VI.

Kindred Torts/Medical Malpractice

Batiquin v. CA

FACTS:

Dr. Batiquin was a Resident Physician at the Negros Oriental Provincial Hospital, Dumaguete City.
She was also the Actg. Head of the Department of Obstetrics and Gynecology at the said Hospital.

Mrs. Villegas submitted to Dr. Batiquin for prenatal care as the latter's private patient. Dr. Batiquin with
the assistance of Dr. Doris Teresita Sy and O.R. Nurse Arlene Diones and some student nurses. Villegas
after 45 minutes Mrs. Villegas delivered her first child. Plaintiff remained confined at the Hospital during
which period of confinement she was regularly visited by Dr. Batiquin.

Soon after leaving the Hospital Mrs. Villegas began to suffer abdominal pains and complained of being
feverish consulted Dr. Batiquin at the latter's polyclinic who prescribed for her certain medicines Mrs.
Villegas was given a Medical Certificate by Dr. Batiquin on October 31, 1988 certifying to her physical
fitness to return to her work. The abdominal pains and fever kept on recurring

When the pains become unbearable and she was rapidly losing weight she consulted Dr. Ma. Salud
Kho at the Holy Child's Hospital in Dumaguete City. Upon examination she felt an abdominal mass one
finger below the umbilicus which she suspected to be either a tumor of the uterus or an ovarian cyst, either
of which could be cancerous. A blood count showed that Mrs. Villegas had [an] infection inside her
abdominal cavity. The result of all those examinations impelled Dr. Kho to suggest that Mrs. Villegas submit
to another surgery to which the latter agreed.

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

The piece of rubber allegedly found near private respondent Flotilde Villegas' uterus was not presented
in court, and although Dr. Ma. Salud Kho testified that she sent it to a pathologist in Cebu City for
examination, it was not mentioned in the pathologist's Surgical Pathology Report. Dr. Victoria Batiquin's
testimony that when she confronted Dr. Kho regarding the piece of rubber, "Dr. Kho answered that there
was rubber indeed but that she threw it away."

The trial court HELD in favor of the petitioners herein.

The Court of Appeals reversed the decision of the trial court. The appellate court ruled: Appellants'
evidence show[s] that they paid a total of P17,000.00 [deposit of P7,100.00 (Exh. G-1-A) plus hospital and
medical expenses together with doctor's fees in the total amount P9,900.00 (Exhs. G and G-2)] for the
second operation that saved her life. For the miseries appellants endured for more than three (3) months,
due to the negligence of appellee Dr. Batiquin, they are entitled to moral damages in the amount of
P100,000.00; exemplary damages in the amount of P20,000.00 and attorney's fees in the amount of
P25,000.00. The fact that appellant Flotilde can no longer bear children because her uterus and ovaries
were removed by Dr. Kho is not taken into consideration as it is not shown that the removal of said organs
were the direct result of the rubber left by appellee Dr. Batiquin near the uterus. What is established is that
the rubber left by appellee cause infection, placed the life of appellant Flotilde in jeopardy and caused
appellants fear, worry and anxiety . . . . WHEREFORE, the appealed judgment, dismissing the complaint for
damages is REVERSED and SET ASIDE. Another judgment is hereby entered ordering
defendants-appellees to pay plaintiffs-appellants the amounts of P17,000.00 as and for actual
damages; P100,000.00 as and for moral damages; P20,000.00 as and for exemplary damages; and
P25,000.00 as and for attorney's fees plus the cost of litigation.
ISSUES:

Whether or not Dr. Batiquin is liable.

RULING:

The phrase relied upon by the trial court does not negate the fact that Dr. Kho saw a piece of rubber in
private respondent Villegas' abdomen, and that she sent it to a laboratory and then to Cebu City for
examination by a pathologist.

Although hearsay, Dr. Batiquin's claim was not objected to, and hence, the same is admissible but it
carries no probative value.

Nevertheless, assuming otherwise, Dr. Batiquin's statement cannot belie the fact that Dr. Kho found a
piece of rubber near private respondent Villegas' uterus whether she threw it away or sent it to Cebu City,
we are not justified in distrusting her as to her recovery of a piece of rubber from private respondent
Villegas' abdomen. The trial court failed to recognize that the assertions of Drs. Batiquin and Sy were
denials or negative testimonies. Well-settled is the rule that positive testimony is stronger than negative
testimony. Of course, as the petitioners advocate, such positive testimony must come from a credible
source, which leads us to the second assigned error.

Dr. Kho as a credible witness. Dr. Kho was frank throughout her turn on the witness stand.
Furthermore, no motive to state any untruth was ever imputed against Dr. Kho, leaving her trustworthiness
unimpaired. Her positive testimony that a piece of rubber was indeed found in private respondent Villegas'
abdomen prevails over the negative testimony in favor of the petitioners.

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

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

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

xxx xxx xxx

The doctrine of [r]es ipsa loquitur as a rule of evidence is peculiar to the law of negligence which
recognizes that prima facie negligence may be established without direct proof and furnishes a substitute
for specific proof of negligence. The doctrine is not a rule of substantive law, but merely a mode of proof or
a mere procedural convenience. The rule, when applicable to the FACTS and circumstances of a particular
case, is not intended to and does not dispense with the requirement of proof of culpable negligence on the
party charged. It merely determines and regulates what shall be prima facie evidence thereof and facilitates
the burden of plaintiff of proving a breach of the duty of due care. The doctrine can be invoked when and
only when, under the circumstances involved, direct evidence is absent and not readily available.[36]
 In the instant case, all the requisites for recourse to the doctrine are present. First, the entire
proceedings of the cesarean section were under the exclusive control of Dr. Batiquin. In this light,
the private respondents were bereft of direct evidence as to the actual culprit or the exact cause of
the foreign object finding its way into private respondent Villegas' body, which, needless to say,
does not occur unless through the intervention of negligence. Second, since aside from the
cesarean section, private respondent Villegas underwent no other operation which could have
caused the offending piece of rubber to appear in her uterus, it stands to reason that such could
only have been a by-product of the cesarean section performed by Dr. Batiquin. The petitioners, in
this regard, failed to overcome the presumption of negligence arising from resort to the doctrine of
res ipsa loquitur. Dr. Batiquin is therefore liable for negligently leaving behind a piece of rubber in
private respondent Villegas' abdomen and for all the adverse effects thereof.

As a final word, this Court reiterates its recognition of the vital role the medical profession
plays in the lives of the people,[37] and State's compelling interest to enact measures to protect the
public from "the potentially deadly effects of incompetence and ignorance in those who would
undertake to treat our bodies and minds for disease or trauma."[38] Indeed, a physician is bound to
serve the interest of his patients "with the greatest of solicitude, giving them always his best talent
and skill."[39] Through her tortious conduct, the petitioner endangered the life of Flotilde Villegas,
in violation of her profession's rigid ethical code and in contravention of the legal standards set
forth for professionals, in the general,[40] and members of the medical profession,[41] in particular.

WHEREFORE, the challenged decision of 11 May 1994 of the Court of Appeals in CA-G.R. CV No.
30851 is hereby AFFIRMED in toto.

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FACTS:
In September 21, 1988 Dr. Batiquin, with the assistance of Dr. Doris Teresita Sy and O.R. Nurse Arlene
Diones and some student nurses performed a simple caesarean section on Mrs. Villegas at the Negros
Oriental Provincial Hospital. after leaving the Hospital Mrs. Villegas began to suffer abdominal pains and
complained of being feverish. The abdominal pains and fever kept on recurring and bothered Mrs. Villegas
no end despite the medications administered by Dr. Batiquin. When the pains became unbearable and she
was rapidly losing weight she consulted Dr. Ma. Salud Kho at the Holy Child's Hospital in Dumaguete City
on January 20, 1989. Blood test shown that Mrs. Villegas had an infection inside her abdominal cavity.
Thereafter Dr. Kho suggested to Mrs. Villegas to submit to another surgery to which the latter agreed.

When Dr. Kho opened the abdomen of Mrs. Villegas she found a "foreign body" looked like a piece of a
"rubber glove". . . and which is [sic] also "rubber-drain like". . . . It could have been a torn section of a
surgeon's gloves or could have come from other sources. And this foreign body was the cause of the
infection of the ovaries and consequently of all the discomfort suffered by Mrs. Villegas after her delivery on
September 21, 1988.

ISSUE: Whether or not a doctor may be held liable for damages for alleged negligence in the conduct of an
operation on the ground of finding a foreign object inside the body of the patient in a subsequent operation.

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

This doctrine [res ipsa loquitur] is stated thus: "Where the thing which causes injury is
shown to be under the management of the defendant, and the accident is such as in the
ordinary course of things does not happen in those who have the management use proper
care, it affords reasonable evidence, in the absence of an explanation by the defendant,
that the accident arose from want of care.
In the instant case, all the requisites for recourse to the doctrine are present. First, the entire proceedings of
the caesarean section were under the exclusive control of Dr. Batiquin. In this light, the private respondents
were bereft of direct evidence as to the actual culprit or the exact cause of the foreign object finding its way
into private respondent Villegas's body, which, needless to say, does not occur unless through the
intersection of negligence. Second, since aside from the caesarean section, private respondent Villegas
underwent no other operation which could have caused the offending piece of rubber to appear in her
uterus, it stands to reason that such could only have been a by-product of the caesarean section performed
by Dr. Batiquin. The petitioners, in this regard, failed to overcome the presumption of negligence arising
from resort to the doctrine of res ipsa loquitur. Dr. Batiquin is therefore liable for negligently leaving behind
a piece of rubber in private respondent Villegas's abdomen and for all the adverse effects thereof.

As a final word, this Court reiterates its recognition of the vital role the medical profession plays in the lives
of the people, and the State's compelling interest to enact measures to protect the public from "the
potentially deadly effects of incompetence and ignorance in those who would undertake to treat our bodies
and minds for disease or trauma." Indeed, a physician is bound to serve the interest of his patients "with the
greatest of solicitude, giving them always his best talent and skill." Through her tortious conduct, the
petitioner endangered the life of Flotilde Villegas, in violation of her profession's rigid ethical code and in
contravention of the legal standards set forth for professionals, in general, and members of the medical
profession, in particular.

Ramos v. CA, GR 124354, Dec. 29, 1999

FACTS:

Plaintiff Erlinda Ramos was, until the afternoon of June 17, 1985 a 47-year old robust woman. Except
for occasional complaints of discomfort due to pains allegedly caused by presence of a stone in her gall
bladder, she was as normal as any other woman. Married to Rogelio Ramos, an executive of Philippine
Long Distance Telephone Company (PLDT), she has three children whose names are Rommel, Roy
Roderick, and Ron Raymond. Because of the discomforts somehow interfered with her normal ways, she
sough professional advice. She was told to undergo an operation for the removal of a stone in her gall
bladder. She underwent series of examination which revealed that she was fit for the said surgery. Through
the intercession of a mutual friend, she and her husband met Dr. Osaka for the first time and she was
advised by Dr. Osaka to go under the operation called cholecystectomy and the same was agreed to be
scheduled on June 17,1985 at 9:00am at the Delos Santos Medical Center. Rogelio asked Dr. Osaka to
look for a good anesthesiologist to which the latter agreed to. A day before the scheduled operation, she
was admitted at the hospital and on the day of the operation, Erlinda’s sister was with her insider the
operating room. Dr. Osaka arrived at the hospital late, Dr. Guttierez, the anesthesiologist, started to
intubate Erlina when Herminda heard her say that intubating Erlinda is quite difficult and there were
complications. This prompt Dr. Osaka to order a call to another anesthesiologist, Dr. Caldron who
successfully intubated Erlina. The patient’s nails became bluish and the patient was placed in a
trendelenburg position. After the operation, Erlina was diagnosed to be suffering from diffuse cerebral
parenchymal damage and that the petitioner alleged that this was due to lack of oxygen supply to Erlinda’s
brain which resulted from the intubation.

ISSUE:

Whether or not the doctors and the hospital are liable for damages against petitioner for the result to
Erlinda of the said operation.

HELD:

Yes. The private respondents were unable to disprove the presumption of negligence on their part in
the care of Erlinda and their negligence was the proximate case of her piteous condition.
 Nevertheless, despite the fact that the scope of res ipsa liquitor has been measurably enlarged, it does
not automatically follow that it apply to all cases of medical negligence as to mechanically shift the burden of
proof to the defendant to show that he is not guilty of the ascribed negligence. Res ipsa liquitor is not a rigid
or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the
circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is
able to say, as a matter of common knowledge and observation, that the consequences of professional care
were not as such as would ordinarily have followed if due care had been exercised. A distinction must be
made between the failure to secure results, and the occurrence of something more unusual and not
ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in that
particular practice. It must be conceded that the doctrine of res ipsa liquitor can have no application in a suit
against a physician or surgeon which involves the merits of a diagnosis or of a scientific treatment.

Scientific studies point out that intubation problems are responsible for 1/3 of deaths and serious
injuries associated with anesthesia. Nevertheless, 98% or the vast majority of difficult intubation may be
anticipated by performing a thorough evaluation of the patient’s airway prior to the operation. As stated
beforehand, respondent, Dra. Guttierez failed to observe the proper pre-operative protocol which could
have prevented this unfortunate incident. Had appropriate diligence and reasonable care been used in the
pre-operative evaluation, respondent physician could have been more prepared to meet the contingency
brought about by the perceived atomic variations in the patient’s neck and oral area; defects which could
have been easily overcome by a prior knowledge of those variations together with a change in technique. In
other words, an experienced anesthesiologist, adequately alerted by a thorough pre-operative evaluation,
would have had little difficulty going around the short neck and potruding teeth. Having failed to observe
common medical standards in pre-operative management and intubation, respondent Dra. Guttierez
negligence resulted in cerebral anoxia and eventual coma of Erlinda.

----------------------------------------------------------------------------------------------------------------------------- ---------------

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

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

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

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

ISSUES:

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

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

RATIO:

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

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

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

The head surgeon, Dr. Hosaka was also negligent. He failed to exercise the proper authority as the
“captain of the ship” in determining if the anesthesiologist observed the proper protocols. Also, because he
was late, he did not have time to confer with the anesthesiologist regarding the anesthesia delivery.

The hospital failed to adduce evidence showing that it exercised the diligence of a good father of the
family in hiring and supervision of its doctors (Art. 2180). The hospital was negligent since they are the one
in control of the hiring and firing of their “consultants”. While these consultants are not employees, hospitals
still exert significant controls on the selection and termination of doctors who work there which is one of the
hallmarks of an employer-employee reationship. Thus, the hospital was allocated a share in the liability.

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

Ramos v. CA, April 11, 2002

The case is about an action for damages filed by petitioners against Dr. Orlino Hosaka (surgeon) and
Dr. Perfecta Gutierrez (anaesthesiologist) for negligence in the performance of their duties during the
operation conducted to Erlinda Ramos for the removal of a stone in her gall bladder, which resulted to her
comatose condition. Delos Santos Medical Center (DLSMC) was impleaded being solidarily liable as their
employer. Based on the evidence presented, it was shown that Dr. Gutierrez had wrongfully inserted the
endotracheal tube into the esophagus instead of the trachea. Consequently, oxygen was delivered not to
the lungs but to the gastrointestinal tract. This resulted to a decrease of blood supply to the patient’s brain.
The brain was thus temporarily deprived of oxygen supply causing Erlinda to go into coma. Another factor
that lead her into coma is the three (3) long waiting hours lying in the operating bed while waiting for Dr.
Hosaka to arrive, which lead to increase her anxiety that adversely affected the administration of
anesthesia. Hence, there is negligence on the part of Dr. Hosaka in not arriving promptly on the scheduled
time.
 The trial court rendered a decision in favor of petitioner holding private respondents negligent in the
performance of their duties. On appeal, the CA reversed the trial court’s decision and directed petitioners to
pay their unpaid medical bills. Petitioners filed a petition for review on certiorari to the SC. The SC reversed
the CA’s decision finding private respondents solidarily liable to Erlinda. Aggrieved, private respondents
filed a motion for reconsideration. The SC rendered a resolution affirming partly its decision, holding
solidarily liable Dr. Hosaka and Dr. Gutierrez only, while absolving DLSMC from any liability. The reason for
this is that there is no employer-employee relationship exists between the surgeons and the hospital. The
amount of damages awarded to petitioners was modified due to the death of Erlinda at the time of hearing of
this motion for reconsideration. Hence, temperate damages was eliminated.

REACTION ON THE DECISION

I was amazed how come the decision reached in this case is different from those rendered in the cases
of PSI vs. Agana (2007), and Nogales vs. CMC (2006). I think it’s because this decision was rendered in
2002, which is much earlier than the two (2) above mentioned cases. In this case, the Supreme Court did
not yet adopt the doctrine of Apparent Authority. It just relied on the control test to determine whether these
specialists are employees of the hospital or not. The fact that these specialists were not under the control of
the DLSMC with regards to means on how the end of their tasks will be achieved made them not employees
of the hospital. Unlike in the doctrine of apparent authority, once the plaintiff had relied on the fact that they
are employed in the hospital through means which would make an ordinary person believed that they are
such, the hospital is estopped from claiming that they are not its employees.

With the current set up of private hospitals nowadays, on how they operate their businesses, it is clear
that most of their consultants and specialists are not employees of the hospital, but rather considered as an
independent contractor. I believe that this decision is not in consonance with the rule on fair play and
equity, because the hospital escaped from liability despite the fact that in case the operation succeed, it will
profit substantially. The doctrine laid down in this decision was abandoned in subsequent medical
negligence cases, in which the SC ruled liberally in favor of patient with regard to the interpretation of
employer-employee relationship. It adopted the modern views enunciated by US Courts to compel hospital
owners to exercise due diligence in the supervision and selection of their employees.

