the Court of Appeals. Hence, this
petition.
The petitioner contended that by issuing the Certificate of Acceptance, UP
has waived the guarantee provision in their contract and is now estopped from
invoking it.
Issue:
Whether or not the petitioner is liable under the guarantee provision in the
contract notwithstanding the Certificate of Acceptance issued by UP?
Held:
The Supreme Court ruled in the Affirmative. All UP certified to, when it
issued the Certificate of Acceptance, was that the building constructed by the
petitioner was in good condition at the time it was turned over to it. It did not
thereby relieve the petitioner of liability for any defect that may arise or be

30

discovered later during the one-year period of the guaranty. The defects
complained against were hidden and UP was not expected to recognize them at
the time the work was accepted. Moreover, there was an express reservation by
UP of its right to hold the petitioner liable for the defects during a period of one
year.
Decision Affirmed.
Submitted by: Lopez, John
SABINA EXCONDE vs. DELFIN CAPUNO, ET AL.
G.R. No. L-10134
June 29, 1957
Facts:
Dante Capuno was a member of the Boy Scouts organization and a
student of Balintawak Elementary school. On March 31, they were instructed by
the schools supervisor to attend a parade in honor of Dr. Jose Rizal. From
school, Dante and other students boarded the jeep that was going to take them
to the parade. Dante then drove the jeep, while the driver sat by his side. They
have not gone too far when the jeep turned turtle resulting to the death of two of
its passengers, Amado Ticzon and Isidore Caperi.
Issue:
Whether or not Delfin capuno may be held jointly and severally liable with
his son Dante Capuno, for the civil liability of his tortuous act?
Held:
Although at the time of the accident the father was not present, plaintiff
contends that at the time of the accident Dante was a minor who was living with
his parents. The court thus found that Delfin Capuno should be held solidarily
liable for the tortuous act of his son Dante, for his failure to exercise proper
parental authority.

31

Submitted by: BOLOS, MARIA GRACIA PATRICIA S.

Fabre vs. CA, 259 SCRA 426
G.R. No. 111127. July 26, 1996
FACTS:
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model
Mazda minibus. They used the bus principally in connection with a bus service
for school children which they operated in Manila. The couple had a driver,
Porfirio J. Cabil, whom they hired after trying him out for two weeks. His job was
to take school children to and from the St. Scholasticas College in Malate,
Manila.
Private respondent Word for the World Christian Fellowship Inc. (WWCF)
arranged with petitioners for the transportation of 33 members of its Young Adults
Ministry from Manila to La Union and back in consideration of which private
respondent paid petitioners the amount of P3,000.00.
The usual route to Caba, La Union was through Carmen, Pangasinan.
However, the bridge at Carmen was under repair, so that petitioner Cabil, who
was unfamiliar with the area ,it being his first trip to La Union, was forced to take
a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night,
petitioner Cabil came upon a sharp curve on the highway, running on a south to
east direction, which he described as siete. The road was slippery because it
was raining, causing the bus, which was running at the speed of 50 kilometers
per hour, to skid to the left road shoulder. The bus hit the left traffic steel brace
and sign along the road and rammed the fence of one Jesus Escano, then turned
over and landed on its left side, coming to a full stop only after a series of
impacts. The bus came to rest off the road. A coconut tree which it had hit fell on
it and smashed its front portion.
The driver, petitioner Cabil, claimed he did not see the curve until it was
too late. He said he was not familiar with the area and he could not have seen
the curve despite the care he took in driving the bus, because it was dark and
there was no sign on the road. He said that he saw the curve when he was
already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers
per hour, but it was too late.
The Lingayen police investigated the incident the next day. On the basis
of their finding they filed a criminal complaint against the driver, Porfirio Cabil.
The case was later filed with the Lingayen Regional Trial Court. Petitioners
Fabre paid Jesus Escano P1,500.00 for the damage to the latters fence. On the

32

basis of Escanos affidavit of desistance the case against petitioners Fabre was
dismissed.
Amyline Antonio, who was seriously injured, brought this case in the RTC
of Makati, Metro Manila. As a result of the accident, she is now suffering from
paraplegia and is permanently paralyzed from the waist down. During the trial
she described the operations she underwent and adduced evidence regarding
the cost of her treatment and therapy.
The trial court found that no convincing evidence was shown that the
minibus was properly checked for travel to a long distance trip and that the driver
was properly screened and tested before being admitted for
employment. Indeed, all the evidence presented have shown the negligent act of
the defendants which ultimately resulted to the accident subject of this case.
The trial court ordered herein petitioners to pay Word for the World
Christian Fellowship, Inc. and Ms. Amyline Antonio for they were the only ones
who adduced evidence for their claim for damages.
The Court of Appeals affirmed the decision of the trial court with respect to
Amyline Antonio but dismissed it with respect to the other plaintiffs on the ground
that they failed to prove their respective claims.
Hence, this petition.
ISSUE:
Whether or not the petitioners, jointly or solidarily, were negligent and if
they are liable for damages and to what extent.
HELD:
The finding that Cabil drove his bus negligently, while his employer, the
Fabres, who owned the bus, failed to exercise the diligence of a good father of
the family in the selection and supervision of their employee is fully supported by
the evidence on record. These factual findings of the two courts we regard as
final and conclusive, supported as they are by the evidence. Indeed, it was
admitted by Cabil that on the night in question, it was raining, and, as a
consequence, the road was slippery, and it was dark. He averred these facts to
justify his failure to see that there lay a sharp curve ahead. However, it is
undisputed that Cabil drove his bus at the speed of 50 kilometers per hour and
only slowed down when he noticed the curve some 15 to 30 meters ahead. By
then it was too late for him to avoid falling off the road. Given the conditions of
the road and considering that the trip was Cabils first one outside of Manila,
Cabil should have driven his vehicle at a moderate speed. There is testimony

33

that the vehicles passing on that portion of the road should only be running 20
kilometers per hour, so that at 50 kilometers per hour, Cabil was running at a very
high speed.
Considering the foregoing, the fact that it was raining and the road was
slippery, that it was dark, that he drove his bus at 50 kilometers an hour when
even on a good day the normal speed was only 20 kilometers an hour, and that
he was unfamiliar with the terrain, Cabil was grossly negligent and should be
held liable for the injuries suffered by private respondent Amyline Antonio.
Pursuant to Articles 2176 and 2180 of the Civil Code his negligence gave
rise to the presumption that his employers, the Fabres, were themselves
negligent in the selection and supervision of their employee.
Due diligence in selection of employees is not satisfied by finding that the
applicant possessed a professional drivers license. The employer should also
examine the applicant for his qualifications, experience and record of service.
Due diligence in supervision, on the other hand, requires the formulation of rules
and regulations for the guidance of employees and the issuance of proper
instructions as well as actual implementation and monitoring of consistent
compliance with the rules.
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La
Union, apparently did not consider the fact that Cabil had been driving for school
children only, from their homes to the St. Scholasticas College in Metro Manila.
They had hired him only after a two-week apprenticeship. They had tested him
for certain matters, such as whether he could remember the names of the
children he would be taking to school, which were irrelevant to his qualification to
drive on a long distance travel, especially considering that the trip to La Union
was his first. The existence of hiring procedures and supervisory policies cannot
be casually invoked to overturn the presumption of negligence on the part of an
employer.
Petitioners argue that they are not a common carrier, hence, ordinary
diligence or diligence of a good father of a family is only the degree of diligence
due of them. As already stated, this case actually involves a contract of carriage.
Petitioners, the Fabres, did not have to be engaged in the business of public
transportation for the provisions of the Civil Code on common carriers to apply to
them. The article makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity.
As common carriers, the Fabres were bound to exercise extraordinary
diligence for the safe transportation of the passengers to their destination. This

34

duty of care is not excused by proof that they exercised the diligence of a good
father of the family in the selection and supervision of their employee.
The liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employees.
The decision of the Court of Appeals is affirmed with modification as to the
award of damages. Petitioners are ordered to pay jointly and severally the
private respondent Amyline Antonio.

35

Submitted by: Equetan, Esteban M.

F.F. CRUZ and Co., INC. VS Court of Appeals
164 SCRA 731
No. L-52732, August 29, 1988
Facts:
Petitioner F.F. Cruz and Co., Inc. is an owner of a furniture shop in
Caloocan City which was adjacent to the residence of Mable family,
herein private respondents.
That sometime in August 1971, private respondent Gregorio
Mable requested to the herein petitioner that a firewall be constructed
between the latters shop and their house. Such request fell on deaf
ears. Unfortunately, on September 6, 1974, a fire broke out in the
petitioners shop which eventually spread into private respondents
house. Both the house and the shop were razed to the ground. As a
result, the private respondent filed an action for recovery of damages
against the petitioner. After the trial, the trial court ruled in favor of the
private respondents and ordered the petitioner to pay the damages for
the loss of the formers house, furnitures and other valuables. The
Court of Appeals affirmed the decision of the Lower Court. Hence, this
appeal.
Issue:
Whether or not the Doctrine of RES IPSA LOQUITUR is applicable
in this case?
Held:
The Supreme Court ruled in affirmative. Under the Doctrine of
RES IPSA LOQUITUR: Where the thing which cause the injury
complained of is shown to be under the management of the defendant
or his servants and the accident is such as in the ordinary course of
things does not happen if those who have its management or control
use proper care, it affords reasonable evidence, in the absence of
explanation by the defendant, that the accident arose from want of
care. The facts of the case at hand clearly call the application of the
abovementioned doctrine. In the normal course of operations of a
furniture manufacturing shop, combustible materials may usually be
found thereon.

36

Furthermore, negligence or want of care on the part of the

petitioner was not merely presumed; the latters failure to construct a
firewall in accordance with city ordinance would suffice to support
findings of negligence.
Submitted by: Mendoza, Barleon R.
FILAMER CHRISTIAN INSTITUTE vs. COURT OF APPEALS
G.R. No. 75112. October 16, 1990
Facts:
Private respondent Potenciano Kapunan, Sr., was struck by the Pinoy jeep
owned by petitioner Filamer and driven by its alleged employee, Funtecha. As a
result of the accident, Kapunan, Sr. suffered multiple injuries for which he was
hospitalized for a total of twenty (20) days.
Evidence showed that at the precise time of the vehicular accident,
Funtecha, who only had a student driver's permit, was driving after having
persuaded Allan Masa, the authorized driver, to turn over the wheels to him.
Kapunan, Sr. commenced a civil case for damages before the RTC of
Roxas City. Named defendants in the complaint were petitioner Filamer and
Funtecha. Also included was Agustin Masa, the director and president of Filamer
Christian Institute, in his personal capacity "in that he personally authorized and
allowed Funtecha who was his houseboy at the time of the incident, to drive the
vehicle in question despite his knowledge and awareness that the latter did not
have the necessary license or permit to drive said vehicle. Allan Masa, was not
impleaded as a co-defendant.
The trial court rendered judgment finding not only petitioner Filamer and
Funtecha to be at fault but also Allan Masa, a non-party.
Daniel Funtecha, Filamer Christian Institute and Allan Masa are at fault
and negligent of the acts complained of which caused the injury to plaintiff.
Judgment was rendered in favor of the plaintiff and against the defendants.
The court absolved defendant Agustin Masa from any personal liability
with respect to the complaint filed against him in his personal and private
capacity, because he was not in the vehicle during the alleged incident.

37

Filamer appealed the lower court's judgment to the Court of Appeals.

Appellate Court affirmed the trial court's decision in toto. Hence, the appeal.
Filamer contented that it cannot be held responsible for the tortuous act of
Funtecha on the ground that there is no existing employer-employee relationship
between them.
Issue:
Whether or not the term "employer" as used in Article 2180 is applicable to
petitioner Filamer with reference to Funtecha.
Held:
The Supreme Court held that Funtecha is an employee of Filamer and
need not to have an official appointment for drivers position in order that Filamer
may be held responsible for his negligent act.
The fact that Funtecha was not the school driver or was not acting within
the janitorial duties, does not relieve Filamer of the burden of rebutting the
presumption juris tantum that there was a negligence on its part either in the
selection of the servant or employee or in the supervision over him.

38

Submitted by: Padlan, Jay Vincent S.

First Malayan Leasing and Finance Corporation vs. Court of Appeals
209 SCRA 660
Facts:
Crisostomo Vitug fild a Civil Case against defendant First Malayan
Leasing and Finance Corporation (FMLFC), to recover damages as a result of a
three-vehicle collision on December 14, 1983, involving his car, another car, and
an Isuzu cargo truck registered in the name of FMLFC and driven by one Crispin
Sicat.
The evidence shows that while Vitugs car was at a full stop at the
intersection of New York Street and EDSA in Cubao, Quezon City, northward
bound, the on-coming Isuzu cargo truck bumped a Ford Granada car behind him
with such force that the Ford car thrown on top of Vitugs car. The cargo truck
thereafter hit Vitugs car in the rear causing the gas tank to explode and setting
the car ablaze.
FMLFC denied any liability, alleging that it was not the owner of the truck,
neither was it the employer of the driver Crispin Sicat, because it had sold the
truck to Vicente Trinidad on September 24, 1980.
Issue:
Whether or not First Malayan Leasing and Finance Corporation is liable
for the mishap
Held:
Yes, FMLFC is liable for damages caused to Vitug.
Regardless of who the actual owner of a motor vehicle might be, the
registered owner is the operator of the same with respect to the public and third
persons, and as such, directly and primarily responsible for the consequences of

39

its operation. In contemplation of law, the registered owner or operator of record

is the one liable for damages caused by a vehicle regardless of any alleged sale
or lease made thereon.
In order for a transfer of ownership of a motor vehicle to be valid against
third persons, it must be recorded in the LTO. For, although valid between the
parties, the sale cannot affect third persons who rely on the public registration of
the motor vehicle as conclusive evidence of ownership. In law, FMLFC was the
owner and operator of the Isuzu truck, hence, fully liable to third parties injured
by its operation.
Submitted by: Menzon, Bradford B.
Fontanilla vs. Maliaman, G.R.No.55963, December 1, 1989

FACTS:
A pick-up owned and operated by respondent National Irrigation
Administration, a government agency driven by Hugo Garcia, an employee of
said agency as its regular driver, bumped a bicycle ridden by Francisco
Fontanilla, son of petitioners along Maharlika Highway. As a result of the impact,
Francisco Fontanilla and his companion were injured and brought to the San
Jose City Emergency Hospital for treatment.Fontanilla was later transferred to
the Cabanatuan Provincial Hospital where he died.
The trial court rendered judgment, which directed National Irrigation
Administration to pay damages (death benefits) and actual expenses to
petitioners.
ISSUE:
Whether or not National Irrigation Administration is liable for the negligent
act of Hugo Garcia.
HELD:
National Irrigation Administration (NIA) is a government corporation with
juridical personality and not a mere agency of the government. Since it is a
corporate body performing non-governmental functions, it now becomes liable for
the damage caused by the accident resulting from the tortious act of its driveremployee(Hugo Garcia).In this particular case, the NIA assumes responsibility of
an ordinary employer and as such, it becomes answerable for damages.

40

This assumption of liability, however, is predicated upon the existence of

negligence on the part of respondent NIA.The negligence referred to here is the
negligence of the supervision.

Submitted by: De Chavez, Faith

REYNALDA GATCHALIAN vs. ARSENIO DELIM and the HON. COURT OF
APPEALS,
G.R. No. L-56487 October 21, 1991
FACTS:
Reynalda Gatchalian boarded paying passenger bus own by Arsenio
Delim. Said bus is bound to Baung La Union. During the course of the trip, the
passengers already noticed a snapping sound which the driver ignored.
Somewehre along the highway of Bo. Payocpoc, the vehicle bumped a cement
flower po on the side of the road causing the vehicle to go off the road, turn turtle
and fall of the ditch.
Consequently, several passengers including Gatchalian were injured.
They were promptly taken to Bethany Hospital at San Fernando, La Union for
medical treatment.
On 14 July 1973, while injured passengers were confined in the hospital,
Mrs. Adela Delim, wife of respondent, visited them and later paid for their
hospitalization and medical expenses. However, before Mrs. Delim left, she had
the injured passengers, including petitioner, sign a prepared affidavit of quit claim
Notwithstanding this document, Gathalian still filed with the then Court of First
Instance of La Union an action extra contractu to recover compensatory and
moral damages.
In defense, respondent averred that the vehicular mishap was due to
force majeure, and that petitioner had already been paid and moreover had
waived any right to institute any action against him by virtue of the signed
affidavit.
ISSUE:

41

Is Gatchalian still entitled for damages despite execution of affidavit of quit

claim?
HELD:
Yes, Gatchalian is still entitled for damages.
The Supreme Court held that since what is involved is the liability of a
common carrier for injuries sustained by passengers in respect of whose safety a
common carrier must exercise extraordinary diligence. Thus, the waiver cannot
be used as an escape for liability.
Delim failed to rebut the statutory presumption of negligence as prescribed
in Artibles 1733 and 1755 of the NCC. To overcome this presumption, the
common carrier must slow to the court that it had exercised extraordinary
diligence to prevent the injuries.
The act of the driver of ignoring the snapping sound and continued on
driver despite it being noticed by most passengers is a clear proof of utter
negligence. This could also mean that the bus had not been checked physically
or mechanically to determine what was causing the "snapping sound" which had
occurred so frequently that the driver had gotten accustomed to it.
A common carrier is bound to carry its passengers safely" as far as
human care and foresight can provide, using the utmost diligence of a very
cautious person, with due regard to all the circumstances".

42

Submitted by: Rodriguez, Christian Patrick S.

Gelisan vs. Alday

154 SCRA 388
Facts:
Herein petitioner Bienvenido Gelisan is the registered owner of a freight
truck. On Jan. 31, 1962, he entered into a contract with Roberto Espiritu under
which the latter hired the same freight truck for the purpose of hauling rice, sugar,
flour and fertilizer. Subsequently, herein respondent Benito Alday, a trucking
operator who had a contract to haul the fertilizers of the Atlas Fertilizer
Corporation, entered into an agreement with Espiritu for the hauling of 400 bags
of fertilizer with the use of the truck leased by the latter. However, Espiritu failed
to deliver the bags of fertilizer to the Atlas Fertilizer bodega in Mandaluyong. The
respondent was then compelled to pay for the value of the 400 bags of fertilizer
to Atlas Fertilizer Corp. This prompted him to file a complaint against both
Espiritu and the petitioner. The petitioner disowned any liability on the ground
that he had no contractual relations with the respondent and that the
misappropriation committed by Espiritu was entirely beyond his control and
knowledge. After trial, the trial court ruled that only Espiritu is liable to the
respondent and not the petitioner. However, the Court of Appeals modified the
said decision and held that the petitioner, being the registered owner of the truck,
is likewise liable. Hence, this petition.
Issue:
Whether or not the petitioner, the registered owner of the truck, is likewise
liable for damages?

