PSBA vs. CA, GR No. 84698, Feb.

4, 1992
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION,
JUAN D. LIM, BENJAMIN P. PAULINO, ANTONIO M.
MAGTALAS, COL. PEDRO SACRO and LT. M.
SORIANO, petitioners, vs. COURT OF APPEALS, HON.
REGINA ORDOEZ-BENITEZ, in her capacity as Presiding
Judge of Branch 47, Regional Trial Court, Manila, SEGUNDA
R. BAUTISTA and ARSENIA D. BAUTISTA, respondents.
G.R. No. 84698 February 4, 1992
PADILLA, J.:
FACTS:
A stabbing incident on 30 August 1985 which caused
the untimely demise of Carlitos Bautista while on the second-floor
premises of the Philippine School of Business Administration
(PSBA) prompted the parents of the deceased to file suit for
damages against the school and its authorities for negligence,
recklessness and lack of security precautions, means and
methods before, during and after the attack on the victim who
was in his third year when he was stabbed by outsiders.
Petitioners sought to have the suit dismissed, alleging that since
they are presumably sued under Article 2180 of the Civil Code,
the complaint states no cause of action against them, as
jurisprudence on the subject is to the effect that academic
institutions, such as the PSBA, are beyond the ambit of the rule in
the afore-stated article. Trial Court denied their motion to dismiss.
CA further affirmed the lower courts decision. CA anchored its
decision based on the rule on quasi delicts holding the teachers
and heads of the school staff liable unless they proved that they
observed all the diligence to prevent damage.
ISSUE:
Whether or not the petitioners may be held liable for damages
HELD:
The record is bereft of all the material facts. However the courts
disagree with the premises of the CAs ruling. The fact that the
assailants in the case at bar are not students of the PSBA,

wherein under Art 2180, the petitioners cannot be held liable, it

does not necessarily follow that they can be exculpated from
liability.
There is a contract between the school and students resulting
bilateral obligations which both parties are bound to comply. The
school undertakes to provide the student with education and an
atmosphere that promotes or assists in attaining its primary
undertaking of imparting knowledge. Necessarily, the school must
ensure that the adequate steps are taken to maintain peace and
order within the campus premises and to prevent the breakdown
thereof. On the other hand, the students shall abide by the
schools academic requirements and observe its rules and
regulations.
It was held in Cangco vs. Manila Railroad that the mere fact that
a person is bound to another contract does not relieve him from
extra-contractual liability to such person. When such a contractual
relation exists the obligor may break the contract under such
conditions that the same act which constitutes a breach of the
contract would have constituted the source of an extracontractual obligation had no contract existed between the
parties.
In the circumstances obtaining in the case at bar, however, there
is, as yet, no finding that the contract between the school and
Bautista had been breached thru the former's negligence in
providing proper security measures. This would be for the trial
court to determine. And, even if there be a finding of negligence,
the same could give rise generally to a breach of contractual
obligation only. Using the test of Cangco, supra, the negligence of
the school would not be relevant absent a contract. In fact, that
negligence becomes material only because of the contractual
relation between PSBA and Bautista. In other words, a
contractual relation is a condition sine qua non to the school's
liability. The negligence of the school cannot exist independently
of the contract, unless the negligence occurs under the
circumstances set out in Article 21 of the Civil Code.
Picart vs. Smith

- Picart seeking recovery of damages from Smith, alleged to have

been caused by the automobile driven by Smith
FACTS
- Picart was riding a pony across a bridge
- Smith was driving his vehicle approaching the bridge. He saw
Picart, honked, and proceeded on his course. It appeared to him
that Picart was not observing road rules.
- Picart, perturbed by the novelty of the apparition, pulled the
pony to the right side of the bridge

(note that right now, on the road, we KEEP RIGHT. Back

then, KEEP LEFT pa yung inoobserve nila)
Smith assumed that Picart would move pony to the other
side of the road

- Smith kept on his course. When Smith was approaching Picarts

area, he suddenly swerved, just in time to avoid the pony.
However, this frightened the pony. Its hind leg then was hit by the
vehicle, knocking it down and throwing Picart to the ground,
unconscious for a while. The ponys leg was broken, among other
injuries. It eventually died.
ISSUE: W/N Smith is liable for negligence
HELD/RATIO: YES, he is liable for negligence.
- Smith shouldve avoided the horse and moved to the right as he
approached the bridge, where there were no people.
- By this time, Picart no longer had control of the situation; only
Smith had. Instead, Smith continued on until he was near the
horse. In so doing, he exposed the horse and its rider to
danger. He is negligent in the eyes of the law.

- Test: did the defendant, in doing the alleged negligent act, use
that reasonable care and caution which an ordinarily prudent man
would have used in the same situation?
- Existence of negligence is not determined by reference to the
personal judgment of the actor in the situation. Take note that,
according to the case, it appeared to him that Picart was not
observing road rules.
- Conduct is considered negligent when a prudent man would
have foreseen that an effect harmful to another was sufficiently
probable to warrant his foregoing conduct or guarding against its
consequences
- NEGLIGENCE CLEARLY ESTABLISHED IN THIS CASE

Prudent man would have recognized the risk in the course

Smith was taking, that it was risky both to Picart and the
pony
o under this circumstance, law imposed on Smith the
duty to guard against the harm
Smith was negligent in his driving; but Picart was also
negligent in putting himself and his pony in the position
they were in.
o But their negligent acts were not contemporaneous.
Picarts negligence happened first; Smiths
negligence succeeded Picarts by an
appreciable interval.
o Person who has the last fair chance of avoiding
the impending harm and fails to do so is
chargeable with the consequences, without
reference to the others negligence
o But because of Picarts contributory negligence, the
amount of damages he will receive must be
reduced.