However, the SC with regard to Dr. Hosaka’s liability, it did apply the Captain of the Ship theory
considering that he is the one overall in-charge of the operation. He became solidarily liable with Dr.
Gutierrez because it is his duty to ensure that the latter is working her task diligently. Furthermore, Dr.
Hosaka is the one who referred Dr. Gutierrez to the Ramos to be Erlinda’s anaesthesiologist because they
have been altogether for a long time every time he performed an operation. The SC belie the claim of Dr.
Hosaka that the trend in US jurisprudence should be followed as it do away with the Captain of the Ship
doctrine because each doctor has different specialization. Thus, he has no right of control over his
anaesthesiologist Dr. Gutierrez. Yet, the SC affirmed its decision to made him liable because he exercise a
certain degree of supervision on how the operation to Erlinda should be performed.

Finally, with regard to Dr. Gutierrez, I think his negligence is the proximate cause which made Erlinda
to comatose, considering the fact that he erroneously inserted the endotracheal tube into the esophagus
instead of the trachea. Hence, the oxygen instead of going to her lungs, was diverted into his
gastrointestinal tract, which lead to the loss of supply of oxygen in her brain. If she just performed diligently
the pre-operation evaluation, this tragic incident will not happen.

Reyes v. Sisters of Mercy

FACTS:

Jorge Reyes has been suffering from recurring fever with chills for around days. Home medication
afforded him no relief so he went to Mercy Community Clinic. He was then attended by Dr. Marlyn Rico.
Since typhoid fever was common at that time, the Widal test was performed and he was found positive for
typhoid. Thereafter, Dr. Marlyn Rico indorse Jorge Reyes to Dr. Marvie Blanes.

Suspecting that that Jorge had typhoid fever, Dr. Marvie Blanes ordered that Jorge be tested for
compatibility with chloromycetin, an antibiotic. Such test was conducted by Nurse Pagente. As there was no
adverse reaction, Dr. Blanes administered 500 mg of the antibiotic. Another dose was given 3 hours later.

Subsequently, Jorge Reyes developed high fever and experienced vomiting and convulsions. He then
turned blue due to deficiency in oxygen – cyanosis – and died. The cause of death was stated to be
“ventricular arrhythmia secondary to hyperpyrexia and typhoid fever.”

The heirs of Reyes filed with the RTC a complaint for damages against Sisters of Mercy, Sister Rose
Palacio, Dr. Blanes, Dr. Rico and Mercy Community Clinic contending that the death of Jorge was due to
the wrongful administration of chloromycetin. (NOTE: Petitioner’s action is for medical malpractice.)

RTC ruled in favor of the respondents. The CA affirmed in toto the RTC decision. Hence, this appeal.

Petitioners contend that:

Dr. Marlyn Rico hastily and erroneously relied upon the Widal test, diagnosed Jorge’s illness as
typhoid fever, and immediately prescribed the administration of the antibiotic chloromycetin

Dr. Marvie Blanes erred in ordering the administration of the second dose of 500 milligrams of
chloromycetin barely 3 hours after the first was given.

Testimony presented: That of Dr. Apolinar Vacalares, (Chief Pathologist of the Northern Mindanao
Training Hospital) who performed an autopsy on the body – Dr. Vacalares testified that Reyes did not die of
typhoid fever but of shock undetermined, which could be due to allergic reaction or chloromycetin overdose.

ISSUE:

WON there was medical malpractice. NO

HELD:

Dr. Apolinar Vacalares is not a specialist of typhoid fever and he is thus not qualified to prove that Dr.
Marlyn Rico erred in her diagnosis.

While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be so as
he is not a specialist on infectious diseases like typhoid fever. Furthermore, although he may have had
extensive experience in performing autopsies, he admitted that he had yet to do one on the body of a
typhoid victim at the time he conducted the postmortem on Jorge Reyes. It is also plain from his testimony
that he has treated only about three cases of typhoid fever.

The two doctors presented by respondents clearly were experts on the subject

They vouched for the correctness of Dr. Marlyn Rico’s diagnosis. Dr. Peter Gotiong, a diplomate
whose specialization is infectious diseases and microbiology and an associate professor at the
Southwestern University College of Medicine and the Gullas College of Medicine, testified that he has
already treated over a thousand cases of typhoid fever.

According to him, when a case of typhoid fever is suspected, the Widal test is normally used, and if the
1:320 results of the Widal test on Jorge Reyes had been presented to him along with the patient’s history,
his impression would also be that the patient was suffering from typhoid fever. As to the treatment of the
disease, he stated that chloromycetin was the drug of choice. He also explained that despite the measures
taken by respondent doctors and the intravenous administration of two doses of chloromycetin,
complications of the disease could not be discounted.
 Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the Philippine
and American Board of Pathology, an examiner of the Philippine Board of Pathology, and chief pathologist
at the MetroCebu Community Hospital, Perpetual Succor Hospital, and the Andres Soriano Jr. Memorial
Medical Center.

He stated that, as a clinical pathologist, he recognized that the Widal test is used for typhoid patients,
although he did not encourage its use because a single test would only give a presumption necessitating
that the test be repeated, becoming more conclusive at the second and third weeks of the disease.

He corroborated Dr. Gotiong’s testimony that the danger with typhoid fever is really the possible
complications which could develop like perforation, hemorrhage, as well as liver and cerebral
complications.

Dr. Rico was not negligent in administering the 2 doses of 500 g of chloromycetin

The chloromycetin was likewise a proper prescription is best established by medical authority. Even if
the deceased suffered from an anaphylactic shock, this, of itself, would not yet establish the negligence of
the appellee-physicians for all that the law requires of them is that they perform the standard tests and
perform standard procedures. The law cannot require them to predict every possible reaction to all drugs
administered.

The practice of medicine requires the highest degree of diligence

The practice of medicine is a profession engaged in only by qualified individuals. It is a right earned
through years of education, training, and by first obtaining a license from the state through professional
board examinations. Such license may, at any time and for cause, be revoked by the government. In
addition to state regulation, the conduct of doctors is also strictly governed by the Hippocratic Oath, an
ancient code of discipline and ethical rules which doctors have imposed upon themselves in recognition and
acceptance of their great responsibility to society. Given these safeguards, there is no need to expressly
require of doctors the observance of “extraordinary” diligence.

As it is now, the practice of medicine is already conditioned upon the highest degree of diligence. And,
as we have already noted, the standard contemplated for doctors is simply the reasonable average merit
among ordinarily good physicians. That is reasonable diligence for doctors or, as the Court of Appeals
called it, the reasonable “skill and competence . . . that a physician in the same or similar locality . . . should
apply.”

There are thus four elements involved in medical negligence cases, namely: duty, breach, injury, and
proximate causation

Petitioner’s action is for medical malpractice. This is a particular form of negligence which consists in
the failure of a physician or surgeon to apply to his practice of medicine that degree of care and skill which
is ordinarily employed by the profession generally, under similar conditions, and in like surrounding
circumstances.

In order to successfully pursue such a claim, a patient must prove that the physician or surgeon either
failed to do something which a reasonably prudent physician or surgeon would have done, or that he or she
did something that a reasonably prudent physician or surgeon would not have done, and that the failure or
action caused injury to the patient.

The doctrine of Res Ipsa Loquitor is not applicable in this case.

Was there a physician-patient relationship between the respondent doctors and Jorge Reyes? Yes.

Respondents were thus duty-bound to use at least the same level of care that any reasonably
competent doctor would use to treat a condition under the same circumstances. It is breach of this duty
which constitutes actionable malpractice.
 As to this aspect of medical malpractice, the determination of the reasonable level of care and the
breach thereof, expert testimony is essential. Inasmuch as the causes of the injuries involved in malpractice
actions are determinable only in the light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation.

The doctrine of res ipsa loquitor is not applicable in the case at bar

Though expert testimony is usually needed to prove malpractice, where common knowledge and
experience teach that the injury would not have occurred if due care had been exercised, the doctrine of res
ipsa loquitur can be invoked to establish negligence.

Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician
negligent upon proper proof of injury to the patient, without the aid of expert testimony, where the court from
its fund of common knowledge can determine the proper standard of care. Where common knowledge and
experience teach that a resulting injury would not have occurred to the patient if due care had been
exercised, an inference of negligence may be drawn giving rise to an application of the doctrine of res ipsa
loquitur without medical evidence, which is ordinarily required to show not only what occurred but how and
why it occurred.

When the doctrine is appropriate, all that the patient must do is prove a nexus between the particular
act or omission complained of and the injury sustained while under the custody and management of the
defendant without need to produce expert medical testimony to establish the standard of care.

There is nothing unusual about the death of Jorge Reyes (absence of 1st requisite that the accident
was of a kind which does not ordinarily occur unless someone is negligent)

In this case, while it is true that the patient died just a few hours after professional medical assistance
was rendered, there is really nothing unusual or extraordinary about his death.

Prior to his admission, the patient already had recurring fevers and chills for five days unrelieved by the
analgesic, antipyretic, and antibiotics given him by his wife. This shows that he had been suffering from a
serious illness and professional medical help came too late for him.

It must be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a
physician or a surgeon which involves the merits of a diagnosis or of a scientific treatment. The physician or
surgeon is not required at his peril to explain why any particular diagnosis was not correct, or why any
particular scientific treatment did not produce the desired result.

----------------------------------------------------------------------------------------------- ---------------------------------------------

Legal Issue:

Whether or not Sisters of Mercy Hospital is liable for the death of Jorge Reyes.

Facts:

Petitioner, Leah Alesna Reyes, is the wife of the deceased patient, Jorge Reyes. Five
days before the latter death, Jorge has been suffering from recurring fever with chills. The doctors
confirmed through the Widal test that Jorge has typhoid fever. However, he did not respond to the treatment
and died. The cause of his death was “Ventricular Arrythemia Secondary to Hyperpyrexia and typhoid
fever.”

Consequently, petitioner filed the instant case for damages before the Regional Trial Court of Cebu
City, which dismissed the case and was affirmed by the Court of Appeals.The contention was that Jorge did
not die of typhoid fever. Instead, his death was due to the wrongful administration of chloromycetin. They
contended that had respondent doctors exercised due care and diligence, they would not have
recommended and rushed the performanceof the Widal Test, hastily concluded that Jorge was suffering
from typhoid fever, and administered chloromycetin without first conducting sufficient tests on the patient’s
compatibility with said drug.

Ruling:

Sisters of Mercy Hospital is not liable for the death of Jorge Reyes.D.

Reasoning of the Court:

There is no showing that the attending physician in this case deviated from the usualcourse of
treatment with respect to typhoid fever. Jorge was given antibiotic choloromycetin andsome dose of triglobe
after compatibility test was made by the doctor and found that no adversereactions manifested which would
necessitate replacement of the medicines. Indeed, the standardcontemplated is not what is actually the
average merit among all known practitioners from
the best to the worst and from the most to the least experienced, but the reasonable average meritamong
the ordinarily good physicians. Here, the doctors did not depart from the reasonablestandard recommended
by the experts as they in fact observed the due care required under thecircumstances.E.

Policy:

In Medical Negligence cases, it is incumbent upon the plaintiff to establish that the usual procedure
in treating the illness is not followed by the doctor. Failure to prove this, the doctor isnot liable. Physicians
are not insurers of the success of every procedure undertaken and if
the procedure was shown to be properly done but did not work, they cannot be faulted for suchresult.

-------------------------------------------------------------------------------------------------------------- ------------------------------

CONCEPT:
Petitioner’s action is for medical malpractice. This is a particular form of negligence which consists in the
failure of a physician or surgeon to apply to his practice of medicine that degree of care and skill which is
ordinarily employed by theprofession generally, under similar conditions, and in like
surrounding circumstances. In order to successfully pursue such a claim, a patient must prove that the
physician or surgeon either failed to do something which a reasonably prudent physician or surgeon would
have done, or that he or she did something that a reasonably prudent physician or surgeon would not have
done, and that the failure or action caused injury to the patient. There are thus four elements involved in
medical negligence cases, namely: duty, breach, injury, and proximate causation.

Elements of Medical Malpractice

 duty – the existence of a physician-patient relationship

 breach of duty

 injury caused

 causal connection between the breach of duty and the injury caused

Evidentiary Rule
TWO-PRONGED EVIDENCE:

 evidence of the recognized standards

 the physician negligently departed from these standards

EXPERT TESTIMONY ESSENTIAL:

In the present case, there is no doubt that a physician-patient relationship existed between respondent
doctors and Jorge Reyes. Respondents were thus duty-bound to use at least the same level of care that
any reasonably competent doctor would use to treat a condition under the same circumstances. It is breach
of this duty which constitutes actionable malpractice. As to this aspect of medical malpractice, the
determination of the reasonable level of care and the breach thereof, expert testimony is essential.
Inasmuch as the causes of the injuries involved in malpractice actions are determinable only in the light of
scientific knowledge, it has been recognized that expert testimony is usually necessary to support the
conclusion as to causation. (Reyes vs. Sisters of Mercy Hospital, supra)

EXCEPTION:
There is a case when expert testimony may be dispensed with, and that is under the doctrine of res ipsa
loquitur. As held in Ramos v. Court of Appeals:

Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician
has done a negligent act or that he has deviated from the standard medical procedure, when the doctrine of
res ipsa loquitor is availed by the plaintiff, the need for expert medical testimony is dispensed with because
the injury itself provides the proof of negligence. The reason is that the general rule on the necessity of
expert testimony applies only to such matters clearly within the domain of medical science, and not to
matters that are within the common knowledge of mankind which may be testified to by anyone familiar with
the facts. Ordinarily, only physicians and surgeons of skill and experience are competent to testify as to
whether a patient has been treated or operated upon with a reasonable degree of skill and care. However,
testimony as to the statements and acts of physicians and surgeons, external appearances, and manifest
conditions which are observable by any one may be given by non-expert witnesses. Hence, in cases where
the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper proof of
injury to the patient, without the aid of expert testimony, where the court from its fund of common knowledge
can determine the proper standard of care. Where common knowledge and experience teach that a
resulting injury would not have occurred to the patient if due care had been exercised, an inference of
negligence may be drawn giving rise to an application of the doctrine of res ipsa loquitur without medical
evidence, which is ordinarily required to show not only what occurred but how and why it occurred. When
the doctrine is appropriate, all that the patient must do is prove a nexus between the particular act or
omission complained of and the injury sustained while under the custody and management of the defendant
without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa
loquitor is allowed because there is no other way, under usual and ordinary conditions, by which the patient
can obtain redress for injury suffered by him. (Reyes vs. Sisters of Mercy Hospital, supra)

Standard of Diligence Required

- the standard of care in the locality (“Locality” Rule)
- a physician is not liable for error in judgment (“Error in Judgment” Rule), provided he applied reasonable
skill and care

STANDARD OF DILIGENCE REQUIRED:

Indeed, the standard contemplated is not what is actually the average merit among all known practitioners
from the best to the worst and from the most to the least experienced, but the reasonable average merit
among the ordinarily good physicians.

STANDARD IS NOT EXTRAORDINARY DILIGENCE:

The standard of extraordinary diligence is peculiar to common carriers. The Civil Code provides: "Art. 1733.
Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to the circumstancesof each case. . . ."

The practice of medicine is a profession engaged in only by qualified individuals. It is a right earned through
years of education, training, and by first obtaining a license from the state through professional board
examinations. Such license may, at any time and for cause, be revoked by the government. In addition to
state regulation, the conduct of doctors is also strictly governed by the Hippocratic Oath, an ancient code of
discipline and ethical rules which doctors have imposed upon themselves in recognition and acceptance of
their great responsibility to society. Given these safeguards, there is no need to expressly require of doctors
the observance of “extraordinary” diligence. As it is now, the practice of medicine is already conditioned
upon the highest degree of diligence. And, as we have already noted, the standard contemplated for
doctors is simply the reasonable average merit among ordinarily good physicians. That is reasonable
diligence for doctors or, as the Court of Appeals called it, the reasonable “skill and competence . . . that a
physician in the same or similar locality . . . should apply.” (Reyes vs. Sisters of Mercy Hospital, supra)

Nograles v. CMC

FACTS:

Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was under
the exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy
or as early as December 1975. Around midnight of 25 May 1976, Corazon started to experience mild labor
pains prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his home. After
examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center ("CMC"). t
6:13 a.m., Corazon started to experience convulsionsAt 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor,
applied low forceps to extract Corazon's baby. In the process, a 1.0 x 2.5 cm. piece of cervical tISSUE was
allegedly torn.At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which rapidly became
profuse. Corazon died at 9:15 a.m. The cause of death was "hemorrhage, post partum.

ISSUE:

Whether or not CMC is vicariously liable for the negligence of Dr. Estrada.

RULING:

Private hospitals, hire, fire and exercise real control over their attending and visiting "consultant" staff.
The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article
2180 of the Civil Code which considers a person accountable not only for his own acts but also for those of
others based on the former's responsibility under a relationship of patria potestas.

In general, a hospital is not liable for the negligence of an independent contractor-physician. There is,
however, an exception to this principle. The hospital may be liable if the physician is the "ostensible" agent
of the hospital. This exception is also known as the "doctrine of apparent authority”.

For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the
hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual
who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent
create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and
acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence. In the instant case, CMC impliedly HELD out Dr. Estrada as a
member of its medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby
leading the Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC.