43

Held:
The Supreme Court ruled in the Affirmative. The registered owner of a
public service vehicle is responsible for damages that may arise from
consequences incident to its operation or that may be caused to any of the
passengers therein. If the property covered by a franchise is transferred or
leased to another without obtaining the requisite approval of the Public Service
Commission, such as what happened in this case, the transfer is not binding
upon the public and third persons. However, the petitioner has the right to be
indemnified by Espiritu for the amount which he may be required to pay as
damages.
Petition Denied.
Submitted by: Pador, Reo Arlan B.
FLORENTINA A. GUILATCO vs. CITY OF DAGUPAN
G.R. No. 61516 March 21, 1989
FACTS:
The plaintiff, while she was about to board a motorized tricycle at a
sidewalk located at Perez Blvd. (a National Road, under the control and
supervision of the City of Dagupan) accidentally fell into a manhole located on
said sidewalk, thereby causing her right leg to be fractured. As a result thereof,
she had to be hospitalized, operated on, confined, at first at the Pangasinan
Provincial Hospital, for a period of 16 days. She also incurred
hospitalization, medication and other expenses.
Hence, a cilvil action was filed by plaintiff Frorentina Guilatco for recovery
of damages against the City of Dagupan.
The city contends that Perez Boulevard, where the fatal drainage hole is located,
is a national road that is not under the control or supervision of the City of
Dagupan. Hence, no liability should attach to the city. It submits that it is
actually the Ministry of Public Highways that has control or supervision through
the Highway Engineer which, by mere coincidence, is held concurrently by the
same person who is also the City Engineer of Dagupan.
ISSUE:
Whether or not control or supervision over a national road by the City of
Dagupan exists.
RULING:

44

The liability of public corporations for damages arising from injuries

suffered by pedestrians from the defective condition of roads is expressed in the
Civil Code as follows:
Article 2189. Provinces, cities and municipalities shall be liable for
damages for the death of, or injuries suffered by, any person by reason of the
defective condition of roads, streets, bridges, public buildings, and other public
works under their control or supervision.
It is not even necessary for the defective road or street to belong to the
province, city or municipality for liability to attach. The article only requires that
either control or supervision is exercised over the defective road or street.
Furthemore, it is expressly provided in the charter of Dagupan that the
City Engineer has care and custody of the public system of waterworks and
sewers and is mandated to inspect and regulate the use of the same.
The same charter of Dagupan also provides that the laying out,
construction and improvement of streets, avenues and alleys and sidewalks, and
regulation of the use thereof, may be legislated by the Municipal Board. Thus the
charter clearly indicates that the city indeed has supervision and control over the
sidewalk where the open drainage hole is located.
Too often in the zeal to put up "public impact" projects such as
beautification drives, the end is more important than the manner in which the
work is carried out. Because of this obsession for showing off, such trivial details
as misplaced flower pots betray the careless execution of the projects, causing
public inconvenience and inviting accidents.

45

Submitted by: Gatioan, Edison

JARCO vs. CA
G.R. No. 129792 December 21,1999
FACTS:
Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the store's
branch manager, operations manager, and supervisor, respectively. Private
respondents are spouses and the parents of Zhieneth Aguilar (ZHIENETH), a six
year old child.
In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the
2nd floor of Syvel's Department Store, Makati City. CRISELDA was signing her
credit card slip at the payment and verification counter when she felt a sudden
gust of wind and heard a loud thud. She looked behind her. She then beheld her
daughter ZHIENETH on the floor, her young body pinned by the bulk of the
store's gift-wrapping counter/structure. ZHIENETH was crying and screaming for
help. Although shocked, CRISELDA was quick to ask the assistance of the
people around in lifting the counter and retrieving ZHIENETH from the floor.
As a result, ZHIENETH died fourteen (14) days after the accident or on 22
May 1983, on the hospital bed.
ISSUES:
(1) Whether the death of ZHIENETH was accidental or attributable to
negligence? and

46

(2) Whether ZHIENETH, a six year old child and CRISELDA can be held
liable for contributory negligence?
HELD:
Petitioners omission and failure to act on the previous observation of an
employee of the counters unsafe structure belies the claim of the petitioners that
what had happened is an accident.
An accident pertains to an unforeseen event in which no fault or
negligence attaches to the defendant. Negligence, on the other hand, 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.
As to the second issue, In our jurisdiction, a person under nine years of
age is conclusively presumed to have acted without discernment, and is, on that
account, exempt from criminal liability.
Further, 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; and the
gift-wrapping counter was just four meters away from CRISELDA. The time and
distance were both significant. ZHIENETH was near her mother and did not loiter
as petitioners would want to impress upon us. She even admitted to the doctor
who treated her at the hospital that she did not do anything; the counter just fell
on her.

47

Submitted By: Dilig, Jose Rodolfo Manuel Hugo B.

G.R. No. 101683 February 23, 1995
LBC AIR CARGO, INC. FERNANDO M. YU and JAIME TANO, petitioners,
vs.
HON. COURT OF APPEALS, Fourth Division, SHERWIN MONTEROLA y
OYON-OYON, represented by PATROCENIA GRONDIANO y MONTEROLA,
and PATROCENIA GRONDIANO y MONTEROLA, respondents.
Facts:
The case arose from a vehicular collision which occurred at about 11:30 in
the morning of 15 November 1987. Rogelio Monterola, a licensed driver, was
traveling on board his Suzuki motorcycle towards Mangagoy on the right lane
along a dusty national road in Bislig, Surigao del Sur.
At about the same time, a cargo van of the LBC Air Cargo Incorporated,
driven by defendant Jaime Tano, Jr., was coming from the opposite direction on
its way to the Bislig Airport. On board were passengers Fernando Yu, Manager of
LBC Air Cargo, and his son who was seated beside Tano.
When Tano was approaching the vicinity of the airport road entrance on
his left, he saw two vehicles racing against each other from the opposite
direction. Tano stopped his vehicle and waited for the two racing vehicles to pass
by. The stirred cloud of dust made visibility extremely bad. Instead of waiting for
the dust to settled, Tano started to make a sharp left turn towards the airport
road.
When he was about to reach the center of the right lane, the motorcycle
driven by Monterola suddenly emerged from the dust and smashed head-on
against the right side of the LBC van. Monterola died from the severe injuries he

48

sustained. A criminal case for "homicide thru reckless imprudence" was filed
against Tano.
A civil suit was likewise instituted by the heirs of deceased Monterola
against Tano, along with Fernando Yu and LBC Air Cargo Incorporated, for the
recovery of damages. The trial court dismissed both cases on the ground that the
proximate cause of the "accident" was the negligence of deceased Rogelio
Monterola.
Private respondent appealed the dismissal of the civil case to the Court of
Appeals. The appellate court reversed the court a quo.
Issue:
Whether or not LBC may invoke the doctrine of Last Clear Chance in
order to refute its liability.
Held:
Affirmed. From every indication, the proximate cause of the accident was
the negligence of Tano who, despite extremely poor visibility, hastily executed a
left turn (towards the Bislig airport road entrance) without first waiting for the dust
to settle.
It was this negligent act of Tano, which had placed his vehicle (LBC van)
directly on the path of the motorcycle coming from the opposite direction, that
almost instantaneously caused the collision to occur. Simple prudence required
him not to attempt to cross the other lane until after it would have been safe from
and clear of any oncoming vehicle.
Petitioners poorly invoke the doctrine of "last clear chance" (also referred
to, at times, as "supervening negligence" or as "discovered peril"). The doctrine,
in essence, is to the effect that where both parties are negligent, but the
negligent act of one is appreciably later in time than that of the other, or when it is
impossible to determine whose fault or negligence should be attributed to the
incident, the one who had the last clear opportunity to avoid the impending harm
and failed to do so is chargeable with the consequences thereof. Stated
differently, the rule would also mean that an antecedent negligence of a person
does not preclude the recovery of damages for supervening negligence of, or bar
a defense against the liability sought by, another if the latter, who had the last fair
chance, could have avoided the impending harm by the exercise of due
diligence.
In the case at bench, the victim was traveling along the lane where he was
rightly supposed to be. The incident occurred in an instant. No appreciable time
had elapsed, from the moment Tano swerved to his left to the actual impact; that
could have afforded the victim a last clear opportunity to avoid the collision.
It is true however, that the deceased was not all that free from negligence
in evidently speeding too closely behind the vehicle he was following.

49

We, therefore, agree with the appellate court that there indeed was
contributory negligence on the victim's part that could warrant a mitigation of
petitioners liability for damages.

Submitted by: Abad, Cernick S.

Lilius v. Manila Road Company
59 Phil. 758
FACTS:
Plaintiff, his wife and his daughter, left Manila in their Studebaker car,
driven by plaintiff for the municipality of Pagsanjan, Province of Laguna, on a
sight seeing trip. At about 7 and 8 meters from the railroad crossing at Dayap,
Pagsanjan, Laguna, Lilius saw a truck parked on the left side of the road and
noticed that several people have alighted from the truck going to the opposite
side. While slowing down his speed at about 12 mile per hour, he sounded his
horn for the people to get out of the way. This distracted his attention and shortly
thereafter, upon hearing two short whistles, his car was hit by a passing train.
The car was dragged ten meters away, and the train stopped about 70 meters
from the crossing. For injury sustained by Lilius, his wife and child, he filed an
action to recover damages from the defendant.
ISSUE:
Is the defendant liable?

50

HELD:
The defendant failed to exercise the diligence of a good father of a family
in the supervision of its employees. In fact, the flagman or watchman arrived after
the collision, and there was no notice nor sign of the existence of the crossing,
nor was there anybody to warn the public of approaching trains. The diligence of
a good father of a family, which the law requires in order to avoid damage, is not
confined to the careful and prudent selection of subordinates or employees but
included inspection of their work and supervision of the discharge of their duties.
Manila Railroad is adjudged liable for its negligence and that of its employees.

Submitted by: Agonoy, Ciara

Lim vs. Ponce de Leon
66 SCRA 299
Facts:
On April 29, 1961, plaintiff-appellant Jikil Taha sold to Alberto
Timbangcaya of Palawan a motor launch. A year later Alberto Timbangcaya filed
a complaint with the Office of the Provincial Fiscal of Palawan, filed with the CFI
of Palawan the corresponding information for Robbery with Force and
Intimidation upon Persons against Jikil Taha.
On June 15, 1962, Fiscal Francisco Ponce de Leon, upon being informed
that the motor launch was in Balacbac, Palawan, wrote the Provincial
Commander of Palawan requesting him to direct the detachment commander in
Balacbac to impound and take custody of the motor launch.
On June 26, 1962, Fiscal Ponce de Leon reiterated his request to the
Provincial Commander to impound the motor launch, explaining that its
subsequent sale to a third party, plaintiff-appellant Delfin Lim, cannot prevent the
court from taking custody of the same. Consequently, on July 6, 1962 upon the
order of the Provincial Commander, defendant-appellee Orlando Maddela,
Detachment Commander of Balacbac, Palawan, seized the motor launch from
plaintiff-appellant Delfin Lim and impounded it.

51

Plaintiffs-appellants Lim and Jikil Taha filed with the CFI of Palawan on
November 19, 1962 a complaint for damages against defendants-appellees
Fiscal Ponce de Leon and Orlando Maddela, alleging that on July 6, 1962,
Maddela entered the premises of Lim without a search warrant and then and
there took away the hull of the motor launch without his consent.
Issue:
Whether or not defendants-appellees are civilly liable to plaintiffsappellants for damages allegedly suffered by them granting that the seizure of
the motor launch was unlawful.
Held:
Defendants-appellees are civilly liable to plaintiff-appellants. To be liable
under Article 32 of the New Civil Code it is enough that there was a violation of
the constitutional rights of the plaintiffs. A person whose constitutional rights have
been impaired is entitled to actual and moral damages from the public officer or
employee responsible therefor. In addition, exemplary damages may also be
awarded.
In the instant case, Delfin Lims claims were amply supported by evidence
that he should be awarded damages. However, with respect to plaintiff Jikil Taha,
he is not entitled to recover any damage which he alleged he had suffered from
the unlawful seizure of the motor launch inasmuch as he had already transferred
the ownership and possession of the motor launch to Delfin Lim at the time it was
seized and therefore, he has no legal standing to question the validity of the
seizure.
Submitted by: Gatioan, Edison
MANUEL vs. CA
G. R. No. 96781 October 1, 1993
FACTS:
Private respondents were passengers of an International Harvester Scout
Car owned by respondent Ramos, which left Manila for Camarines Norte in the
morning of December 27, 1971 With respondent Fernando Abcede, Sr. as the
driver of the vehicle.
There was a drizzle at about 4:10 P.M. when the Scout car was hit on its
left side by a bus. The bus was was driven by petitioner Emiliano Manuel. Due to
the impact, the Scout car was thrown backwards against a protective railing. All
its ten occupants, which included four children, were injured, seven of the victims
sustained serious physical injuries.
The Lower Court and the Court of Appeals finds for the respondent.

52

In their appeal before us, petitioners contend that it was Fernando

Abcede, Jr., driver of the Scout car, who was at fault. Besides, petitioners claim
that Fernando Abcede, Jr., who was only 19-years old at the time of the incident,
did not have a driver's license. The awarded damages were likewise contested
as excessive and unsubstantiated.
ISSUES:
1. Whether or not the allegation of lack of drivers license of the alleged
driver of the injured party will exempt petitioners from liability?
2. Whether or not the damages awarded is justified?
HELD:
The evidence with respect to the issue that Fernando Abcede, Jr. who was
not duly licensed, was the one driving the Scout car at the time of the accident,
could not simply exempt petitioners' liability because they were the parties at fault
for encroaching on the Scout car's lane.
Nevertheless, the witnesses presented by petitioners who allegedly saw
"the younger Abcede pinned behind the driver's wheels," testified on matters that
transpired after the accident. Discrediting this allegation, the Court of Appeals
noted that none of the aforesaid witnesses actually saw the younger Abcede
driving the car and that the younger Abcede could have simply been thrown off
his seat toward the steering wheel.
The damages awarded are proper. Plaintiffs were able to prove their
injuries and submitted evidence to show expenses for their treatment,
hospitalization and incidental disbursement. The above mentioned damages are
considered actual or compensatory (Par. 1 Art. 2197 in relation to Art. 2199, New
Civil Code). Evidence was also adduced showing that as a result of the incident
and the resultant injuries there had been an impairment on the earning capacity
of some of the plaintiffs which are recoverable pursuant to Article 2205 of the
New Civil Code. Considering the nature of their, injuries one month each loss of
income seem reasonable. Attorney's fees and expenses of litigation is also
proper. Since the act complained of falls under the aegis of quasi-delict (culpa
aquilina), moral damages is likewise available to plaintiffs pursuant to Article
2219 also the New Civil Code".

53

Submitted by: Lasque, Mervin N.

MCKEE, ET AL. VS. IAC ET AL.,
G.R. NO. L-68102, 16 JULY 1992
FACTS:
Between 9 & 10 o'clock in the morning of 8 January 1977, in Pulong Pulo
Bridge along MacArthur Highway, between Angeles City & San Fernando,
Pampanga, a head-on-collision took place between an International cargo truck,
Loadstar owned by private respondents, and driven by Ruben Galang, and a
Ford Escort car driven by Jose Koh. The collision resulted in the deaths of Jose
Koh, Kim Koh McKee and Loida Bondoc, and physical injuries to George Koh
McKee, Christopher Koh McKee and Araceli Koh McKee, all passengers of the
Ford Escort. Jose Koh was the father of petitioner Araceli Koh McKee, the
mother of minors George, Christopher and Kim Koh McKee. Loida Bondoc, on
the other hand, was the baby sitter of 1 1/2 year old Kim. At the time of the
collision, Kim was seated on the lap of Loida Bondoc who was at the front
passenger's seat of the car while Araceli and her two (2) sons were seated at the
car's back seat. Immediately before the collision, the cargo truck, which was

54

loaded with two hundred (200) cavans of rice weighing about 10,000 kilos, was
travelling southward from Angeles City to San Fernando Pampanga, and was
bound for Manila. The Ford Escort, on the other hand, was on its way to Angeles
City from San Fernando. When the northbound car was about (10) meters away
from the southern approach of the bridge, two (2) boys suddenly darted from the
right side of the road and into the lane of the car. The boys were moving back
and forth, unsure of whether to cross all the way to the other side or turn back.
Jose Koh blew the horn of the car, swerved to the left and entered the lane of the
truck; he then switched on the headlights of the car, applied the brakes and
thereafter attempted to return to his lane. Before he could do so, his car collided
with the truck. The collision occurred in the lane of the truck, which was the
opposite lane, on the said bridge (lasque, mervins digest).
ISSUE:
Whether or not the herein truck driver can be held liable under the doctrine
of last clear chance.
RULING:
The court ruled that it was the truck driver's negligence in failing to exert
ordinary care to avoid the collision which was, in law, the proximate cause of the
collision. The court had the occasion to apply the doctrine of the last clear
chance which expound that the negligence of a claimant does not preclude a
recovery for the negligence of defendant where it appears that the latter, by
exercising reasonable care and prudence, might have avoided injurious
consequences to claimant notwithstanding his negligence. The doctrine applies
only in a situation where the plaintiff was guilty of prior or antecedent negligence
but the defendant, who had the last fair chance to avoid the impending harm and
failed to do so, is made liable for all the consequences of the accident
notwithstanding the prior negligence of the plaintiff. The subsequent negligence
of the defendant in failing to exercise ordinary care to avoid injury to plaintiff
becomes the immediate or proximate cause of the accident which intervenes
between the accident and the more remote negligence of the plaintiff, thus
making the defendant liable to the plaintiff. Generally, the last clear chance
doctrine is invoked for the purpose of making a defendant liable to a plaintiff who
was guilty of prior or antecedent negligence, although it may also be raised as a
defense to defeat claim (sic) for damages. The court herein also imposed liability
on the private respondents as employers of the truck driver under Article 2180 of
the Civil Code are directly and primarily liable for the resulting damages. The
presumption that they are negligent flows from the negligence of their employee.
That presumption, however, is only juris tantum, not juris et de jure. Their only
possible defense is that they exercised all the diligence of a good father of a
family to prevent the damage.

55

Submitted by: Mendoza, Barleon R.