RULING: Plaintiff allowed to recover damages

Philippine School of Business Administration et al vs. Court

of Appeals et al
Date (4 February 1992) | Ponente: Padilla
Overview: PSBA is being made to account by the parents of its
student, Carlitos Bautista, who was stabbed to death by
assailants from outside the school inside the school premises.
The Court of Appeals ruled that the RTC decision to deny the
schools motion to dismiss was correct, affirming the order,
following the rule on quasi-delicts (NCC Arts. 2180 and 2176).
The Supreme Court, however, ruled that the law on quasi-delicts
does not apply, as there exists a contract between school and
student including an obligation to safety; it rules that torts may be
the acts that break a contract and thus liability may still be
incurred by the school following NCC Art. 21.
Topic: Obligations; quasi-delicts; torts

Statement of the Case

The death of one Carlitos Bautista on the premises of the
Philippine School of Business Administration (PSBA) prompted
his parents to file a suit for damages resulting from negligence,
recklessness, and insufficiency of safety precautions against said
school, specifically its officials, at the RTC of Manila, which was
presided over by Judge Regina Ordonez-Benitez. As defendants,
PSBA et al sought the dismissal of the case on the ground that
PSBA, as an academic institution, is beyond the ambit of Article
2180 of the NCC, under which they are being sued. The RTC
denied their motion to dismiss, then the subsequent motion for
reconsideration.
Defendants-turned-petitioners assailed the RTCs dispositions
before the CA, but the appellate court upheld the ruling given by
the RTC, and denied the subsequent motion for reconsideration,
bringing the appellants to the Supreme Court.

Statement of Facts
- 30 August 1985: Carlitos Bautista was stabbed to death on the
second floor balcony of PSBA. Bautista was a student in said
school, a junior commerce major. It was established that the
assailants were outsiders, not enrolled nor affiliated with the
school.
o His parents (the private respondents Segunda [?] and Arsenia),
filed suit for damages against the school and the following school
officials: Juan D. Lim (President), Benjamin P. Paulino (VicePresident), Antonio M. Magtalas (Treasurer/Cashier), Col. Pedro
Sacro (Chief of Security) and Lt. M. Soriano (Assistant Chief of
Security). The last, during the proceedings, resigned from his
position.
- 8 December 1987: The respondent Manila RTC, having overruled
instant petitioners contentions, denies their motion to dismiss the
case.
- 25 January 1988: The RTC dismisses the motion for
reconsideration as well.
- 10 June 1988: The CA affirms the trial courts orders; petitioners
file a motion for reconsideration.
- 22 August 1988: The CA denies the motion for reconsideration.
Applicable Laws:
ART. 1157(5), NCC: OBLIGATIONS ARISE FROM:
(5) QUASI-DELICTS
ART. 1162, NCC: OBLIGATIONS DERIVED FROM QUASI-DELICTS
SHALL BE GOVERNED BY THE PROVISIONS OF CHAPTER 2, TITLE
XVII OF THIS BOOK, AND BY SPECIAL LAWS.
ART. 2176, NCC: W HOEVER BY ACT OR OMISSION CAUSES DAMAGE
TO ANOTHER, THERE BEING FAULT OR NEGLIGENCE, IS OBLIGED TO
PAY FOR THE DAMAGE DONE. SUCH FAULT OR NEGLIGENCE, IF THERE
IS NO PRE-EXISTING CONTRACTUAL RELATION BETWEEN THE
PARTIES, IS CALLED A QUASI-DELICT AND IS GOVERNED BY THE
PROVISIONS OF THIS CHAPTER.
ART. 2180, PARS. 1, 7, NCC: 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.
XXX

LASTLY, TEACHERS OR HEADS OF ESTABLISHMENTS OF ARTS AND

enrollees. Part of the obligations of this contract is the

providence of an adequate atmosphere of safety for its
students (x x x no student can absorb the intricacies
of physics or higher mathematics or explore the realm
of the arts and other sciences when bullets are flying
or grenades exploding in the air or where there looms
around the school premises a constant threat to life
and limb.). Obligations from quasi-delict or tort* do not
govern, since these are extra-contractual and a
contract has been made here. However, in Air France
vs. Carroscoso, it was established that liability from
tort may still exist even if there is a contract, because
the act that breaks the contract may also be a tort.
This rule obeys Art. 21. The SC here dictates that a
trial is necessary in order to determine whether such
willful negligence really lies, in order that liability
should be properly determined.

TRADES SHALL BE LIABLE FOR DAMAGES CAUSED BY THEIR PUPILS

AND STUDENTS OR APPRENTICES, SO LONG AS THEY REMAIN IN
THEIR CUSTODY.
ART. 21, NCC: ANY PERSON WHO WILFULLY CAUSES LOSS OR
INJURY TO ANOTHER IN A MANNER THAT IS CONTRARY TO MORALS,
GOOD CUSTOMS OR PUBLIC POLICY SHALL COMPENSATE THE LATTER
FOR THE DAMAGE.