----------------------------------------------------------------------------------------------------------------------------- ---------------

Nograles v. CMC

FACTS:

Pregnant with her fourth child, Corazon Nogales (“Corazon”), who was then 37 years old, was under the
exclusive prenatal care of Dr. Oscar Estrada (“Dr. Estrada”) beginning on her fourth month of pregnancy or
as early as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted an
increase in her blood pressure and development of leg edema indicating preeclampsia, which is a
dangerous complication of pregnancy. Around midnight of 25 May 1976, Corazon started to experience
mild labor pains prompting Corazon and Rogelio Nogales (“Spouses Nogales”) to see Dr. Estrada at his
home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical
Center (“CMC”). The following day, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse
noted the written admission request of Dr. Estrada. Upon Corazon’s admission at the CMC, Rogelio
Nogales (“Rogelio”) executed and signed the “Consent on Admission and Agreement” and “Admission
Agreement.” Corazon was then brought to the labor room of the CMC. Corazon died at 9:15 a.m. The cause
of death was “hemorrhage, post partum.”

Petitioners filed a complaint for damages with the Regional Trial Court of Manila against CMC, Dr. Estrada,
and the rest of CMC medical staff for the death of Corazon. In their defense, CMC pointed out that Dr.
Estrada was a consultant to be considered as an independent-contractor, and that no employer-employee
relationship existed between the former and the latter.

After more than 11 years of trial, the trial court rendered judgment on 22 November 1993 finding Dr. Estrada
solely liable for damages. Petitioners appealed the trial court’s decision. Petitioners claimed that aside from
Dr. Estrada, the remaining respondents should be held equally liable for negligence. Petitioners pointed out
the extent of each respondent’s alleged liability.

On appeal, the Court of Appeals affirmed the trial court’s ruling and applied the “borrowed servant doctrine”
to release the liability of other medical staff. This doctrine provides that once the surgeon enters the
operating room and takes charge of the proceedings, the acts or omissions of operating room personnel,
and any negligence associated with such acts or omissions, are imputable to the surgeon. While the
assisting physicians and nurses may be employed by the hospital, or engaged by the patient, they normally
become the temporary servants or agents of the surgeon in charge while the operation is in progress, and
liability may be imposed upon the surgeon for their negligent acts under the doctrine of respondeat
superior.

ISSUE:

Whether CMC is vicariously liable for the negligence of Dr. Estrada as its attending independent-contractor
physician considering that facts of the instant case.

HELD:

YES.

In general, a hospital is not liable for the negligence of an independent contractor-physician. There is,
however, an exception to this principle. The hospital may be liable if the physician is the “ostensible” agent
of the hospital. This exception is also known as the “doctrine of apparent authority.”xxx The doctrine of
apparent authority essentially involves two factors to determine the liability of an independent-contractor
physician. The first factor focuses on the hospital’s manifestations and is sometimes described as an
inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the
individual who was alleged to be negligent was an employee or agent of the hospital. In this regard, the
hospital need not make express representations to the patient that the treating physician is an employee of
the hospital; rather a representation may be general and implied. xxx The second factor focuses on the
patient’s reliance. It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon
the conduct of the hospital or its agent, consistent with ordinary care and prudence.

xxx

In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff. Through CMC’s
acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe that
Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate such authority. The records
show that the Spouses Nogales relied upon a perceived employment relationship with CMC in accepting
Dr. Estrada’s services. Rogelio testified that he and his wife specifically chose Dr. Estrada to handle
Corazon’s delivery not only because of their friend’s recommendation, but more importantly because of Dr.
Estrada’s “connection with a reputable hospital, the [CMC].” In other words, Dr. Estrada’s relationship with
CMC played a significant role in the Spouses Nogales’ decision in accepting Dr. Estrada’s services as the
obstetrician-gynecologist for Corazon’s delivery. Moreover, as earlier stated, there is no showing that
before and during Corazon’s confinement at CMC, the Spouses Nogales knew or should have known that
Dr. Estrada was not an employee of CMC. xxx CMC’s defense that all it did was “to extend to [Corazon] its
facilities” is untenable. The Court cannot close its eyes to the reality that hospitals, such as CMC, are in the
business of treatment.

xxx

The Court finds respondent Capitol Medical Center vicariously liable for the negligence of Dr. Oscar
Estrada. The amounts of P105,000 as actual damages and P700,000 as moral damages should each earn
legal interest at the rate of six percent (6%) per annum computed from the date of the judgment of the trial
court. The Court affirms the rest of the Decision dated 6 February 1998 and Resolution dated 21 March
2000 of the Court of Appeals in CA-G.R. CV No. 45641.

----------------------------------------------------------------------------------------------------------------------------- ---------------

Nogales vs Capitol Medical Center

Facts: Pregnant with her fourth child, Corazon Nogales, who was then 37 y/o was under the exclusive
prenatal care of Dr. Oscar Estrada beginning on her fourth month of pregnancy or as early as December
1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted an increase in her blood
pressure and development of leg edemas indicating preeclampsia which is a dangerous complication of
pregnancy. Around midnight of May 26, 1976, Corazon started to experience mild labor pains prompting
Corazon and Rogelio Nogales to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada
advised her immediate admission to Capitol Medical Center (CMC). Upon her admission, an internal
examination was conducted upon her by a resident-physician. Based on the doctor’s sheet, around 3am,
Dr. Estrada advised for 10mg valium to be administered immediately by intramuscular injection, he later
ordered the start of intravenous administration of syntociron admixed with dextrose, 5% in lactated ringer’s
solution, at the rate of 8-10 micro-drops per minute. When asked if he needed the services of
anesthesiologist, he refused. Corazon’s bag of water ruptured spontaneously and her cervix was fully
dilated and she experienced convulsions. Dr. Estrada ordered the injection of 10g of magnesium sulfate but
his assisting Doctor, Dr. Villaflor, only administered 2.5g. She also applied low forceps to extract Corazon’s
baby. In the process, a 10 x 2.5cm piece of cervical tissue was allegedly torn. The baby came out in an
apric, cyanatic weak and injured condition. Consequently the baby had to be intubated and resuscitated.
Corazon had professed vaginal bleeding where a blood typing was ordered and she was supposed to
undergo hysterectomy, however, upon the arrival of the doctor, she was already pronounced dead due to
hemorrhage.
Issue: Whether or not in the conduct of child delivery, the doctors and the respondent hospital is liable for
negligence.
Held: Yes. In general, a hospital is not liable for the negligence of an independent contractor-physician.
There is, however an exception to this principle. The hospital may be liable if the physician is the ostensible
agent of the hospital. This exception is also known as the doctrine of apparent authority.
Under the doctrine of apparent authority a hospital can be held vicariously liable for the negligent acts of a
physician providing care at the hospital, regardless of whether the physician is an independent contractor,
unless the patient knows, or should have known, that the physician is an independent contractor.
For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that 1.) the hospital,
or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was
alleged to be negligent was an employee or agent of the hospital; 2.) Where the acts of the agent create the
appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquired in
them; and 3.) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with
ordinary care and prudence.
Borrowed servant doctrine provides that once a surgeon enters the operating room and takes charge of the
acts or omissions of operating room personnel and any negligence associated with each acts or omissions
are imputable to the surgeon, while the assisting physicians and nurses may be employed by the hospital,
or engaged by the patient, they normally become the temporary servants or agents of the surgeon in charge
while the operation is in progress, and liability may be imposed upon the surgeon for their negligent acts
under the doctrine of respondeat superior.

PSI v. Agana

FACTS:

PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded
by Enrique Agana and Natividad Agana (later substituted by her heirs), in a complaint10 for damages filed
in the Regional Trial Court (RTC) of Quezon City, Branch 96, for the injuries suffered by Natividad when Dr.
Ampil and Dr. Fuentes neglected to remove from her body two gauzes which were used in the surgery they
performed on her on April 11, 1984 at the Medical City General Hospital. PSI was impleaded as owner,
operator and manager of the hospital.

In a decision dated March 17, 1993, the RTC held PSI solidarily liable with Dr. Ampil and Dr.
Fuentes for damages. On appeal, the Court of Appeals (CA), absolved Dr. Fuentes but affirmed the liability
of Dr. Ampil and PSI, subject to the right of PSI to claim reimbursement from Dr. Ampil.

On petition for review, this Court, in its January 31, 2007 decision, affirmed the CA decision. PSI
filed a motion for reconsideration16 but the Court denied it in a resolution dated February 11, 2008.

With prior leave of court,1 petitioner Professional Services, Inc. (PSI) filed a second motion for
reconsideration urging referral thereof to the Court en banc and seeking modification of the decision dated
January 31, 2007 and resolution dated February 11, 2008 which affirmed its vicarious and direct liability for
damages to respondents Enrique Agana and the heirs of Natividad Agana (Aganas).

ISSUE:

Whether a hospital may be held liable for the negligence of physicians-consultants allowed to
practice in its premises.

What is the relationship that governs hospitals and its consultants.

HELD:

PSI cannot be liable under doctrine of corporate negligence since the proximate cause of Mrs.
Agana's injury was the negligence of Dr. Ampil, which is an element of the principle of corporate negligence.

After gathering its thoughts on the issues, this Court holds that PSI is liable to the Aganas, not
under the principle of respondeat superior for lack of evidence of an employment relationship with Dr. Ampil
but under the principle of ostensible agency for the negligence of Dr. Ampil and, pro hac vice, under the
principle of corporate negligence for its failure to perform its duties as a hospital.

While in theory a hospital as a juridical entity cannot practice medicine, in reality it utilizes doctors,
surgeons and medical practitioners in the conduct of its business of facilitating medical and surgical
treatment.
 Within that reality, three legal relationships crisscross: (1) between the hospital and the doctor
practicing within its premises; (2) between the hospital and the patient being treated or examined within its
premises and (3) between the patient and the doctor. The exact nature of each relationship determines the
basis and extent of the liability of the hospital for the negligence of the doctor.

Where an employment relationship exists, the hospital may be held vicariously liable under Article
217634 in relation to Article 218035 of the Civil Code or the principle of respondeat superior. Even when no
employment relationship exists but it is shown that the hospital holds out to the patient that the doctor is its
agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 143136 and Article
186937 of the Civil Code or the principle of apparent authority.38 Moreover, regardless of its relationship
with the doctor, the hospital may be held directly liable to the patient for its own negligence or failure to
follow established standard of conduct to which it should conform as a corporation.

In fine, as there was no dispute over the RTC finding that PSI and Dr. Ampil had no
employer-employee relationship, such finding became final and conclusive even to this Court.

Nonetheless, to allay the anxiety of the intervenors, the Court holds that, in this particular instance,
the concurrent finding of the RTC and the CA that PSI was not the employer of Dr. Ampil is correct. Control
as a determinative factor in testing the employer-employee relationship between doctor and hospital under
which the hospital could be held vicariously liable to a patient in medical negligence cases is a requisite fact
to be established by preponderance of evidence. Here, there was insufficient evidence that PSI exercised
the power of control or wielded such power over the means and the details of the specific process by which
Dr. Ampil applied his skills in the treatment of Natividad. Consequently, PSI cannot be held vicariously liable
for the negligence of Dr. Ampil under the principle of respondeat superior.

There is, however, ample evidence that the hospital (PSI) held out to the patient (Natividad) that the
doctor (Dr. Ampil) was its agent. Present are the two factors that determine apparent authority: first, the
hospital's implied manifestation to the patient which led the latter to conclude that the doctor was the
hospital's agent; and second, the patient’s reliance upon the conduct of the hospital and the doctor,
consistent with ordinary care and prudence.

This Court must therefore maintain the ruling that PSI is vicariously liable for the negligence of Dr.
Ampil as its ostensible agent.

The Court notes that PSI made the following admission in its Motion for Reconsideration:

51. Clearly, not being an agent or employee of petitioner PSI, PSI [sic] is not liable for Dr.
Ampil's acts during the operation. Considering further that Dr. Ampil was personally engaged as a
doctor by Mrs. Agana, it is incumbent upon Dr. Ampil, as "Captain of the Ship", and as the Agana's
doctor to advise her on what to do with her situation vis-a-vis the two missing gauzes. In addition to
noting the missing gauzes, regular check-ups were made and no signs of complications were
exhibited during her stay at the hospital, which could have alerted petitioner PSI's hospital to render
and provide post-operation services to and tread on Dr. Ampil's role as the doctor of Mrs. Agana.
The absence of negligence of PSI from the patient's admission up to her discharge is borne by the
finding of facts in this case. Likewise evident therefrom is the absence of any complaint from Mrs.
Agana after her discharge from the hospital which had she brought to the hospital's attention, could
have alerted petitioner PSI to act accordingly and bring the matter to Dr. Ampil's attention. But this
was not the case. Ms. Agana complained ONLY to Drs. Ampil and Fuentes, not the hospital. How
then could PSI possibly do something to fix the negligence committed by Dr. Ampil when it was not
informed about it at all. (emphasis supplied)

The significance of the foregoing statements is critical.

First, they constitute judicial admission by PSI that while it had no power to control the means or
method by which Dr. Ampil conducted the surgery on Natividad Agana, it had the power to review or cause
the review of what may have irregularly transpired within its walls strictly for the purpose of determining
whether some form of negligence may have attended any procedure done inside its premises, with the
ultimate end of protecting its patients.

Second, it is a judicial admission that, by virtue of the nature of its business as well as its
prominence in the hospital industry, it assumed a duty to "tread on" the "captain of the ship" role of any
doctor rendering services within its premises for the purpose of ensuring the safety of the patients availing
themselves of its services and facilities.

Third, by such admission, PSI defined the standards of its corporate conduct under the
circumstances of this case, specifically: (a) that it had a corporate duty to Natividad even after her operation
to ensure her safety as a patient; (b) that its corporate duty was not limited to having its nursing staff note or
record the two missing gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it,
bringing the matter to his attention, and correcting his negligence.

And finally, by such admission, PSI barred itself from arguing in its second motion for
reconsideration that the concept of corporate responsibility was not yet in existence at the time Natividad
underwent treatment; and that if it had any corporate responsibility, the same was limited to reporting the
missing gauzes and did not include "taking an active step in fixing the negligence committed." An admission
made in the pleading cannot be controverted by the party making such admission and is conclusive as to
him, and all proofs submitted by him contrary thereto or inconsistent therewith should be ignored, whether
or not objection is interposed by a party.

To begin with, PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil
the duty to review what transpired during the operation. The purpose of such review would have been to
pinpoint when, how and by whom two surgical gauzes were mislaid so that necessary remedial measures
could be taken to avert any jeopardy to Natividad’s recovery. Certainly, PSI could not have expected that
purpose to be achieved by merely hoping that the person likely to have mislaid the gauzes might be able to
retrace his own steps. By its own standard of corporate conduct, PSI's duty to initiate the review was
non-delegable.

While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing
gauzes, PSI imposed upon itself the separate and independent responsibility of initiating the inquiry into the
missing gauzes. The purpose of the first would have been to apprise Natividad of what transpired during her
surgery, while the purpose of the second would have been to pinpoint any lapse in procedure that led to the
gauze count discrepancy, so as to prevent a recurrence thereof and to determine corrective measures that
would ensure the safety of Natividad. That Dr. Ampil negligently failed to notify Natividad did not release PSI
from its self-imposed separate responsibility.

Corollary to its non-delegable undertaking to review potential incidents of negligence committed

within its premises, PSI had the duty to take notice of medical records prepared by its own staff and
submitted to its custody, especially when these bear earmarks of a surgery gone awry. Thus, the record
taken during the operation of Natividad which reported a gauze count discrepancy should have given PSI
sufficient reason to initiate a review. It should not have waited for Natividad to complain.

As it happened, PSI took no heed of the record of operation and consequently did not initiate a
review of what transpired during Natividad’s operation. Rather, it shirked its responsibility and passed it on
to others – to Dr. Ampil whom it expected to inform Natividad, and to Natividad herself to complain before it
took any meaningful step. By its inaction, therefore, PSI failed its own standard of hospital care. It
committed corporate negligence.

It should be borne in mind that the corporate negligence ascribed to PSI is different from the
medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those of the
doctor-consultant practicing within its premises in relation to the patient; hence, the failure of PSI to fulfill its
duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil.
 All this notwithstanding, we make it clear that PSI’s hospital liability based on ostensible agency
and corporate negligence applies only to this case, pro hac vice. It is not intended to set a precedent and
should not serve as a basis to hold hospitals liable for every form of negligence of their doctors-consultants
under any and all circumstances. The ruling is unique to this case, for the liability of PSI arose from an
implied agency with Dr. Ampil and an admitted corporate duty to Natividad.

Professional Services, Inc. is ORDERED pro hac vice to pay Natividad (substituted by her children
Marcelino Agana III, Enrique Agana, Jr., Emma Agana-Andaya, Jesus Agana and Raymund Agana) and
Enrique Agana the total amount of P15 million, subject to 12% p.a. interest from the finality of this resolution
to full satisfaction.