E. MERRITT vs. GOVERNMENT OF THE PHILIPPINE ISLANDS
[G.R. No. 11154. March 21, 1916.]
Facts:
The plaintiff, riding on a motorcycle, was going toward the western part of Calle
Padre Faura. Upon crossing Taft Avenue and was ten feet from the southwestern
intersection of said streets, the General Hospital ambulance, upon reaching said
avenue, instead of turning toward the south turned unexpectedly and struck the
plaintiff. The plaintiff was taken to the General Hospital on the very same day as
he was so severely injured.
The trial court ordered the Government of the Philippine Islands to pay damages.
The Attorney-General on behalf of the defendant urges that the Government of
the Philippine Islands is not liable for the damages sustained by the plaintiff as a

56

result of the collision, even if it be true that collision was due to the negligence of
the chauffeur.
Issue:
Whether or not the Government of the Philippine Islands may be held
liable for the act done by the chauffeur.
Held:
The Government of the Philippine Islands is not liable.
The substantive law touching the defendant's liability for the negligent acts
of its officers, agents, and employees can be found in paragraph 5 of article 1903
of the civil Code, which reads:
"The state is liable in this sense when it acts through a special agent, but
not when the damage should have been caused by the official to whom properly
it pertained to do the act performed, in which case the provisions of the
preceding article shall be applicable."
The state by virtue of such provision of law, is not responsible for the
damages suffered by private individuals in consequence of acts performed by its
employees in the discharge of the functions pertaining to their office, because
neither fault nor even negligence can be presumed on the part of the state in the
organization of branches of the public service and in the appointment of its
agents.
Submitted by: Ciara Agonoy
MHP Garments, Inc. vs. Court of Appeals
236 SCRA 227
Facts:
On February 22, 1983, petitioner MHP Garments, Inc., was awarded by
the Boy Scouts of the Philippines, the exclusive franchise to sell and distribute
official Boy scouts uniforms, supplies, badges, and insignias. In their
Memorandum Agreement, petitioner corporation was given the authority to
undertake or cause to be undertaken the prosecution in court of all illegal
sources of scout uniforms and other scouting supplies.
Sometime in October 25, 1983, petitioner corporation received information
that private respondents Agnes Villacruz, Mirasol Lugatiman, and Gertrudes
Gonzales were selling Boy Scouts items and paraphernalia without any authority.

57

Petitioner de Guzman, and employee of petitioner corporation, was tasked to

undertake the necessary surveillance and to make a report to the Philippine
Constabulary.
On October 25, 1983, at about 10:30 AM, petitioner de Guzman, Captain
Peafiel, and 2 other constabulary men of the Reaction Force Battalion, Sikatuna
Village, Diliman, Quezon city went to the stores of respondents at the Marikina
Public Market. Without any warrant, they seize the boy and girl scouts pants,
dresses, and suits on display at respondents stalls. The seizure caused a
commotion and embarrassed private respondents. Receipts were issued for the
seized items. The items were then turned over by captain Peafiel to petitioner
corporation for safekeeping.
A criminal complaint for unfair competition was then filed against private
respondents. On December 6, 1983, after a preliminary investigation, the
Provincial Fiscal of Rizal dismissed the complaint against all private respondents.
Late on, he also ordered the return of the seized items. The seized items were
not immediately returned despite demands. Upon return of the said items, some
of them were of inferior quality.
Private respondents then filed a civil suit against the petitioners for sums
of money and damages. In its Decision, the trial court ruled for the private
respondents.
The Decision was appealed to the respondent court. The latter affirmed
the decision with modifications.
Issue:
Whether or not the Court of Appeals is correct in finding that the manner
with which the confiscation of the items from private respondents was tortious.

Held:
Yes. Article III, section 2, of the Constitution protects our people from
unreasonable search and seizure. In the case at bar, the seizure was made
without any warrant.
The respondent court correctly granted damages to private respondents.
Petitioners were indirectly involved in transgressing the right of private
respondents against unreasonable search and seizure. Firstly, they instigate the

58

raid pursuant to their covenant in the Memorandum Agreement to undertake the

prosecution in court of all illegal sources of scouting supplies.
The raid was conducted with active participation of their employee. Larry
de Guzman did not lift a finger to stop the seizure of the bot and girl scouts items.
By standing by and apparently assenting thereto, he was liable to the same
extent as the officers themselves. So with the petitioner corporation which even
received for safekeeping the goods unreasonably seized by the PC raiding team
and de Guzman, and refused to surrender them for quite a time despite the
dismissal of its complaint for unfair competition.

Submitted by: PADOR, REO ARLAN B.

JUAN F. NAKPIL & SONS VS. THE COURT OF APPEALS
G.R. No. L-47863 October 3, 1986
FACTS:
The plaintiff, Philippine Bar Association decided to construct an office
building on its lot located at Intramuros, Manila. The construction was undertaken
by the United Construction, Inc. and the plans and specifications for the building
were prepared by the other third-party defendants Juan F. Nakpil & Sons. The
building was completed in June, 1966.
In the early morning of August 2, 1968 an unusually strong earthquake hit
Manila and the front columns of the building buckled, causing the building to tilt

59

forward dangerously. The tenants vacated the building in view of its precarious
condition. As a temporary remedial measure, the building was shored up by
United Construction, Inc.
A pre-trial was conducted on March 7, 1969, during which among others,
the parties agreed to refer the technical issues involved in the case to a
Commissioner. Mr. Andres O. Hizon, who was ultimately appointed by the trial
court.
The Commissioner eventually submitted his report on September 25, 1970
with the findings that while the damage sustained by the PBA building was
caused directly by the August 2, 1968 earthquake whose magnitude was
estimated at 7.3 they were also caused by the defects in the plans and
specifications prepared by the third-party defendants' architects, deviations from
said plans and specifications by the defendant contractors and failure of the latter
to observe the requisite workmanship in the construction of the building and of
the contractors, architects and even the owners to exercise the requisite degree
of supervision in the construction of subject building.
United Construction Co., Inc. and the Nakpils claimed that it was an act of
God that caused the failure of the building which should exempt them from
responsibility and not the defective construction, poor workmanship, deviations
from plans and specifications and other imperfections in the case of United
Construction Co., Inc. or the deficiencies in the design, plans and specifications
prepared by petitioners in the case of the Nakpils.

ISSUE:
Whether or not an act of God-an unusually strong earthquake-which
caused the failure of the building, exempts from liability, parties who are
otherwise liable because of their negligence.
RULING:
The applicable law governing the rights and liabilities of the parties herein
is Article 1723 of the New Civil Code, which provides:
Art. 1723. The engineer or architect who drew up the plans and
specifications for a building is liable for damages if within fifteen years from the
completion of the structure the same should collapse by reason of a defect in

60

those plans and specifications, or due to the defects in the ground. The
contractor is likewise responsible for the damage if the edifice fags within the
same period on account of defects in the construction or the use of materials of
inferior quality furnished by him, or due to any violation of the terms of the
contract. If the engineer or architect supervises the construction, he shall be
solidarily liable with the contractor.
Acceptance of the building, after completion, does not imply waiver of any
of the causes of action by reason of any defect mentioned in the preceding
paragraph.
The action must be brought within ten years following the collapse of the
building.
On the other hand, the general rule is that no person shall be responsible
for events which could not be foreseen or which though foreseen, were inevitable
(Article 1174, New Civil Code).
An act of God has been defined as an accident, due directly and
exclusively to natural causes without human intervention, which by no amount of
foresight, pains or care, reasonably to have been expected, could have been
prevented. There is no dispute that the earthquake of August 2, 1968 is a
fortuitous event or an act of God.
To exempt the obligor from liability under Article 1174 of the Civil Code, for
a breach of an obligation due to an "act of God," the following must concur:
The cause of the breach of the obligation must be independent of the will of the
debtor;
The event must be either unforseeable or unavoidable;
The event must be such as to render it impossible for the debtor to fulfill
his obligation in a normal manner; and
The debtor must be free from any participation in, or aggravation of the
injury to the creditor.
Thus it has been held that when the negligence of a person concurs with
an act of God in producing a loss, such person is not exempt from liability by
showing that the immediate cause of the damage was the act of God. To be
exempt from liability for loss because of an act of God, he must be free from any
previous negligence or misconduct by which that loss or damage may have been
occasioned.

61

The negligence of the defendant and the third-party defendants petitioners

was established beyond dispute both in the lower court and in the Intermediate
Appellate Court. Defendant United Construction Co., Inc. was found to have
made substantial deviations from the plans and specifications. and to have failed
to observe the requisite workmanship in the construction as well as to exercise
the requisite degree of supervision; while the third-party defendants were found
to have inadequacies or defects in the plans and specifications prepared by
them.
As correctly assessed by both courts, the defects in the construction and
in the plans and specifications were the proximate causes that rendered the PBA
building unable to withstand the earthquake of August 2, 1968. For this reason
the defendant and third-party defendants cannot claim exemption from liability.

Submitted By: Dayo, Jesus Frederick D.L.

National Power Corporation vs. Court of Appeals
(161 SCRA 335)
Facts:
on November 4,1967, typhoon 'Welming' hit Central Luzon, passing
through NAPOCORs (NPC) Angat Hydro-electric Project and Dam at lpo,
Norzagaray, Bulacan. Strong winds struck the project area, and heavy rains
intermittently fell. Due to the heavy downpour, the water in the reservoir of the
Angat Dam was rising perilously at the rate of sixty (60) centimeters per hour. To

62

prevent an overflow of water from the dam, since the water level had reached the
danger height of 212 meters above sea level, the corporation caused the opening
of the spillway gates.
Due to the manner with which the spillway gates of the Angat Dam were
opened, an extraordinary large volume of water rushed out of the gates, and hit
the installations and construction works of ECI at the lpo site with terrific impact,
as a result of which the latter's stockpile of materials and supplies, camp facilities
and permanent structures and accessories either washed away, lost or
destroyed.
NPC asserts that the destruction and loss of the ECI's equipment and
facilities were due to force majeure. It argues that the rapid rise of the water level
in the reservoir of its Angat Dam due to heavy rains brought about by the typhoon
was an extraordinary occurrence that could not have been foreseen.
Issue:
Whether or not the NPC can be held liable for the destruction of ECIs
structures and equipments.
Held:
The NPC is Liable. Based on the findings of fact, petitioner NPC was
undoubtedly negligent because it opened the spillway gates of the Angat Dam
only at the height of typhoon "Welming" when it knew very well that it was safer
to have opened the same gradually and earlier, as it was also undeniable that
NPC knew of the coming typhoon at least four days before it actually struck. And
even though the typhoon was an act of God or what we may call force majeure,
NPC cannot escape liability because its negligence was the proximate cause of
the loss and damage.
Thus, it has been held that when the negligence of a person concurs with
an act of God in producing a loss, such person is not exempt from liability by
showing that the immediate cause of the damage was the act of God. To be
exempt from liability for loss because of an act of God, he must be free from any
previous negligence or misconduct by which the loss or damage may have been
occasioned.
Submitted by: Leon, David Martin L.
NATIONAL POWER CORPORATION VS. COURT OF APPEALS
May 21,1993
161 SCRA 384
FACTS:

63

When typhoon Welming hit Luzon in 1967 heavy rains fell and, to
prevent an overflow of water at the Angat Hydro Electric Project and Dam at Ipo,
Bulacan, NPC opened the spillway gates. An extraordinarily large volume of
water rushed out of the gatesand hit the installations and construction works of
ECI at Ipo site with terrific impact as a result pf which the latters stock pile of
materials and supplies, camp facilities, and permanent structures including its
accessories were either washed way, lost or destroyed. An action for damages
was filed. NPC raised force majeure as a defense.
ISSUE:
Whether or not NPC should be held liable for damages as a result of its
negligence act.
HELD:
NPC is liable. The negligent manner with which the spillway gates were
opened caused the extraordinarily large volume of water to rush out of the gates.
If upon the happening of a fortuitous event or an act of God there occurs a
corresponding fraud, negligence, delay, or contravention of the tenor of the
obligation which resulted in loss or damages, the obligor cannot escape liability.
To be exempt from such, he must be free from any previous negligence or
misconduct which occasioned the loss.
Thus, under Art.1174, NCC, for breach of an obligation due to an act of
God, the following must concur:
1. the cause of the breach of the obligation must be independent
of the will of the obligor;
2. the event must either be unforeseeable or unavoidable;
3. the event must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and
4. the debtor must be free from any participation in, or
aggravation of the injury to the creditor.

Submitted by: Dacanay, Jan Jacob

Pantranco v Baesa 179 SCRA 399
Facts:

64

The spouses Ceasar and Marilyn Baesa and their children Harold Jim,
Marceline and Maricar, together with spouses David Ico and Fe O. Ico with their
son Erwin Ico and seven other persons, were aboard a passenger jeepney on
their way to a picnic at Malalam River, Ilagan, Isabela
The jeepney, while going towards MAlalam River, collided with a speeding
Pantranco bus while the latter was negotiating a turn, which had encroached on
the jeepneys lane. As a result of the accident David Ico, spouses Ceasar Baesa
and Marilyn Baesa and their children, Harold Jim and Marcelino Baesa, died
while the rest of the passengers suffered injuries. The jeepney was extensively
damaged. The driver of the bus went in hiding after.
Pantranco contended that the proximate cause of the collision was the
negligence of the driver David Ico. Furthermore, Pantranco raised the defense
that it exercised due diligence in the selection and supervision of its employee.
The lower court rendered a decision against Pantranco, which was
sustained by the Court of Appeals.
Thus, Pantranco filed a case in the Supreme Court, contending that the
Court of Appeals erred in not applying the Doctrine of Last Clear Chance.
Issue
Whether or not the doctrine of Last Clear Chance is applicable
Held:
The Court found no merit in the claim of Pantranco that the negligence of
the driver of the jeepney was the proximate cause of the collision. Neither did the
Court find merit in the claim of Pantranco that the jeepney driver could have
avoided the collision. It stated that even if the jeepney driver saw from a distance
the approaching bus, he could not have had seen the impending danger, since it
was safe to assume that the bus would go back to its lane. Moreover, the bus in
this case was speeding, so much so that it might have been too late for the
jeepney driver to do anything by the time he realized that the bus was not going
back to its lane. Hence, the jeepney driver had no chance to avoid the bus.

Submitted by: Tejano, Francis John L.

Pecson vs. Court of Appeals
244 SCRA 407

65

Facts:
Pedro Pecson was the owner of a commercial lot located in Kamias
Street. Quezon City on which he built a four (4) door two- storey apartment
building. For his failure to pay realty taxes amounting to P12,000.00, the lot was
sold to the Spouses Juan Nuguid and Erlinda Tan-Nuguid.
Pedro Pecson filed a complaint on the validity of the auction sale before
the Regional Trial Court of Quezon City but RTC dismissed the complaint,
however, private respondent would like to include the building and praying that
a writ of possession must be issued. RTC ruled that petitioner is a builder in
good faith and that a public auction of the building was not included as appealed
tax payer. Private respondent appealed to Court of Appeals and CA affirmed
the decision of RTC in toto and ordered Nuguid to pay the construction cost.
Petitioner move for MR but it was not acted upon, Hence, it ordered the sheriff to
place movant Juan Nuguid in possession of the subject property. Petitioner
Pecson aggrieved by the decision of the CA hence, he filed a petition to Supreme
Court that he be restored in possession.
Issue:
Whether or not the issue here is that the petitioner is a good faith?
Held:
It was ruled that the petitioner be reinstated to possession until
after the respondent has indemnified the petitioner to the cost of the land and
building to its market value, in order that respondent shall not unjustly enrich at
the expense of the petitioner.

Submitted by: VILLANUEVA, Vincent Irving P.

PHILIPPINE MATCH CO., LTD vs. CITY OF CEBU

66

G.R. No. L-30745 January 18, 1978

FACTS:
Ordinance No. 279 of Cebu City which was approved by the mayor as well
as by the Provincial Board provides that, for purposes of the tax, "all deliveries of
goods or commodities stored in the City of Cebu, or if not stored are sold" in that
city, "shall be considered as sales" in the city and shall be taxable.
Petitioner assails the legality of the tax which the city treasurer collected
on out-of- town deliveries of matches, which it paid under protest and filed a
claim for damages predicated on articles 19, 20, 21, 27 and 2229 of the Civil
Code. It argued that the city treasurer refused and neglected without just cause
to perform his duty and to act with justice and good faith. The company faults the
city treasurer for not following the opinion of the city fiscals, as legal adviser of
the city, that all out-of-town deliveries of matches are not subject to sales tax
because such transactions were effected outside of the city's territorial limits.
In reply, it is argued for defendant city treasurer that in enforcing the tax
ordinance in question he was simply complying with his duty as collector of taxes
ISSUE:
Whether or not the claim for damages filed by the petitioner will prosper.
HELD:
No.
Article 27 presupposes that the refuse or omission of a public official is
attributable to malice or inexcusable negligence. In this case, it cannot be said
that the city treasurer acted willfully or was grossly negligent in not refunding to
the plaintiff the taxes which it paid under protest on out-of-town sales of matches.
The city treasurer acted within the scope of his authority and in
consonance with his bona fide interpretation of the tax ordinance. The fact that
his action was not completely sustained by the courts would not him liable for we
have upheld his act of taxing sales of matches booked and paid for in the city.
Submitted by: Dayo, Jesus Frederick D.L.
Phoenix Construction, Inc. vs. Internediate Appellate Court

67

(148 SCRA 353)

Facts:
Leonardo Dionisio was on his way from a cocktails-and-dinner meeting
with his boss. Dionisio was driving his Volkswagen car not far from his home
when his car headlights (in his allegation) suddenly failed. He switched his
headlights on "bright" and thereupon he saw a Ford dump truck looming some 21/2 meters away from his car. The dump truck, owned by and registered in the
name of Phoenix Construction Inc. ("Phoenix"), was parked on the right hand
side facing the oncoming traffic. The dump truck was parked in such a manner as
to stick out onto the street, partly blocking the way of oncoming traffic. There
were no lights nor any so-called "early warning" reflector devices set anywhere
near the dump truck, front or rear. Dionisio claimed that he tried to avoid a
collision by swerving his car to the left but it was too late and his car smashed
into the dump truck. As a result of the collision, Dionisio suffered some physical
injuries.
Dionisio commenced an action for damages in the Court of First Instance
of Pampanga basically claiming that the legal and proximate cause of his injuries
was the negligent manner in which the driver had parked the dump truck
entrusted to him by his employer Phoenix. Phoenix and the driver, on the other
hand, countered that the proximate cause of Dionisio's injuries was his own
recklessness in driving fast at the time of the accident, while under the influence
of liquor, without his headlights on and without a curfew pass. Phoenix also
sought to establish that it had exercised due rare in the selection and supervision
of the dump truck driver.
Issue:
Whether or Not Phoenix and the dump truck driver may be held liable for
the injuries sustained by Dionisio.
Held:
Phoenix construction and its driver is liable. There are four factual issues
that need to be looked into: (a) whether or not private respondent Dionisio had a
curfew pass valid and effective for that eventful night; (b) whether Dionisio was
driving fast or speeding just before the collision with the dump truck; (c) whether
Dionisio had purposely turned off his car's headlights before contact with the
dump truck or whether those headlights accidentally malfunctioned moments
before the collision; and (d) whether Dionisio was intoxicated at the time of the
accident.