Issues:
1. Was the Court of Appeals correct in affirming the decision of the
RTC not to dismiss the case against PSBA?
Held Rationale:
1. Yes. HOWEVER, the Supreme Court disagrees with the
CAs basis for the decision being anchored on Arts.
2176 and 2180 of the NCC. The SC agrees with the
CA that the case must be remanded to the RTC for
trial on its merits. But the reason provided by the CA,
which is that in light of previous jurisprudence and the
fact that Article 2180 is a holdover from the Spanish
era, the school administrators should be made liable
for damages until they prove themselves absolved of
liability in trial by merits, is erroneous. The SC points
out that Arts 2180 and 2176 establish the rule of in
loco parentis (in place of the parents Mikey) and
that in the discussions provided in the cases cited by
the CA, it was clear that the liability of the school exists
only for the acts performed by students while in school
custody, something which was established to have not
been the case here. Thus the rule on quasi-delicts
does not apply.
The SC rules that despite the inapplicability of the rule
on quasi-delicts, the school is still liable because all
academic institutions enter into a contract with all its

Judgment: Case remanded to Manila RTC, the court of origin.

Notes:
* tort. 1. A civil wrong for which a remedy may be obtained, usu.
in the form of damages; a breach of duty that the law imposes on
everyone in the same relation to one another as those involved in
a given transaction. 2. (pl.) The branch of law dealing with such
wrongs. (Blacks Law Dictionary
Ongsiako vs. IAC, 152 SCRA 627
Antonio Ramon Ongsiako vs. Intermediate Appellate Court
and The People of the Philippines
G.R. L-69901, July 31, 1987
Cruz, J.:
FACTS:

Petitioner with companion Heras was driving a car, southbound toward Manila along MacArthur highway; Robert Ha was
driving a jeep from the opposite direction with 7 passengers. A
Philippine Rabbit bus ahead of the jeep swerved into the
petitioners lane to overtake a tricycle, as a result of the sudden
move, petitioner veered his car to the shoulder of the highway to
avoid head-on collision. The car collided with Has jeep damaging
it and causing injuries to its passengers. The Philippine Rabbit
bus sped away. Trial Court held that petitioner was 150 meters
away from the bus, the Supreme Court found through evidence
that the distance is not 150 meters but 150 feet.

SANTOS VENTURA V. SANTOS

QUISUMBING, J. / NOVEMBER 5, 2004
PARTIES: SANTOS VENTURA HOCORMA FOUNDATION, INC.,
petitioner, vs. ERNESTO V. SANTOS and RIVERLAND, INC.,
respondents
Art. 1169 CC. Those obliged to deliver or to do something incur in
delay from the time the oblige judicially or extrajudicially demands
from them the fulfillment of their obligation.

ISSUE:

NATURE: Review on certiorari of the decision and resolution of

the Court of Appeals

Whether or not petitioner is both criminally and civilly

liable.
HELD:
No. The evidence of record is that the distance was not
150 meters but 150 feet, which makes quite a difference. The
Court considers this discrepancy important because the finding of
negligence by the trial court is based on whether or not the
accused had enough opportunity to avoid the collision. Guilt of
petitioner has not been proved beyond reasonable doubt.
Consequently he should not have been guilty of even simple
negligence and instead is entitled to be completely absolved of
the criminal responsibility.
The civil liability is, however a different question. There is
preponderance of evidence to hold the petitioner liable in
damages for the injuries sustained by the victims. Although it is
really doubtful that he was criminally negligent, we find there is
enough evidence to sustain the conclusion that a little more
caution and discretion on his part in reacting to the threat of a
head-on collision with the bus could have avoided the unfortunate
incident. We apply the doctrine announced in the case of People
vs. Ligon, we make a similar finding in this case and hold
petitioner civilly answerable for his quasi delict.

FACTS:
Santos had filed several civil cases against Santos Ventura
Hocorma Foundation, Inc. (SVHFI). On October 26, 1990, they
executed a Compromise Agreement which amicably ended all
their pending litigations subject to the following:
that SVHFI shall pay Santos Php14.5 M with Php1.5 M
immediately upon the execution of the agreement and the
balance of Php13 M whether in lump sum or in installments within
a period of not more than 2 years from the execution of the
agreement; provided that in the event that SVHFI does not pay
the whole or any part of the balance, it shall be paid with the land
or real properties of SVHFI which were previously covered by lis
pendens but in no case shall the payment of such balance be
later than 2 years from the date of the agreement.
that immediately upon the execution of the agreement and the
receipt of the Php1.5 M, Santos shall cause the dismissal of Civil
Cases and voluntarily withdraw the appeals from the other civil
cases; provided that in the event that SVHFI shall sell or dispose
any lands previously subject of lis pendens, the proceeds of such
sale may be required and shall be partially devoted to the
payment of the SVHFIs foundations.