-------------------------------------------------------------------------------------------------------------------- ------------------------

Professional Services, Inc. v. Natividad and Enrique Agana

Facts:

 Natividad Agana was rushed to the Medical City General Hospital (Medical City Hospital) because
of difficulty of bowel movement and bloody anal discharge. After a series of medical examinations,
Dr. Miguel Ampil diagnosed her to be suffering from "cancer of the sigmoid."
 Dr. Ampil, assisted by medical staff, performed an anterior resection surgery on Natividad. He
found that the malignancy in her sigmoid area had spread on her left ovary, necessitating the
removal of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband,
Enrique Agana, to permit Dr. Juan Fuentes to perform hysterectomy on her.
 However, the operation appeared to be flawed, with the attending nurses including in the Record of
Operation that 2 sponges were missing, but closure was nonetheless ordered.
 Natividad was released from the hospital. Her hospital and medical bills, including the doctors’ fees,
amounted to P60,000.00. After a couple of days, Natividad complained of excruciating pain in her
anal region.
 Natividad, accompanied by her husband, went to the United States to seek further treatment. After
four months of consultations and laboratory examinations, Natividad was told she was free of
cancer. Hence, she was advised to return to the Philippines.
 Natividad flew back to the Philippines, still suffering from pains. Two weeks thereafter, her daughter
found a piece of gauze protruding from her vagina. Upon being informed about it, Dr. Ampil
proceeded to her house where he managed to extract by hand a piece of gauze measuring 1.5
inches in width. He then assured her that the pains would soon vanish.
 Dr. Ampil’s assurance did not come true. Instead, the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital. A foul-smelling gauze was detected, measuring 1.5
inches in width which badly infected her vaginal vault. A rectovaginal fistula had formed in her
reproductive organs which forced stool to excrete through the vagina. Another surgical operation
was needed to remedy the damage. Thus, in October 1984, Natividad underwent another surgery.
 Natividad and her husband filed with the RTC, Branch 96, Quezon City a complaint for
damages against the Professional Services, Inc. (PSI), owner of the Medical City Hospital,
Dr. Ampil, and Dr. Fuentes for negligence in leaving 2 pieces of gauze inside Natividad’s
body, and malpractice for concealing their acts of negligence.
 Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr.
Fuentes.
 The RTC found PSI, Dr. Ampil and Dr. Fuentes guilty.
 Pending appeal before the CA, a motion for partial execution of the RTC decision was granted.
 The PRC Board of Medicine held that the prosecution failed to show that Dr. Fuentes was the one
who left the 2 pieces of gauze inside Natividad’s body; and that he concealed such fact from
Natividad.

Issue:
  Is Dr. Ampil liable for negligence and malpractice?
 Is Dr. Fuentes liable for negligence and malpractice?
 Is PSI liable for the negligence of Dr. Ampil?

Ruling:

AS TO DR. AMPIL

 YES, Dr. Ampil is liable for negligence and malpractice.

 The glaring truth is that all the major circumstances, taken together, as specified by the Court of
Appeals, directly point to Dr. Ampil as the negligent party.
 An operation requiring the placing of sponges in the incision is not complete until the sponges are
properly removed, and it is settled that the leaving of sponges or other foreign substances in the
wound after the incision has been closed is at least prima facie negligence by the operating
surgeon. To put it simply, such act is considered so inconsistent with due care as to raise an
inference of negligence. There are even legions of authorities to the effect that such act is
negligence per se.
 Even if it has been shown that a surgeon was required by the urgent necessities of the case to
leave a sponge in his patient’s abdomen, because of the dangers attendant upon delay, still, it is his
legal duty to so inform his patient within a reasonable time thereafter by advising her of what he had
been compelled to do. This is in order that she might seek relief from the effects of the foreign
object left in her body as her condition might permit.
 This is a clear case of medical malpractice or more appropriately, medical negligence. To
successfully pursue this kind of case, a patient must only prove that a health care provider either
failed to do something which a reasonably prudent health care provider would have done, or that he
did something that a reasonably prudent provider would not have done; and that failure or action
caused injury to the patient.
 Simply put, the elements are duty, breach, injury and proximate causation.
o Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects, such as gauzes,
from Natividad’s body before closure of the incision. When he failed to do so, it was his duty
to inform Natividad about it. Dr. Ampil breached both duties.
o Such breach caused injury to Natividad, necessitating her further examination by American
doctors and another surgery. That Dr. Ampil’s negligence is the proximate cause of
Natividad’s injury could be traced from his act of closing the incision despite the information
given by the attending nurses that two pieces of gauze were still missing.
o That they were later on extracted from Natividad’s vagina established the causal link
between Dr. Ampil’s negligence and the injury. And what further aggravated such injury
was his deliberate concealment of the missing gauzes from the knowledge of Natividad
and her family.

AS TO DR. FUENTES
 NO, Dr. Fuentes is not liable for negligence & malpractice
 Under the "Captain of the Ship" rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation. Their duty is to obey his orders.16 As
stated before, Dr. Ampil was the lead surgeon. In other words, he was the "Captain of the Ship."
 That he discharged such role is evident from his following conduct:
1) calling Dr. Fuentes to perform a hysterectomy;
2) examining the work of Dr. Fuentes and finding it in order;
3) granting Dr. Fuentes’ permission to leave; and
4) ordering the closure of the incision. To our mind, it was this act of ordering the closure of
the incision notwithstanding that two pieces of gauze remained unaccounted for, that
caused injury to Natividad’s body.
 Clearly, the control and management of the thing which caused the injury was in the hands of Dr.
Ampil, not Dr. Fuentes.

AS TO PSI
  YES, PSI is liable for the negligence of Dr. Ampil.
 It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of the
Medical City Hospital’s staff, composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator of the hospital, has actual or constructive
knowledge of the procedures carried out, particularly the report of the attending nurses that the two
pieces of gauze were missing.
 The plaintiffs did plead that the operation was performed at the hospital with its knowledge, aid, and
assistance, and that the negligence of the defendants was the proximate cause of the patient’s
injuries.
 The Court found that such general allegations of negligence, along with the evidence produced at
the trial of this case, are sufficient to support the hospital’s liability based on the theory of negligent
supervision.

VII. Special Torts in Human Relations

a. Abuse of Rights (Art. 19)

Carpio vs. Valmonte, 438 SCRA 38

FACTS

Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon Sierra engaged her
services for their church wedding. On that day, Valmonte went to the Manila Hotel where the bride and her
family were billeted. When she arrived at the Suite, several persons were already there including the bride.
Among those present was petitioner Soledad Carpio, an aunt of the bride who was preparing to dress up for
the occasion.

After reporting to the bride, Valmonte went out of the suite carrying the items needed for the wedding rites
and the gifts from the principal sponsors. She proceeded to the Maynila Restaurant where the reception
was to be held.

She went back to the suite after, and found several people lstaring at her when she entered. . It was at this
juncture that petitioner allegedly uttered the following words to Valmonte: “Ikaw lang ang lumabas ng
kwarto, nasaan ang dala mong bag? Saan ka pumunta? Ikaw lang and lumabas ng kwarto, ikaw ang
kumuha.” Petitioner then ordered one of the ladies to search Valmonte’s bag. It turned out that after
Valmonte left the room to attend to her duties, petitioner discovered that the pieces of jewelry which she
placed inside the comfort room in a paper bag were lost. Hotel Security was later called.

A few days after the incident, petitioner received a letter from Valmonte demanding a formal letter of
apology which she wanted to be circulated to the newlyweds’ relatives and guests to redeem her smeared
reputation as a result of petitioner’s imputations against her. Petitioner did not respond to the letter. Thus,
on 20 February 1997, Valmonte filed a suit for damages against petitioner.

ISSUES & ARGUMENTS

W/N respondent Valmonte is entitled to damages

HOLDING & RATIO DECIDENDI

Valmonte is entitled to damages.

To warrant recovery of damages, there must be both a right of action, for a wrong inflicted by the defendant,
and the damage resulting therefrom to the plaintiff. Wrong without damage, or damage without wrong, does
not constitute a cause of action.

In the our law on human relations, the victim of a wrongful act or omission, whether done willfully or
negligently, is not left without any remedy or recourse to obtain relief for the damage or injury he sustained.
Incorporated into our civil law are not only principles of equity but also universal moral precepts which are
designed to indicate certain norms that spring from the fountain of good conscience and which are meant to
serve as guides for human conduct. First of these fundamental precepts is the principle commonly known
as “abuse of rights” under Article 19 of the Civil Code. It provides that “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.” To find the existence of an abuse of right, the following elements must be present: (1) there
is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent or prejudicing or injuring
another. When a right is exercised in a manner which discards these norms resulting in damage to another,
a legal wrong is committed for which the actor can be held accountable.

The following provisions Complement the abuse of right principle:

Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall
indemnify the latter for the same.

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals or
good customs or public policy shall compensate the latter for the damage.

The foregoing rules provide the legal bedrock for the award of damages to a party who suffers damage
whenever one commits an act in violation of some legal provision, or an act which though not constituting a
transgression of positive law, nevertheless violates certain rudimentary rights of the party aggrieved.

In the case at bar, petitioner’s verbal reproach against respondent was certainly uncalled for considering
that by her own account nobody knew that she brought such kind and amount of jewelry inside the paper
bag. True, petitioner had the right to ascertain the identity of the malefactor, but to malign respondent
without an iota of proof that she was the one who actually stole the jewelry is an act which, by any standard
or principle of law is impermissible. Petitioner had willfully caused injury to respondent in a manner which is
contrary to morals and good customs. She did not act with justice and good faith for apparently, she had no
other purpose in mind but to prejudice respondent. Certainly, petitioner transgressed the provisions of
Article 19 in relation to Article 21 for which she should be held accountable.

----------------------------------------------------------------------------------------------------------------------------- ---------------

FACTS:

Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon Sierra engaged her
services for their church weddinng on October 10, 1996. At about 4:30 pm on that day, Valmonte went to
the Manila Hotel and when she arrived at Suite 326-A, several persons were already there including
Soledad Carpio, the aunt of the bride.

After reporting to the bride, Valmonte went out of the suite to go to the reception hall to give the meal
allowance to the band and to pay the suppliers. Upon entering the suite, Valmonte noticed the people
staring at her and it was at this juncture that Soledad Carpio allegedly uttered the following words to
Valmonte: “Ikaw lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka pumunta? Ikaw lang
ang lumabas ng kwarto, ikaw ang kumuha” It turned out that after Valmonte left the room to attend to her
duties, petitioner discovered that the pieces of jewelry which she placed ins i de the comfort room in a paper
bag were lost and these include diamond rings, earrings, bracelet and diamong necklace with a total value
of about 1M pesos. Valmonte was allegedly bodily searched, interrogated and trailed by the police officers,
but the pe titioner kept on saying the words “Siya lang ang lumabas ng kwarto.” Valmonte’s car was also
searched but the search yielded nothing.
Few days after the incident, petitioner received a letter from Valmonte demanding a formal letter of apology
which she wanted to be circulated to the newlyweds’ relatives and guests to redeem her smeared
reputation but the petitioner did not respond. Valmonte filed a suit for damages.

The trial court dismissed the complaint and ruled that when sought investigation for the loss of her jewelry,
she was merely exercising her right and if damage results from a person exercising his legal right, it is
damnum absque injuria. It added that no proof was presented by Valmonte to show that petitioner acted
maliciously and in bad fai th in pointing to her as the culprit.

The CA ruled out differently and opined that Valmonte has clearly established that she was singled out by
the petitioner as the one responsible for the loss of her jewelry. However, the court find no sufficient
evidence to justify the award of actual damages.

Hence, this petition.

ISSUE:

Whether the respondent is entitled to the award of actual and moral damages

HELD:

The Court ruled that the respondent in entitled to moral damages but not to actual damages.

In the sphere of our law on human relations, one of the fundamental precepts is the principle known as
“abuse of rights” under Article 19 of the Civil Code. To find existence of an abuse of right, the following
elements must be present: 1) there is legal right or duty; 2) which is exercised in bad faith; 3) for the sole
intent or prejudicing or injuring another. Thus, a person should be protected only when he acts in the
legitimate exercise of his right, that is when he acts with prudence and good faith; but not when he acts with
negligence or abuse.

The Court said that petitioner’s verbal reproach against respondent was certainly uncalled for considering
that by her own account nobody knew that she brought such kind and amount of jewelry inside the paper
bag. This being the case, she had no right to attack respondent with her innuendos which were not merely
inquisitve but outrightly accusatory. By openly accusing respondent as the only person who went out of the
room before the loss of the jewelry in the presence of all the guests therein, and ordering that she be
immediately bodily searched, petitioner virtually branded respondent as the thief. Petitioner had willfully
caused injury to respondent in a manner which is contrary to morals and good customs. Certainly, petitioner
transgressed the provisions of Article 19 in relation to Article 20 for which she should be held accountable.

--------------------------------------------------------------------------------------------------------------------------------------------

Facts:

Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon Sierra engaged her
services for their church wedding, as such Valmonte went to the Manila Hotel where the bride and her
family were billeted. When she arrived there, several persons were already there including the bride, the
bride’s parents and relatives, the make-up artist and his assistant, the official photographers, and the
fashion designer. Among those present was petitioner Soledad Carpio, an aunt of the bride who was
preparing to dress up for the occasion.

After reporting to the bride, Valmonte went out of the suite carrying the items needed for the wedding rites
and the gifts from the principal sponsors. She proceeded to the Maynila Restaurant where the reception
was to be held. She paid the suppliers, gave the meal allowance to the band, and went back to the suite.
Upon entering the suite, Valmonte noticed the people staring at her. It was at this juncture that petitioner
allegedly uttered the following words to Valmonte: "Ikaw lang ang lumabas ng kwarto, nasaan ang dala
mong bag? Saan ka pumunta? Ikaw lang and lumabas ng kwarto, ikaw ang kumuha." Petitioner then
ordered one of the ladies to search Valmonte’s bag.
It turned out that after Valmonte left the room, petitioner discovered that the pieces of jewelry which she
placed inside the comfort room in a paper bag were lost. The jewelry pieces consist of two (2) diamond
rings, one (1) set of diamond earrings, bracelet and necklace with a total value of about one million pesos.

All the people inside the room were searched. Valmonte was allegedly bodily searched, interrogated and
trailed by a security guard throughout the evening. During all the time Valmonte was being interrogated by
the police officers, petitioner kept on saying the words "Siya lang ang lumabas ng kwarto." Valmonte’s car
which was parked at the hotel premises was also searched but the search yielded nothing.

Issue:

Whether or not respondent can recover damages from petitioner based on the latter's act.

Held:

Yes, the court awarded moral damages in favor of respondent.

To warrant recovery of damages, there must be both a right of action, for a wrong inflicted by the defendant,
and the damage resulting therefrom to the plaintiff. Wrong without damage, or damage without wrong, does
not constitute a cause of action.

Moreover, a claim for damages based on abuse of right inorder to prosper must have the following
elements:
(1) there is a legal right or duty;
(2) which is exercised in bad faith;
(3) for the sole intent or prejudicing or injuring another.

When a right is exercised in a manner which discards these norms resulting in damage to another, a legal
wrong is committed for which the actor can be held accountable. One is not allowed to exercise his right in
a manner which would cause unnecessary prejudice to another or if he would thereby offend morals or
good customs. Thus, a person should be protected only when he acts in the legitimate exercise of his right,
that is when he acts with prudence and good faith; but not when he acts with negligence or abuse.

In the case at bar, petitioner’s verbal reproach against respondent was certainly uncalled for considering
that by her own account nobody knew that she brought such kind and amount of jewelry inside the paper
bag. This being the case, she had no right to attack respondent with her innuendos which were not merely
inquisitive but outrightly accusatory. By openly accusing respondent as the only person who went out of the
room before the loss of the jewelry in the presence of all the guests therein, and ordering that she be
immediately bodily searched, petitioner virtually branded respondent as the thief. True, petitioner had the
right to ascertain the identity of the malefactor, but to malign respondent without an iota of proof that she
was the one who actually stole the jewelry is an act which, by any standard or principle of law is
impermissible. Petitioner had willfully caused injury to respondent in a manner which is contrary to morals
and good customs. Her firmness and resolve to find her missing jewelry cannot justify her acts toward
respondent. She did not act with justice and good faith for apparently, she had no other purpose in mind but
to prejudice respondent. Certainly, petitioner transgressed the provisions of Article 19 in relation to Article
21 for which she should be held accountable.

Respondent’s claim for actual damages has not been substantiated with satisfactory evidence during the
trial and must therefore be denied. However, respondent is clearly entitled to an award of moral damages.

Moral damages may be awarded whenever the defendant’s wrongful act or omission is the proximate cause
of the plaintiff’s physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury in the cases specified or analogous to those
provided in Article 2219 of the Civil Code. Though no proof of pecuniary loss is necessary in order that
moral damages may be adjudicated, courts are mandated to take into account all the circumstances
obtaining in the case and assess damages according to their discretion. Worthy of note is that moral
damages are not awarded to penalize the defendant, or to enrich a complainant, but to enable the latter to
obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone,
by reason of defendant’s culpable action. In any case, award of moral damages must be proportionate to
the sufferings inflicted.

Considering respondent’s social standing, and the fact that her profession is based primarily on trust
reposed in her by her clients, the seriousness of the imputations made by petitioner has greatly tarnished
her reputation and will in one way or the other, affect her future dealings with her clients, the award of
P100,000.00 as moral damages appears to be a fair and reasonable assessment of respondent’s
damages.

---------------------------------------------------------------------------------------------------------------------------------- ----------

CARPIO v. VALMONTE

FACTS:

Respondent Valmonte is a wedding coordinator. Michelle del Rosario

and Jon Sierra engaged her services for their church wedding. On that day,Valmonte went to the Manila
Hotel to where the bride and her family were
billeted. When she arrived at the Suite, several persons were already
there including the petitioner Soledad Carpio, an aunt of the bride who waspreparing to dress up for the
occasion. After reporting to the bride, Valmonte went out of the suite carrying the items
needed for the wedding rites and the gifts from the principal sponsors. She proceeded to the Maynila
Restaurant where the reception was to be held. She went back to the suite after, and found several people
staring at her when she entered. . It was at this juncture that petitioner allegedly uttered the following
words to Valmonte:

“Ikaw lang ang lumabas ng kwarto, nasaan ang dala mongbag? Saan ka pumunta? Ikaw lang and lumabas
ng kwarto, ikaw ang kumuha.”

Petitioner then ordered one of the ladies to search Valmonte’s bag.