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As to the first issue relating to the curfew pass, it is clear that no curfew
pass was found on the person of Dionisio immediately after the accident nor was
any found in his car. As to the second, the testimony of the patrolman present
immediately after the accident was given credence by the court, hence leading to
the conclusion that the volkswagon was moving fast. As to the third issue, the
court believes that the petitioners' theory is a more credible explanation than that
offered by private respondent Dionisio. Finally, as to the fourth issue, the court
finds there simply is not enough evidence to show how much liquor he had in fact
taken and the effects of that upon his physical faculties or upon his judgment or
mental alertness. The conclusion we draw from the factual circumstances
outlined above is that private respondent Dionisio was negligent the night of the
accident.
Nonetheless, the supreme court agrees with the Intermediate Appellate
Court that the legal and proximate cause of the accident and of Dionisio's injuries
was the wrongful or negligent manner in which the dump truck was parked in
other words, the negligence of petitioner Carbonel. That there was a reasonable
relationship between petitioner Carbonel's negligence on the one hand and the
accident and respondent's injuries on the other hand, is quite clear. The collision
of Dionisio's car with the dump truck was a natural and foreseeable consequence
of the truck driver's negligence.
Dionisio's negligence was "only contributory," that the "immediate and
proximate cause" of the injury remained the truck driver's "lack of due care" and
that consequently respondent Dionisio may recover damages though such
damages are subject to mitigation by the courts (Article 2179, Civil Code of the
Philippines).
Phoenix also ask us to apply what they refer to as the "last clear chance" doctrine.
It is difficult to see what role, if any, the common law last clear chance doctrine has to
play in a jurisdiction where the common law concept of contributory negligence as an
absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in Article
2179 of the Civil Code of the Philippines.

Submitted by: Abad, Cernick S.

Picart v. Smith
37 Phil. 813

69

FACTS:
Plaintiff Picart was riding a pony in a bridge. He saw an approaching
automobile and he improperly pulled his horse over to the railing in the right, the
wrong side of the bridge. The driver of the automobile sounded his horn but
Picart made no move to go to the right side. The driver guided his car to the right
without diminution of speed until he was only a few feet away. He turned to the
right but passed so closely to the horse that the latter being frightened, jumped
around and was killed by the passing car.
Picart was thrown off his horse and suffered contusions, he sued Smith for
the value of his animal, medical expenses and damage to his apparel.
ISSUE:
Who is at fault?
HELD:
Plaintiff Picart was originally at fault but defendant Smith has the last clear
chance to avoid the impending harm by merely swerving his automobile. Smith
failed to do this and he should therefore be chargeable for the consequences of
his acts, without reference to the prior negligence of the other party. It is enough
to say that the negligence of the defendant was in this case the immediate and
determining cause of the accident and that the antecedent negligence of the
plaintiff was a more remote factor in the case.

Submitted by: Dacanay, Jan Jacob

PLDT v. CA 178 SCRA 94

70

Facts:
The jeep which spouses Esteban ran over a mound of earth and fell into
an open trench, thereby sustaining injuries. The trench was an excavation was
allegedly undertaken for the installation of conduit systems of PLDT. Antonio
Esteban also alleges that he failed to notice the mound of earth and the trench
since there were no adequate warning signs and it was dark at that time. Having
sustained injuries, they filed a claim for damages against PLDT.
PLDT for its part, denies liability contending that the injuries were caused
by the negligence of Antonio Esteban. Furthermore, PLDT contends that if an
entity should be held responsible, it should be L.R. Barte and Co., an
independent contractor who undertook the construction of the trench and the
installation of the conduit system. As such, PLDT filed a third-party complaint
against Barte alleging that, under the terms of their agreement, PLDT should in
no manner be answerable for any accident or injuries arising from the negligence
or carelessness of Barte or any of its employees.
In answer thereto, Barte claimed that it was not aware nor was it notified of the
accident involving respondent spouses and that it had complied with the terms of its
contract with PLDT by installing the necessary and appropriate standard signs in the
vicinity of the work site, with barricades at both ends of the excavation and with red
lights at night along the excavated area to warn the traveling public of the presence of
excavations.
Issue:
Whether or not the accident was imputable to the negligence of PLDT or
to that of Antonio Esteban.
Held:
The accident was imputable to the negligence of Antonio Esteban. First,
Antonio Esteban knew of the excavations, as he regularly passes by the route.
Secondly, the Court sustained the findings of the trial court that the jeep could not
have had been running for only 25 km/hour since, if it was doing so, it could have
stopped before it reached the mound, or at least before it went airborne. Also, if
Antonio Esteban could not have seen the mound which was fairly big and visible,
he also could not have seen the warning devices, given the fact that he had his
dim lights on.
SUBMITTED BY: SAYO, RICHARD EMMANUEL L.
PONCE VS. LEGASPI
208 SCRA 377

71

FACTS:
Spouses Ponce, petitioners herein, owned 43% of the stockholdings of
LNOR Corporation. Spouses filed a disbarment case against Atty. Legaspi,
herein defendant, on the ground that Atty. Legaspi in his dual capacity as legal
counsel of LNOR and YRASPORT (corporation which was incorporated by some
of the officers of LNOR to compete with the latter with aid and assistance of Atty.
Legaspi who happens to be the retaining counsel of LNOR), facilitated, assisted
and aided in the fraudulent manipulations, anomalous management and
prejudicial operations by certain officers of LNOR which caused great damage
and prejudice to LNOR. The disbarment proceeding was dismissed. Thus, Atty.
Legaspi filed a complaint for damages against the spouses Ponce on the ground
of malicious prosecution.
ISSUE:
Whether or not filing of disbarment case makes out a case of malicious
prosecution
HELD:
Yes
RATIO:
Generally, malicious prosecution refers to unfounded criminal actions and
has been expanded to include unfounded civil suits just to vex and humiliate the
defendant despite the absence of a cause of action or probable cause. The
foundation of an action for malicious prosecution is an original proceeding,
judicial in character. A disbarment proceeding is, without doubt, judicial in
character and therefore may be basis for a subsequent action for malicious
prosecution.
An action for damages arising from malicious prosecution is anchored on
the provisions of Articles 21, 2217 and 2219 of the New Civil Code.
Malice is essential to the maintenance of an action for malicious
prosecution and not merely to the recovery of exemplary damages. Malice and
want of probable cause must both exist in order to justify action. The general rule
is well settled that one cannot be held liable in damages for maliciously instituting
a prosecution where he acted with probable cause. In other words, a suit will lie
only in cases where a legal prosecution had been carried on without probable
cause.
Submitted by: Carlos, Mary Maizie C.
Rakes vs. Atlantic Gulf and Pacific Co.
No. 1719, January 23, 1907
FACTS:

72

The plaintiff, one of the laborers in the employment of the defendant, was
at work transporting iron rails from a barge in the harbor to the companys yard in
Manila. Plaintiff claims that only one car was used in this work. The defendant,
however, has proved that they were two immediately following one another, upon
which were piled lengthwise seven rails, each weighing 560 pounds, so that the
ends of the rails projected beyond the cars both in front and behind. The rails lay
upon two crosspieces secured to the cars, but without side pieces or guards to
prevent them from slipping off.
According to the plaintiff, the men were either in the rear of the car or at its
sides. The defendant, on the other hand, contends that some of them were also
in front, hauling by a rope. At a certain spot at or near the waters edge the track
sagged, the tie broke, the car either canted or upset, the rails slid off and caught
the plaintiff. As a result, the plaintiff broke his leg which was afterwards
amputated at about the knee.
The trial court found that the dislodging of the crosspiece or piling under
the stringer by the water of the bay raised by a recent typhoon was the cause of
the sagging of the track and the breaking of the tie, which was the immediate
occasion of the accident. A fellow-worker of the plaintiff testified that a day
before the accident, he called the attention of the foreman and asked the latter to
have it repaired. It has not been proved that the company inspected the track
after the typhoon or had any proper system of inspection. It is upon the failure of
the defendant to repair the weakened track, after notice of its condition, that the
trial court based its judgment.
ISSUE:
Whether or not a criminal action is the proper remedy for injuries through
negligence.
Whether or not there was contributory negligence on the part of the
plaintiff which caused his injury.
Whether or not the plaintiff may recover damages if he is guilty of
contributory negligence.

HELD:
NO. The Civil Code provides that obligations arising from faults or
negligence not punished by the law, shall be subject to the provisions of Chapter

73

II of Title XVI. Since nowhere in our general statutes is the employer penalized
for failure to provide or maintain safe appliances for his workmen, his obligation
therefore is one not punished by law and falls under civil rather than criminal
jurisprudence.
Where an individual is civilly liable for a negligent act or omission, it is not
required that the injured party should seek out a third person criminally liable
whose prosecution must be a condition precedent to the enforcement of the civil
right.
Under the Penal Code, the responsibility of an employer may be regarded
as subsidiary in respect of criminal actions against his employees only while they
are in the process of prosecution, or in so far as they determine the existence of
the criminal act from which liability arises, and his obligation under the civil law
and its enforcement in the civil courts is not barred thereby unless by the election
of the injured person. Inasmuch as no criminal proceeding had been instituted,
growing out of the accident in question, the provisions of the Penal Code cannot
affect this action.
YES. The plaintiff is charged with carelessness in two particulars: a) that
having noticed the depression in the track he continued his work; and b) that he
walked on the ends of the ties at the side of car instead of along the boards,
either before or behind it.
As to the first point, there is nothing in the evidence to show that the
plaintiff did or could see the displaced timber underneath the sleeper. While the
method of construction may have been known to the men who had helped build
the road, it was otherwise with the plaintiff who had worked at his job less than
two days. Although the plaintiff perceived the sagging of the track, his lack of
caution in continuing at his work after noticing the slight depression of the rail
was not so gross as to constitute negligence which would bar him to recover from
the defendant.
With regard to the second, while the plaintiff and his witnesses testified
that not only were they not forbidden to proceed in this way, but were expressly
directed by the foreman to do so, both the officers of the company and three of
the workmen testified that there was a general prohibition frequently made known
to all against walking by the side of the car, and the foreman swears that he
repeated the prohibition before the starting of this particular load. On this
contradiction of proof, the preponderance is in favor of the defendants contention
to the extent of the general order being made known to the workmen. If so, the
disobedience of the plaintiff in placing himself in danger contributed in some
degree to the injury as a proximate, although not as its primary cause.

74

YES. In determining which acts of the injured party shall be considered

immediate causes of the accident, a distinction must be made between the
accident and the injury between the event itself, without which there could have
been no accident, and those acts of the victim not entering into it, independent of
it, contributing to his own proper hurt. In the case at bar, the cause of the
accident was the displacement of the crosspiece or the failure to replace it. This
produced the event giving to the occasion for damages. To this event, the act of
the plaintiff in walking by the side of the car did not contribute, although it was an
element of the damage which came to himself. On the other hand, had the
crosspiece been out of place through the act or omission of the plaintiff, that
would have been one of the determining causes of the event or accident, for
which he would have been responsible. Where he contributes to the principal
occurrence, as one of its determining factors, he cannot recover. However,
where, in conjunction with the occurrence, he contributes only to his own injury,
as in the case at bar, he may recover the amount that the defendant responsible
for the event should pay for such injury, less a sum deemed a suitable equivalent
for his own imprudence.

Submitted by: CHENG, ROY E.

75

RADIO COMMUNICATION OF THE PHILIPPINES, INC. VS COURT OF

APPEALS
G.R. No. 79528, March 13, 1991
FACTS:
Minerva and Flores Timan sent a telegram of condolence to their cousins,
Mr. and Mrs. Hilario Midoranda, through Radio Communication of the Philippines,
Inc. (RCPI), to convey their deepest sympathy for the death of the mother-in-law
of Hilario, to wit:
Mr. & Mrs. Hilario Medoranda
Trinidad, Calbayog
May God give you courage and strength to bear your loss. Our deepest
sympathy to you and members of the family.
Miner and Flory
The condolence telegram was correctly transmitted as far as the written
text was concerned. However, the condolence message as communicated and
delivered to the addresses was typewritten on a HAPPY BIRTHDAY card and
placed inside a CHRISTMASGRAM envelope.
Believing that the transmittal of the aforesaid telegram in that manner was
done intentionally and with gross breach of contract resulting in ridicule,
contempt, and humiliation of private respondents and the addresses, including
their friends and relatives , the spouses Timan demanded an explanation
The Timans were not convinced of the explanations of RCPI. Hence, their
complaint for damages against RCPI.
The trial court decided in favor of the Timans, and the Court of Appeals
affirmed the decision of thye lower court in toto.
RCPI argued that it still correctly transmitted the text of the telegram and
was received by the addressee on time despite the fact that there as error in the
social form and envelope used.
RCPI asserted that there was no showing that it has any motive to cause
harm or damage to the Timans.

ISSUE:

76

Is RCPI guilty of negligence? Is RCPI guilty of bad faith, fraud and malice?
RULING:
Anyone who avails of the facilities of a telegram company can choose to
send his message in the ordinary form or a social form. In the ordinary form, the
text of the message is typed on plain newsprint paper. On the other hand, a
social telegram is placed in a special form with the proper decorations and
embellishments to suit the occasion and the message and delivered in an
envelope matching the pupose of the occasion and the words and intent of the
message. The sender pays a higher amount for the social telegram than for the
ordinary form. Hence, when RCPI typed the message of condolence in a birthday
and delivered the same in a colorful Christmas envelope, it committed a breach
of contract as well as gross negligence. Its excuse that it had run out of social
condolence cards and envelope is flimsy and unacceptable.
It could not have been faulted had it delivered the message in ordinary
form and reimbursed the difference in the cost of the sender. But by transmitting
it unfittingly, through other special forms, clearly, albeit outwardly, portraying the
opposite feelings of joy and happiness and thanksgiving, RCPI only exacerbated
the sorrowful situation of the addressees and the senders. This botchery
exposed not only RCPIs gross negligence but also its callousness and disregard
for the sentiments of its clientele, which is tantamount to wanton misconduct, for
which it must be held liable for damages
It is not surprising that when the Timans telegraphic message reached
their cousin, it became the joke of the Midorandas friends, relative, and
associates who thought that the unpardonable mix-up was a mockery of the
death of the mother-in-law of the senders cousin. Thus, it was not unexpected
that because of this unusual incident, which caused much embarrassment and
distress to Timan, he suffered nervousness and hypertension resulting in his
confinement for 3 days at the hospital.
Under the circumstances, defendants plea of good faith predicated on the
exhaustion of social condolence forms cannot be accepted, gross negligence or
carelessness can be attributed to defendant in not supplying its various stations
with such sufficient and adequate social condolence forms when it held out to the
public the availability of such social condolence forms and accepted for a fee the
transmission of message on said forms. Knowing that there is no such forms as
testified to by its material control manager, and entering into a contract for the
transmission of message in such forms, defendant committed acts of bad faith,
fraud, and malice.

77

Submitted by: Mori, Paul Krian Akira

Salvosa vs. Intermediate Appellate Court
G.R. No. 70458, October 5, 1988
Facts:
Jimmy Abon was a duly appointed armorer of the ROTC Unit of Baguio
Colleges Foundation (BCF). He received his appointment as an armorer from the
AFP. Not being an employee of BCF, he received his salary from the AFP, as well
as orders from Captain Roberto Ungos, Commandant of the said ROTC unit.
Abon was also a commerce student of BCF.
On March 3, 1977, around 8:00pm, Abon shot Napoleon Castro, a student
of University of Baguio, with an unlicensed firearm which the former took from the
armory of the ROTC Unit of BCF. As a result, Castro died and Abon was
prosecuted and convicted of the crime of Homicide by the Military Commission.
Subsequently, the heirs of Casto sued for damages, impleading Jimmy
Abon, Roberto Ungos, Benjamin Salvosa (President and Chairman of the Board
of BCF), LIbertad Quetolio (Dean of the College of Education and Executive
Trustee of BCF), and Baguio Colleges Foundation, Inc., as party defendants.
After hearing, the Trial Court rendered a decision sentencing only defendants
Jimmy Abon, Benjamin Salvosa, and Baguio Colleges Foundation jointly and
severally to pay private respondents (heirs of Castro). The rest of the defendants
were absolved. On appeal by petitioners, the respondent Court affirmed with
modifications the decision of the Trial court reducing the amount of some of the
awards given by the Trial Court.
Hence, this petition.
Issue:
Can the petitioners be held solidarily liable with Abon for damages under
Article 2180 of the Civil Code as a consequence of the tortuous act of Abon?
Ruling:
NO. the petitioners cannot be held under Article 2180 of the Civil Code be
held solidarily liable with Jimmy Abon for the damages resulting from the latters
acts.
The Court held that under the penultimate paragraph of Article 2180 of the
Civil Code, teachers or heads of establishments of arts and trades are liable for
"damages caused by their pupils and students or apprentices, so long as they

78

remain in their custody. The rationale of such liability is that so long as the
student remains in the custody of the teacher, the latter stands, to a certain
extent, in loco parentis as to the student and is called upon to exercise
reasonable supervision over the conduct of the student. Likewise, the phrase
used in Article 2180 so long as the [students] remain in their custody means the
protective and supervisory custody that the school and its heads and teachers
exercise over the pupils and students for as long as they are at attendance in the
school, including recess time.
The Court held that Jimmy Abon cannot be considered to have been at
attendance in school or in the custody of BCF when he shot Napoleon Castro.

79

Submitted by: Tejano, Francis John L

Security Bank vs. Court of Appeals
249 SCRA 206
Facts:
Private respondent Ysmael Ferrer entered into a contract of building
construction with petitioner Security Bank and Trust Company (SBTC) in
Febrary 1980. It was stipulated therein that Ferrer would finish the said
construction in Davao City within 200 working days for the price of
P1,760,000.00.
Ferrer made demands for reimbursement of the said expenses
but was repeatedly denied by petitioner who reiterated the stipulated cost it
the agreement. A complaint for breach of contract was filed by Ferrer. The
trail court ruled in favor of Ferrer. The trail court ruled in favor of Ferrer,
prompting SBTC to appeal.
Issue:
Whether or not SBTC may be held liable for the payment of additional
expenses incurred by Ferrer?
Held:
It cannot be denied that SBTC derived benefits when private respondent
completed the construction even at an increase amount. To allow SBTC to
acquire the constructed cost would undoubtedly constitute unjust payment for the
bank to the prejudice of private respondent, Such unjust enrichment is not
allowed by law. So, therefore SBTC is liable for the additional expenses
incurred by private respondent Ysmael Ferrer.

80

SUBMITTED BY: SAYO, RICHARD EMMANUEL L.