that if there is failure of compliance, the aggrieved party shall be

entitled to a write of execution for the enforcement of the
agreement.
Santos moved for the dismissal of the civil cases and the
lifting of the notices of lis pendens on the real properties involved.
SVHFI also paid the Php1.5M. Subsequently, SVHFI sold two
real properties which were previously subjects of lis pendens.
Upon discovery of this, Santos sent a letter to SVHFI demanding
the payment of the Php13 M which was ignored by SVHFI.
Meanwhile, on September 20, 1991, the Compromise
Agreement was judicially approved.
Santos applied for the issuance of a writ of execution of
the Compromise agreement which was granted. The sheriff
levied on the real properties of the petitioner which were
auctioned and awarded to Riverland Inc. Santos and Riverland
Inc. filed a Complaint for Declaratory Relief and Damages
alleging delay on the part of SVHFI in paying the balance and that
under the Compromise Agreement, the obligation became due on
October 26, 1992 but the payment of Php12 M was effected only
on November 22, 1994. The suit covered claims for legal interest
on the obligation, penalty, attorneys fees, costs of litigation and
that the sales to Riverland Inc be declared final and not subject to
redemption.
RTC: decision for SVFHI
CA: decision for Santos and Riverland Inc.
Arguments of SVHFI: The compromise agreement does not
provide for the payment of interest, thus the legal interest by way
of penalty on account of fault or delay shall not be due and
payable. Also, the said agreement did not provide for a period
within which the obligation will become due and demandable,
thus it is incumbent upon respondent to ask for judicial
intervention to fix the period. It is only when a fixed period exists
that the legal interests can be computed.

Argument of Santos and Riverland Inc: Their right to damages

is based on delay in the payment of the obligation provided in the
compromise agreement which as stated is 2 years from its
execution. This was approved by the trial court and became the
law governing their contract. Thus, SVHFIs failure to comply
entitles them to damages, by way of interest.
ISSUE: WON there was delay on the part of SVHFI so as to
entitle Santos and Riverland Inc to legal interest
DECISION: Yes. Petition is Denied.
REASONING: In order for the debtor to be in delay or default
(otherwise knows as mora which means the delay in the
fulfillment of obligations), the following requisites are to be
present:
1.that the obligation be demandable and already liquidated:
In the case, the obligation was already due and
demandable after the lapse of the 2 year period from the
execution of the contract (October 26, 1990) and not from the
judicial approval of the compromise agreement (September 20,
1991). The 2 year period ended on October 26, 1992. When the
respondents gave a demand letter on October 28, 1992, the
obligation was already due and demandable and the obligation is
liquidated because SVFHI knows how must he is to pay and
when he is to pay.
2.that the debtor delays performance:
In the case, SVHFI delayed in the performance. It was
only able to settle the entire balance on February 8, 1995, more
than 2 years after the extrajudicial demand. It also filed several
motions to delay the fulfillment of its obligation.
3.that the creditor requires the performance judicially or extra
judicially:
In the case, the demand letter was sent to SVHFI on
October 28, 1992 which was in accordance with an extrajudicial
demand contemplated by law.

Aside: When the debtor knows the amount and period when he is
to pay, interest as damages is allowed as a matter of right. The
complaining party has been deprived of funds to which he is
entitled by virtue of their compromise agreement. The goal of
compensation requires that the complainant be compensated for
the loss of use of those funds. This compensation is in the form
of interest. In the absence of agreement, the legal interest shall
prevail which is 12% per annum to be computed from the
extrajudicial demand.

Barzaga vs CA 1998 (DELAY)

268 SCRA 105
Facts:
Petitioners wife died and her wish is to be buried before
Christmas.
After her death on Dec 21, 1990, in fulfillment of her wishes,
petitioner went to respondents store to inquire the availability of
materials to be used in building his wifes niche. Respondents
employee advised petitioner that to come back the following
morning. That following morning, petitioner made a payment of
P2,100 to secure the delivery of the materials. However, the
materials were not delivered on time. Several times petitioner
went to respondents store to ask for the delivery. Later that day,
the petitioner was forced to dismiss his laborer since there is
nothing to work with for the materials did not arrive.
Petitioner however purchased the materials from other stores.
After his wife was buried, he sued respondent for damages
because of delay
For his part, respondent offered a lame excuse of fortuitous event
that the reason for delay is because the trucks tires were flat.
Issue:

Whether or not respondent is guilty of delay that will entitle

petitioner for damages, although it was not specified in the
invoice the exact time of delivery?
Held:
Yes! The law expressly provides that those who in the
performance of their obligation are guilty of fraud, negligence, or
delay and those who in any manner contravene the tenor thereof,
are liable for damages. (Art 1170 of the Civil Code).
The appellate court appears to have belittled petitioners
submission that under the prevailing circumstances time was of
the essence in the delivery of the materials to the grave site.
However, we find petitioners assertion to be anchored on solid
ground. The niche had to be constructed at the very least on the
twenty-second of December considering that it would take about
two (2) days to finish the job if the interment was to take place on
the twenty-fourth of the month. Respondents delay in the delivery
of the construction materials wasted so much time that
construction of the tomb could start only on the twenty-third. It
could not be ready for the scheduled burial of petitioners wife.
This undoubtedly prolonged the wake, in addition to the fact that
work at the cemetery had to be put off on Christmas day.
This case is clearly one of non-performance of a reciprocal
obligation. 7 In their contract of purchase and sale, petitioner had
already complied fully with what was required of him as
purchaser, i.e., the payment of the purchase price of P2,110.00. It
was incumbent upon respondent to immediately fulfill his
obligation to deliver the goods otherwise delay would attach.
Phil. Communications Satelite Corp. vs. Globe Telecom, GR
No. 147324, May 25, 2004
PHILIPPINE COMMUNICATIONS SATELLITE
CORPORATION vs.
GLOBE TELECOM, INC. (formerly Globe Mckay Cable and
Radio Corporation)
G.R. No. 147324
May 25, 2004

