Chavez v Gonzales GR No.

L-2745 Issue:

Facts: Whether or not Gonzales is liable to cost incurred by

On July 1963, Plaintiff Chavez delivered to Defendant
Gonzales who is a typewriter repairer, a portable type
writer for cleaning and servicing.
Gonzales wasnt able to finish the job, despite repeated
remainders. He only gave assurances which he failed to
comply also.
On October, Gonzales asked for Chavez 6 Pesos for
purchase of spare parts.
After getting exasperated with the delay of the repair of
the typewriter, Chavez went to Gonzales and asked for the
return of the typewriter to which Gonzales delivered it in
a wrapped package.
Chavez noticed that the returned typewriter was missing
some parts and was in shambles.
Consequently, the Chavez sent a letter to Gonzales
formally demanding the return of the missing parts and
the sum of 6 pesos.
The following day, defendant returned to the plaintiff
some of the missing parts and the 6 pesos
Chavez in the repair of his typewriter
Ruling:
Yes.
The inferences derivable from these findings of fact are
that the appellant and the appellee had a perfected
contract for cleaning and servicing a typewriter; that they
intended that the defendant was to finish it at some future
time although such time was not specified; and that such
time had passed without the work having been
accomplished, far the defendant returned the typewriter
cannibalized and unrepaired, which in itself is a breach of
his obligation.
It is clear that the defendant-appellee contravened the
tenor of his obligation because he not only did not repair
the typewriter but returned it "in shambles", according to
the appealed decision.
The cost of the execution of the obligation in this case
should be the cost of the labor or service expended in the
repair of the typewriter, which is in the amount of P58.75.
Because the obligation or contract was to repair it.

On August 1964, Chavez had his typewriter repaired by

Freixas business and machines and cost him 89.85 Pesos
including labor and materials.

August 23, 1965, the plaintiff commenced this action

before the City Court of Manila, demanding from the
defendant the payment of P90.00 as actual and
compensatory damages, P100.00 for temperate damages,
P500.00 for moral damages, and P500.00 as attorney's
fees.

The lower court ruled the total cost of P89.85 should not,
however, be fully chargeable against the defendant. The
repair invoice shows that the missing parts had a total
value of only P31.10

Chavez contended that he was only awarded with the

value of the missing parts of the typewriter instead of the
whole cost of labor and material that went into the repair
of the machine.