GASHEM SHOOKAT BAKSH VS. COURT OF APPEALS
219 SCRA 115
FACTS:
Private respondent filed a complaint for damages before the RTC on the
ground of breach of promise to marry against petitioner. Private respondent
alleged that petitioner courted and proposed to marry her. Because of such
promise, petitioner made private respondent surrender her virginity to him and to
live with him. They agreed to get married after the end of the school semester.
Petitioner already secured the approval of private respondents parents to the
marriage. The parents of private respondent, by reason of petitioners promise to
marry their daughter, made some preparations for the wedding including giving of
invitations to friends and relatives. However, before the wedding and during their
cohabitation, petitioners attitude towards private respondent started to change.
He maltreated and threatened her. Petitioner, despite his promise, did not marry
private respondent because according to him he was already married to other
woman.
RTC ruled in favor of private respondent which was affirmed by the CA.
Hence, this petition.
ISSUE:
Whether or not damages may be recovered for a breach of promise to
marry on the basis of Article 21 of the New Civil Code
HELD:
Yes
RATIO:
The existing rule is that a breach of promise to marry per se is not an
actionable wrong. However, where a mans promise to marry is in fact the
proximate cause of the acceptance of his love by a woman and his
representation to fulfill that promise thereafter becomes the proximate cause of
the giving of herself unto him in sexual congress, proof that he had, in reality, no
intention of marrying her and that the promise was only a subtle scheme or
deceptive device to entice her to accept him and to obtain her consent to the
sexual act, could justify the award of damages pursuant to Article 21 not because
of such promise to marry but because of the fraud and deceit behind it and the
willful injury to her honor and reputation which followed thereafter. It is essential,

81

however, that such injury should have been committed in a manner contrary to
morals, good customs or public policy.
Submitted by: Gatioan, Edison
SOLIMAN vs. TUAZON
G. R. No. 66207 May 18, 1992
FACTS:
On 13 August 1982, in the morning thereof, while the plaintiff was in the
campus ground and premises of the defendant, REPUBLIC CENTRAL
COLLEGES, as he was and is still a regular enrolled student of said school
taking his morning classes, the defendant, JIMMY B. SOLOMON, who was on
said date and hour in the premises of said school performing his duties and
obligations as a duly appointed security guard under the employment,
supervision and control of his employer-defendant R.L. SECURITY AGENCY,
INC., headed by Mr. Benjamin Serrano, without any provocation, in a wanton,
fraudulent, reckless, oppressive or malevolent manner, with intent to kill, attack,
assault, strike and shoot the plaintiff on the abdomen with a .38 Caliber Revolver,
a deadly weapon, which ordinarily such wound sustained would have caused
plaintiffs death were it not for the timely medical assistance given to him. The
plaintiff was treated and confined at Angeles Medical Center, Angeles City, and,
as per doctor's opinion, the plaintiff may not be able to attend to his regular
classes and will be incapacitated in the performance of his usual work for a
duration of from three to four months before his wounds would be completely
healed."
Issue:
Whether or not the RCC may be held liable for the action of the security
guard who is an employee of the security agency?
Held:
Supreme Court held that as a general rule a client or customer of a
security agency has no hand in selecting who among the pool security guards or
watchmen employed by the agency shall be assigned to it. The duty to observe
due diligence of a good father of a family in selecting its security guard is the
agency. While it is true that the school was not the employer of the guard its
liability is not only based on Article 2180 of the Civil Code. The lower court must
have read the case of PSBA vs. CA in dismissing its judgment, for it should have

82

allowed the petitioner to prove acts constituting breach of an obligation ex

contactu or ex lege on the part of respondent school.
Submitted by: Cuyco, Kate Juris Prudence C.
David Taylor vs. Manila Electric Railroad and Light Company
Facts:
David Taylor, 15 years of age and son of a mechanical engineer, more
mature than the average boy of his age and having considerable aptitude and
training in mechanics went together with a friend to the power plant of Manila
Electric to meet an employee of the said company. When the employee did not
show up, the boys decided to roam around the vicinity out of curiosity. They
bought home a cylinder ( a capt size of a pistol cartridge), which are indended for
use in the explosion of blasting charges of dynamite and have in themselves a
considerable explosive. They opened it and decided to light it with matches. The
device exploded and injured the two boys and a girl who accompanied them.
Taylor said the company for damages.
Issue:
Whether the company should be held liable?
Ruling:
No, the company cannot be held liable because it was the plaintiffs own
acts which caused the injury. It was held that the boy well knew of the danger
that comes with lighting the device, considering he was more mature and
intelligent than the average boy of his age; and the fact that he had previous
work experiences, yet he still recklessly and knowingly produced the explosion.
On this note, the Supreme Court held that the just thing is that a man should
suffer the damage which comes to him through his own fault and that he cannot
demand reparation therefore from another.

83

Submitted by: Acosta, Votlaire S.

Umali vs. Bacani
69 SCRA 263
Facts:
A strong typhoon hit Alcala, Pangasinan on May 14, 1972 as a result,
banana plants near Alcala Electric Plant fell on the electric wire which caused it
to be cut. One end of the wire was left hanging on the electric post and the other
fell on the ground under the fallen banana plants. Knowing this, the Captain of
the Barangay told an employee of the electric plant about it and asked him to fix
it. The latter said he will look for a lineman to fix it. Unfortunately, Manuel Saynes,
a boy leaving nearby got in contact with the live cut wire which led to his death.
Fidel Saynes, father of Manuel Saynes, filed an action for damages against
Teodoro Umali, owner and manager of the electric plant.
Umalis contention is that the death of Manuel Saynes is due to a
fortuitous event (referring to the strong storm that caused the banana plants to
fall and cut the electric wire).
Issue:
Whether the owner of the electric plant is liable for damages?
Held:
Umali was held liable for damages. The employees of Alcala Electric
Plant were already aware of the possible damage caused by the storm to the
electric lines which is dangerous to life and property, but they did not cut off from
the plant the flow of electricity along the lines. They could have done this pending
inspection of the wires. Likewise, they did not take the necessary precaution to
eliminate the source of danger to the electric line, knowing that tall banana plants
were standing on elevated ground and which were higher than the electric post.
The Court also took note of the negligence of Cipriano Baldomero. He being an
employee of the electric plant and aware of the live cut wire, he did not take the
necessary precaution to prevent anybody from approaching the place.

84

Submitted by: Rodriguez, Christian Patrick S.

Velayo vs. Shell Company of the Philippine Islands

100 Phil. 186
Facts:
Herein defendant Shell Company of the Philippine Islands is the official
supplier of gasoline of Commercial Airlines, Inc. (CALI). The latter has an existing
debt of P170,162.58 to the former. In 1948, the management of CALI called a
meeting of all its major creditors and announced that it was in a state of
insolvency and will stop its operations. The said creditors all agreed to proceed
with a pro-rata division of the assets of CALI. The defendant then assigned its
credit to the Shell Oil Company in the United States. The latter then filed an
action in a California court for the collection of the credit and for a writ of
attachment, which was granted, of a C-54 plane belonging to CALI. As a result of
the defendants action, CALI filed in the Philippines a petition for voluntary
insolvency. During the proceedings of the case, the creditors of CALI
unanimously elected herein plaintiff Alfredo Velayo as assignee. The latter then
filed an action for recovery of damages against the defendant.
Issue:
Whether or not the defendant acted in bad faith and is therefore liable for
damages?
Held:
The Supreme Court ruled in the Affirmative. The defendant clearly acted in
bad faith when it schemed and effected the attachment of the C-54 plane of its
debtor CALI by assigning its credit to its sister company in the United States. It
took advantage of its knowledge that insolvency proceedings would most
probably be instituted by CALI if its creditors fail to come up with an
understanding as to the manner of distribution of the assets. According to Article
21 of the New Civil Code, Any person who willfully causes loss and injury to
another in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage. A moral wrong or injury, even if it
does not constitute a violation of a statute or law, should be compensated by
damages. Therefore, the defendant is liable to pay damages in an amount
double the value of the attached aircraft.

85

Submitted by: CHENG, ROY E.

VERGARA VS. COURT OF APPEALS
G.R. No. 77679, September 30, 1987
FACTS:
The defendant and his friend were traveling by car to Manila from Baguio.
From the opposite direction, the following were travelling: a tricycle, a passenger
bus and a private jeep in that order. The bus tried to overtake the tricycle but in
doing so, it swerved into the lane of the defendant. This prompted the defendant
veer his car to the shoulder of the highway to avoid a head-on collision.
Defendant, however, lost control of his car causing it to collide with a private jeep.
No charges were filed against the owner of the passenger bus. Defendant as
then charged of reckless imprudence resulting to damage to property and
multiple physical injuries. Defendant claimed that he is not guilty of criminal
negligence because he lost control of his car when the bus swerved into his lane.
ISSUE:
Is the contention of defendant tenable?
RULING:
The owner of the car cannot be faulted because he lost control of his car
when in order to avoid a head-on collision with a passenger bus which suddenly
swerved into his lane, he veered his car to the shoulder of the highway and
collided with a private jeep.
The real culprit is the passenger bus but there were no charges that were
filed. The court held that although the defendant was not criminally negligent, and
therefore cannot be held liable for a crime, there is enough evidence to prove
that defendant should have exercised a little more caution and discretion in
reacting to the treat of a head-on collision.
For this reason, he was adjudged civilly liable for the hospital expenses
and unearned salaries of the victims.

86

Submitted by: Mori, Akira

Vestil vs. Intermediate Appellate Court
179 SCRA 47, G.R. No. 74431, November 6, 1989
Facts:
3-year old girl Theness Tan Uy was bitten by a dog while she was playing
with a child of the petitioners Purita Miranda Vestil and Agustin Vestil in the house
of the late Vicente Miranda, father of Purita Vestil. Theness was rushed to the
hospital where she was treated for multiple lacerated wounds on the forehead
and administered an anti-rabies vaccine by Dr. Antonio Tautjo. The following day,
Theness died. The cause of death was certified as broncho-pneumonia.
Seven months later, the Uys sued for damages alleging that the Vestils
were liable to them as the possessors of Andoy, the dog that bit and eventually
killed their daughter. The Vestils rejected the charge insisting that the dog was
owned by the late Vicente Miranda, that the dog was tame, and that no one
witnessed that the dog bit Theness. After trial, the CFI of Cebu sustained the
defendants and dismissed the complaint.
On appeal, the respondent court arrived at a different conclusion ruling
that the Vestils were in possession of the house and the dog and so should be
responsible under Article 2183 of the Civil Code for the injuries caused by the
dog. It also held that the child died as a result of the dog bites and not from
causes independent thereof a submitted by the appellees. The respondent court
ordered the Vestils to pay for damages and for the death of Theness.
Issue:
Are the Vestils liable for damages as possessor of an animal causing
damage to another under Article 2183 of the Civil Code?
Ruling:
YES. The Vestils are liable for damages under Article 2183 of the Civil
Code.

87

The Court held that the evidence of the childs hydrophobia (based on the
medical report and testimony under oath of Dr. Tautjo) is sufficient to convince it
that she died because she was bitten by the dog even if the death certificate
stated a different cause of death.
The Court further held that the petitioners contention that they could not
be expected to exercise remote control of the dog is not acceptable. In fact,
Article 2183 of the Civil Code holds the possessor liable even if the animal
should escape or be lost and so be removed from his control. And it does not
matter either that, as the petitioners contend, the dog was tame and was merely
provoked by the child into biting her. The law does not speak only of vicious
animals but covers even tame ones as long as they cause injury. As for the
alleged provocation, the petitioners forgot that Theness was only three years old
at the time she was attacked and can hardly be faulted for whatever she might
have done to the animal.

88

Submitted by: Gumabay, Ma. Nina Katrina M.

Air France vs. CA
G.R. No. 76093 March 21, 1989
Facts:
Sometime in October 1977, respondent Narciso Morales thru his
representative purchased an airline ticket from Aspac Management Corporation,
petitioner's General Sales Agent in Makati. The itinerary covered by the ticket
included several cities, with certain segments thereof restricted by markings of
"non endorsable' and 'valid on AF (meaning Air France) only. While in New York,
Morales obtained 3 medical certificates attesting to an ear infection which
necessitated medical treatment. From New York, he flew to Paris, Stockholm and
then Copenhagen where he made representations with petitioner's office to
shorten his trip by deleting some of the cities in the itinerary. Morales was
informed that, as a matter of procedure, confirmation of petitioner's office in
Manila (as ticketing office) must be secured before shortening of the route. Air
France in Amsterdam telexed AF Manila requesting for rerouting of the
passenger to Amsterdam, Hamburg, Geneva, Rome, Hong Kong, Manila. As
there was no immediate response to the telex, respondent proceeded to
Hamburg where he was informed of AF Manila's negative reply. After reiterating
his need to flying home on a shorter route due to his ear infection, and
presentation of supporting medical certificates, again, the airline office made the
necessary request to Manila on 23 November 1977 for a Hamburg, Paris,
Geneva, Rome, Paris, Hong Kong and Manila route. Still, the request was
denied. Despite respondents protest and offer to pay any fare difference,
petitioner did not relent in its position. Respondent, therefore, had to buy an
entirely new set of tickets, for the homeward route. Upon arrival in Manila,
respondent sent a letter-complaint to Air France dated 20 December 1977 thru
Aspac Management Corporation. Morales was advised to surrender the unused
flight coupons for a refund of its value, but he kept the same and, instead, filed a
complaint for breach of contract of carriage and damages.
The CFI found Air France in evident bad faith for violation of the contract
of carriage, aggravated by the threatening attitude of its employees in Hamburg.
Considering the social and economic standing of respondent, who is chairman of
the board of directors of a multi-million corporation and a member of several civic
and business organizations, an award of moral and exemplary damages, in

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addition to the actual damages incurred, was deemed proper under the
circumstances. On appeal, the CA modified the award of damages, ordering
defendant to pay to said plaintiff: (1) 1,914 German Marks in its equivalent in
Philippine peso at prevailing rate of exchange as actual damages, with legal
interest thereon from the date of the filing of the complaint until fully paid; (2) P
500,000.00, as moral damages; (3) P 150,000.00, as exemplary damages; and
(4) 5% of the amount of actual, moral and exemplary damages which are
recoverable, as attorney's fees.
Issue:
WON there was a breach of contract of carriage on the part of the
petitioner, as to justify the award to private respondent of actual, moral and
exemplary damages.
Ruling:
NO. Private respondent wanted a rerouting to Hamburg, Geneva, Rome,
Hong Kong and Manilas which shortened the original itinerary on the ticket
issued by AF Manila through ASPAC. Considering the original restrictions on the
ticket, it was not unreasonable for Air France to deny the request. Besides, a
recurring ear infection was pleaded as reason necessitating urgent return to
Manila. Assuming arguendo a worsening pain or discomfort, private respondent
appears to have still proceeded to 4 other cities covering a period of at least 6
days and leaving open his date of departure from Hong Kong to Manila. And
even if he claimed to have undergone medical examination upon arrival in
Manila, no medical certificate was presented. He failed to even remember his
date of arrival in Manila. With a claim for a large amount of damages, the Court
finds it unusual for respondent, a lawyer, to easily forget vital information to
substantiate his plea. It is also essential before an award of damages that the
claimant must satisfactorily prove during the trial the existence of the factual
basis of the damages and its causal connection to defendant's acts. Air France
employees in Hamburg informed private respondent that his tickets were partly
stamped "non-endorsable" and "valid on Air France only." Mere refusal to accede
to the passenger's wishes does not necessarily translate into damages in the
absence of bad faith. Respondent has failed to show wanton, malevolent or
reckless misconduct imputable to petitioner in its refusal to re-route.
Air France Manila acted upon the advise of ASPAC in denying private
respondent's request. There was no evident bad faith when it followed the advise
not to authorize rerouting. At worst, the situation can be considered a case of
inadvertence on the part of ASPAC in not explaining the non-endorsable
character of the ticket. Of importance, however, is the fact that private

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respondent is a lawyer, and the restriction box clearly indicated the nonendorsable character of the ticket.

Submitted by: HAMDAIN ,TASNEM A.

ARAOS VS. COURT OF APPEALS
232 SCRA 771
FACTS:
The petitioners are lessees of a ten-door apartment building which they
have been occupying for some 25 years. The building was originally owned by
one Vivien B. Bernardino with whom the petitioners had a written contract of
lease which expired on January 31, 1988. Nevertheless, after this period, the
petitioners peacefully occupied their respective units and the lessor continued to
collect monthly rentals from the petitioners despite the absence of a written
contract.
On 11 July 1991, the apartment was sold to private respondent Jovan
Land, Inc. Bernardino and the private respondent made a simultaneous demand
to petitioners and other lessees who were occupying to vacate the units. When
the demands went unheeded, ten separate cases for unlawful detainer were filed
against the petitioners and other lessees by the private respondent.
ISSUE:
Whether or not, the petitioners were entitled to recover damages
RULING:
The rule is settled that in forcible entry or unlawful detainer cases, the only
damage that can be recovered is the fair rental value or the reasonable
compensation for the use and occupation of the leased property. The cases is
that of rightful possession; hence, the damages which could be recovered are
those which the plaintiff could have sustained as a mere possessor, or those
caused by the loss of the use and occupation of the property, and not the
damages which he may have suffered but which have no direct relation to his
loss of material possession.

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The petition is hereby partly GRANTED.

Submitted by: Agonoy , Ciara

Country Bankers Insurance Corporation vs. Court of Appeals
G.R. No. 85161
Facts:
Respondent Oscar Ventanilla Enterprises Corporation (OVEC), as lessor,
and the petitioner Enrique F. Sy, as lessee, entered into a lease agreement over
the Avenue, Broadway and Capitol Theaters and the land on which they are
situated in Cabanatuan City, including their air-conditioning systems, projectors
and accessories needed for showing the films or motion pictures. The term of
lease was for 6 years commencing from June 13, 1977 and ending June 12,
1983. After more than 2 years of operation of the Avenue, Broadway and Capitol
Theaters, the lessor OVEC made demands for the repossession of the said
leased properties in view of the Sys arrears in monthly rentals and non-payment
of amusement taxes. On August 8, 1979, OVEC and Sy had a conference and by
reason of Sys request for reconsideration of OVECs demand for repossession
of the 3 theaters, the former was allowed to continue operating the leased
premises upon his conformity to certain conditions imposed by the latter in a
supplemental agreement dated August 13, 1979.
In pursuance of their latter agreement, Sys arrears in rental was reduced
as of December 31, 1979. However, the accrued amusement tax liability of the 3
theaters to the City Govt of Cabanatuan City had accumulated. Hence, letters of
demand dated January 7, 1980 and February 3, 1980 were sent to Sy
demanding payment of the arrears and amusement tax delinquency. The latter
demand was with warning that OVEC will re-enter and repossess the Avenue,
Broadway and Capital Theaters on February 11, 1980 in pursuance of the
pertinent provisions of their lease contract of June 11, 1977 and their
supplemental letter-agreement. Notwithstanding the said demands and warnings
Sy failed to pay the above-mentioned amounts in full. Consequently, OVEC
padlocked the gates of the three theaters under lease and took possession
thereof in the morning of February 11, 1980 by posting its men around the
premises of the movie houses and preventing the lessees employees from
entering the same.