Tinga, J.:
FACTS: Globe Telecom (formerly Mckay Cable and Radio Corp)
is engaged in the provision of communication facilities in US
military bases in Clark and Subic, Pampanga. In May 1991, it
entered into an Agreement with Philippine Communications
Satellite Corp (Philcomsat) whereby Philcomsat would operate an
IBS Standard B earth station with in Cubi Point for the exclusive
use of two bases. The term of contract was for 60 months (5
years). Globe promised to pay the monthly rentals for each
leased circuit involved. However, in September 1991, the
Philippine Government sent a note to the US Government
signifying the termination of RP-US Military Bases Agreement. In
August 1991, Globe notified Philcomsat of its intention to
discontinue the use of earth station in view of the withdrawal of
US military personnel. Globe invoked as basis for the termination
the clause on non-liability of any party if the failure in the
performance of the obligation results directly or indirectly from
force majeure. Philcomsat demanded payment of its outstanding
obligations under the Agreement amounting to US$4,910,136.00
plus interest and attorneys fees. However, Globe refused to heed
Philcomsats demand. Philcomsat filed with the RTC of Makati
a Complaint against Globe, praying that the latter be ordered to
pay liquidated damages under the Agreement, with legal interest,
exemplary damages, attorneys fees and costs of suit.
ISSUE: W/N the termination of the RP-US Military Bases
Agreement can be considered a fortuitous event which would
exempt Globe from complying with its obligation to pay rentals
HELD: YES. In order that Globe may be exempt from noncompliance with its obligation to pay rentals under Section 8, the
concurrence of the following elements must be established: (1)
the event must be independent of the human will; (2) the
occurrence must render it impossible for the debtor to fulfill the
obligation in a normal manner; and (3) the obligor must be free of
participation in, or aggravation of, the injury to the creditor. The
Court agrees with the Court of Appeals and the trial court that the
abovementioned requisites are present in the instant case.
Philcomsat and Globe had no control over the non-renewal of the
term of the RP-US Military Bases Agreement when the same

expired in 1991, because the prerogative to ratify the treaty

extending the life thereof belonged to the Senate. Neither did the
parties have control over the subsequent withdrawal of the US
military forces and personnel from Cubi Point in December 1992.
The aforementioned events made impossible the continuation of
the Agreement until the end of its five-year term without fault on
the part of either party. The Court of Appeals was thus correct in
ruling that the happening of such fortuitous events rendered
Globe exempt from payment of rentals for the remainder of the
term of the Agreement.
SICAM vs. JORGE
G.R. No. 159617 August 8, 2007
Facts:
Lulu Jorge pawned several pieces of jewelry with Agencia de R.
C. Sicam to secure a loan.
On October 19, 1987, two armed men entered the pawnshop and
took away whatever cash and jewelry were found inside the
pawnshop vault.
Sicam sent respondent Lulu a letter informing her of the loss of
her jewelry due to the robbery incident in the pawnshop.
Respondent Lulu expressed disbelief stating that when the
robbery happened, all jewelry pawned were deposited with Far
East Bank near the pawnshop since it had been the practice that
before they could withdraw, advance notice must be given to the
pawnshop so it could withdraw the jewelry from the bank.
Respondent Lulu then requested petitioner Sicam to prepare the
pawned jewelry for withdrawal on but petitioner Sicam failed to
return the jewelry.
Respondent Lulu is seeking indemnification for the loss of
pawned jewelry and payment of damages. Petitioner is
interposing the defense of caso fortuito on the robber committed
against the pawnshop.
Issue:
WON Sicam is liable for the loss of the pawned articles in their
possession? YES
Held:
Fortuitous events by definition are extraordinary events not
foreseeable or avoidable. It is therefore, not enough that the
event should not have been foreseen or anticipated, as is

commonly believed but it must be one impossible to foresee or to

avoid. The mere difficulty to foresee the happening is not
impossibility to foresee the same.
Robbery per se, just like carnapping, is not a fortuitous event. It
does not foreclose the possibility of negligence on the part of
herein petitioners.
A review of the records clearly shows that petitioners failed to
exercise reasonable care and caution that an ordinarily prudent
person would have used in the same situation. Petitioners were
guilty of negligence in the operation of their pawnshop business.
No sufficient precaution and vigilance were adopted by petitioners
to protect the pawnshop from unlawful intrusion. There was no
clear showing that there was any security guard at all.
Sicams admission that the vault was open at the time of robbery
is clearly a proof of petitioners failure to observe the care,
precaution and vigilance that the circumstances justly demanded.
Petitioner Sicam testified that once the pawnshop was open, the
combination was already off. Instead of taking the precaution to
protect them, they let open the vault, providing no difficulty for the
robbers to cart away the pawned articles.
In contrast, the robbery in this case took place in 1987 when
robbery was already prevalent and petitioners in fact had already
foreseen it as they wanted to deposit the pawn with a nearby
bank for safekeeping. Moreover, unlike in Austria, where no
negligence was committed, we found petitioners negligent in
securing their pawnshop as earlier discussed

NPC vs CA, ECI 1986 (Quasi-Delict; Fortuitous Event)

Facts:
ECI entered into a contract with NAWASA to undertake a
construction of a tunnel from Ipo Dam to Bicti including all
materials, equipment and labor for the said construction for 800
days. The project involved 2 phases. The first involves tunnel
works and the second consists of outworks at both ends of the
tunnel.