It turned out that after Valmonte left the room to attend to her duties, petitionerdiscovered that the pieces of
jewelry which she placed inside the comfort room in apaper bag were
lost.A few days after the incident, petitioner received a letter from Valmontedemanding a formal letter of
apology which she wanted to be circulated to thenewlyweds ’relatives and guests to redeem her smeared
reputation as a result of petitioner’s imputations against her. Petitioner did not respond to the letter. Thus,on
20February 1997, Valmonte filed a suit for damages against petitioner.

ISSUE:

W/N respondent Valmonte is entitled to damages

RULING:

Valmonte is entitled to damages. In the case at bar, petitioner’s verbalreproach against respondent was
certainly uncalled for considering that by her ownaccount nobody knew that she brought such kind and
amount of jewelry inside thepaper bag. True, petitioner had the right o ascertain the identity of the
malefactor,but to malign respondent without an iota of proof that she was the one who
actuallystole the jewelry is an act which, by any standard or principle of law isimpermissible. Petitioner ha
d willfully caused injury to respondent in amanner which is contrary to morals and good customs. She did
not act with justiceand good faith for apparently, she had no other purpose in mind but to
prejudicerespondent. Certainly, petitioner transgressed the provisions of Article 19 inrelation to Article 21
for which she should be held accountable
 SEA Comm’l v. CA, 319 SCRA 211

FACTS

SEACOM is a corporation engaged in the business of selling and distributing agricultural machinery,
products and equipment. On September 20, 1966, SEACOM and JII entered into a dealership agreement
whereby SEACOM appointed JII as its exclusive dealer in the City and Province of Iloilo. Tirso Jamandre
executed a suretyship agreement binding himself jointly and severally with JII to pay for all obligations of JII
to SEACOM. The agreement was subsequently amended to include Capiz in the territorial coverage and to
make the dealership agreement on a non-exclusive basis. In the course of the business relationship arising
from the dealership agreement, JII allegedly incurred a balance of P18,843.85 for unpaid deliveries, and
SEACOM brought action to recover said amount plus interest and attorney’s fees.

JII filed an Answer denying the obligation and interposing a counterclaim for damages representing
unrealized profits when JII sold to the Farm System Development Corporation (FSDC) twenty one (21) units
of Mitsubishi power tillers. In the counterclaim, JII alleged that as a dealer in Capiz, JII contracted to sell in
1977 twenty-four (24) units of Mitsubishi power tillers to a group of farmers to be financed by said
corporation, which fact JII allegedly made known to petitioner, but the latter taking advantage of said
information and in bad faith, went directly to FSDC and dealt with it and sold twenty one (21) units of said
tractors, thereby depriving JII of unrealized profit of eighty-five thousand four hundred fifteen and 61/100
pesos (P85,415.61).

ISSUES & ARGUMENTS

W/N SEACOM acted in bad faith when it competed with its own dealer as regards the sale of farm
machineries to FSDC

HOLDING & RATIO DECIDENDI

"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.”

Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold
number of moral wrongs which is impossible for human foresight to provide specifically in statutory law. If
mere fault or negligence in one’s acts can make him liable for damages for injury caused thereby, with more
reason should abuse or bad faith make him liable. The absence of good faith is essential to abuse of right.
Good faith is an honest intention to abstain from taking any unconscientious advantage of another, even
through the forms or technicalities of the law, together with an absence of all information or belief of fact
which would render the transaction unconscientious. In business relations, it means good faith as
understood by men of affairs.

While Article 19 may have been intended as a mere declaration of principle, the“cardinal law on human
conduct” expressed in said article has given rise to certainrules, e.g. that where a person exercises his
rights but does so arbitrarily or unjustlyor performs his duties in a manner that is not in keeping with honesty
and goodfaith, he opens himself to liability. The elements of an abuse of rights under Article 19 are: (1) there
is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another.

Clearly, the bad faith of SEACOM was established. By appointing as a dealer of its agricultural equipment,
SEACOM recognized the role and undertaking of JII to promote and sell said equipment. Under the
dealership agreement, JII was to act as a middleman to sell SEACOM’s products, in its area of operations,
i.e. Iloilo and Capiz provinces, to the exclusion of other places, to send its men to Manila for training on
repair, servicing and installation of the items to be handled by it, and to comply with other personnel and
vehicle requirements intended for the benefit of the dealership After being informed of the demonstrations
JII had conducted to promote the sales of SEACOM equipment, including the operations at JII’s expense
conducted for five months, and the approval of its facilities (service and parts) by FSDC, SEACOM
participated in the bidding for the said equipment at a lower price, placing itself in direct competition with its
own dealer. The actuations of SEACOM are tainted by bad faith.

Even if the dealership agreement was amended to make it on a non-exclusive basis, SEACOM may not
exercise its right unjustly or in a manner that is not in keeping with honesty or good faith; otherwise it opens
itself to liability under the abuse of right rule embodied in Article 19 of the Civil Code above-quoted. This
provision, together with the succeeding article on human relation, was intended to embody certain basic
principles “that are to be observed for the rightful relationship between human beings and for the stability of
the social order.” What is sought to be written into the law is the pervading principle of equity and justice
above strict legalism.

Citytrust Banking v. Villanueva, 361 SCRA 446

Facts:

 In February 1984, Isagani Villanueva (VILLANUEVA) opened a savings account and a current account
with Citytrust Banking Corporation (BANK) with an automatic transfer arrangement.
 VILLANUEVA deposited some money in his savings account with the BANK’s Legaspi Village Branch.
 Realizing that he had run out of blank checks, VILLANUEVA requested a new checkbook from one of
the BANK’s customer service representatives.
o He filled up a checkbook requisition slip with the obligatory particulars, except for his current account
number which he could not remember. He expressed his predicament to a customer service
representative of the BANK, who in turn assured him that she could supply the information from the
BANK’s account records. After signing the requisition slip, he gave it to her.
o Pia Rempillo, another customer service representative of the BANK, saw VILLANUEVA’s
checkbook requisition slip. She took it and proceeded to check the BANK’s checkbook register
which contained all the names and account numbers of the BANK’s clients who were issued
checkbooks.
o Rempillo copied the account number on the space intended for it in Villanueva’s requisition slip.
 When Villanueva received his requested checkbook, he signed and issued a check for P50k payable to
Kingly Commodities. He delivered this check to Helen Chu, his investment consultant at Kingly
Commodities.
 HOWEVER, Villanueva's check was dishonored due to insufficiency of funds and disparity in the
signature. He informed the bank about this, and he was assured that the check would be honored
subsequently.
 When Kingly Commodities tried to deposit the check again, it was again dishonored. This time, it was
found out that the account number assigned to Villanueva's new checkbook was the account
number of another depositor with the same name but with a different middle initial.
 The bank issued a manager's check to correct the situation with Kingly Commodities. It apologized to
Villanueva, but reminded him that the dishonor was actually due to his failure to state his current
account number in the requisition slip.
 In June 1986, VILLANUEVA sent a letter to the BANK addressed to the President, Jose Facundo
(hehe), demanding for indemnification for alleged losses and damages suffered by him as a result of
the dishonor of his well-funded check.
o He demanded P70, 000 as indemnification for actual damages in the form of lost profits and P2M for
moral and other damages.
o The bank refused, insisting that it was due to VILLANUEVA’s irresponsibility.
 He then filed a complaint for damages based on breach of contract and/or quasi-delict before the
Makati RTC.
 Makati RTC dismissed the case for lack of merit and ruled in favor of the bank.
o It found that Villanueva's negligence was the proximate cause of the injury.
 o It conceded, however, that the BANK was negligent when it failed to supply VILLANUEVA’s correct
account number despite its promise to do so; but its negligence was merely contributory, which
would have reduced the damages recoverable by VILLANUEVA had the latter proved his claims for
actual, moral and exemplary damages, and attorney’s fees.
 The CA ruled in favor of VILLANUEVA, and decided that the BANK’s voluntary processing of the
requisition slip is the proximate cause of the injury.
 Thus, this case.

Issues:

1. W/N Villanueva is entitled to payment of damages

Held/Ratio:

1. NO.
a. Actual losses: NOT ENTITLED

 The issue of whether VILLANUEVA suffered actual or compensatory damages in the form of
loss of profits is factual. Both lower courts found that he was not able to prove his demand
for compensatory damages arising from loss.
 His evidence was found inadequate, uncorroborated, speculative, hearsay, and not the best
evidence.
 Actual damages cannot be presumed but must be duly proved with reasonable
certainty.
 Basic is the jurisprudential principle that in determining actual damages, the court cannot rely
on mere assertions, speculations, conjectures, or guesswork but must depend on competent
proof and on the best obtainable evidence of the actual amount of the loss.
b. Moral damages: NOT ENTITLED

 Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury.
 Although incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant’s wrongful act or omission.
 Requisites: (1) injury, (2) culpable act or omission factually established, (3) act or omission is
the proximate cause of the injury, (4) award of damages is predicated on any of the cases
stated in Art. 2219
 Under the circumstances of this case, VILLANUEVA might have suffered some form of
inconvenience and discomfort as a result of the dishonor of his check. However, the same
could not have been so grave or intolerable. Also, the bank was able to remedy the situation
with Kingly Commodities.
c. Attorney's fees: NOT ENTITLED 

 The general rule is that attorney’s fees cannot be recovered as part of damages because of the
policy that no premium should be placed on the right to litigate. They are not to be awarded
every time a party wins a suit.
 The power of the court to award attorney’s fees under Art. 2208 of the Civil Code demands
factual, legal, and equitable justification.
 Even when a claimant is compelled to litigate with third persons or to incur expenses to protect
his rights, still attorney’s fees may not be awarded where there is no sufficient showing of bad
faith in the parties’ persistence of a case other than an erroneous conviction of the
righteousness of his cause.

There is no need to deliberate on whose negligence was the proximate cause, since Villanueva did
not sustain any compensable injury. The present case is considered an instance of damnum
absque injuria.

Wherefore, the CA’s decision is REVERSED and the RTC’s judgment is REINSTATED.
 Nikko Hotel Manila Garden v. Reyes

FACTS:

Respondent Reyes also known as Amay Bisaya was having a coffee break at the lobby of Hotel Nikko
Manila Garden when his friend Mrs. Filart invited him to attend the natal party of the owner of the hotel, thus
respondent Reyes acceded to his friend but when they are going to take food in the buffet table , party
organizer, Ruby Lim confronted the respondent since allegedly the latter was not invited and that the party
was for limited guests. The respondent was so embarrassed especially when he was driven away by
policemen. The trial court ruled in favor of Lim however, the Appellate Court favored the respondent.

ISSUE:

Whether Amay Bisaya (private respondent) is entitled to payment of damages.

RULING:

No. The respondent can not recover damages from the organizer of the party

since the organizer acted in pursuance of the ordered of the celebrant that the party was for limited guests
and thus, the latter approached the respondent to leave the area. The act of the respondent is considered
as a self- inflicted injury when he, being a gate crasher has voluntary went to a party in which he is not
invited. Therefore, the act of Ruby Lim is justified and reasonable.

----------------------------------------------------------------------------------------------------- ---------------------------------------

FACTS:

Petitioners Nikko Hotel Manila and Ruby Lim assailed the decision of the Court of Appeals in reversing the
decision of RTC of Quezon City. CA held petitioner liable for damages to Roberto Reyes aka “Amang
Bisaya”, an entertainment artist.

There are two versions of the story:

Mr. Reyes: On the eve of October 13, 1994, Mr. Reyes while having coffee at the lobby of Nikko Hotel was
approached by Dr. Violet Filart, a friend several years back. According to Mr. Reyes, Dr. Filart invited him
to join a birthday party at the penthouse for the hotel’s former General Manager, Mr. Tsuruoka. Plaintiff
agreed as Dr. Filart agreed to vouch for him and carried a basket of fruits, the latter’s gift. He He lined up at
the buffet table as soon as it was ready but to his great shock, shame and embarrassment, Ruby Lim,
Hotel’s Executive Secretary, asked him to leave in a loud voice enough to be heard by the people around
them. He was asked to leave the party and a Makati policeman accompanied him to step-out the hotel. All
these time, Dr Filart ignored him adding to his shame and humiliation.

Ms. Ruby Lim: She admitted asking Mr. Reyes to leave the party but not in the manner claimed by the
plaintiff. Ms. Lim approached several people including Dr. Filart’s sister, Ms. Zenaida Fruto, if Dr. Filart did
invite him as the captain waiter told Ms. Lim that Mr. Reyes was with Dr. Filart’s group. She wasn’t able to
ask it personally with Dr. Filart since the latter was talking over the phone and doesn’t want to interrupt
her. She asked Mr. Reyes to leave because the celebrant specifically ordered that the party should be
intimate consisting only of those who part of the list. She even asked politely with the plaintiff to finish his
food then leave the party.

During the plaintiff’s cross-examination, he was asked how close was Ms. Lim when she approached him at
the buffet table. Mr. Reyes answered “very close because we nearly kissed each other”. Considering the
close proximity, it was Ms. Lim’s intention to relay the request only be heard by him. It was Mr. Reyes who
made a scene causing everybody to know what happened.
ISSUE:

Whether or not petitioners acted abusively in asking Mr. Reyes to leave the party.

HELD:

Supreme Court held that petitioners did not act abusively in asking Mr. Reyes to leave the party. Plaintiff
failed to establish any proof of ill-motive on the part of Ms. Lim who did all the necessary precautions to
ensure that Mr. Reyes will not be humiliated in requesting him to leave the party. Considering almost 20
years of experience in the hotel industry, Ms. Lim is experienced enough to know how to handle such
matters. Hence, petitioners will not be held liable for damages brought under Article 19 and 20 of the Civil
Code.

b. Acts and Omissions Contrary to Morals

Ruiz v. Sec. Of National Defense

FACTS:

Petitioner Corazon Ruiz is engaged in the business of buying and selling jewelry. She obtained loans from
private respondent Consuelo Torres on different occasions and in different amounts. Prior to their maturity,
the loans were consolidated under 1 promissory note worth P750 000 secured by real estate mortgage of a
land registered to petitioner. Petitioner obtained 3 more loans from private respondent worth P100 000
each. These combined loans of P300 000 were secured by jewelry pledged by petitioner to private
respondent worth P571 000.

Petitioner paid the stipulated 3% monthly interest on the P750 000 loan, amounting to P270 000. After
March 1996, petitioner was unable to make interest payments as she had difficulties collecting from her
clients in her jewelry business.

Because of petitioner’s failure to pay the principal loan of P750 000, as well as the interest payment, private
respondent demanded payment not only of the P750 000 loan but also of the P300 000 loan. When
petitioner failed to pay, private respondent sought the extrajudicial foreclosure of the aforementioned real
estate mortgage.

ISSUE:

Whether or not there is undue influence in the signing of the promissory note.

RULING:

The fact that petitioner and private respondent had entered into not only one but several loan transactions
shows that petitioner was not in any way compelled to accept the terms allegedly imposed by private
respondent.

The promissory notes in question did not contain any fine print provision which could have escaped the
attention of the petitioner. Petitioner had all the time to go over and study the stipulations embodied in the
promissory notes. These promissory notes contain similar terms and conditions, with a little variance in the
terms of interests and surcharges. Moreover, petitioner, in her complaint never claimed that she was forced
to sign the subject note.
 Tenchavez v. Escano

Facts:

Direct appeal, on factual and legal questions, from the judgment of the Court of First Instance of Cebu,
denying the claim of the plaintiff-appellant, Pastor B. Tenchavez, for legal separation and one million pesos
in damages against his wife and parents-in-law, the defendants-appellees, Vicente, Mamerto and Mena, all
surnamed "Escaño," respectively.

Missing her late afternoon classes on 24 February 1948 in the University of San Carlos, Cebu City, where
she was then enrolled as a second year student of commerce, Vicenta Escaño, 27 years of age (scion of a
well-to-do and socially prominent Filipino family of Spanish ancestry and a "sheltered colegiala"),
exchanged marriage vows with Pastor Tenchavez, 32 years of age, an engineer, ex-army officer and of
undistinguished stock, without the knowledge of her parents, before a Catholic chaplain, Lt. Moises
Lavares, in the house of one Juan Alburo in the said city. The marriage was the culmination of a previous
love affair and was duly registered with the local civil register.

Her parents were disgusted when they found out about the marriage and considered a Re-celebration of the
marriage as they believed it to be invalid.

The re-celebration never took place.

On 24 June 1950, without informing her husband, Vicenta applied for a passport, indicating in her
application that she was single, that her purpose was to study, and she was domiciled in Cebu City, and that
she intended to return after two years. The application was approved, and she left for the United States.

On 22 August 1950, she filed a verified complaint for divorce against the herein plaintiff in the Second
Judicial District Court of the State of Nevada in and for the County of Washoe, on the ground of "extreme
cruelty, entirely mental in character." On 21 October 1950, a decree of divorce, "final and absolute", was
issued in open court by the said tribunal.

In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of Cebu to annul their daughter's
marriage to Pastor (Exh. "D"). On 10 September 1954, Vicenta sought papal dispensation of her marriage
(Exh. "D"-2).

On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. She now lives with
him in California, and, by him, has begotten children. She acquired American citizenship on 8 August 1958.

But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint in the Court of First
Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Escaño, her parents, Mamerto and
Mena Escaño, whom he charged with having dissuaded and discouraged Vicenta from joining her husband,
and alienating her affections, and against the Roman Catholic Church, for having, through its Diocesan
Tribunal, decreed the annulment of the marriage, and asked for legal separation and one million pesos in
damages. Vicenta claimed a valid divorce from plaintiff and an equally valid marriage to her present
husband, Russell Leo Moran; while her parents denied that they had in any way influenced their daughter's
acts, and counterclaimed for moral damages.