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Sy, through counsel, filed the present action for reformation of the lease
agreement, damages and injunction late in the afternoon of the same day.
Sy prayed for the issuance of a restraining order/preliminary injunction to
enjoin OVEC and all persons employed by it from entering and taking possession
of the Three theaters, conditioned upon Sys filing of a P500,000.00 bond
supplied by Country Bankers Insurance Corporation (CBISCO).
The trial court ruled that Sy is not entitled to the reformation of the lease
agreement and that Sy was not entitled to the writ of preliminary injunction issued
in his favor after the commencement of the action and that the injunction bond
filed by Sy is liable for whatever damages OVEC may have suffered by reason of
the injunction.
From this decision of the trial court, Sy and CBISCO appealed it to the
respondent court. The latter found no ambiguity in the provisions of the lease
agreement. It held that the provisions are fair and reasonable and therefore,
should be respected and enforced as the law between the parties.
Issue:
Whether or not the awarding of damages to the respondents constitutes
unjust enrichment at the expense of the petitioners.
Held:
No. the forfeiture clause stipulated in the lease agreement does not
unjustly enrich the respondent OVEC at the expense of Sy and CBISCO. A
provision which calls for the forfeiture of the remaining deposit still in the
possession of the lessor, without prejudice to any other obligation still owing, in
the event of the termination or cancellation of the agreement by reason of the
lessees violation of any of the terms and conditions of the agreement is a penal
clause that may be validly entered into. A penal clause is an accessory obligation
which the parties attach to a principal obligation for the purpose of insuring the
performance thereof by imposing on the debtor a special presentation in case the
obligation is not fulfilled or is irregularly or inadequately fulfilled.
As a general rule, in obligations with a penal clause, the penalty shall
substitute the indemnity for damages and the payment of interest in case of noncompliance. This is specifically provided for in Article 1226 (1), New Civil Code.
However, there are exceptions to the rule that the penalty shall substitute the
indemnity for damages and the payment of interests in case of non-compliance
with the principal obligation. They are first, when there is a stipulation to the
contrary; second, when the obligor is sued for refusal to pay the agreed penally;
and third, when the obligor is guilty of fraud. It is evident that in all said cases, the
purpose of the penalty is to punish the obligor. Therefore, the obligee can recover

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from the obligor not only the penalty but also the damages resulting from the
non-fulfillment or defective performance of the principal obligation.
In view of the foregoing, the respondent court correctly sustained the trial
court in holding that the bond shall and may answer only for damages which
OVEC may suffer as a result of the injunction. The arrears in rental, the
unmeritted amounts of the amusement tax delinquency and attorneys fees which
were all charged against Sy were correctly considered by the respondent court
as Damages which the OVEC sustained not as a result of the injunction.
Submitted by: Legasto, Vanessa G.

Davila vs. Philippine Airlines

49 SCRA 497
Facts:
On November 23, 1960, at 5:30 in the afternoon, the plane identified as
PI-C133 took of from the Manduriao Airport, Iloilo, on its way to Manila, with 33
people on board, including Pedro T. Davila Jr.. It did not reach its destination, but
crashed at Mt. Baco, Mindoro, one hour and fifteen minutes after take-off. The
plaintiffs, parents of Pedro T. Davila Jr., had no definite news of what had
happened to their son, until they received, on December 19, 1960, a letter of
condolence from the defendants president Andres Soriano, informing them that
their son died in the crash.
It was said that the route prescribed by the Civil Aeronautics
Administration was Iloilo- Romblon-Manila, the latter stage, denominated as
airway Amber I, being a straight lane from Romblon to Manila. The prescribed
elevation of the fight was 6,000 ft. However, it did not intercept airway Amber I,
over Romblon as it was supposed to do although Romblon was a compulsory
checking point. The fact was that the plane had deviated from the prescribed
route by 32 miles to the west when it crashed at Mt. Baco. The reading of the
altimeter of the plane when its wreckage was found was 6,800 ft.
In lieu of these findings, the Court of first Instance of Iloilo rendered
judgment against the defendant ordering the latter to pay the plaintiff various
sums of money as follows: The amount of P6,000 for the death of Pedro t. Davila
Jr., the rate of p12,000 per annum for five 5 years in the amount of P60,000 for
the loss of earning capacity of the deceased, P10,000 for moral damages,
P10,000 for exemplary damages, P5,000 for actual damages, and P10,000 for
Attorneys fees.

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Both parties appealed from the judgment herefrom, the plaintiffs seeking
for an increase in said amounts, while the defendant asks for a complete
exoneration from, or at least mitigation of liability.
Issue:
1. Whether or not the defendant is liable for breach of contract of carriage
2. Whether or not the amount of damages awarded to the plaintiffs by the
Court of First Instance of Iloilo are deemed proper.
Held:
1.The provisions of the Civil code on this substantive question of liability
are clear and explicit. Article 1733 binds common carriers to observe
extraordinary diligence for the safety of the passengers transported by them, by
reason of the nature of their business and public policy. Article 1755 establishes
the standard of care required of common carrier, which is, to carry the
passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due regard for all the
circumstances. Article 1756 fixes the burden of proof by creating the
presumption that common carriers are at fault or negligent in case of death or
injuries to passengers. Lastly, Article 1757 states that the responsibility of a
common carrier for the safety of passengerscannot be dispensed with or
lessened by stipulation, by the posting of notices, by statements of tickets, or
otherwise.
It is undisputed that the pilot of the defendant plane did not follow the
prescribed route for his flight to which a reasonable conclusion could be made
that his failure to do so was intentional and that he probably wanted to fly on a
straight line to Manila, and that a clear violation of air-traffic rules therefore
amounts to a breach of contract of carriage for failure to observe extraordinary
diligence required of it.
2. Pursuant to the current jurisprudence, the indemnity for Pedro T.
Davilas death fixed by the trial court should be increased from P6,000.00 to
P12,000.00. As to the damages for the loss of earning capacity of the deceased,
the latter having a gross income of P15,000.00 a year but with P7,800.00 as his
net yearly income must be multiplied by his life expectancy which is fixed to 25
years founded on the basis of his medical history showing that he suffered from
certain ailments during his lifetime, thereby amounting to a total of P195,000.00
which should be the amount to be awarded to the plaintiffs in this particular
respect. The amount of actual damages was however sustained as well as that
with respect to the moral damages for the long period of uncertainty and suffering

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underwent by the plaintiffs from November 23, when the plane crashed to
December 19, when the death of their son was confirmed. The court, on the
other hand eliminated the award for exemplary damages since that the defendant
has not been found to have acted fraudulently or in a wanton, reckless,
oppressive or malevolent manner which would have warrant the award of
exemplary damages under Article 2232 of the Civil Code in contracts and quasicontracts. Lastly, the award of Attorneys fees made by the trial court in the
P10,000.00 was sustained since that the same has not been found to be
groundless.

Submitted by: VILLANUEVA, Vincent Irving P.

DE LEON vs. COURT OF APPEALS
G.R. No. L-31931 August 31, 1988
FACTS:
The third-party defendants spouses Juan Briones and Magdalena
Bernardo were the former registered owners of the fishpond situated at
Bulcacan. This fishpond was the subject of a deed of mortgage executed by the
spouses Briones in favor of Hermogenes Tantoco involving the consideration of
P20,000.00 which amount was later assigned by the mortgagee to his father
herein defendant and third party plaintiff Dr. Cornelio S. Tantoco. Apart from this
mortgage, the spouses Briones likewise executed a deed of second mortgage for
P68,824.00 with 10% interest per annum in favor of Cornelio S. Tantoco. Both
mortgages were duly registered and duly annotated at the back of TCT No.
28296of the Briones. While these two mortgages were still subsisting the Briones
spouses sold the fishpond, which is the subject matter of said two mortgages, to
plaintiff spouses De Leon in the amount of P120,000.00. Of the said amount, the
Briones spouses actually received only the amount of P31,000.00, as the amount
of P89,000.00 was withheld by the plaintiff De Leon who assumed to answer the
mortgage indebtedness of the Briones to the Tantocos. After the sale plaintiffs De
Leon satisfied the mortgage loan of P20,000.00 including 10% interest per
annum to Hermogenes Tantoco who then accordingly executed a deed of
discharge of mortgage, but the mortgage in favor of Cornelio S. Tantoco in the
amount of P68,824 was not satisfied. On February 5, 1962 plaintiffs made
payment of P29,382.50 to the defendant Cornelio Tantocos.
Petitioners a complaint with the CFI of Bulacan against private
respondent Tantoco, for discharge of mortgage.

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The Lower Court dismissed the complaint filed by De Leon and ordered
him to pay the private respondent attorneys fees as well as moral and exemplary
damages.
Petitioner appealed the said decision to the CA. The latter affirmed the
decision of the Lower Court, hence the present petition.
Petitioner questions the award of moral and exemplary damages to private
respondents, inter alia.
ISSUE:
Whether or not the award for damages is proper.
HELD:
Yes.
The Court ruled that the filing of the case against respondent being
unfounded and maliciously prosecuted satisfactorily proves the existence of the
factual basis for moral damages and the causal relation to petitioners' acts.

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Submitted by: Mangotara, Aisha M.

EASTERN SHIPPING LINES, INC. VS. COURT OF APPEALS
234 SCRA 79
FACTS:
This is an action against defendants shipping company, arrastre operator
and broker-forwarder for damages sustained by a shipment while in defendants'
custody, filed by the insurer-subrogee who paid the consignee the value of such
losses/damages.
On December 4, 1981, two fiber drums of riboflavin were shipped from
Yokohama, Japan for delivery vessel "SS EASTERN COMET" owned by
defendant Eastern Shipping Lines under Bill of Lading No. YMA-8. The shipment
was insured under plaintiff's Marine Insurance Policy No. 81/01177 for
P36,382,466.38.
Upon arrival of the shipment in Manila on December 12, 1981, it was
discharged unto the custody of defendant Metro Port Service, Inc. The latter
excepted to one drum, said to be in bad order, which damage was unknown to
plaintiff.
On January 7, 1982 defendant Allied Brokerage Corporation received the
shipment from defendant Metro Port Service, Inc., one drum opened and without
seal (per "Request for Bad Order Survey.")
On January 8 and 14, 1982, defendant Allied Brokerage Corporation made
deliveries of the shipment to the consignee's warehouse. The latter excepted to
one drum which contained spillages, while the rest of the contents was
adulterated/fake (per "Bad Order Waybill" No. 10649).
Plaintiff contended that due to the losses/damage sustained by said drum, the
consignee suffered losses totaling P19,032.95, due to the fault and negligence of

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defendants. Claims were presented against defendants who failed and refused to
pay the same.
As a consequence of the losses sustained, plaintiff was compelled to pay the
consignee P19,032.95 under the aforestated marine insurance policy, so that it
became subrogated to all the rights of action of said consignee against
defendants (per "Form of Subrogation", "Release" and Philbanking check).
ISSUES:
(a) whether or not a claim for damage sustained on a shipment of goods
can be a solidary, or joint and several, liability of the common carrier, the arrastre
operator and the customs broker; (b) whether the payment of legal interest on an
award for loss or damage is to be computed from the time the complaint is filed
or from the date the decision appealed from is rendered; and (c) whether the
applicable rate of interest, referred to above, is twelve percent (12%) or six
percent (6%).
RULING:
The question of charging both the carrier and the arrastre operator with
the obligation of properly delivering the goods to the consignee has, too, been
passed upon by the Court. In Fireman's Fund Insurance vs. Metro Port Services
(182 SCRA 455),the court have explained, in holding the carrier and the arrastre
operator liable in solidum, thus:
The legal relationship between the consignee and the arrastre operator is
akin to that of a depositor and warehouseman (Lua Kian v. Manila Railroad Co.,
19 SCRA 5 [1967]. The relationship between the consignee and the common
carrier is similar to that of the consignee and the arrastre operator (Northern
Motors, Inc. v. Prince Line, et al., 107 Phil. 253 [1960]). Since it is the duty of the
ARRASTRE to take good care of the goods that are in its custody and to deliver
them in good condition to the consignee, such responsibility also devolves upon
the CARRIER. Both the ARRASTRE and the CARRIER are therefore charged
with the obligation to deliver the goods in good condition to the consignee.
The court do not, of course, imply by the above pronouncement that the
arrastre operator and the customs broker are themselves always and necessarily
liable solidarily with the carrier, or vice-versa, nor that attendant facts in a given
case may not vary the rule. The instant petition has been brought solely by
Eastern Shipping Lines, which, being the carrier and not having been able to
rebut the presumption of fault, is, in any event, to be held liable in this particular
case. A factual finding of both the court a quo and the appellate court, we take
note, is that "there is sufficient evidence that the shipment sustained damage
while in the successive possession of appellants" (the herein petitioner among
them). Accordingly, the liability imposed on Eastern Shipping Lines, Inc., the sole
petitioner in this case, is inevitable regardless of whether there are others
solidarily liable with it.

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The ostensible discord is not difficult to explain. The factual circumstances

may have called for different applications, guided by the rule that the courts are
vested with discretion, depending on the equities of each case, on the award of
interest. Nonetheless, it may not be unwise, by way of clarification and
reconciliation, to suggest the following rules of thumb for future guidance.
I. When an obligation, regardless of its source, i.e., law, contracts, quasicontracts, delicts or quasi-delicts 18 is breached, the contravenor can be held
liable for damages. 19 The provisions under Title XVIII on "Damages" of the Civil
Code govern in determining the measure of recoverable damages. 20
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:
1. 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. 21 Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. 22 In the
absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 23 of the Civil Code.
2. 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 24 at the rate of 6% per annum. 25 No interest, however,
shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. 26 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.
3. 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 12% per annum from such finality
until its satisfaction, this interim period being deemed to be by then an equivalent
to a forbearance of credit.
WHEREFORE, the petition is partly GRANTED. The appealed decision is
AFFIRMED with the MODIFICATION that the legal interest to be paid is SIX
PERCENT (6%) on the amount due computed from the decision, dated
03 February 1988, of the court a quo. A TWELVE PERCENT (12%) interest, in

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lieu of SIX PERCENT (6%), shall be imposed on such amount upon finality of
this decision until the payment thereof.
Submitted by: De Chavez, Faith
FILINVEST CREDIT CORPORATION vs. THE INTERMEDIATE APPELLATE
COURT and NESTOR B. SUGA JR.
G.R. No. L-65935 September 30, 1988
FACTS:
Nestor Sunga purchased a passenger Mazda minibus from Motor Center,
Inc. He executed a promissory not in lieu of the amount of the vehicle. A chattel
mortgage was likewise executed in favor Motor Center. The Chattel Mortgage
and assignment was assigned to Filinvest Credit Corp (FCC).
On 21 October 1978, Sunga claims that the minibus was seized by 2 employees
without any receipt. The taking was because of alleged delinquency in payments.
It was later found out that there was a mistake on the part of FCC and the vehicle
was returned to him.
Sunga filed a claim for moral damages in the trial court. Trial Court awarded
damages amounting to P 30,000. FCC appealed to the Court of Appeals. CA
affirmed decision and increased amount of damages to P50,000.
FCC filed a Petition for Certiorari saying that there was grave abuse of discretion
in the ascertainment of the amount of damages.
ISSUE:
Is the amount of moral damages awarded valid?
HELD:
Yes, the award is valid however it is exorbitant.
The Supreme Court held that the respondent court committed a grave
abuse of discretion in increasing extravagantly the award of moral damages and
in granting litigation expenses.
Although, 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 circumstances, the SC set the criterion that "in the case of moral
damages, the yardstick should be that the "amount awarded should not be
palpably and scandalously excessive" so as to indicate that it was the result of
passion, prejudice or corruption on the part of the trial court.

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The SC reiterated the caveat to lower courts to guard against the award of
exorbitant damages that are way out of proportion circumstances of a case.
Submitted by: Dacanay, Jan Jacob
Jison v. CA 164 SCRA 399
Facts:
In a contract to sell, Robert O. Phillips and Sons (ROPSI) agreed to sell a
lot in Antipolo for P55,000.00 to the spouses Jison, with the interest of 8%
payable on installment basis. The contract also provided that a house be built on
the lot. When the spouses Jison failed to build a house, a penalty of P5 per sq/m.
the Jison spouses failed to pay the monthly installments for January, February,
and March 1966 on their due dates, but ROPSI accepted their subsequent
payments. Afterwards, the Jison spouses failed to pay again, this time for their
October, November, and December 1966 and January 1967. ROPSI reminded
the spouses to settle their accounts and of the automatic rescission clause of
their contract to sell. The Jison spouses eventually paid. However, the Jison
spouses again failed to pay their February, March, and April 1967 payments.
When the Spouses Jison tried to tender payments, ROPSI refused, prompting
the Jison spouses to file an action for specific performance.
Issue:
Whether or not the automatic rescission clause as well as the forfeiture
clause was valid
Held:
The Court ruled that the automatic rescission clause was valid, citing the
fact that while the Jison spouses had substantial compliance, there was also a
substantial breach on their part, as evidenced by their failure to tender their
monthly installment payments. Furthermore, the forfeiture of the amounts already
paid was valid. In this case, the Court ruled the forfeiture of the amounts paid is
to be treated as liquidated damages.
However, the Court found that the forfeiture of the accumulated fines due to the
non-construction of a house as stipulated in the contract was iniquitous, and thus lowered
the amount which was to be forfeited. The Code provides that liquidated damages,
whether intended as an indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable [Art. 2227.]

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Submitted by: Suntay, Angel

DENNIS L. LAO, petitioner,
vs.
HON. COURT OF APPEALS, JUDGE FLORENTINO FLOR, Regional Trial
Court, Branch 89 of Morong, Rizal, BENJAMIN L. ESPIRITU, MANUEL
QUERUBIN and CHAN TONG, respondents.
G.R. No. 82808 July 11, 1991
FACTS:
Petitioner Dennis Lao was an employee of the New St. Joseph Lumber &
Hardware Supply, owned by the private respondent, Chan Tong. In January
1981, St. Joseph Lumber filed a collection suit against a customer, the private
respondent, Benjamin Espiritu, for unpaid purchases of construction materials
from St. Joseph Lumber.
Upon advice St. Josephs lawyer a criminal case for estafa was filed
against Espiritu. Lao being the employee who transacted business with Espiritu,
he was directed by his employer, Chan Tong, to sign the affidavit or complaint
prepared by the lawyer, Attorney Manuel Querubin.
The Fiscal finding probable cause filed an information for estafa which
was dismissed, the court believed that the liability of Espiritu was only civil and
not criminal.
On April 12, 1984, Espiritu filed a complaint for malicious prosecution
against the petitioner and St. Joseph Lumber, praying that the defendants be
ordered to pay him P500,000 as moral damages, P10,000 as actual damages,
and P100,000 as attorney's fees. Lao in his answer alleged he acted only as
agent or employee of St. Joseph Lumber when he executed the affidavit which
his employer submitted to the investigating fiscal who conducted the preliminary
investigation of his employer's estafa charge against Espiritu.
After petitioner was declared in default, private respondent was allowed to
present his evidence ex parte.
On January 22, 1985, a decision was rendered by the trial court in favor of
Espiritu ordering the defendants Lao and St. Joseph Lumber to pay jointly and
severally to Espiritu the sums of P100,000 as moral damages, P5,000 as
attorney's fees, and costs.