Gonzales argued that he is not liable at all, not even for

the sum of P31.10, because his contract with plaintiff-
appellant did not contain a period, so that plaintiff-
appellant should have first filed a petition for the court to
fix the period, under Article 1197 of the Civil Code, within
which the defendant appellee was to comply with the
contract before said defendant-appellee could be held
liable for breach of contract.
Debtor must be free from any participation in or aggravation
of the injury to the creditor.
Petitioner failed to show that the collapse of the windmill was
due to a fortuitous event. The CA correctly observed that
given the newly-constructed windmill system, the same
would not have collapsed had there been no inherent defect
in it which could only be attributable to the appellee.
Emphasizing that respondent had in his favor the
presumption that things have happened according to the
ordinary course of nature and the ordinary habits of life.
On the payment of his outstanding balance of P15,000 should
bear his own loss, is untenable. In reciprocal obligations,
neither party incurs in delay if the other does not comply or no
ready to comply in a proper manner. When the windmill failed
to function properly it became incumbent upon petitioner to
institute the proper repairs in accordance with the guaranty
stated in the contract. Respondent cannot be said to have
incurred in delay, instead, it is petitioner who should bear the
expenses for the reconstruction of the windmill. Art 1167, CC
is explicit on this point that if a person obliged to do something
fails to do it, the same shall be executed at his cost.
PICZON VS. PICZON
FACTS:
This an appeal from the decision of the Court of First Instance
of Samar in its Civil Case No. 5156, entitled Consuelo P. Piczon,
et al. vs. Esteban Piczon, et al.,
sentencing defendants-appellees, Sosing Lobos and Co.,
Inc., as principal, and Esteban Piczon, as guarantor, to pay
plaintiffs-appellants "the sum of P12,500.00 with 12% interest
from August 6, 1964 until said principal amount of P12,500.00
shall have been duly paid, and the costs." Annex "A", the
actionable document of appellants reads thus:
AGREEMENT OF LOAN KNOW YE ALL MEN BY THESE PRESENTS:
That I, ESTEBAN PICZON, of legal age, married, Filipino, and
resident of and with postal address in the municipality of
Catbalogan, Province of Samar, Philippines, in my capacity as
the President of the corporation known as the "SOSING-LOBOS
and CO., INC.," as controlling stockholder, and at the
same time as guarantor for the same, do by these
presents contract a loan of Twelve Thousand Five
Hundred Pesos (P12,500.00), Philippine
Currency, the receipt of which is hereby
acknowledged, from the "Piczon and Co., Inc."
another corporation, the main offices of the two
corporations being in Catbalogan, Samar, for
which I undertake, bind and agree to use the loan
as surety cash deposit for registration with the
Securities and Exchange Commission of the
incorporation papers relative to the "Sosing-Lobos
and Co., Inc.," and to return or pay the same
amount with Twelve Per Cent (12%) interest per
annum, commencing from the date of execution
hereof, to the "Piczon and Co., Inc., as soon as the
said incorporation papers are duly registered and
the Certificate of Incorporation issued by the
aforesaid Commission.
IN WITNESS WHEREOF, I hereunto signed my
name in Catbalogan, Samar, Philippines, this 28th
day of September, 1956.
(signed)Esteban Piczon
ISSUE:
Was the trial court correct in its decision that
defendant will only have to pay the interest from August 6,
1964 instead of September 28, 1956?
RULING:
No. Instead of requiring appellees to pay interest
at 12% only from August 6, 1964, the trial court should
have adhered to the terms of the agreement which plainly
provides that Esteban Piczon had obligated Sosing-Lobos
and Co., Inc. and himself to "return or pay (to Piczon and
Co., Inc.) the same amount (P12,500.00) with Twelve Per
Cent (12%) interest per annum commencing from the date
of the execution hereof", Annex A, which was on
September 28, 1956. Under Article 2209 of the Civil Code
"(i)f the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall
be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six per
cent per annum." In the case at bar, the "interest agreed
upon" by the parties in Annex A was to commence from
the execution of said document.
Appellees' contention that the reference in Article
2209 to delay incurred by the debtor which can serve as
the basis for liability for interest is to that defined in
Article 1169 of the Civil Code is untenable. In Quiroz vs.
Tan Guinlay, 5 Phil. 675, it was held that the article cited
by appellees (which was Article 1100 of the Old Civil Code
read in relation to Art. 1101) is applicable only when the
obligation is to do something other than the payment of
money. And in Firestone Tire & Rubber Co. (P.I.) vs.
Delgado, 104 Phil. 920, the Court squarely ruled that if the
contract stipulates from what time interest will be counted,
said stipulated time controls, and, therefore interest is
payable from such time, and not from the date of the filing
of the complaint (at p. 925). Were that not the law, there
would be no basis for the provision of Article 2212 of the
Civil Code providing that "(I)nterest due shall earn legal
interest from the time it is judicially demanded, although
the obligation may be silent upon this point." Incidentally,
appellants would have been entitled to the benefit of this
article, had they not failed to plead the same in their
complaint. Their prayer for it in their brief is much too
late. Appellees had no opportunity to meet the issue
squarely at the pre-trial.