The appealed judgment did not decree a legal separation, but freed the plaintiff from supporting his wife and
to acquire property to the exclusion of his wife. It allowed the counterclaim of Mamerto Escaño and Mena
Escaño for moral and exemplary damages and attorney's fees against the plaintiff-appellant, to the extent
of P45,000.00, and plaintiff resorted directly to this Court.

Issue:

WON Vicenta’s parents are liable for damages.

Ruling:

No. There is no evidence that the parents of Vicenta, out of improper motives, aided and abetted her
original suit for annulment, or her subsequent divorce; she appears to have acted independently, and being
of age, she was entitled to judge what was best for her and ask that her decisions be respected. Her
parents, in so doing, certainly cannot be charged with alienation of affections in the absence of malice or
unworthy motives, which have not been shown, good faith being always presumed until the contrary is
proved.

Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or social discrimination and with
having exerted efforts and pressured her to seek annulment and divorce, unquestionably caused them
unrest and anxiety, entitling them to recover damages. While this suit may not have been impelled by actual
malice, the charges were certainly reckless in the face of the proven facts and circumstances. Court actions
are not established for parties to give vent to their prejudices or spleen.

Pe v. Pe

Facts:

Alfonso Pe, the defendant, was a married man, agent of La Perla Cigar and Cigarette Factory in Gasan
Marinduque who was treated like a son by Cecilio Pe, one of the petitioners. Cecilio introduced Alfonso to
his children and was given access to visit their house. Alfonso got fond of Lolita, 24 year old single,
daughter of Cecilio. The defendant frequented the house of Lolita sometime in 1952 on the pretext that he
wanted her to teach him how to pray the rosary. Eventually they fell in love with each other.

Plaintiff brought action before lower court of Manila and failed to prove Alfonso deliberately and in bad faith
tried to win Lolita’s affection. The case on moral damages was dismissed.

Issue:

WON defendant is liable to Lolita’s family on the ground of moral, good custom and public policy due to their
illicit affair.

Ruling:

“The circumstances under which defendant tried to win Lolita’s affection cannot lead to any other
conclusion than that it was he who, thru an ingenious scheme or trickery, seduced the latter to the extent of
making her fall in love with him. Indeed, no other conclusion can be drawn from this chain of events than
that defendant not only deliberately, but through a clever strategy, succeeded in winning the affection and
love of Lolita to the extent of having illicit relations with her. The wrong he has caused her and her family is
indeed immeasurable considering the fact that he is a married man. Verily, he has committed an injury to
Lolita’s family in a manner contrary to morals, good customs and public policy as contemplated in Article 21
of the New Civil Code.”

Alfonso committed an injury to Lolita’s family in a manner contrary to morals, good customs and public
policy contemplated in Article 20 of the civil code. The defendant took advantage of the trust of Cecilio and
even used the praying of rosary as a reason to get close with Lolita.

WHEREFORE, the decision appealed from is reversed. Defendant is hereby sentenced to pay the plaintiffs
the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and expenses of litigations. Costs
against appellee.
 Wassmer v. Velez

FACTS

Velez and Wassmer decided to get married and set the wedding day for September 4, 1954. On September
2, 1954, Velez left a note for Wassmer stating that the wedding would have to be postponed because his
mother opposes it, and that he was leaving for his hometown.

The next day, however, he sent her a telegram stating that nothing changed and that he would be returning
very soon. But then, Velez did not appear nor was he heard from again.

Wassmer sued him, and he was declared in default. Judgment was rendered ordering Velez to pay actual
damages, moral and exemplary damages, and attorney’s fees.

Velez filed a petition for relief from judgment and motion for new trial and reconsideration. Since he still
failed to appear during the hearings set by the lower court, and because his counsel had declared that there
was no possibility for an amicable settlement between the parties, the court issued an order denying his
petition. Hence this appeal. Dante Capuno was a member of the Boy Scouts organization and a student of
the Balintawak Elementary School. He attended a parade in honor of Jose Rizal upon instruction of the city
school’s supervisor. He boarded a jeep, took hold of the wheel and drove it.

ISSUES & ARGUMENTS

W/N Velez is liable to pay damages to Wassmer.

HOLDING & RATIO DECIDENDI

VELEZ LIABLE TO PAY DAMAGES.

In support of his motion for new trial and reconsideration, Velez asserts that the judgment is contrary to law
because there is no provision in the Civil Code authorizing an action for breach of a promise to marry.
Moreover, the same thing was declared by this court in the cases of Hermosisima and Estopa.

It must not be overlooked, however, that the extent to which acts not contrary to law may be perpetrated
with impunity, is not limitless for Article 21 of the NCC provides that “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.”

Here, the invitations had already been printed out and distributed, and numerous things had been
purchased for the bride and for wedding. Bridal showers were given and gifts had been received.

Surely this is not a case of mere breach of promise to marry. To formally set a wedding and go through all
the preparation and publicity, only to walk out of it at the last minute, is quite different. This is palpably and
unjustifiably contrary to good customs for which defendant must be held answerable for damages.

Petition DENIED. Lower court’s decision AFFIRMED.

----------------------------------------------------------------------------------------------------------------------------- ---------------

Facts:
In 1954, Francisco Velez and Beatriz Wassmer planned their marriage. They decided to schedule it on
September 4, 1954. And so Wassmer made preparations such as: making and sending wedding invitations,
bought her wedding dress and other apparels, and other wedding necessities. But 2 days before the
scheduled day of wedding, Velez sent a letter to Wassmer advising her that he will not be able to attend the
wedding because his mom was opposed to said wedding. And one day before the wedding, he sent another
message to Wassmer advising her that nothing has changed and that he will be returning soon. However,
he never returned.
This prompted Wassmer to file a civil case against Velez. Velez never filed an answer and eventually
judgment was made in favor of Wassmer. The court awarded exemplary and moral damages in favor of
Wassmer.

On appeal, Velez argued that his failure to attend the scheduled wedding was because of fortuitous events.
He further argued that he cannot be held civilly liable for breaching his promise to marry Wassmer because
there is no law upon which such an action may be grounded. He also contested the award of exemplary and
moral damages against him.

Issue: WON the award of damages is proper.

Ruling:

Yes. The defense of fortuitous events raised by Velez is not tenable and also unsubstantiated. It is true that
a breach of promise to marry per se is not an actionable wrong. However, in this case, it was not a simple
breach of promise to marry. because of such promise, Wassmer made preparations for the wedding.
Velez’s unreasonable withdrawal from the wedding is contrary to morals, good customs or public policy.
Wassmer’s cause of action is supported under Article 21 of the Civil Code which provides in part “any
person who 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.”

And under the law, any violation of Article 21 entitles the injured party to receive an award for moral
damages as properly awarded by the lower court in this case. Further, the award of exemplary damages is
also proper. Here, the circumstances of this case show that Velez, in breaching his promise to Wassmer,
acted in wanton, reckless, and oppressive manner – this warrants the imposition of exemplary damages
against him.

c. Unjust Enrichment (Art. 22-23)

Perez v. Pomar

FACTS

Perez filed in the Court of First Instance of Laguna a complaint asking the Court to determine the amount
due him for services rendered as an interpreter for Pomar and for judgement to be rendered in his favor.

Pomar, on his part, denied having sought the services of Perez, contending that, Perez being his friend, he
only accepted the services for they were rendered in a spontaneous, voluntary and officious manner.

ISSUE

Whether or not consent has been given by the other party.

HELD

Yes. It does not appear that any written contract was entered into between the parties for the employment of
the plaintiff as interpreter, or that any other innominate contract was entered into, but whether the plaintiff’s
services were solicited or whether they were offered to the defendant for his assistance, inasmuch as these
services were accepted and made use of by the latter, there was a tacit and mutual consent as to the
rendition of services. This gives rise to the delegation upon the person benefited by the services to make
compensation thereof, since the bilateral obligation to render services as interpreter, on the one hand, and
on the other to pay for the services rendered is thereby incurred.
As was held in the Supreme Court of Spain in its decision of February 12, 1889, it stated that “not only is
there an express and tacit consent which produces real contract but there is also a presumptive consent
which is the basis of quasi-contracts this giving rise to the multiple judicial relations which result in
obligations for the delivery of a thing or the rendition of a service.

Pacific Merchandising v. Consolacion Insurance

FACTS

Pacific Merchandising Corporation instituted an action against Consolacion Insurance & Surety Co., Inc., to
collect the sum of P2,562.88. Consolacion Inc. in turn filed a third-party complaint against Gregorio V.
Pajarillo. The City Court of Manila rendered judgment in favor of Pacific ordering Consolacion to pay the
amount with interest at the rate of 12% per annum from May 30, 1963 until fully paid, with attorney’s fees
and costs of suit. The court also condemned third party defendant to pay the third party plaintiff for whatever
amount the latter paid on account of the judgment.

By virtue of the appeal interposed by the third-party defendant Gregorio V. Pajarillo, the case was elevated
to the Court of First Instance of Manila.

On July 21, 1964, the parties, through their respective counsel, submitted the following Stipulation of Facts:

1. That on the 19th day of October, 1962, a Writ of Execution was issued the Court of First Instance of
Manila under Civil Case No. 49691, entitled Pacific Merchandising Corporation vs. Leo Enterprises, Inc., a
copy of the said Writ of Execution is attached as ANNEX Ato the complaint;

2. That by virtue of the aforesaid Writ of Execution, the Sheriff of Manila levied and attached the following:

'l. Second Hand AUTOMATICKET Machine No. MG-31833;and

'2. Cinema Projectors Complete, trademark SIMPLEX PEERLESS MAGNARC NOS. 52625 and 62387'
which items were advertised for sale on March 2, 1963, copy of Notice of sale attached as ANNEX 'B' to the
Complaint;

3. That Atty. Greg V. Pajarillo was appointed on March 2, 1963 as Receiver of all the assets, properties
and equipment of Paris Theatre, olwrated by Leo Enterprises, Inc. under Civil Case No. 50201 entitled
Gregorio V. Pajarillo vs. Leo Enterprises, Inc.;

4. That the sale at public auction of the above described properties was postponed and was later
cancelled due to thc representation of Atty. Greg V. Pajarillo as Receiver of Paris Theatre operated by Leo
Enterprises, Inc. in which he undertook the 1anient of the judgment rendered in favor of the plaintiff against
Leo Enterprises, Inc. as Ier undertaking dated March 11, 1963, copy of which is attached as ANNEX 'C' to
the complaint;

5. That on or about hie third of March, 1963, third-party defendant Pajarillo approached the third-party
plaintiff and applied for a surety bond in the amount of P5,000.00 to be rated in favor of the abovenamed
plaintiff in order to guarantee to said plaintiff the payment of obligations in its favor by the Leo Enterprises,
Inc.;

6. That the bond applied for was in fact executed in favor of the pIaintiff rith third-party defendant Pajarillo
as principal and third-party plaintiff as surety in the context of the allegations of the preceding paragraph
and a copy of the said bond is attached a ANNEX 'A' to the third party complaint;

7. That to protect thirrd party plaintiff against damage and injury, the third party defendant Pajarillo
executed in favor of the former an INDEMNITY AGREEMENT, copy of which is attached as ANNEX 'B' to
third party complaint; tlie trms of which aie incorporated by reference;

8. That the plaintiff received from hie aid principal, Greg V. Pajarillo the sum of P2,000.00 leaving a
balance of P2,562.88 still unpaid aside from interest at the rate of 1% per month and atto lnen s f cluiaient to
25% of tht amount due as provided for in said undertaking (ANNEX 'C' to tlie complaint);

9. That on July 1, 1963, a decision was rendered tne court of First Instance of Manila in Civil case No.
50201, copy of' which is attached its ANNEX 'A' to Answer to Third Party Complaint, by virtue of which Greg
V. Pajarillo, as said Received stololcl making payments to plaintiff;

10. That the said decision in Civl Case No. 50201 dated July 1, 1963 was appealed lix defendant Leo
Enterprises, Inc. to the court of Appeals and that the records kere eleattd to the aid ApiIiat court on August
27, 1963;

11. That on October 9, 1963, plaintiff's counsel demanded from the said principal, Greg V. Paiarillo, the
payment of the installments corresponding to the months of May, June, July, August and September, 1963,
which remain unpaid in spite of said demand, copy of said letter being, attached as ANNEX 'E' to the
complaint;

12. That the defendant was duly notified of the demand made on the principal, Greg V. Pajarillo and in
spite of said notice the defendant has failed and refused to pay the unpaid obligation;

13. That on December 19, 1963, plaintiff's counsel demanded from the defendant the payment of the
unpaid obligation of the principal, Greg V. Pajarillo but refused and failed to pay the same in spite of said
demand;

14. That when reminded by third-party plaintiff regarding his obligations in favor of the plaintiff, the
third-party defendant, Greg V. Pajarillo replied that he no longer was bound to pay because he had ceased
to be the receiver of Paris Theatre operated by Leo Enterprises, Inc. by virtue of the decision of the Court in
Civil Case No. 50201 cited above, and for this reason, third- party plaintiff refused to pay the demand of the
plaintiff 2
On the basis of the foregoing Stipulation of Facts, the Court of First Instance rendered judgment on August
8, 1964, which judgment was amended on August 25, 1964, affirming the appealed decision of the City
Court .2*

The trial court predicated its judgment on the following considerations: (1) Since the unpaid claim
represents the cost of certain materials used in the construction of the Paris Theatre, the possession of
which reverted to Gregorio V. Pajarillo as owner of said property by virtue of the judgment in Civil Case No.
50201, "it is only simple justice that Pajarillo should pay for the said claim. otherwise he would be enriching
himself by having the said building without paying plaintiff for the cost of certain materials that went into its
construction"; (2) "under Section 7 of Rule 61 of the former Rules of Court, one of the powers of a receiver
i8 to pay outstanding debts, and since the said plaintiff's claim has been outstanding since August 27, 1962,
if not before, Pajarillo should have paid the same long before the alleged termination of the receivership on
July 1, 1963"; (3) the procedure outlined in Section 8 of the Rule, namely, that whenever the court "shall
determine that the necessity for a receiver no longer exists, it shall, after due notice to all interested parties
and hearing, settle the accounts of the receiver, direct the delivery of the funds and other property in his
hands to the persons adjudged entitled to receive them, and order the discharge of the receiver from further
duty as such," has not been followed; and (4) when Gregorio V. Pajarillo undertook to pay the amount owed
to plaintiff (Annex "C") and executed the surety bond (Annex "D") in favor of plaintiff, he 4 6 stepped into the
shoes" of the dr Leo Enterprises, Inc., .4 and the properties of the said debtor having all subsequently
passed on to Pajarillo, there is no reason, legal or otherwise, for relieving defendants of their said
undertaking."

The court a quo likewise declared that (1) "the receivership was not terminated by virtue of the appeal
interposed by Leo Enterprises, Inc., one of the defendants in Civil Case No. 50201, because a decision
which is appealed cannot be the subject of execution"; (2) "granting arguendo that the decision is final and
executory, the said decision cannot bind nor can it be enforced against the plaintiff in the present case
because it is not a party in Civil Case No. 50201"; and (3) "when Atty. Pajarillo assumed the obligation of
Leo Enterprises, Inc., as a Receiver, there was a subrogation of the party liable and, therefore, the plaintiff
cannot enforce the judgment in Civil Case No. 49691 against Leo Enterprises, Inc."

From the foregoing judgment, third-party defendant Gregorio V. Pajarillo interposed an appeal to the Court
of Appeals. The aforesaid Appellate Court, in turn certified the same to this Court on the ground that there is
no question of fact involved, but only one of law.

ISSUES

Whether or not third party defendant-appellant Gregorio V. Pajarillo is, under the facts and circumstances
obtaining, liable to plaintiff for the unpaid amount claimed.

Upon the resolution of this issue will in turn depend the liability of defendant-third-party plaintiff Consolacion
Insurance & surety Co., Inc. under the Surety Bond, on the basis of which it was ordered by the court a quo
to pay the amount involved to plaintiff-appellee.

1. A receiver is not an agent or representative of any party to the action. He is an officer of the court
exercising his functions in the interest of neither plaintiff nor defendant, but for the common benefit of all the
parties in interest. 3 He performs his duties "subject to the control of the Court," and every question involved
in the receivership may be determined by the court taking cognizance of the receivership proceedings. 4
Thus, "a receiver, strictly speaking, has no right or power to make any contract binding the property or fund
in his custody or to pay out funds in his hands without the authority or approval of the court ... . 5 As
explained by Justice Moran, speaking for the Court in a 1939 case 6 ... The custody of the receiver is the
custody of the court. His acts and possession are the acts and possession of the court, and his contracts
and liabilities are, in contemplation of law, the contracts and liabilities of the court. As a necessary
consequence, receiver is f subject to the control and supervision of the court at every step in his
management of the property or funds placed in his hands. ... 7 He cannot operate independently of the
court, and cannot enter into any contract without its approval.