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Petitioner's motion for reconsideration of the decision and motion for new
trial was denied by the trial court. Appeal to the Court of Appeals was likewise
denied, thus the filing of a special civil action of certiorari and prohibition to
partially annul the appellate court's decision and to enjoin the execution of said
decision against him.
ISSUE:
Whether or not Lao together with his employer is liable for damages for
malicious prosecution?
Whether the damages awarded to the defaulting debtor may be satisfied by
execution against the employee's property since his employer's business has
already folded up?
HELD:
Lao had a valid defense to the action for malicious prosecution (Civil Case
No. 84-M) because it was his employer, St. Joseph Lumber, not himself, that was
the complainant in the estafa case against Espiritu. It was Chan Tong, the owner
of the St. Joseph Lumber, who, upon advice of his counsel, filed the criminal
complaint against Espiritu. Lao was only a witness in the case. He had no
personal interest in the prosecution of Espiritu for he was not the party defrauded
by Espiritu. He executed the affidavit which was used as basis of the criminal
charge against Espiritu because he was the salesman who sold the construction
materials to Espiritu. He was only an agent of St. Joseph Lumber, hence, not
personally liable to the party with whom he contracted (Art. 1897, Civil Code;
Philippine Products Co. vs. Primateria Societe Anonyme, 122 Phil. 698).
To maintain an action for damages based on malicious prosecution, three
elements must be present: First, the fact of the prosecution and the further fact
that the defendant was himself the prosecutor, and that the action was finally
terminated with an acquittal; second, that in bringing the action, the prosecutor
acted without probable cause; and third, the prosecutor was actuated or impelled
by legal malice (Ferrer vs. Vergara, 52 O.G. 291).
Lao was not motivated by malice in making the affidavit upon which the
fiscal based the filing of the information against Espiritu. He executed it as an
employee, a salesman of the St. Joseph Lumber from whom Espiritu made his
purchases of construction materials and who, therefore, had personal knowledge
of the transaction. Although the prosecution of Espiritu for estafa did not prosper,
the unsuccessful prosecution may not be labelled as malicious. "Sound principles
of justice and public policy dictate that persons shall have free resort to the
courts for redress of wrongs and vindication of their rights without later having to
stand trial for instituting prosecutions in good faith" (Buenaventura vs. Sto.
Domingo, 103 Phil. 239).

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In view of the foregoing circumstances, the judgment against Lao was a

nullity and should be set aside. Its execution against the petitioner cannot be
allowed to proceed.
Submitted by: Manlapaz, Katherine Grace R.
FERNANDO LOPEZ, ET AL., vs. PAN AMERICAN WORLD AIRWAYS
FACTS:
Reservations for first class accommodations and tickets of PAN-AM from
Tokyo to San Francisco were made for then Senator Fernando Lopez, his wife
Maria J. Lopez, his son-in-law Alfredo Montelibano, Jr., and his daughter, Mrs.
Alfredo Montelibano, Jr., As scheduled plaintiffs left Manila, arriving in Tokyo. As
soon as they arrived Senator Lopez followed up regarding their first class
accommodations for that evening's flight. Through mistake, PAN-AMs agents
cancelled the reservations. Expecting that some cancellations of bookings would
be made before the time, the supervisor decided to withhold from the plaintiffs
the fact that their reservations had been cancelled. The first class seats therein
were all booked up that PAN-AM could not accommodate them in that trip as first
class passengers. PAN-AM's Tokyo office firmly reiterated that there was no
accommodation for them in the first class, stating that they could not go in that
flight unless they took the tourist class therein.
Due to pressing engagements awaiting in the United States, business
conference and a medical check-up plaintiffs were constrained to take PAN-AM's
flight from Tokyo to San Francisco as tourist passengers and did so under
protest. Hence, the plaintiffs filed a suit for damages for breach of contracts in
bad faith, actual, moral and exemplary damages and a claim for attorneys fees.
ISSUE:
Whether defendant acted in bad faith in the breach of its contract with
plaintiffs.
RULING:
Plaintiffs were mislead into purchasing first class tickets in the conviction
that they had confirmed reservations for the same, when in fact they had none,
defendant wilfully and knowingly placed itself into the position of having to breach
its a foresaid contracts with plaintiffs should there be no last-minute cancellation
by other passengers before flight time. Such actuation of defendant may indeed
have been prompted by nothing more than the promotion of its self-interest in

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holding on to plaintiffs as passengers in its flight and foreclosing on their chances

to seek the services of other airlines that may have been able to afford them first
class accommodations. All the time, in legal contemplation such conduct already
amounts to action in bad faith. For bad faith means a breach of a known duty
through some motive of interest or ill-will.
Submitted by: BOLOS, MARIA GRACIA PATRICIA S.
G.R. No. 78015 December 11, 1987
MALAYSIAN AIRLINE SYSTEM BERNAD, petitioner, vs. THE HONORABLE
COURT OF APPEALS and RENATO ARELLANO, respondent.
FACTS:
The petitioner recruited the private respondent, Renato Arellano from
Philippine Airlines for his training and experience and contracted his services as
pilot for two years. When the plane he was driving landed at Bintulo Airport, all
the tires burst, causing alarm among the passengers but, fortunately, no injuries.
An investigation was conducted pending which he was preventively suspended.
He was offered and accepted an extension of his contract for another year,
subject to the expressed condition that he would submit to the jurisdiction of
Malaysian courts in all matters relating to the contract. Ultimately, however, he
was found negligent by the investigating board and dismissed by the petitioner.
The private respondent sought relief from the Malaysian courts but to no
avail. He then brought suit in the regional trial court of Manila where the petitioner
moved to dismiss for lack of jurisdiction and improper venue. The order of the
trial court denying its motion was affirmed by the Court of Appeals and later by
this Court. The case then proceeded to trial on the merits. After hearing, it was
held that the private respondent was not guilty of negligence and that the
accident was due not to his violation of the Malaysian Airline System (MAS)
manual of instructions but to a defect in the rigging of the brake control valve and
the failure of the ground crew to properly maintain the aircraft. The court also
found that the petitioner had acted in bad faith in inveigling the private
respondent into signing the renewal of the contract submitting himself to the
jurisdiction of the Malaysian courts and that his dismissal was prompted by a
letter-complaint signed by Filipino and Indonesian pilots, including himself,
protesting their discrimination in pay and benefits by MAS.
The trial court ordered petitioner to pay private respondent which was
affirmed by the Court of Appeals. Hence, this petition.
ISSUE:

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Whether or not the respondent court erred in awarding the private

respondent damages.
HELD:
We affirm the factual findings of the respondent court and the lower court,
there being no sufficient showing that the said courts committed reversible error
in reaching such conclusions. As we are not a trier of facts, we generally rely
upon, and are bound by, the conclusions on this matter of the lower courts, which
are better equipped and have better opportunity to assess the evidence firsthand, including the testimony of the witnesses. We have repeatedly held that the
findings of fact of the Court of Appeals are final and conclusive and cannot be
reviewed on appeal to the Supreme Court provided they are based on substantial
evidence.
We cannot agree, however, with the award of damages, which seems to
have gotten out of hand. The inordinate amount granted to the private
respondent cans for the moderating hand of the Court, that justice may be
tempered with reason instead of being tainted with what appears here to be a
ruthless vindictiveness.
The petition is denied and the challenged decision is affirmed.

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Submitted by: BARRIOS, NOELLE ANN E.

DIOSDADO OCTOT vs. JOSE R. YBAEZ
G.R.No. L-48643 January 18, 1982
FACTS:
Petitioner Diosdado Octot was employed as Security Guard since 1970
and at the time of his separation from the service was receiving a salary of
P4,632 per annum plus P50.00 per month as cost of living allowance. In 1975,
petitioner was summarily dismissed for being notoriously undesirable pursuant
to P.D. No. 6 and LOI Nos. 14 and 14-A, having been convicted by the Court of
First Instance of the crime of libel, but his appeal therefrom was pending in the
Court of Appeals.
Believing that his dismissal was illegal, petitioner continued reporting for
work the whole month of October 1975 but respondent Regional Director refused
to order the release of his salary for the period and instead ordered that his name
be deleted from the office payroll
When petitioner was acquitted by the Court of Appeals, and made a
request for his reinstatement, respondents readily took him back and
recommended to the authorities concerned his reinstatement.
Petitioner's papers were likewise favorably acted upon by the Presidential
Executive Assistant but in returning the papers to the Secretary of Health,
attention was invited to the provision of LOI No. 647, dated December 27, 1977.
After his reinstatement was authorized by the Office of the President,
respondents promptly communicated with him, directing him to report to the
Regional Office and accomplish the necessary papers for his reinstatement, but
he delayed doing so
ISSUE:

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Whether or not petitioner is entitled to his claim for backwages from the
date of his dismissal in 1975 up to the date of reinstatement and damages.

HELD:
In the absence of Proof that respondent Regional Director acted in bad
faith and with grave abuse of discretion, petitioner is not entitled to backwages
and consequently cannot claim for damages. The record manifests that
respondents officials were not motivated by ill will or personal malice in
dismissing petitioner but only by their desire to comply with the mandates of
Presidential Decree No. 6.
The Court likewise denies petitioner's claim for moral damages, because if
there was any delay in his reinstatement, it was attributed to his own fault and
negligence. It is clear that since the separation of petitioner from the government
service had not been shown to be in bad faith, an award for damages under the
circumstances would not be just and proper. Neither is it among the cases
mentioned in Articles 2219 and 2220 of the Civil Code wherein moral damages
may be recovered.
Thus, our jurisprudence sets certain conditions when exemplary damages
may be awarded, as follows:
First:
They may be imposed by way of example or correction only in addition,
among others, to compensatory damages, and cannot be recovered as a matter
of right, their determination depending upon the amount of compensatory
damages that may be awarded to the claimant. 6
Second:
The claimant must first establish his right to moral, temperate, liquidated
or compensatory damages.
Third:
The wrongful act must be accompanied by bad faith, 8 and the award
would be allowed only if the guilty party acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner.

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Submitted By: Dayo, Jesus Frederick D.L.

Philippine Airlines, Inc. vs. Court of Appeals
(185 SCRA 110)
Facts:
On November 23, 1960, at 5:30 P.M., Starlight Flight No. 26 of the
Philippine Air Lines (hereafter PAL) took off from the Manduriao Airport in Iloilo,
on its way to Manila, with 33 persons on board, including the plane's
complement. The plane did not reach its destination but crashed on Mt. Baco,
Mindoro, one hour and fifteen minutes after takeoff.
Among the fatalities was Nicanor Padilla who was a passenger on the star
crossed flight. He was 29 years old, single. His mother, Natividad A. Vda. de
Padilla, was his only legal heir.
As a result of her son's death, Mrs. Padilla filed a complaint against PAL,
demanding payment of P600,000 as actual and compensatory damages, plus
exemplary damages and P60,000 as attorney's fees.
The Trial Court ruled in favor of Mrs. Padilla and ordered PAL to pay the
sum of P477,000.00 as award for the expected income of the deceased Nicanor;
P10,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the
costs.
Issue: Whether or not the trial court erred in computing the awarded indemnity
on the basis of the life expectancy of the late Nicanor A. Padilla rather than on
the life expectancy Natividad Padilla, and thus erred in awarding what appears to
the petitioner as the excessive sum of P477,000 as indemnity for loss of
earnings.
Held: The trial court was correct in computing the award based on the life expectancy of
Nicanor Padilla. The laws provide:
Art. 1764. Damages in cases comprised in this Section shall be awarded
in accordance with Title XVIII of this Book, concerning Damages. Article 2206

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shall also apply to the death of a passenger caused by the breach of contract by
a common carrier.
Art. 2206. The amount of damages for death caused by a crime or quasidelict shall be at least three thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the
deceased, and the indemnity shall be paid to the heirs of the latter; such
indemnity shall in every case be assessed and awarded by the court, unless the
deceased on account of permanent physical disability not caused by the
defendant, had no earning capacity at the time of his death;
Submitted by: Carlos, Mary Maizie C.
PHILIPPINE AIRLINES, INC. vs. COURT OF APPEALS, DR. JOSEFINO
MIRANDA and LUISA MIRANDA
G.R. No. 119641 May 17, 1996
FACTS:
Private respondent spouses went to the United States of America. For
their trip back to the country, they obtained confirmed bookings from PAL for a
flight from San Francisco to Manila via Honolulu on June 21, 1988; then from
Manila to Cebu on June 24, 1988; and finally from Cebu to Surigao also on June
24, 1988.
On June 21, 1988, private respondents boarded the flight in San
Francisco with five pieces of baggage. After a stopover at Honolulu, and upon
arrival in Manila on June 23, 1988, they were told by the PAL personnel that all
their baggage were off-loaded at Honolulu due to weight limitations. As a result,
private respondents missed their connecting flight from Manila to Cebu City,
since they had to wait for their baggage which arrived the following day, June 24,
1988, after their connecting flight had left. They also missed their other
connecting flight from Cebu City to Surigao City.
On June 25, 1988, they departed for Cebu City and therefrom for Surigao
City. On the way to Surigao City, their flight had to return to Mactan Airport due
to some mechanical problem. The passengers were then booked for the
afternoon flight to Surigao City. However, said flight was also canceled.
Since there were no more flights for Surigao City that day, private
respondents asked to be billeted at the Cebu Plaza Hotel. But they were told by
PAL employees that they could not be accommodated at said hotel because it

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was fully booked. However, when Dr. Miranda called the hotel, he was informed
that he and his wife could be accommodated there.
By the time private respondents were ready to go to the hotel, the shuttle
bus had already left. PAL offered them P150.00. Dr. Miranda asked for P150.00
more as they could not be accommodated in just one taxi, also for tipping money
for hotel boys. PAL refused the said request. Thus, Dr. Miranda decided that he
would not avail of the amenities offered by PAL.
When private respondents tried to retrieve their baggage, they were told
this time that the same were loaded on another earlier flight to Surigao City.
Private respondents were finally able to leave to Surigao City only on June 26,
1988. Thereafter, they instituted an action for damages which, after trial as well
as on appeal, was decided in their favor.
ISSUE:
Whether or not PAL acted in bad faith warranting the award of moral and
exemplary damages as well as attorneys fees to the private respondents.
HELD:
YES. A contract of air carriage generates a relation attended with a public
duty and any discourteous conduct on the part of a carrier's employee toward a
passenger gives the latter an action for damages and, more so, where there is
bad faith.
In the present case, the trial court and the Court of Appeals ruled that
there was breach of contract committed in bad faith by petitioner airline. The
private respondents had a confirmed booking on a PAL flight from San Francisco
to Manila. Therefore they were entitled to an assured passage not only for
themselves but for their baggage as well. It was shown that the private
respondents baggage were properly loaded and stowed in the plane when it left
San Francisco for Honolulu. The off-loading by PAL of their baggage to give way
to other passengers or cargo was an arbitrary and oppressive act which clearly
amounted to a breach of contract committed in bad faith and with malice.
The situation was aggravated by the poor treatment of the Mirandas by
the PAL employees during the stopover at Mactan Airport in Cebu; the denial of
petitioner's personnel to the Miranda spouses' request to be billeted at the Cebu
Plaza Hotel by saying that it was fully booked, which was disproven by the fact
that Dr. Miranda was able to arrange for accommodations thereat; and, the PAL
employees' negligent act of sending off the baggage of private respondents to

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Surigao City, while they were still in Cebu, without any explanation for this gross
oversight.
Moral damages are recoverable in suits predicated on breach of a contract
of carriage where it is proved that the carrier was guilty of fraud or bad faith.
What amounts to bad faith which would entitle a carriers passenger to an award
of moral damages is inattention to and lack of care for the interests of its
passengers who are entitled to its utmost consideration. What the law considers
as bad faith which may furnish the ground for an award of moral damages would
be bad faith in securing the contract and in the execution thereof, as well as in
the enforcement of its terms, or any other kind of deceit. Such unprofessional
and proscribed conduct is attributable to petitioner airline in the case at bar.
In a contractual or quasi-contractual relationship, exemplary damages
may be awarded only if the defendant had acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner. Attorney's fees in the concept of
damages may be awarded where there is a finding of bad faith. The evidence on
record adequately sustains that the awards assessed against petitioner on the
said items of damages are justified and reasonable.
It is PAL's duty to provide assistance to private respondents and any other
passenger similarly inconvenienced due to delay in the completion of the
transport and the receipt of their baggage. Therefore, its unilateral and voluntary
act of providing cash assistance is deemed part of its obligation as an air carrier.
Likewise, arrangements for and verification of requested hotel accommodations
for private respondents could and should have been done by PAL employees
themselves.

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Submitted by: HAMDAIN,TASNEM A.

PHILIPPINE AIR LINES VS. MIANO
242 SCRA 235
FACTS:
Private respondent took petitioners flight PR 722, Mabuhay Class bound
for Frankfurt, Germany. He had an immediate onward connecting flight via
Lufthansa flight LH 1452 to Vienna, Austria. At the Ninoy Aquino International
Airport (NAIA), he checked-in one brown suitcase weighing twenty (20) kilograms
but did not declare a higher valuation. He claimed that his suitcase contained
money, documents, one Nikkon camera with zoom lens, suits, sweaters, shirts,
pants, shoes and other accessories.
Upon private respondetns arrival at Vienna via Lufthansa, his checked-in
baggage was missing. He reported the matter to the Lufthansa authorities. After
eleven (11) days, his suitcase was delivered to him in his hotel in Piestany,
Czecholovakia. He claimed that because of the delay in the delivery of his
suitcase, he was forced to borrow money to buy some clothes, to pay for the
transportation of his baggage from Vienna to Piestany, and lost his Nikkon
camera.
Private respondent instituted an action for damages.
ISSUE:
Whether or not private respondent is entitle to recover damages for
breach of contract of carriage

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RULING:
In breach of contract of carriage by air, moral damages are awarded only if
the defendant acted fraudulently or in bad faith. Bad faith means a breach of a
known duty through some motive of interest or ill will.
The court neither sustains the award of exemplary damages. The
prerequisite for the award of exemplary damages in cases of contract or quasicontract is that the defendant acted in wanton, fraudulent, reckless, oppressive,
or malevolent manner. The undisputed facts do not so warrant the
characterization of the action of petitioner.
The award of attorneys fee must also be disallowed for lack of legal leg to
stand on. The fact that private respondent was compelled to litigate and incur
expenses to protect and enforce his claim did not justify the award of attorneys
fee. Petitioner is willing to pay the just claim of $200.00 as result of the delay in
the transportation of the luggage in accord with the Warsaw Convention.
Needless to say, the award of attorneys fee must be deleted where the awards
of moral and exemplary damages are eliminated.
Submitted by: AURE, GARY C.
G.R. No. L-51832 April 26, 1989
RAFAEL PATRICIO, petitioner, vs. THE HONORABLE OSCAR LEVISTE,
JUDGE, CFI CAPIZ, BRANCH II and BIENVENIDO BACALOCOS,
respondents.
FACTS:
On 16 May 1976 at about 10:00 o'clock in the evening, while a benefit
dance was on-going in connection with the celebration of the town fiesta,
petitioner together with two (2) policemen were posted near the gate of the public
auditorium to check on the assigned watchers of the gate. Private respondent
Bienvenido Bacalocos who is the President of the Association of Barangay
Captains of Pilar, Capiz and a member of the Sangguniang Bayan, who was in a
state of drunkenness and standing near the same gate together with his
companions, struck a bottle of beer on the table causing an injury on his hand
which started to bleed. Then, he approached petitioner in a hostile manner and
asked the latter if he had seen his wounded hand, and before petitioner could
respond, private respondent, without provocation, hit petitioner's face with his
bloodied hand. As a consequence, a commotion ensued and private respondent
was brought by the policemen to the municipal building.
As a result of the incident, a criminal complaint for Slander by Deed was
flied by petitioner with the Municipal Trial Court of Pilar, Capiz, docketed as
Criminal Case No. 2228, but the same was dismissed. Subsequently, a complaint
for damages was filed by petitioner with the court.