As soon as ECI finished the tunnel works in Bicti, it transferred all

its equipments to Ipo Dam to finish the second phase of the
project.
The record shows that on November 4,1967, typhoon Welming
hit Central Luzon, passing through defendants (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 prevent an overflow of water
from the dam, since the water level had reached the danger
height of 212 meters above sea level, the defendant corporation
caused the opening of the spillway gates.
ECI sued NPC for damages. The trial court and the court of
appeals found that defendant NPC was negligent when opened
the gates only at the height of the typhoon holding that it could
have opened the spill gates gradually and should have done so
before the typhoon came. Thus both courts awarded ECI for
damages.
NPC assails the decision of the CA as being erroneous on the
grounds, inter alia, that the loss sustained by ECI was due to
force majeure. It argued that the rapid rise of water level in the
reservoir due to heavy rains brought about by the typhoon is an
extraordinary occurrence that could not have been foreseen.
On the other hand, ECI assails the decision of the court of
appeals modifying the decision of the trial court eliminating the
awarding of exemplary damages.
Hence this present appeal.
Issues:
1. Whether or not NPC is liable for damages even though the cause
of the damage is due to a force majeure? Otherwise stated,
whether or not the damage sustained by ECI could be attributed
to NPC notwithstanding the occurrence of a force majeure?
2. Whether or not ECI is entitled to exemplary damages?
Held:
Yes. 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. As we have ruled in Juan F. Nakpil & Sons v. Court of
Appeals, (144 SCRA 596, 606-607):
Thus, if upon the happening of a fortuitous event or an act of
God, there concurs a corresponding fraud, negligence, delay or
violation or contravention in any manner of the tenor of the
obligation as provided for in Article 1170 of the Civil Code, which
results in loss or damage, the obligor cannot escape liability.
The principle embodied in the act of God doctrine strictly requires
that the act must be one occasioned exclusively by the violence
of nature and human agencies are to be excluded from creating
or entering into the cause of the mischief. When the effect, the
cause of which is to be considered, is found to be in part the
result of the participation of man, whether it be from active
intervention or neglect, or failure to act, the whole occurrence is
thereby humanized, as it was, and removed from the rules
applicable to the acts of God. (1 Corpus Juris, pp. 1174-1175).
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. (Fish & Elective Co. v. Phil. Motors, 55 Phil.
129; Tucker v. Milan 49 O.G. 4379; Limpangco & Sons v. Yangco
Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657).
Substantial evidence is defined as such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion (Philippine Metal Products, Inc. v. Court of Industrial
Relations, 90 SCRA 135 [1979]; Police Commission v. Lood, 127
SCRA 757 [1984]; Canete v. WCC, 136 SCRA 302 [1985])
Exemplary Damages
No. As to the question of exemplary damages, we sustain the
appellate court in eliminating the same since it found that there

was no bad faith on the part of NPC and that neither can the
latters negligence be considered gross. In Dee Hua Liong
Electrical Equipment Corp. v. Reyes, (145 SCRA 713, 719) we
ruled:
Neither may private respondent recover exemplary damages
since he is not entitled to moral or compensatory damages, and
again because the petitioner is not shown to have acted in a
wanton, fraudulent, reckless or oppressive manner (Art. 2234,
Civil Code; Yutuk v. Manila Electric Co., 2 SCRA 377; Francisco v.
Government Service Insurance System, 7 SCRA 577; Gutierrez v.
Villegas, 8 SCRA 527; Air France v. Carrascoso, 18 SCRA 155;
Pan Pacific (Phil.) v. Phil. Advertising Corp., 23 SCRA 977;
Marchan v. Mendoza, 24 SCRA 888).
Comments:
Under Art. 1170 of the Civil Code, When those who in the
performance of their obligations are guilty of fraud, delay, or
negligence, or in any manner contravene in the tenor of the
obligation, are liable for damages. What the provision
contemplates is that there is an express obligation between the
obligor and the obligee arising from a contractual obligation that
must be complied with in good faith. And what the aforestated
provision liable for damages is that breach either because of
fraud, delay, or negligence, or contravention to the tenor of
obligation. Hence it should not be applied generally in all cases,
especially in quasi-delict which is treated specifically by law. In
the case at bar, ECI and NPC has no pre-existing obligation
arising from a contract. Although negligence is indubitably present
in the case, there cannot be located from the facts that there is a
prior obligation arising form NPC and ECI. But instead the
applicable law in the case at bar is Art. 2176 which provides,
Whoever by act or omission causes damage to another, there
being fraud or negligence, is obliged to pay for the damage done.
Such fault of negligence, if there is no pre-existing contractual
relation between the parties, is called quasi-delict and is
governed by the provisions of this chapter. I should rather say
that the Honorable Supreme Court misplaced the application of
the law.
I should further say that the Act of God Doctrine should be
applied inversely to that