2. In the case at bar, appellant Pajarillo does not dispute the fact that he never secured the court's
approal of either the agreement of March 11, 1963, with Pacific Merchandising Corporation or of his
Indemnity Agreement with the Consolacion Insurance & Surety Co., Inc. on March 14, 1963, in
consideration of the performance bond submitted by the latter to Pacific Merchandising Corporation to
guarantee the payment of the obligation. As the person to whom the possession of the theater and its
equipment was awarded by the court in Civil Case No. 50201, it was certainly to his personal profit and
advantage that the sale at public auction of the liquipment of the theater was prevented by his execution of
the aforesaid agreement and submission of the afore-mentioned bond. In order to bind the property or fund
in his hands as receiver, he should have applied for and obtained from the court authority to enter into the
aforesaid contract. 9 Unauthorized contracts of a receiver do not bind the court in charge of receivership.
They are the receiver's own contracts and are not recognized by the courts as contracts of the receivership.
10 Consequently, the aforesaid agreement and undertaking entered into by appellant Pajarillo not having
been approved or authorized by the receivership court should, therefore, be considered as his personal
undertaking or obligation. Certainly, if such agreements were known by the receivership court, it would not
have terminated the receivership without due notice to the judgment creditor as required by Section 8 of
Rule 59 of the Rules of Court. This must be assumed because of the legal presumption that official duty has
been regularly performed. 11 Indeed, if it were true that he entered into the agreement and undertaking as
a receiver, he should have, as such receiver, submitted to the court an account of the status of the
properties in his hands including the outstanding obligations of the receivership. 12 Had he done so, it is
reasonable to assume that the judgment creditor would have opposed the termination of the receivership,
unless its claim was paid. Having failed to perform his duty, to the prejudice of the creditor, appellant should
not be permitted to take advantage of his own wrong. The judgment creditor having been induced to enter
into the aforesaid agreement by appellant Pajarillo it was the duty of the latter to comply with is end of the
bargain. He not only failed to perform his undertaking, but now attempts to evade completely his liability.
Under such circumstances, appellant is not entitled to equitable relief. No ground for equitable relief can be
found in a case where a party has not only failed to perform the conditions upon which he alone obtained
the execution of the contract, but where it is clear that he never, at any time, intended to perform them.

3. Moreover, it will be recalled that the obligation due the Pacific Merchandising Corporation represented
the cost of materials used in the construction of the Paris Theatre. There can not be any question that such
improvements, in the final analysis, redounded to the advantage and personal profit of appellant Pajarillo
because the judgment in Civil Case No. 50201, which was in substance affirmed by the Appellate Court,
ordered that the "possession of the lands, building equipment, furniture, and accessories ..." of the theater
be transferred to said appellant as owner thereof.

As the trial court aptly observed "... it is only simple justice that Pajarillo should pay for the said claim,
otherwise he would be enriching himself without paying plaintiff for the cost of certain materials that went
into its construction. ... It is argLicd however, that he did so only as a receiver of Leo Pajarillo by virtue of the
judgment in Civil Case No. 50201 all of the properties of Leo Enterprises, Inc. passed on to Pajarillo by
virtue of the judgment in Civil Case No. %201 ...". This Roman Law principle of "Nemo Cum alterious
detrimento locupletari protest" is embodied in Article 22 (Human Relations), 14 and Articles 2142 to 2175
(QuasiContracts) of the New Civil Code. Long before the enactment of this Code, however, the principle of
unjust enrichment which is basic in every legal system, was already expressly recognized in this
jurisdiction.

As early as as 1903, in Perez v. Pomar, 15 this Court ruled that where one has rendered services to
another, and these services are accepted by the latter, in the absence of proof that the service ",as
rendered gratuitously, it is but just that he should pay a reasonable remuneration therefore because "it is a
wellknown principle of law, that no one should be permitted to enrich himself to the damage of another."
Similarly in 1914, this Court declared that in this jurisdiction, even in the absence of statute," ... under the
general principle that one person may not enrich himself at the expense of another, a judgment creditor
would not be permitted to retain the purchase price of land sold as the property of the judgment debtor after
it has been made to appear that the judgment debtor had no title to the land and that the purchaser had
failed to secure title thereto ... 16 The foregoing equitable principle which springs from hie fountain of good
conscience are applicable to the case at bar.

ACCORDINGLY, in view of the foregoing, the judgment unirilleal is httcf AFFIRMED. Costs against
appellant.

RULING

CIR v. Friedman’s Funds Inc.

CIR v. Friedman's Funds Inc., 148 SCRA 316

Velayo v. Shell

FACTS

Commercial Air Lines (CALI) was supplied by Shell Co. of the Philippines Islands (defendant) ever since it
started its operations.

As per the books of the defendant, it had reasons to believe that the financial condition of CALI was far from
being satisfactory.

The management of CALI informally convened its principal creditors on August 6, 1948, and informed them
that CALI was in a state of insolvency and had to stop operations.

The creditors present agreed to the formation of a working committee to continue the discussion of the
payment of claims and preferences alleged by certain creditors, and it was further agreed that said working
committee would supervise the preservation of the properties of the corporation while the creditors
attempted to come to an under standing as a fair distribution of the assets among them.

To this committee, Mr. Fitzgerald the credit manager of the defendant, Mr. Agcaoili of the National airports
corporation and Atty Alexander Sycip were appointed.

It was agreed upon that the creditors would not file suit to achieve a fair pro-rata distribution, although CALI
announced that in the event of non-agreement, it was to file for insolvency proceedings.

However, on the very day of the meeting of the working committee, which Mr. Fitzgerald attended, the
defendant effected a telegraphic transfer of its credit against CALI to the American corporation Shell Oil
Company, Inc., assigning its credit, which was subsequently followed by a deed of assignment of credit
dated August 10, 1948.

The American corporation then sued CALI in the superior court of californinia, USA for the amount of the
credit thus assigned. And a writ of attachment was issued against a C-54 PLANE in Ontario International
Airport. And on January 5, 1949, a judgment by default had been issued by the American court against
CALI.

The stockholders of CALI were unaware of this.

When the suit in the american court was found out, on the first weeks of September 1948, CALI immediately
file for voluntary insolvency and the court issued the order of insolvency accordingly on the same day. The
court appointed Mr. Velayo as Assignee.

On December 17, 1948, Velayo filed for a writ of injuction to stop the foreign court from prosecuting the
claim, and in the alternative, he prayed for damages in double the amount of the plane which was attached.

The plaintiff having failed to restrain the progress of the attachment suit in the US by denial of the
application of the writ of injuction and the consequences on execution of the C-54 plane in the state of
California, USA, he confines his action to the recovery of damages against the defendant.

The complaint was dismissed, hence this petition.

ISSUES & ARGUMENTS

W/N the defendant acted in bad faith and btrayed the trust and confidence of the other creditors of CALI.

W/N by reason of the betrayal,, defendant may be made to answer for the damages prayed for by the
plaintiff.

HOLDING & RATIO DECIDENDI

Moreover, we might say that DEFENDANT could not have accomplished the transfer of its credit to its sister
corporation if all the shell companies throughout the wworld would not have a sort of union, relation or
understanding among themselves to come to the aid of each other. The telegraphic transfer made without
the knowledge and at the back of the other creditors of CALI may be a shrewd and surprise move that
enabled the DEFENDANT to collect almost allif not the entire amount of its credit, but the Court of Justice
cannot countenance cuch attitude at all, and much less a foreign corporation to the detriment of our
Government and local business.

Chapter 2 of the preliminary title of the civil code on human relations, proveides the following:

Article 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.

It maybe said that this article only contains a mere declaration of principles and while such statement is
essentially correct, yet We find that such declaration is implemented by Article 21and the sequence of the
same chapter, which prescribe the following:

Article 21. Any person who wilfully causes loss or injury to another in manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage.

d. Judicial Vigilance (Art. 24)

e. Thoughtless Extravagance (Art. 25)

f. Right to Privacy (Art. 26)

St. Louis Realty v. CA

FACTS
This case is about the recovery of damages for a wrongful advertisement in the Sunday Times where Saint
Louis Realty Corporation misrepresented that the house of Doctor Conrado J. Aramil belonged to Arcadio
S. Arcadio.

The same advertisement appeared in the Sunday Times dated January 5, 1969. Doctor Aramil a
neuropsychiatrist and a member of the faculty of the U. E. Ramon Magsaysay Memorial Hospital, noticed
the mistake. On that same date, he wrote St. Louis Realty the following letter of protest:

This is anent to your advertisements appearing in the December 15, 1968 and January 5, 1969 issues of
the Sunday Times which boldly depicted my house at the above-mentioned address and implying that it
belonged to another person. I am not aware of any permission or authority on my part for the use of my
house for such publicity.

This unauthorized use of my house for your promotional gain and much more the apparent distortions
therein are I believe not only transgression to my private property but also damaging to my prestige in the
medical profession I have had invited in several occasions numerous medical colleagues, medical students
and friends to my house and after reading your December 15 advertisement some of them have uttered
some remarks purporting doubts as to my professional and personal integrity. Such sly remarks although in
light vein as "it looks like your house," "how much are you renting from the Arcadios?", " like your wife
portrayed in the papers as belonging to another husband," etc., have resulted in no little mental anguish on
my part.

I have referred this matter to the Legal Panel of the Philippine Medical Association and their final advice is
pending upon my submission of supporting ownership papers. I will therefore be constrained to pursue
court action against your corporation unless you could satisfactorily explain this matter within a week upon
receipt of this letter.

The letter was received by Ernesto Magtoto, an officer of St. Louis Realty in charge of advertising. He
stopped publication of the advertisement. He contacted Doctor Aramil and offered his apologies.
However, no rectification or apology was published.

On February 20, 1969, Aramil's counsel demanded from St. Louis Realty actual, moral and exemplary
damages of P110,000 (Exh. D). In its answer dated March 10, St. Louis Realty claimed that there was
an honest mistake and that if Aramil so desired, rectification would be published in the Manila Times

It published in the issue of the Manila Times of March 18, 1969 a new advertisement with the Arcadio family
and their real house. But it did not publish any apology to Doctor Aramil and an explanation of the error.

On March 29, Aramil filed his complaint for damages. St. Louis Realty published in the issue of the Manila
Times of April 15, 1969 the following "NOTICE OF RECTIFICATION" in a space 4 by 3 inches:

This will serve as a notice that our print ad 'Where the Heart is' which appeared in the Manila Times issue of
March 18, 1969 is a rectification of the same ad that appeared in the Manila Times issues rectification of the
same ad that appeal of December 15, 1968 and January 5, 1969 wherein a photo of the house of another
Brookside Homeowner (Dr. Aramil-private respondent) was mistakenly used as a background for the
featured homeowner's the Arcadio family.

The ad of March 18, 1969 shows the Arcadio family with their real house in the background, as was
intended all along.

Judge Jose M. Leuterio observed that St. Louis Realty should have immediately published a rectification
and apology. He found that as a result of St. Louis Realty's mistake, magnified by its utter lack of sincerity,
Doctor Aramil suffered mental anguish and his income was reduced by about P1,000 to P1,500 a month.
Moreover, there was violation of Aramil's right to privacy (Art. 26, Civil Code).

ISSUES & ARGUMENTS

W/N St Louis Realty liable for damages

HOLDING & RATIO DECIDENDI

YES, St Louis Realty liable for damages

St. Louis Realty committed an actionable quasi-delict under articles 21 and 26 of the Civil Code because
the questioned advertisements pictured a beautiful house which did not belong to Arcadio but to Doctor
Aramil who, naturally, was annoyed by that contretemps.

St. Louis Realty contends that the decision is contrary to law and that the case was decided in a way not in
conformity with the rulings of this Court. It argues that the case is not covered by article 26 which provides
that "every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and
other persons". "Prying into the privacy of another's residence" and "meddling with or disturbing the private
life or family relations of another" and "similar acts", "though they may not constitute a criminal offense, shall
produce a cause of action for damages, prevention and other relief".

The damages fixed by Judge Leuterio are sanctioned by Articles 2200, 2208 and 2219 of the Civil Code.
Article 2219 allows moral damages for acts and actions mentioned in Article 26. As lengthily explained by
Justice Gatmaitan, the acts and omissions of the firm fan under Article 26.

St. Louis Realty's employee was grossly negligent in mixing up the Aramil and Arcadio residences in a
widely circulated publication like the Sunday Times. To suit its purpose, it never made any written apology
and explanation of the mixup. It just contented itself with a cavalier "rectification ".

Persons, who know the residence of Doctor Aramil, were confused by the distorted, lingering impression
that he was renting his residence from Arcadio or that Arcadio had leased it from him. Either way, his private
life was mistakenly and unnecessarily exposed. He suffered diminution of income and mental anguish.

Catro v. People

FACTS

Justin Albert was the son of Mr. Tan.

Justin was a Grade 12 student of Reedley International School (RIS). He was dismissed for violating the
rules of his probation

Tan requested for a reconsideration and RIS imposed non-appealable conditions such as not allowing
Albert to participate in the graduation ceremonies.

Tan filed a complaint in the DepEd, claiming malice and bad faith

DepEd nullified RIS sanctions as unreasonable and a denial of due process. DepEd orders readmission of
Albert without any conditions.

Albert finally participated in the graduation ceremonies.

After the graduation ceremonies, Tan talked to a fellow parent Ching, intimating his contemplating suit
against officers of RIS in their personal capacities, including Asst. Headmaster Castro.

Ching relayed the information to Castro. At the end of the conversation, Castro said “be careful talking to
Tan, that’s dangerous”

Ching then relayed the information to Tan, and Tan filed a grave oral defamation suit against Castro.

MetC ruling: December 2005, Castro was guilty

RTC ruling: Action had prescribed, as action was filed 5 months after discovery (should have been within 4
months). But held guilty of only slight oral defamation.

SolGen: RTC misinterpreted the facts and should not have lowered the offense to slight oral defamation
only.

CA: Reinstate MeTC ruling.

ISSUES & ARGUMENTS

W/N petitioner can still be held liable, or has double jeopardy set in?

HOLDING & RATIO DECIDENDI

NO. PETITIONER CANNOT BE HELD LIABLE AS DOUBLE JEOPARDY HAS SET IN.

Double jeopardy occurs upon (1) a valid indictment (2) before a competent court (3) after arraignment (4)
when a valid plea has been entered and (5) when the accused was acquitted or convicted or the case was
dismissed or otherwise terminated without the express consent of the accused. Thus, an acquittal, whether
ordered by the trial or appellate court, is final and unappealable on the ground of double jeopardy.

The only exception is when the trial court acted with grave abuse of discretion or, as we held in Galman v.
Sandiganbayan, when there was mistrial. In such instances, the OSG can assail the said judgment in a
petition for certiorari establishing that the State was deprived of a fair opportunity to prosecute and prove its
case.

The rationale behind this exception is that a judgment rendered by the trial court with grave abuse of
discretion was issued without jurisdiction. It is, for this reason, void. Consequently, there is no double
jeopardy.

In this case, the OSG merely assailed the RTC's finding on the nature of petitioner's statement, that is,
whether it constituted grave or slight oral defamation. The OSG premised its allegation of grave abuse of
discretion on the RTC's "erroneous" evaluation and assessment of the evidence presented by the parties.

What the OSG therefore questioned were errors of judgment (or those involving misappreciation of
evidence or errors of law). However, a court, in a petition for certiorari, cannot review the public
respondent's evaluation of the evidence and factual findings. Errors of judgment cannot be raised in a Rule
65 petition as a writ of certiorari can only correct errors of jurisdiction (or those involving the commission of
grave abuse of discretion).

Because the OSG did not raise errors of jurisdiction, the CA erred in taking cognizance of its petition and,
worse, in reviewing the factual findings of the RTC.

We therefore reinstate the RTC decision so as not to offend the constitutional prohibition against double
jeopardy.

At most, petitioner could have been liable for damages under Article 26 of the Civil Code:

Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors
and other persons. The following and similar acts, though they may not constitute a criminal offense,
shall produce a cause of action for damages, prevention and other relief:

xxxxxxxxx

(3) Intriguing to cause another to be alienated from his friends;

xxxxxxxxx
Petitioner is reminded that, as an educator, he is supposed to be a role model for the youth. As such, he
should always act with justice, give everyone his due and observe honesty and good faith.

g. Dereliction of Duty (Art. 27)

g. Dereliction of Duty (Art. 27)

Pilar v. SB
Pilar v. SB, 128 SCRA 173

Phil. Match v. City of Cebu

FACTS

Perez filed in the Court of First Instance of Laguna a complaint asking the Court to determine the amount
due him for services rendered as an interpreter for Pomar and for judgement to be rendered in his favor.

Pomar, on his part, denied having sought the services of Perez, contending that, Perez being his friend, he
only accepted the services for they were rendered in a spontaneous, voluntary and officious manner.

ISSUE

Whether or not consent has been given by the other party.

HELD

Yes. It does not appear that any written contract was entered into between the parties for the employment of
the plaintiff as interpreter, or that any other innominate contract was entered into, but whether the plaintiff’s
services were solicited or whether they were offered to the defendant for his assistance, inasmuch as these
services were accepted and made use of by the latter, there was a tacit and mutual consent as to the
rendition of services. This gives rise to the delegation upon the person benefited by the services to make
compensation thereof, since the bilateral obligation to render services as interpreter, on the one hand, and
on the other to pay for the services rendered is thereby incurred.