PHILIPPINE CHARTER INSURANCE CORP v CENTRAL COLLEGES
OF THE PHILIPPINES
FACTS:
Respondent Central College of the Philippines (CCP)
contracted the services of Dynamic Planners and Construction
Corp. (DPCC) for the construction of the 5-storey building for
248M which would be done in 2 phases and each phase value
is 124M.
To guarantee the fulfillment of the obligation, DPCC posted 3
Bonds; all issued by the Philippine Charter Insurance
Corporation (PCIC) all bonds are callable on demand and set to
expire on October 30, 2003.
Phase 1 of the project was completed therefore the CCP paid
12 % of the 124M as down payment for the phase 2 of the
project. Phase 2 of the project however encountered so many
delays in which only 47% of the work was actually finished as
assailed by the CCP.
The CCP informed the construction Corporation (DPCC) and
the Insurance Corporation (PCIC) of the breach of contract and
plan to claim on the construction bonds.
Because only 51% of the phase was completed, they declare
the occurrence of the default against the Construction
Corporation (DPCC) and requested the Insurance Corporation
(PCIC) to remit the proceeds of the bond.
DPCC confirmed that the project was not completed and asked
for the extension as the revision of plans requires more days.
CCP notified the Insurance Corporation (PCIC) that they
decided to terminate the contract because of the inability of
the DPCC to complete the project and decided to continue the
construction on its own.
Meanwhile, the Insurance Corporation (PCIC) approved the
request of the Construction Corporation (DPCC) for the
extension of the bonds. CCP on the other hand, hired another
contractor to work on the site.
PCIC also denied the claims of CCP against 3 bonds which
prompted the CCP to file a complaint with request for
arbitration with the Construction Industry Arbitration
Commission (CIAC) against DPCC and PCIC to which the CIAC
ruled in favor of the CCP but ordered the latter to pay DPCC for
the materials left and cost of the equipments. Further, it
ordered DPCC and PCIC to pay the CCP from the surety bond.
However, the PCIC is entitled for indemnification from DPCC.
In case of delay of payment to indemnify PCIC, the DPCC shall
pay interest of 21% per annum.
The CA modified the CIAC decision with regards to the
counterclaim of DPCC for materials and ordered it to be
deleted. CA also ordered the DPCC and PCIC to pay CCP
P13,231,460.73 under the surety bond with 6% interest per
annum.
ISSUE: WON DPCC incurred delay in the fulfillment of its
obligation and PCIC as a surety, are entitled to the effects
thereof.
HELD:
The civil law concept of delay or default commences from the
time the obligor demands either judicially or extra judicially,
the fulfillment of obligation.
The SC further said, demand is the assertion of legal or
procedural right hence, DPCC incurred delay from the time the
CCP called its attention that it has breach of contract and extra
judicially demanded the fulfillment of its commitment against
the bond.
Upon notice of default of obligor DPCC, PCICs liability as surety
was already attached which binds himself with the principal
debtor to assure the fulfillment of the obligation.
Having acted as surety, PCIC is duty bound to perform what it
has guaranteed on its surety and performance bind, all of
which are callable (can be paid off earlier than the maturity
date) on demand occasioned by its principal default.
The Supreme Court also ruled that the CCP need not file
another claim as to supposed extended bonds because the
letter was sufficient notice to PCIC and DPCC of the latters
default. Further, the CCP is legally warranted in terminating
the contract because it is clearly apparent in the parties
agreement.
PCIC and DPCC are ordered to, jointly and severally, pay
Central Colleges of the Philippines the total amount of
P13,231,460.73 under Surety Bond with an interest of 6% per
annum.
The SC also agreed with the decision of the CA in the deleting
the award of damages as DPCC was not able to establish that
they are entitled to the actual damages. It failed to prove that
the items in the receipts corresponds to the items allegedly left
at work site.
Palmares vs. CA Ruling:

No. The Court believes that demand was no longer necessary

in this case because under paragraph G of the promissory note,
Facts:
petitioner agreed that if she fails to pay on the schedule of
Petitoiner agreed to be jointly and solidarily liable to a loan payment, she waives her right to notice or demand.
amounting to 30,000 php, extended by M.B. Lending Therefore, demand was no longer necessary to put her on
Corp.(private respondents) to Spouses Azarraga on March 13, delay or default.
1990. In the promissory note, she agreed to be liable once the
The Court also believes that the Petitioner is liable as a
principals are insolvent or at default The loan was payable on
surety because she bound herself jointly and solidarily to the
or before May 12, 1990 with a 6% per annum interest to be
loan. And again as a surety, demand is no longer necessary
computed every 30 days.
because commencement of the suit is sufficient demand.
When the load matured, the debtor were only able to pay
The Court therefore, affirms the decision of the CA
a sum of 16,300 php on four different occasions, leaving a
declaring Petitioner as liable to pay the Corp, however
balance of 13, 700 php. When principal debtors defaulted,
modifying it by deleting 3% per month penalty for being
Palmares asked M.B. to collect from the principals first but at
unconscionable and reducing attorneys fees into 10,000 php.
the same time, offered a parcel of land but was refused.

M.B Lendong Corp., filed a complaint against Palamares

alone, for being solidarily liable of the loan. But Palamares
contends that the Corp. Was in bad faith for filing a case only
against her.

RTC dismissed the case for discharge of prior party

because the pricipals were excluded. And also because of
Palamares offer to pay but refused, she was discharged of her
secondary liabilities.