Lydia L. Geraldez v. Court of Appeals and Kenstar Travel

Corporation
G.R. No. 108253, February 23 (1994)
Facts:
With reference to Civil Case No. Q-90-4649 of the RTC of
Quezon City, Petitioner Geraldez filed an action for damages
against Respondent Kenstar Travel Corporation for breach of
contract with antecedent facts as follows:
Petitioner opt a 22-day Europe tour travel package offered by
Respondent Corporation paying 2,990 dollars as consideration.
The tour did not end up as expected by herein petitioner, it did not
as represented in the brochure: no European tour manager, hotls
were not 1st class and the Filipino tour guide who is supposed to
accompany them is a 1st timer. Petitioner then filed a breach of
contract against Respondent Corporation for committing acts of
representations constituting fraud in contracting the obligation.
RTC rendered judgment ordering Respondent Corporation to pay
petitioner 500,000 as moral damages, 200,000 as nominal
damages, 300,000 as exemplary damages and 50,000 as
litigation and attorneys fees (all in pesos). On appeal, award for
moral and exemplary damages were deleted and a reduction of
nominal damages to 40,000 pesos, this on account that the
Respondent has substantially complied with the prestation and no
malice or bad faith is imputable as a consequence . Hence, the
petition.
Issue:
Whether or not private respondent acted in bad faith or with gross
negligence in discharging its obligation under contract.

be awarded in breaches of contract where fraud is evident.

Private respondent faulted with fraud in the inducement, which is
employed by a party to a contract in securing the consent of the
other.
In the case at bar, the Private respondent has committed either
dolo causante or dolo incidente by making false
misrepresentation. Either which oblige a person to indemnify
damages.
Wherefore, premises considered, the decision of Respondent
Court of Appeals is hereby set aside, and another one rendered,
ordering private respondent Kenstar Travel Corporation to pay
petitioner Lydia Geraldez the sums of P 100,000 by way of moral
damages, P 50,000 as exemplary damages, and
P
20,000 as attorneys fees with litigation cost against private
respondent. The nominal award of damages is hereby deleted.
JAVIER VS CA
JOSE M. JAVIER and ESTRELLA F. JAVIER vs. COURT OF
APPEALS and LEONARDO TIRO
GR No. 48194 March 15, 1990
Regalado, J.:
FACTS:
Leonardo Tiro executed a Deed of assignment concerning his
shares of stock in Timberwealth Corporation on Feb. 15, 1966 in
favor of spouses Jose and Estrella Javier and for the amount of P
120,000. Spouses paid P20,000 as initial Payment and the
balance to be paid in instalments as agreed. The parties entered
into another deed on Feb. 28, 1966 for
the addtl forest concession, subject of a pending application,
adjoining the area covered in the first deed. As agreed, the
payment therefor of P 30,000 shall be paid as soon as the
application is approved.

Held:
On the foregoing considerations, respondent court erred in
deleting the award for moral and exemplary damages which may

On Nov. 18, 1966, the Dir. of Forestry directed a consolidation for

the renewal of the concession. By virtue of the deed, spouses
Javier consolidated with the other adjoining concessionaires.On

July 16, 1968, Tiro filed a complaint for failure of the spouses to
pay the remaining balance.Spouses filed their answer arguing
therein the nullity of the deeds and the
return of the payments made by them. It appeared in record that
the Timberwealth Corporation was a non-existent
organization.The trial court dismissed the complaint hence, Tiro
appealed to CA. CA reversed the judgment.
Petition to review filed with SC.
ISSUE:
W/N THE TWO DEEDS ARE NULL AND VOID, THE FORMER
FOR TOTAL ABSENCE OF CONSIDERATION AND THE
LATTER FOR NON-FULFILLMENT OF CONDITIONS.
RULING:
Decision Modified.
Petitioners contend that the deed of assignment conveyed to
them the shares of stocks of private respondent in timberwealth
Corporation, as stated in the deed itself. Since said corporation
never came into existence, no share of stocks was ever
transferred to them, hence the said deed is null and void for lack
of cause or consideration.
The true cause or consideration of said deed was the transfer of
the forest concession of private respondent to petitioners for
P120,000.00. This finding is supported by the contemporaneous
and subsequent acts of petitioners and private respondent. It is
settled that the previous and simultaneous and subsequent acts
of the parties are properly
cognizable indicia of their true intention. Their acts reveal that the
cause stated in the questioned deed of assignment is false.
The deed of assignment of February 15, 1966 is a relatively
simulated contract which states a false cause or consideration, or
one where the parties conceal their true agreement. A contract
with a false consideration is not null and void per se. Under Article
1346 of the Civil Code, a relatively simulated contract, when it

does not prejudice a third person and is not intended for any
purpose contrary to law, morals, good customs, public order or
public policy binds the
parties to their real agreement.
As to the nullity for the non-fulfilment of the conditions, SC
agrees. The efficacy of said deed of assignment is subject to the
condition that the application of private respondent for an
additional area for forest concession be approved by the Bureau
of Forestry. Since private respondent did not obtain that approval,
said deed produces no effect. When a contract
is subject to a suspensive condition, its birth or effectivity can take
place only if and when the event which constitutes the condition
happens or is fulfilled.
Moreover, under the second paragraph of Article 1461 of the Civil
Code, the efficacy of the sale of a mere hope or expectancy is
deemed subject to the condition that the thing will come into
existence. In this case, since private respondent never acquired
any right over the additional area for failure to secure the
approval of the Bureau
of Forestry, the agreement executed therefore, which had for
its object the transfer of said right to petitioners, never
became effective or enforceable.