As was held in the Supreme Court of Spain in its decision of February 12, 1889, it stated that “not only is
there an express and tacit consent which produces real contract but there is also a presumptive consent
which is the basis of quasi-contracts this giving rise to the multiple judicial relations which result in
obligations for the delivery of a thing or the rendition of a service.

h. Unfair Competition (Art. 28)

US v. Manuel
US v. Manuel, 7 Phil 221

i. Article 29

Velasco v. Meralco

FACTS: Pedro J. Velasco, the appellant, complained that MERALCO, the appellee company, created a
nuisance, as defined in Art. 694 of the Civil Code of the Philippines, in form of noise from their substation
which was in the same street, next to Velasco’s property/residence, which the appellant also uses for his
Medical Practice as a physician. The claim cannot be proven solely by testimony however, as the
testimonies given by the locals do not corroborate with each other, or were subjective. To get a more
accurate proof, under instructions from the Director of Health, Dr. Jesus Almonte, noted as an impartial
party, used a sound level meter and other instruments within the compound of the plaintiff-appellant to get a
reading on the decibels or sound meter. It was observed that the readings range from 46-80 decibels,
depending on the time and place. The appellee company also took sound level samplings, with Mamerto
Buenafe conducting the reading within and near the vicinity of the substation, whose readings range from
42-76 decibels. The readings were compared to Technical charts, which listed the decibels of areas from an
average home: 40, to the noisiest spot of Niagara Falls: 92. Thus, the readings from the impartial party
appeared more reliable. The court concluded that the evidence pointed the noise levels to be of actionable
nuisance, and that the appellant is entitled to relief, as there was a possibility that it had effect on the
appellant’s health. Appellee company contended that the appellant should not have a ground to complain
because of: 1) the intensity inside Velasco’s house was on 46 to 47 decibels; 2) the sound level at the North
General Hospital, where silence was observed, was higher that his residence and did not take action; 3)
MERALCO had received no complaint in its 50 years of operations until the case.

ISSUES: Whether or not the substation constituted a public nuisance. Whether or not Velasco had the right
to claim for damages.

HELD: The court held that the substation constituted a public nuisance in form of noise, of which they made
reference and consideration with cases in the U.S. regarding what level of noise would constitute as public
nuisance as defined in Art. 694 of the Civil Code of the Philippines. The court also contended that the
damage claims by the plaintiff-appellant was exaggerated, taking into consideration that 1) the appellant did
not make all the possible measures, for example to perhaps lease the property to others, 2) as for his
health, it was observed that only Velasco, among the other locals seem to have the ailments as he listed,
and therefore lowered it to a more justifiable amount of 20,000 pesos in damages and 5,000 pesos in
attorney’s fees, payable by the appellee. They also ordered that the appellee should take measures in
lowering the noise within 90 days.

----------------------------------------------------------------------------------------------------------------------------- ---------------

Doctrine:

“ART.1250. In case an extraordinary inflation or deflation of the currency stipulated should

supervene, the value of the currency at the time of the establishment of the obligation shall be the
basis of payment, unless there is an agreement to the contrary.”

Art. 1250 of new Civil Code not applicable to torts.—–From the employment of the words “extraordinary
inflation or deflation of the currency stipulated” in Art. 1250 of the new Civil Code, it can be seen that the
same envisages contractual obligations where a specific currency is selected by the parties as the medium
of payment; hence it is inapplicable to obligations arising from tort and not from contract. Besides, there is
no showing in the case at bar that the factual assumption of the said article has come into existence. Lastly,
the amount granted the appellant had already taken into account the changed economic circumstances.

FACTS:

 This case talks about the two (2) motions for reconsideration for the August 6, 1971 decision for the
original (OG) velasco v meralco case. The thrust of these motions is that the court incorrectly assessed
appellant’s damages and unreasonably reduced their amount.

Gist of the OG velasco v meralco case:

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

Both appellant Velasco and appellee Manila Electric Co. filed their respective motions to reconsider.

APPELLANT’S MOTION FOR RECONSIDERATION [VELASCO]

It is first argued that the decision erred in not taking into account, in computing appellant’s loss of
income, the appellant’s undeclared income of P8,338.20, assessed by the Bureau of Internal Revenue
for the year 1954, in addition to his declared income for that year (P10,975), it being argued that
appellant never claimed any other source of income besides his professional earnings.

 Several circumstances of record disprove this claim.

(1) That the amount of P8,338.20 was kept apart from the ordinary earnings of appellant for the year
1954 (P10,975), and not declared with it, is in itself circumstantial evidence that it was not of
comparable character.
(2) If it was part of his ordinary professional income, appellant was guilty of fraud in not declaring it and
he should not be allowed to derive advantage from his own wrongdoing.
(3) The decision pointed out that by including the undeclared amount in appellant’s disclosed
professional earnings for 1954, to a grand total of P19,313.20, the income for said year becomes
abnormally high, as compared to appellant’s earnings for the three preceding years, 1951-1953, that
averaged not more than P7,000 per annum. Such abnormality justifies the Court’s refusal to consider
the undisclosed P8,338.20 as part of appellant’s regular income for the purpose of computing the
reduction in his earnings as a result of the complained acts of appellee.
(4) Finally, the true source of the undeclared amount lay in appellant’s own knowledge, but he chose
not to disclose it: neither did he call upon the assessing revenue officer to reveal its character.

 Appellant Velasco further urges that the damages awarded him are inadequate considering the
present high cost of living, and calls attention to Article 1250 of the present Civil Code, and to the
doctrines laid down in People vs. Pantoja, G.R. No. L-18793, 11 October 1968, 25 SCRA 468.

 The court does not deem the rules invoked to be applicable. Article 1250 of the Civil Code is to the
effect that:

“In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of
the currency at the time of the establishment of the obligation shall be the basis of payment, unless
there is an agreement to the contrary.”

 It can be seen from the employment of the words “extra-ordinary inflation or deflation of the currency
stipulated” that the legal rule envisages contractual obligations where a specific currency is
selected by the parties as the medium of payment; hence it is inapplicable to obligations
arising from tort and not from contract, as in the case at bar, besides there being no showing that
the factual assumption of the article has come into existence.

 As to the Pantoja ruling, the regard paid to the decreasing purchase of the peso was considered a
factor in estimating the indemnity due for loss of life, which in itself is not susceptible of accurate
estimation. It should not be forgotten that the damages awarded to herein appellant were by no means
full compensatory damages, since the decision makes clear that appellant, by his failure to minimize
his damages by means easily within his reach, was declared entitled only to a reduced award for the
 nuisance sued upon (Steel vs. Rail & River Coal Co., 43 Ohio App. 228, 182 N.E. 552); and the amount
granted him had already taken into account the charged economic circumstances.

 Nor is the fact that appellant lost a chance to sell his house for P95.000 to a certain Jose Valencia
constitute a ground for an award of damages in that amount.

 As remarked in the main decision, there is no adequate proof of loss, since there is no evidence of the
depreciation in the market value of the house in question caused by the acts of defendant Meralco.
The house, after all, has remained with appellant, and he admits in his motion for reconsideration that
properties have increased in value by 200% since then.

MOTION DENIED.

APPELLEE’S MOTION TO RECONSIDER [MANILA ELECTRIC CO.]

Manila Electric Company argues that in case the noise emitted by its substation can not be brought down to
the 50 decibel level imposed by the courts, the remedy of the appellant would be to compel the appellee
Company to acquire and pay for the value of the house, under the so-called doctrine of “inverse
condemnation”, and cites in support our doctrines in Bengzon vs. Province of Pangasinan and Republic vs.
Philippine Long Distance Telephone Co.

But as pointed out by appellant in his opposition, this issue was not raised, nor was the inverse
condemnation doctrine invoked in the trial court, so that it would be improper to consider it on appeal, and
worse still, on a motion for reconsideration of the decision on the merits.

Furthermore, there is no showing that it is impossible to reduce the substation noise to the level decreed by
this Court in the main decision. On the contrary, appellee’s own evidence is that the noise can be reduced
by erecting a wall barrier on the line separating the substation lot and the property of appellant.

The version that appellee did not erect the wall because of the objections of appellant’s wife was denied by
her, and there is no preponderance of evidence in favor of appellee on this point. Moreover, since it was
appellant Dr. Velasco who complained, his wife’s objection would not suffice to constitute a waiver of his
claim.

As to the petition to increase the sound level prescribed by his Court from 50 to 55 decibels, on the ground
that present “ambient sound already ranges from 44 to 65 decibels in the mornings”, the same cannot be
granted. As shown by the evidence at the trial, the intensity of the noise emitted by appellee’s transformers
are most objectionable at night, when people are endeavoring to rest and sleep in compensation for the
fatigue and tensions accumulated during daytime.

MOTION DENIED.

ISSUES:

W/N Article 1250 of the New Civil code is applicable in this case

HELD: NO

Article 1250 states that:

“In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the
currency at the time of the establishment of the obligation shall be the basis of payment, unless there is an
agreement to the contrary.”

It can be seen from the employment of the words “extra-ordinary inflation or deflation of the currency
stipulated” that the legal rule envisages contractual obligations where a specific currency is selected by the
parties as the medium of payment; hence it is inapplicable to obligations arising from tort and not from
contract, as in the case at bar, besides there being no showing that the factual assumption of the article has
come into existence.

It should not be forgotten that the damages awarded to herein appellant were by no means full
compensatory damages, since the decision makes clear that appellant, by his failure to minimize his
damages by means easily within his reach, was declared entitled only to a reduced award for the nuisance
sued upon; and the amount granted him had already taken into account the charged economic
circumstances.

It was also noted that:

Article 1250 applies to cases where extraordinary inflation or deflation of the stipulated currency takes
place. Extraordinary inflation or deflation may be said to be that which is unusual or beyond the common
fluctuation in the value of the currency, which the parties could not have reasonably foreseen or which was
manifestly beyond their contemplation at the time when the obligation was obligated (IV Tolentino,
Commentaries and Jurisprudence on the Civil Code 284).

Meralco v. CA

CHARACTERS:

MERALCO – petitioner, electricity provider of CHAVES FAMILY

YAMBAO – petitioner, MERALCO’s bill collector

CHAVES FAMILY – private respondents, composed of: Isaac Chaves (husband) and Juana O. Chaves
(wife), together with their children—Isaac O. Chaves, Jr. and Rosendo O. Chaves. They are a family of
lawyers.

FACTS:

To recover the damages due to embarrassment, humiliation, hurt pride, and wounded feelings inflicted by
MERALCO & YAMBAO during the disconnection of the CHAVES FAMILY’s electrical service; the CHAVES
FAMILY filed a complaint at CFI-Manila. The court ordered MERALCO & YAMBAO to pay 10,000 pesos to
the CHAVES FAMILY as payment for damages. Hence, MERALCO & YAMBAO filed an appeal in the CA,
but the CA denied the petition.

It was found that the CHAVES FAMILY is a customer of MERALCO. The CHAVES FAMILYs claims that
MERALCO did not provide any notice before the disconnection. CHAVEZ FAMILY contends that it must be
compulsory to issue a disconnection notice. MERALCO & YAMBAO say that they have the right to
disconnect the electric service of the delinquent customer, because the CHAVES FAMILY failed to pay
certain bills (bills in arrears).

ISSUE:

WON, in the absence of bad faith in disconnecting the service to CHAVES family, MERALCO & YAMBAO
could be held liable for damages? YES, MERALCO & YAMBAO CAN BE HELD LIABLE.

HELD: There is no abuse of discretion in the part of the CA in affirming the assailed decision of the CFI
Manila. The right to disconnect the electric service of a delinquent customer shall be accompanied by a
given notice 48 hours in advanced as provided for in Section 97 of the Revised Order No. 1 of the Public
Service Commission. In accordance with the previous rulings, failure to give such prior notice amounts to a
tort. And since, MERALCO & YAMBAO in this particular case disregarded the rule on 48-hour notice prior to
disconnection which is protected by law, MERALCO & YAMBAO is liable for damages according to Article
1170 of the civil code, therefore, the CHAVES FAMILY is entitled to claim damages.
------------------------------------------------------------------------------------------------------------------------------------------

FACTS:

CHAVES FAMILY filed a complaint for damages for embarassment, humiliation, wounded feelings and hurt
pride, by reason of the disconnection of their electrical service. The present Petition is for Certiorari by
MERALCO & YAMBAO –seeking to challenge the decision of the CA which affirmed CFIManila’s decision
ordering MERALCO & YAMBAO to pay moral damages, exemplary damages and attorney’s fees and
dismissing MERALCO & YAMBAO’s counterclaim.

1. Isaac Chaves (husband) became a customer of MERALCO in the year 1953.

2. March 1965: YAMBAO went to the residence of CHAVES FAMILY and presented two overdue bills
referring to 2 different billing periods, Jan-Feb Bill for P7.90 and Feb-Mar Bill for P7.20.

3. Juana O. Chaves (wife), however, informed Yambao that these bills would be paid at the MERALCO
main office.

4. 02 Apr 1965: Isaac Chaves went to the defendant's main office at San Marcelino, Manila, but paid only 1
bill, leaving the other bill Identified unpaid.

5. 21 Apr 1965: WITHOUT A DISCONNECTION NOTICE, MERALCO caused the electric service in
CHAVES FAMILY 's residence to be discontinued and the power line cut off.

6. 22 Apr 1965: Rosendo O. Chaves (1 of the children) went to the MERALCO main office and paid the
amount of P7.20 for the other bill previously left unpaid, and the sum of P7.00 for the subsequent bill
corresponding to the period from Mar-Apr after his attention was called to the latter account. Rosendo O.
Chaves then sought the help of Atty. Lourdy Torres, one of MERALCO's counsel, and, thereafter, the power
line was reconnected and electric service restored to the Chaves residence at about 7:00 p.m. of that same
day.

7. MERALCO & YAMBAO dispute the finding that there was no notice given to the CHAVES FAMILY.
However, since only questions of law may be raised in a petition for certiorari under Rule 45 of the Revised
Rules of Court, MERALCO & YAMBAO, 'for the sake of argument and for the purpose of giving focus on the
legal issues', do not take issue with such finding.

8. MERALCO & YAMBAO’s CONTENTION: that in the absence of bad faith, they could not be held liable for
moral and exemplary damages as well as attorney's fees. The failure to give a notice of disconnection to the
CHAVES FAMILY might have been a breach of duty or breach of contract, but by itself does not constitute
bad faith or fraud; it must be shown that such a failure was motivated by in or done with fraudulent intent.

9. MERALCO & YAMBAO also maintain that THE CHAVES FAMILY were in arrears in the payment of their
electricity bills when their electric service was disconnected, thus no moral damages may be recovered by
them under the 'clean hands' doctrine.

ISSUE:

WON, in the absence of bad faith in disconnecting the service to CHAVES family, MERALCO & YAMBAO
could be held liable for damages? YES, MERALCO CAN BE HELD LIABLE

HELD:

We find no reversible error in the decision appealed from. Accordingly, we find no grave abuse of discretion
committed by the CA in affirming the trial court's decision. The petition is hereby DISMISSED for lack of
merit.

RATIO:
1. QUOTED IN THE CA DECISION: MERALCO's right to disconnect the electric service of a delinquent
customer "is an absolute one, subject only to the requirement that MERALCO should give the customer a
written notice of disconnection 48 hours in advance." This requirement is embodied in Section 97 of the
Revised Order No. 1 of the Public Service Commission:

Section 97. Payment of bills. — A public service, may require that bills for service be paid within a specified
time after rendition. When the billing period covers a month or more, the minimum time allowed will be ten
days and upon expiration of the specified time, service may be discontinued for the nonpayment of bills,
provided that a 48 hours' written notice of such disconnection has been given the customer: Provided,
however, that disconnections of service shall not be made on Sundays and official holidays and never after
2 p.m. of any working day: Provided, further, that if at the moment the disconnection is to be made the
customer tenders payment of the unpaid bill to the agent or employee of the operator who is to effect the
disconnection, the said agent or employee shall be obliged to accept tender of payment and issue a
temporary receipt for the amount and shall desist from disconnecting the service.

The CA stressed the importance and necessity of the 48-hour advance written notification before a
disconnection of service may be effected. Said the court:

... It sets in motion the disconnection of an electrical service of the customer by giving the notice,
determining the expiration date thereof, and executing the disconnection. It, therefore, behooves the
defendant MERALCO that before it disconnects a customer's electrical service, there should be sufficient
evidence that the requirements for the disconnection had been duly complied with, otherwise, the poor
consumer can be subjected to the whims and caprices of the defendant, by the mere pretension that the
written notice had been duly served upon the customer.

2. One can not deny the vital role which a public utility such as MERALCO, having a monopoly of the supply
of electrical power in Metro Manila and some nearby municipalities, plays in the life of people living in such
areas. Electricity has become a necessity to most people in these areas justifying the exercise by the State
of its regulatory power over the business of supplying electrical service to the public, in which petitioner
MERALCO is engaged. Thus, the state may regulate, as it has done through Section 97 of the Revised
Order No. 1 of the Public Service Commission, the conditions under which and the manner by which a
public utility such as MERALCO may effect a disconnection of service to a delinquent customer. Among
others, a prior written notice to the customer is required before disconnection of the service. Failure to give
such prior notice amounts to a tort, as held by us in a similar case, where we said:

... petitioner's act in 'disconnecting Ongsip's gas service without prior notice constitutes breach of contract
amounting to an independent tort. The prematurity of the action is indicative of an intent to cause additional
mental and moral suffering to private respondent. This is a clear violation of Article 21 of the Civil Code
which provides that any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for damages. This is reiterated by
paragraph 10 of Article 2219 of the Code. Moreover, the award of moral damages is sanctioned by Article
2220 which provides that wilfull injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.

3. Likewise, we find no merit in MERALCO & YAMBAO's contention that being in arrears in the payment of
their bills, THE CHAVES FAMILY is not entitled to moral damages under the doctrine that "he who comes to
court in demand of equity, must come with clean hands." This cannot be utilized by MERALCO & YAMBAO
to defeat or null the claim for damages. At most, this circumstance can be considered as a mitigating factor
in ascertaining the amount of damages to which respondent ... is entitled."

Bengson v. Pangasinan
Bengson v. Pangasinan, 62 Phil 816
 HOA of El Deposito v. Lood
HOA of El Deposito v. Lood, 47 SCRA 174

Solis v. Pujeda
Solis v. Pujeda, 42 Phil 699

Ramcar v. Milar
Ramcar v. Milar, 116 Phil 699

Timoner v. People
Timoner v. People, 125 SCRA 830