However, upon appeal, CA reversed the ruling of trial

court and declared Palmares liable to pay the Corp with:

1. outstanding balance 13,700php plus 6% interest

every 30 days from execution of loan until fully paid

2. Sum of stipulated penalty, 3% per month of the

balance

3. 25% of the total amount due as attorneys fees

4. Costs of suit

CA also ruled that petitioner is a surety and not a

guarantor, for she bound herself as jointly and solidarily liable
to the loan.

Petitioner appealed to the SC that the complaint was

prematurely filed because principal debtor were not yet in
default for lack of demand and that she is only a guarantor for
she made herself liable only when the principal is insolvent,
according to the third paragraph for her note.

Issue:

WON demand was necessary to place the principal and the

petitioner at default.

WON the petitioner is liable as a guarantor or surety.

Binalbagan Tech, Inc. vs. CA, Magdalena Puentevella,
Angelina Echaus et. al
March 10, 1993
FACTS:
On 1967, private respondent Angelina P. Echaus, as Judicial
Administrator of the intestate estate of Luis Puentevella,
executed a Contract to Sell and a Deed of Sale of Forty-Two
(42) subdivision lots conveying and transferring said lots to
petitioner Binalbagan Tech, Inc. Upon the transfer of titles,
petitioner took possession of the lots and started operating a
school on the property from 1967 when the titles were
transferred to it.
It appears that there was a pendency case involving said lots.
There was a Third-Party Claim based on alleged Deed of Sale
executed, thus Puentevella was constrained to assert physical
possession of the premises. The possession of the building and
other property was taken from petitioner Binalbagan and
given to the third-party claimant, the de la Cruz Spouses.
1982, more than fifteen (15) years elapsed. Seemingly, the 10-
year prescriptive period has expired before she brought her
action to recover title. But the period of prescription was
interrupted, because from 1974 to 1982, the private
respondent themselves could not have restored unto
petitioner the possession of the 42 subdivision lots because of
the preliminary injunction.
The period 1974 to 1982 should be deducted in computing the
prescriptive period because a party to a contract cannot
demand performance of the other partys obligations unless
he is in a position to comply with his own obligations.
Consequently, the case filed by private respondent Angelina
Echaus was within the 10-year prescriptive period deducting
eight year (1974 to 1982) from the period 1967 to 1982, only
seven years elapsed.
The petition is denied and the decision of the Court of Appeals
affirmed.

In the meantime, an appeal was interposed by the defendant.

Consequently, in 1982 the judgment was finally executed and
enforced, and petitioner Binalbagan was restored to the
possession of the subdivision lots on May 31, 1982. Also, it will
be noted that petitioner was not in possession of the lots from
1974 to May 31, 1982.

Private Respondent Angelina Echaus demanded payment from

petitioner after the possession of the said lots was transferred
again to them. Enclosing in the letter of demand a statement
of account as of September 1982 showing a total amount of P
367,509.93, price of the land and accrued interest as of that
date. Private respondent Angelina Echaus filed a case against
petitioner for recovery of title and damages as petitioner failed
to effect payment.

RTC rendered decision that there is no fraud and since the

written contract has long prescribed, judgment is rendered in
favor of Binalbagan Tech and against Private Respondent
(Angelina Echaus).

Private respondent appealed to the CA where a new one is

rendered ordering the appellee Binalbagan Tech Inc. to
execute a deed of conveyance transferring and returning unto
the appellants the ownership and titles of the subject 42
subdivision lots.

ISSUE: WON the period to institute action upon a written

contract has prescribed.