NPC vs CA, ECI 1986 (Quasi-Delict; Fortuitous Event)

Facts:
ECI entered into a contract with NAWASA to undertake a
construction of a tunnel from Ipo Dam to Bicti including all
materials, equipment and labor for the said construction for 800
days. The project involved 2 phases. The first involves tunnel
works and the second consists of outworks at both ends of the
tunnel.
As soon as ECI finished the tunnel works in Bicti, it transferred all
its equipments to Ipo Dam to finish the second phase of the
project.

The record shows that on November 4,1967, typhoon Welming

hit Central Luzon, passing through defendants (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 prevent an overflow of water
from the dam, since the water level had reached the danger
height of 212 meters above sea level, the defendant corporation
caused the opening of the spillway gates.
ECI sued NPC for damages. The trial court and the court of
appeals found that defendant NPC was negligent when opened
the gates only at the height of the typhoon holding that it could
have opened the spill gates gradually and should have done so
before the typhoon came. Thus both courts awarded ECI for
damages.
NPC assails the decision of the CA as being erroneous on the
grounds, inter alia, that the loss sustained by ECI was due to
force majeure. It argued that the rapid rise of water level in the
reservoir due to heavy rains brought about by the typhoon is an
extraordinary occurrence that could not have been foreseen.
On the other hand, ECI assails the decision of the court of
appeals modifying the decision of the trial court eliminating the
awarding of exemplary damages.
Hence this present appeal.
Issues:
1. Whether or not NPC is liable for damages even though the
cause of the damage is due to a force majeure? Otherwise
stated, whether or not the damage sustained by ECI could
be attributed to NPC notwithstanding the occurrence of a
force majeure?
2. Whether or not ECI is entitled to exemplary damages?
Held:
Yes. 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. As we have ruled in Juan F. Nakpil & Sons v. Court of
Appeals, (144 SCRA 596, 606-607):
Thus, if upon the happening of a fortuitous event or an act of
God, there concurs a corresponding fraud, negligence, delay
or violation or contravention in any manner of the tenor of the
obligation as provided for in Article 1170 of the Civil Code,
which results in loss or damage, the obligor cannot escape
liability.
The principle embodied in the act of God doctrine strictly
requires that the act must be one occasioned exclusively by
the violence of nature and human agencies are to be excluded
from creating or entering into the cause of the mischief. When
the effect, the cause of which is to be considered, is found to
be in part the result of the participation of man, whether it be
from active intervention or neglect, or failure to act, the whole
occurrence is thereby humanized, as it was, and removed
from the rules applicable to the acts of God. (1 Corpus Juris,
pp. 1174-1175).
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. (Fish & Elective Co. v.
Phil. Motors, 55 Phil. 129; Tucker v. Milan 49 O.G. 4379;
Limpangco & Sons v. Yangco Steamship Co., 34 Phil. 594,
604; Lasam v. Smith, 45 Phil. 657).
Substantial evidence is defined as such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion (Philippine Metal Products, Inc. v. Court of Industrial
Relations, 90 SCRA 135 [1979]; Police Commission v. Lood, 127
SCRA 757 [1984]; Canete v. WCC, 136 SCRA 302 [1985])
Exemplary Damages

No. As to the question of exemplary damages, we sustain the

appellate court in eliminating the same since it found that there
was no bad faith on the part of NPC and that neither can the
latters negligence be considered gross. In Dee Hua Liong
Electrical Equipment Corp. v. Reyes, (145 SCRA 713, 719) we
ruled:
Neither may private respondent recover exemplary
damages since he is not entitled to moral or compensatory
damages, and again because the petitioner is not shown to
have acted in a wanton, fraudulent, reckless or oppressive
manner (Art. 2234, Civil Code; Yutuk v. Manila Electric Co.,
2 SCRA 377; Francisco v. Government Service Insurance
System, 7 SCRA 577; Gutierrez v. Villegas, 8 SCRA 527;
Air France v. Carrascoso, 18 SCRA 155; Pan Pacific (Phil.)
v. Phil. Advertising Corp., 23 SCRA 977; Marchan v.
Mendoza, 24 SCRA 888).
Comments:
Under Art. 1170 of the Civil Code, When those who in the
performance of their obligations are guilty of fraud, delay, or
negligence, or in any manner contravene in the tenor of the
obligation, are liable for damages. What the provision
contemplates is that there is an express obligation between the
obligor and the obligee arising from a contractual obligation that
must be complied with in good faith. And what the aforestated
provision liable for damages is that breach either because of
fraud, delay, or negligence, or contravention to the tenor of
obligation. Hence it should not be applied generally in all cases,
especially in quasi-delict which is treated specifically by law. In
the case at bar, ECI and NPC has no pre-existing obligation
arising from a contract. Although negligence is indubitably present
in the case, there cannot be located from the facts that there is a
prior obligation arising form NPC and ECI. But instead the
applicable law in the case at bar is Art. 2176 which provides,
Whoever by act or omission causes damage to another, there
being fraud or negligence, is obliged to pay for the damage done.
Such fault of negligence, if there is no pre-existing contractual
relation between the parties, is called quasi-delict and is
governed by the provisions of this chapter. I should rather say

that the Honorable Supreme Court misplaced the application of

the law.
I should further say that the Act of God Doctrine should be
applied inversely to that