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The court ruled in favor of herein petitioner, as complainant, holding

private respondent liable to the former for moral damages as a result of the
physical suffering, moral shock and social humiliation caused by private
respondent's act of hitting petitioner on the face in public.
Petitioner filed a motion for execution of judgment, alleging that the
decision had become final and executory after the lapse of thirty (30) days from
receipt thereof by private respondent, without any motion for reconsideration or
appeal having been filed. However, said motion was denied by the court a quo on
the ground that there was a pending motion for reconsideration filed by private
respondent.
Petitioner further argues that respondent's admission that he slapped
herein petitioner in public causing him physical suffering and social humiliation,
entitles the latter to moral damages. Actual and compensatory damages need not
be proven before an award of moral damages can be granted, so petitioner
contends.
Petitioner filed the petition at bar contending that no copy of the Motion for
consideration was served upon petitioner and no proof of service as well as
notice of hearing were attached to said motion when filed with the court. Thus,
the motion for reconsideration did not interrupt the running of the period to
appeal.
ISSUE:
Whether or not the award of moral damages to petitioner is without basis
for lack of proof of bad faith on the part of private respondent.
HELD:
In the case at bar, a copy of the motion for reconsideration was served
upon petitioner although service was effected through ordinary mail and not by
registered mail as required by the rules. But, petitioner was duly given the full
opportunity to be heard and to argue his case when the court a quo required him
to file a reply or opposition to the motion for reconsideration and subsequently
set the motion for oral argument.
Meritorious. There is no question that moral damages may be recovered
in cases where a defendant's wrongful act or omission has caused the
complainant physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and

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similar injury. An award of moral damages is allowed in cases specified or

analogous to those provided in Article 2219 of the Civil Code.
Private respondent's contention that there was no bad faith on his part in
slapping petitioner on the face and that the incident was merely accidental is not
tenable. It was established before the court a quo that there was an existing feud
between the families of both petitioner and private respondent and that private
respondent slapped the petitioner without provocation in the presence of several
persons.
The act of private respondent in hitting petitioner on the face is contrary to
morals and good customs and caused the petitioner mental anguish, moral
shock, wounded feelings and social humiliation. Private respondent has to take
full responsibility for his act and his claim that he was unaware of what he had
done to petitioner because of drunkenness is definitely no excuse and does not
relieve him of his liability to the latter.
The fact that no actual or compensatory damage was proven before the
trial court, does not adversely affect petitioner's right to recover moral damages.
In addition to the award of moral damages, exemplary or corrective damages
may be imposed upon herein private respondent by way of example or correction
for the public good. Exemplary damages are required by public policy to
suppress the wanton acts of the offender. They are an antidote so that the poison
of wickedness may not run through the body politic. The amount of exemplary
damages need not be proved where it is shown that plaintiff is entitled to either
moral, temperate or compensatory damages, as the case may be, although such
award cannot be recovered as a matter of right.
Wherefore, the petition is granted and the order appealed from is
reversed.

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Submitted by: Legasto, Vanessa

People vs. Quilaton
205 SCRA 279
Facts:
Appellant, Gumercindo Quilaton, was a laborer in the Bureau of Forest
Development assigned at the PROFEM Nursery in San Agustin, San Simon
Pampanga Until June 3,1983 when his services was terminated. While still a
laborer, and occasionally after his termination, appellant would spend the night in
one of the rooms of the PROFEM office. In the evening of August 16, 1983,
Rolando Manahan, then officer-in-charge of the PROFEM, called the appellants
attention and told the latter to see him at his office to which the appellant did not
accede. Rolando Manahan came out of his office and proceeded to admonish
appellant to discontinue his practice of sleeping inside the office and of bringing
there women brought from the town. A heated exchange of words then ensued
between the two. Appellant left the office after his bag of clothes, which has been
left inside the office, had been given to him by Lamberto Abugan, an employee
of PROFEM, upon his request and upon Rolando Manahans instructions.

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Rolando Manahan followed the appellant in order to ascertain that the latter had
in fact left the premises. Lamberto Abugan had also went out to look after the two
and saw them at the provincial road where Rolando Manahan kicked appellants
shoes which were lying on the road, and that a heated altercation between the
two continued. Thereafter, appellant pulled a fan knife from his right hip and told
Rolando Manahan that hes going to kill him. Lamberto Abugan left to proceed to
the police headquarters in order to seek help, and when he, in the company of
Pfc. Yambao, returned to the provincial road, they saw Rolando Manahan already
dead.
Thereafter, appellant was arrested. He admitted that he indeed killed
Rolando Manahan but interposed self-defense as a justifying circumstance. The
contention of self-defense was, however, rejected by the trial court since that it
has only been based on the appellants own testimony and without corroborative
evidence to support the same.
The trial court convicted the appellant for the crime of murder and
sentenced him to suffer the penalty of reclusion perpetua. The court further
sentences him to indemnify the heirs of the offended party the sum of
P100,000.00 for the death of Rolando Manahan, P26,445.00 for actual damages
incurred for burial and other expenses of the deceased, and, P250,000.00 for
moral damages, with costs against the appellant.
Issues:
1.
Whether or not the trial court erred in convicting Gurmecindo
Quilaton for the crime of murder.
2.
Whether or not the trial court arrived at a sound determination with
regard to the award of damages.
Held:
1.
The appellant should be convicted of homicide only. The findings of
the trial court that the stabbing was attended by the qualifying circumstance of
treachery could not be sustained. Treachery cannot be presumed and must be
proven positively and that there must be evidence as to the mode of attack used
by the offender. This is so because treachery exists only when the offender
commits any of the crimes against the person, employing means, methods, or
forms in the execution thereof which tend directly and specially to insure its
execution, without risk to himself arising from any defense which the offended
party might make. Lamberto Ambugan did not witness the actual stabbing by
appellant of Rolando Manahan as he ran away in order to seek help, therefore,

119

his testimony in this respect affords no sufficient basis for reasonably inferring
that treachery attended the commission of the crime.
2. Actual damages awarded in favor of the heirs of Rolando Manahan in
the amount of P26,445.00 representing interment and related expenses incurred,
was sustained since that the same has been supported by various receipts
submitted by the brother of Rolando Manahan and that the same has not been
controverted in any way by the appellant. The amount of P100,000.00 as
indemnity for death must, however, be reduced to P50,000.00 in conformity with
the prevailing jurisprudence on this matter. Aside from this ordinary indemnity for
death, appellant is obliged, in accordance with Article 2206 of the Civil Code: 1.
to compensate the heirs of Rolando Manahan for the latters loss of earning
capacity; 2. to give support in the form of expenses for education to the sisters of
Rolando Manahan who had been dependent on him therefore; and 3. to pay the
heirs of Rolando Manahan moral damages for the mental anguish suffered by
them. In the instant case, the trial court lumped these monetary obligations into
what it called moral damages, which therefore needs some analysis. As to the
loss of earning capacity, life expectancy and net compensable earnings should
be taken into account. Considering that Rolando Manahan was 26 years of age
at the time of death, he was expected to live for another 46 years as determined
from the generally accepted formula in computing for life expectancy, based on
the 1980 CSO table. However, a man does not normally continue working to earn
money up to the final month or year of his life; hence, 46 years could be
reasonably reduced to 39 years. Besides, Rolando Manahan is a government
employee who is expected to retire at the age of 65. If there are 261 working
days in a year and that Rolando Manahan is receiving P23.00 a day, his gross
earnings would be approximately P234,000.00, wherein a reasonable amount
representing his necessary expenses had he been living, which in this case is
P120,000.00, should be deducted, thereby fixes the amount to P114,000.00 for
his net or compensable earnings lost. Finally, the Court, in the exercise of its
discretion, considers it appropriate to award the amount of P20,000.00 by way of
moral damages, having the same based also on the testimony of Ruben, brother
of Rolando Manahan, that their mother suffered a mild stroke upon learning of
Rolando Manahans slaying, which resulted in the mothers semi-paralysis.

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Submitted by: Manlapaz, Katherine Grace R.

PHILIPPINE NATIONAL BANK vs. UTILITY ASSURANCE & SURETY CO.,
INC.
FACTS:
The Kangyo Bank Ltd., Tokyo, Japan, issued Letter of Credit in favor of
the Pedro Bartolome Enterprises of Manila to cover an export shipment of logs to
Japan. The beneficiary of the Letter of Credit assigned its rights to Lanuza
Lumber. Lanuza Lumber obtained a loan of P 25,000.00 from PNB secured by a
PN of the proceeds of the Letter of Credit. The PNB in addition required Lanuza
Lumber to submit a surety bond executed by defendant Utassco.
The promissory note executed by Lanuza Lumber became due and
payable. Neither Lanuza Lumber nor Utassco paid the loan despite repeated
demands by PNB for payment. Accordingly, PNB filed in the then CFI of Manila
an action to recover the amount of the promissory note with interest as provided
thereon plus attorney's fees. Utassco admitted that it had executed the surety
bond and contended that its obligation under the Surety Bond was to secure the

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performance of all the terms and conditions of the US$ 28,150.00 Letter of Credit
issued by Kangyo Bank Ltd. and had not guaranteed the performance of Lanuza
Lumber's obligation under its P 25,000.00 loan from PNB. CFI and CA ruled in
favor of PNB and moreso, awarded interest and attorneys fees.
ISSUE:
Whether or not interest and attorneys fees should have been granted
despite the clause limiting the liability of Utassco.
RULING:
Creditors suing on a suretyship bond may recover from the surety as part
of their damages, interest at the legal rate even if the surety would thereby
become liable to pay more than the total amount stipulated in the bond. The
theory is that interest is allowed only by way of damages for delay upon the part
of the sureties in making payment after they should have done.

Submitted by: Mangotara, Aisha M.

REFORMINA VS TOMOL
139 SCRA 261
FACTS:
REFORMINAS (herein petitioners) filed this Petition for Review on
certiorari of the Resolution of the Hon. respondent Judge Valeriano P. Tomol, Jr.
issued in Civil Case No. R-11279, an action for Recovery of Damages for injury
to Person and Loss of Property.
The dispositive portion of the assailed Resolution reads as follows:
In light (sic) of the foregoing, the considered view here that by legal
interest is meant six (6%) percent as provided for by Article 2209 of the Civil
Code. Let a writ of execution be issued.
Petitioners' motion for the reconsideration of the questioned Resolution
having been denied, they now come before the Supreme Court through the
instant petition praying for the setting aside of the said Resolution and for a
declaration that the judgment in their favor should bear legal interest at the rate

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of twelve (12%) percent per annum pursuant to Central Bank Circular No. 416
dated July 29, 1974.
On appeal to the then Court of Appeals, the trial court's judgment was
modified, the rest of the judgment appealed from is affirmed. The defendantsappellants shall pay costs in favor of the plaintiffs.
The said decision having become final on October 24, 1980, the case was
remanded to the lower court for execution and this is where the controversy
started. In the computation of the "legal interest" decreed in the judgment sought
to be executed, petitioners claim that the "legal interest" should be at the rate of
twelve (12%) percent per annum, invoking in support of their aforesaid
submission, Central Bank of the Philippines Circular No. 416. Upon the other
hand, private respondents insist that said legal interest should be at the rate of
six (6%) percent per annum only, pursuant to and by authority of Article 2209 of
the New Civil Code in relation to Articles 2210 and 2211 thereof.

ISSUE:
How much, by way of legal interest, should a judgment debtor pay the
judgment creditor?
RULING:
Central Bank Circular No. 416 provides:
otherwise known as the "Usury Law" the Monetary Board in its Resolution
No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan
or forbearance of any money, goods, or credits and the rate allowed in
judgments, in the absence of express contract as to such rate of interest, shall be
twelve (12%) per cent per annum.
The judgments spoken of and referred to are Judgments in litigations
involving loans or forbearance of any 'money, goods or credits. Any other kind of
monetary judgment which has nothing to do with, nor involving loans or
forbearance of any money, goods or credits does not fall within the coverage of
the said law for it is not within the ambit of the authority granted to the Central
Bank.
Coming to the case at bar, the decision herein sought to be executed is
one rendered in an Action for Damages for injury to persons and loss of property
and does not involve any loan, much less forbearances of any money, goods or
credits. As correctly argued by the private respondents, the law applicable to the
said case is Article 2209 of the New Civil Code which reads:

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Art. 2209. If the obligation consists in the payment of a sum of money, and
the debtor incurs in delay, the indemnity for damages, there being no stipulation
to the contrary, shall be the payment of interest agreed upon, and in the absence
of stipulation, the legal interest which is six percent per annum.
IN VIEW OF THE FOREGOING CONSIDERATIONS, and finding the
instant petition to be without merit, the same is hereby DISMISSED with costs
against petitioners.

Submitted by: Suntay, Angel

SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES, INC.,
respondents.
G.R. No. 104235 November 18, 1993
FACTS:
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their
daughter, Liana Zalamea, purchased three (3) airline tickets from the Manila
agent of respondent TransWorld Airlines, Inc. for a flight to New York to Los
Angeles on June 6, 1984. The tickets of petitioners-spouses were purchased at a
discount of 75% while that of their daughter was a full fare ticket. All three tickets
represented confirmed reservations.
While in New York, on June 4, 1984, petitioners received notice of the
reconfirmation of their reservations for said flight. On the appointed date,
however, petitioners checked in at 10:00 a.m., an hour earlier than the scheduled
flight at 11:00 a.m. but were placed on the wait-list because the number of
passengers who had checked in before them had already taken all the seats
available on the flight. Liana Zalamea and Cesar Zalamea, holding full fare
tickets were able to board while the two others holding discounted tickets were
not able to fly and thus were constrained to purchase tickets with American
Airlines.
Upon their arrival in the Philippines, petitioners filed an action for damages
based on breach of contract of air carriage before the Regional Trial Court. The
court ruled in favor of petitioners ordering the defendants to pay for the purchase
of tickets fro, American Airlines, Suthira and Lianas ticket with TWA, P250, 000
as moral damages and P100,000 as attorneys fees and costs of suit.
On appeal, the respondent Court of Appeals modified the ruling eliminating the
award for moral and exemplary damages. That moral damages are recoverable

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in a damage suit predicated upon a breach of contract of carriage only where

there is fraud or bad faith. And in cancelling the order of refund for the tickets
purchased with TWA.
Not satisfied with the decision, petitioners raised the case on petition for
review on certiorari.
ISSUE:
Whether or not fraud or bad faith existed on the part of TWA in
overbooking their flights and in the absence of bad faith or fraud defendants need
not pay exemplary damages?
HELD:
SC ruled in favor of petitioner and modified the ruling of the Court of
Appeals allowing the payment of exemplary and moral damages as well as
attorneys fees however modifying to a lesser amount.
Court ruled that there was fraud or bad faith on the part of respondent airline
when it did not allow petitioners to board their flight for Los Angeles in spite of
confirmed tickets.
Existing jurisprudence explicitly states that overbooking amounts to bad
faith, entitling the passengers concerned to an award of moral damages. In
Alitalia Airways v. Court of Appeals, 9 where passengers with confirmed bookings
were refused carriage on the last minute, this Court held that when an airline
issues a ticket to a passenger confirmed on a particular flight, on a certain date, a
contract of carriage arises, and the passenger has every right to expect that he
would fly on that flight and on that date. If he does not, then the carrier opens
itself to a suit for breach of contract of carriage. Where an airline had deliberately
overbooked, it took the risk of having to deprive some passengers of their seats
in case all of them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said
passenger is entitled to an award of moral damages.
A contract to transport passengers is quite different in kind and degree
from any other contractual relation. So ruled this Court in Zulueta v. Pan
American World Airways, Inc. 12 This is so, for a contract of carriage generates a
relation attended with public duty. A duty to provide public service and
convenience to its passengers which must be paramount to self-interest or
enrichment.
Even on the assumption that overbooking is allowed, respondent TWA is
still guilty of bad faith in not informing its passengers beforehand that it could

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breach the contract of carriage even if they have confirmed tickets if there was
overbooking. Respondent TWA should have incorporated stipulations on
overbooking on the tickets issued or to properly inform its passengers about
these policies so that the latter would be prepared for such eventuality or would
have the choice to ride with another airline.
Moreover, respondent TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to discounted tickets. While
the petitioners had checked in at the same time, and held confirmed tickets, yet,
only one of them was allowed to board the plane ten minutes before departure
time because the full-fare ticket he was holding was given priority over
discounted tickets. The other two petitioners were left behind.
It is evident that petitioners had the right to rely upon the assurance of
respondent TWA, thru its agent in Manila, then in New York, that their tickets
represented confirmed seats without any qualification. The failure of respondent
TWA to so inform them when it could easily have done so thereby enabling
respondent to hold on to them as passengers up to the last minute amounts to
bad faith. Evidently, respondent TWA placed its self-interest over the rights of
petitioners under their contracts of carriage. Such conscious disregard of
petitioners' rights makes respondent TWA liable for moral damages. To deter
breach of contracts by respondent TWA in similar fashion in the future, we
adjudge respondent TWA liable for exemplary damages, as well.

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Submitted by: Gatioan, Edison

ZAMBOANGA vs. BUAT
G. R. No. 100514 March 29, 1995
FACTS:
On June 25, 1986, petitioner's board of directors, acting upon a complaint
by some members, held a special meeting and passed Board Resolution No. 16A-86, creating a fact-finding committee to investigate charges of unlawful
disbursement or misappropriation of cooperative funds committed by certain
officers of the electric cooperative. Among those charged with committing the
alleged irregularities was private respondent.
On July 15, 1988, petitioner's board of directors passed Resolution No.
21A-88 terminating the services of private respondent on the grounds of
mismanagement and loss of trust and confidence.
ISSUE:
Whether or not the respondent is entitled to moral damages arising from
the dismissal?

HELD:

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NO. Before private respondent was dismissed from the service, petitioner
created a committee to investigate the charges against him. The committee was
composed of highly respectable members of the community. Private respondent
was given an opportunity to answer all the charges against him, which he did.
After almost one year of investigation, the committee recommended that private
respondent be dismissed from service.
Private respondent's dismissal from the service based on loss of trust and
confidence had basis. Therefore, his dismissal was not attended by bad faith.
Private respondent is not entitled to the recovery of moral damages since
these are recoverable only where the dismissal of the employee was attended by
bad faith or fraud, or constituted an act oppressive to labor, or was done in a
manner contrary to morals, good customs or public policy.

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