RULING:
No. The prescriptive period within which to institute an action
upon a written contract is ten years. The cause of action of
private respondent Echaus is based on the deed of sale. The
deed of sale whereby private respondent Echaus transferred
ownership of the subdivision was executed on May 11, 1967.
She filed for recovery of title and damages only on October 8,
Ignacio Barzaga vs CA and Angelito Alviar
GR No. 115129
FACTS:
After a prolonged pain and suffering, Barzagas wife
succumbed to a debilitating ailment on December 19, 1990.
Forewarned of her impending death, she wished to be buried
before Christmas.
In the fulfilment of his wifes dying wish, Petitioner arranged
her internment on the 24th of December. On December 21,
1990 at 3 pm, he went to Angelito Alviars hardware store to
inquire about the availability of certain materials for the
construction of his wifes niche and if it could be delivered at
once. Alviars storekeeper replied that if there are pending
deliveries for this afternoon, it would be delivered the
following day.
Petitioner returned the following day at 7 am. He told the
employees that the materials he was buying would have to be
delivered at the cemetery by eight in the morning since his
hired workers were already there and time was of the essence.
With the assurance that the materials will be delivered at the
designated time and place, he paid the full amount of P2,
110.00.
However, the materials were not delivered on time. After
several follow ups, Alviars employees gave him the same
answer, assuring him that the materials will be delivered in no
time. Due to the delay in the delivery, the petitioner was
forced to dismiss his laborers for the day.
those who in the performance of their obligation are guilty of
fraud, negligence, or delay and those who in any manner
contravene the tenor thereof, are liable for damages.
There was actually a specific time agreed upon for the delivery
of the materials. It was evident when the petitioner only
agreed to buy the materials when he was assured of the
immediate delivery according to his time frame. Time was of
the essence in the delivery of the materials to the grave site.
The niche had to be constructed on the 22nd considering that
it would take about 2 days to finish the job if the internment
was on the 24th. Respondents delay on the delivery wasted so
much time that the construction could only start on the 23 rd.
Respondents justification that his truck had a flat tire is
unacceptable, for this event was foreseeable and should have
been reasonably guarded against.
This is a clear non-performance of a reciprocal obligation.
Petitioner had already complied with his obligation as a
purchaser when he paid the purchase price. It was incumbent
upon the respondent to immediately fulfil his obligation to
deliver otherwise delay would attach.
Petition was granted. The Court ordered private respondent to
refund the purchase price of P2, 110.00 with interest, pay
moral damages, litigation expenses and attorneys fee.

Petitioner, determined to fulfil his wifes dying wish and

distressed that Alviars employees were not the least
concerned, despite his impassioned pleas, he decided to
cancel the transaction and buy the materials from another
store. Her wife was finally laid to rest two-and-a-half days
behind schedule since the niche was not finished in time.

Petitioner sued Alviar for compensation of the damages

caused by the delay. Respondent claims that the legal delay
could not be validly ascribed to him because no specific time
of delivery was agreed upon and even if there was delay, it was
due to a fortuitous event since the truck suffered a flat tire.

RTC ruled in favor of the petitioner but such was reversed by

the CA.

Hence, this petition.

ISSUE: WON Alviar incurred delay in the fulfilment of his

obligation and is liable for damages?

RULING:

Yes. The Respondent was negligent and incurred delay in

performing his obligations. The law expressly provides that
Financial Building Corp. vs. Rudlin (3) No. Under the Civil Code, one is entitled to an adequate
compensation for pecuniary loss suffered by him as he has duly
FACTS: proved. Not a single receipt was presented by Rudlin to prove
Financial Building Corp. (FBC) and Rudlin entered into a that they have incurred expenses for the repair of the
Construction Agreement for the construction of a three-storey defective waterproofing, a testimony alleging the cost spent
school building. In the said agreement, it was stipulated that by Rudlin is not enough. Competent proof of such must point
any delay not due to force majeure will be held against FBC out specific facts that could provide the gauge for measuring
and shall be deducted from the stipulated contract price or any whatever compensatory or actual damages were borne.
balance due to FBC. It appears that FBC was not able to finish
the construction on the stipulated date in the contract but
Rudlin allowed them an extension through a letter agreement.
In that same agreement, it was stipulated that payment of the
balance due to FBC shall be made after the parties have
reconciled their accounts regarding the upgrading and
downgrading of the work done on the project.

Later on, the said school building has been inaugurated and
utilized by Rudlin. FBC thus demanded payment but was not
heeded by Rudlin. FBC thus filed a suit praying for the payment
of the balance due to them and payment of legal interest,
attorneys fees and moral and exemplary damages. Rudlin
contended that FBC was not able to complete the work despite
the extension given to them. Furthermore, they also alleged
that many of the portions of the work performed by FBC are
incomplete and/or faulty, defective and deficient.

ISSUE/S:
(1) WoN FBC is liable for the delay in the completion of the
works.
(2) WoN Rudlin is liable for the balance of the contract price
due to FBC.
(3) WoN Rudlin is entitled for damages by reason of delay.

HELD:
(1) Yes. After ocular inspection, it is undisputed that the water
seepage was so pervasive that many portions of the school
could not be properly utilized since it posed danger to the
teachers and students. FBC is therefore liable for the poor
quality of waterproofing on the ground that when the changes
made by FBC with regards to the waterproofing was not
authorized by Rudlin. It must be also stressed that there was
no proper turn over of the building to Rudlin and no final
acceptance in writing was made by Rudlin. FBC defaulted in
their obligations under the Construction Agreement. They are
bound to replace and reexecute defective waterproofing and
correct the damage such has caused to the building.

(2) No. Rudlin properly executed their rights under the

Construction Agreement by withholding their payment of the
balance of the contract price. In reciprocal obligations, neither
party incurs in delay if the other does not comply or is not
ready to comply in a proper manner with what is incumbent
upon him. FBC shouldve performed the proper repairs to the
damage the substandard waterproofing cause in accordance
with the guaranty-warranty stated in the Construction
Agreement. Thus, Rudlin did not incur delay in the
reconciliation of accounts, as a precondition for final payment.
It was FBC who was guilty of delay by its refusal to replace or
re-execute the defective waterproofing of the school.
Jacinto Tanguilig v Court of Appeals
This case involves interpretation of the contract between the
parties.
Facts:
Jacinto Taguiling doing business under the name and style of
JMT Engineering and General Merchandising proposed to
respondent Vicente Herce, Jr. to construct a windmill system
for him. They agreed for a consideration of P60,000 with a one-
year guaranty from the date of completion and acceptance by
respondent. Respondent paid petitioner a downpayment of
P30,000 and an installment of P15,000 leaving a balance of
P15,000.
Respondent refused to pay the balance which prompted the
petitioner to file a complaint to collect the amount. The
respondent denied the claim saying he already paid the
amount to the San Pedro General Merchandising Inc. (SPGMI)
which constructed the deep well where the windmill system
will be connected. Respondent claimed that the payment
tendered to SPGMI should be credited to him. Assuming that
he owed petitioner the balance payment, this should be offset
by the defects in the windmill system which caused he
structure to collapse after a strong wind hit their place.
Petitioner denied that the construction of a deep well was
included in the agreement to build the windmill system, the
P60,000 was solely for the windmill assembly and installation.
He disowned any obligation to repair or reconstruct and he
insisted that it was delivered in good and working condition.
The collapse was attributable to a typhoon, force majeure,
which relieved him of any liability.
The Trial Court held that the well was not part of the windmill
project further saying that building of the well should be
stipulated in the proposal. The absence of such agreement, the
court concluded that the construction of the well is not part of
the project undertaken by the plaintiff. On the repair of the
windmill, there is no clear and convincing proof that the
windmill system fell down due to the defect of the
construction.
CA reversed the trial court. It ruled that deep well was included
in the agreement because the term deep well was
mentioned in the proposals. It credited the testimony of
Guillermo Pili, the proprietor of SPGMI which installed the
deep well and that petitioner Tanguilig told him that the
construction of the well would be deducted from the contract
price of P60,000. Respondents payment of P15,000 to SPGMI
should be applied to his remaining balance thus effectively
extinguishing his contractual obligation. It rejected force
majeure and ordered to reconstruct the windmill in
accordance with the one-year guaranty.
Motion for Recon was denied by CA, now sought relief from
SC.
Issues:
WON the agreement to construct the windmill system
included the installation of a deep well.
WON petitioner is under obligation to reconstruct the windmill
after it collapsed.
Ruling:
Reversed CA on the first issue but sustain on the second.
The preponderance of evidence tells that the installation of
deep well was not included in the proposals of petitioner to
construct a windmill system for respondent. There were two
(2) proposals.
Nowhere in either proposal is the installation of a deep well
mentioned, even remotely. Neither is there an itemization or
description of the materials to be used in constructing the
deep well. The contract prices fixed in both proposals cover
only features specifically described therein and no other.
While the term deep well and deep well pump were
mentioned in both, these do not indicate that a deep well is
part of the windmill system. They merely describe the type of
deep well pump for which the proposed windmill would be
suitable. Since the terms used are clear and leave no doubt as
to the meaning, they should not be disturbed.
Cardinal rule that the interpretation of contracts that the
intention of the parties shall be accorded primordial
consideration, their contemporaneous and subsequent acts
shall be principally considered. Respondent insists that
petitioner verbally agreed that the contract price of P60,000
covered the installation of a deep well pump. Further contends
that, having no capacity to install the pump the latter agreed
to have a third party to do the work. He presented Guillermo
Pili of SPGMI who declared Tanguilig approached him with a
letter asking him to build a deep well pump as part of the
price/contract Engr. Herce had with Mr. Tanguilig but the
latter was never presented to the court.
SC found it unusal that Pli would readily consent to build a
deep well the payment for which would come supposedly from
the windmill contract price on the mere representation of
petitioner, whom he had never met before, without written
commitment at least from the former. It would have been
strictly a matter between petitioner and Pili himself with the
former assuming the obligation to pay the price.
Respondent cannot claim the benefit of the law concerning
payments made by a third person. Civil Code provisions do not
apply in the instant case because no creditor-debtor
relationship between Pili and SPGMI has been established.
These circumstances only show that that the construction of
the well by SPGMI was for the sole account of respondent and
that petitioner merely supervised the installation of the well
because the windmill was to be connected to it. No legal nor
factual basis by SC can impose petitioner an obligation he did
not expressly assume nor ratify.
Force Majeure
In long line of cases, SC has consistently held that in order for
a party to claim exemption from liability by reason of
fortuitous event under Art. 1174, CC the event should be the
sole and proximate cause of the los or destruction of the object
of the contract. Four requisites must concur (Nakpil v. CA):
Cause of the breach of the obligation must be independent of
the will of the debtor;
Event must be either unforeseeable or unavoidable;
Event must be such as to render it impossible for the debtor to
fulfill his obligation in a normal manner;
AEROSPACE CHEMICAL Vs CA On this score, we quote with approval the findings of the
appellate court, thus: The defendant [herein private
FACTS: On June 27, 1986, petitioner Aerospace Industries, Inc.
respondent] was not remiss in reminding the plaintiff that it
(Aerospace) purchased five hundred (500) metric tons of
would have to bear the said expenses for failure to lift the
sulfuric acid from private respondent Philippine Phosphate
commodity for an unreasonable length of time.But even
Fertilizer Corporation (Philphos). Initially set beginning July
assuming that the plaintiff did not consent to be so bound, the
1986, the agreement provided that the buyer shall pay its
provisions of Civil Code come in to make it liable for the
purchases in equivalent Philippine currency value, five days
damages sought by the defendant.
prior to the shipment date. Petitioner as buyer committed to
secure the means of transport to pick-up the purchases from
private respondent's loadports. Per agreement, one hundred
metric tons (100 MT) of sulfuric acid should be taken from
Basay, Negros Oriental storage tank, while the remaining four
hundred metric tons (400 MT) should be retrieved from Sangi,
Cebu. On December 18, 1986, M/T Sultan Kayumanggi docked
at Sangi, Cebu, but withdrew only 157.51 MT of sulfuric acid.
Again, the vessel tilted. Further loading was aborted. Two
survey reports conducted by the Societe Generale de
Surveillance (SGS) Far East Limited, dated December 17, 1986
and January 2, 1987, attested to these occurrences. Later, on
a date not specified in the record, M/T Sultan Kayumanggi sank
with a total of 227.51 MT of sulfuric acid on board. Petitioner
chartered another vessel, M/T Don Victor, with a capacity of
approximately 500 MT.6 [TSN, September 1, 1989, pp. 28-29.]
On January 26 and March 20, 1987, Melecio Hernandez, acting
for the petitioner, addressed letters to private respondent,
concerning additional orders of sulfuric acid to replace its
sunken purchases.

ISSUE: Should expenses for the storage and preservation of

the purchased fungible goods, namely sulfuric acid, be on
seller's account pursuant to Article 1504 of the Civil Code?

RULING: Petitioner tries to exempt itself from paying rental

expenses and other damages by arguing that expenses for the
preservation of fungible goods must be assumed by the seller.
Rental expenses of storing sulfuric acid should be at private
respondent's account until ownership is transferred, according
to petitioner. However, the general rule that before delivery,
the risk of loss is borne by the seller who is still the owner, is
not applicable in this case because petitioner had incurred
delay in the performance of its obligation. Article 1504 of the
Civil Code clearly states: "Unless otherwise agreed, the goods
remain at the seller's risk until the ownership therein is
transferred to the buyer, but when the ownership therein is
transferred to the buyer the goods are at the buyer's risk
whether actual delivery has been made or not, except that: (2)
Where actual delivery has been delayed through the fault of
either the buyer or seller the goods are at the risk of the party
at fault."
Far East Bank & Trust Company vs. CA, Diaz Realty, Inc.
FACTS
In August 1973, Diaz and company contracted a loan from
Pacific Banking Corporation (PaBC) amounting to P 720,000,
with interest of 12% per annum which was later increased to
14%, 16%, 18% and 20% respectively. The loan was secured by
a real estate mortgage over two parcels of land owned by Diaz
Realty both located in Davao City. In 1981, Allied Company
rented an office space in the building constructed in the land
mortgaged; it was further agreed that the monthly rental
payments of Allied Company shall be directly paid to the
mortgagee [PaBC] for the lessors account. Allied bank paid the
monthly rentals to PaBC in conformance with the contract. On
July 5, 1985, Central Bank closed PaBC, placed it under
receivership, and appointed Renan Santos as its liquidator. In
December 1986, Far East Bank Trust Company purchased the
credit of Diaz & Company in favor of PaBc. However, it was only
in March 23, 1988 that Diaz was informed about the said
purchase of credit.
According to FEBTC, on March 23, 1988, Antonio Diaz
(President of Diaz & Company and Vice-President of Diaz
Realty) went to PaBCs office which by then housed FEBTC and
was told that the latter had acquired PaBC. Diaz was told by
cashier Ramon Lim that as of the said date, his outstanding
balance with his loan is P 1,447,142.03. Diaz asked the
defendant to make an accounting of Allied Banks monthly
rental payments. In December 14, 1988, Diaz furnished a check
to FEBTC in the amount of P 1,450, 000 to avoid further
payments of interests and other penalties. However, FEBTC did
not accept it as payment, instead, Diaz was asked to deposit
the same to defendants Davao City Branch Office, pending the
approval of Central Bank liquidator Renan Santos. In the
meantime, Diaz asked the defendant to reduce the interest
from 20% to 12% per annum; no reply was received from
FEBTC. The defendant asked Diaz to change the P 1,450,000
payment to a money market placement which he obeyed and
that which expired in April 14, 1989. When there was still no
response from the defendant on whether or not it will accept
his tender of payment, he filed his case at the Davao Regional
Trial Court.
In its responsive pleading, the defendant set up the following
affirmative defenses: that in December 1986, FEBTC
purchased from PaBC the account of Diaz for a total
consideration of P 1,828, 875 and that despite the purchase
PaBC Davao branch continued to collect interests and penalty
charges on the loan from January 6, 1988 to July 8, 1988. It
was not FEBTC but PaBC that collected the interest rates
mentioned in the complaint and it is not true that FEBTC
imposed exorbitant interest rates. That as a matter of fact,
FEBTC tried to negotiate with the plaintiffs and that FEBTC has
no knowledge of the rates imposed previously by PaBC.
Therefore, FEBTC could not be held responsible for
transactions which took place before the purchase and that
defendant acted at the right time to settle the account.
ISSUES
A. Whether or not the CA correctly ruled that the validity of
the tender of payment was not properly raised in the RTC and
could not thus be raised in the appeal.
B. Whether or not the CA erred in failing to apply settled
jurisprudential principles militating against the private
respondents contention that a valid tender of payment had
been made by it.
C. Whether or not the CA correctly found that the transaction
between petitioner and PaBC was an innefective novation
and that the consent of private respondents was necessary
therefor.
D. Whether or not the CA erred in refusing to apply the rate of
interest freely stipulated upon by the parties to the
respondents obligation.
E. Whether or not the CA committed an irreconcilable error in
ordering the parties to re-negotiate the terms of the contract
while finding at the same time that the mortgage contract
containing the lease was valid.
F. Whether or not the petition, as argued by private
respondent raises questions of fact not reviewable by
certiorari.
HELD
A. A check does not constitute legal tender, and that a creditor
may validly refuse it. It must be emphasized, however, that this
dictum does not prevent a creditor from accepting a check as
payment. Meaning, the creditor has the option and the
discretion of refusing or accepting it. Therefore, since the
petitioner bank did not refuse respondents check, and since
the check was cleared, it served as a valid tender of payment.
B. The transfer of credit from PaBC to FEBTC is not an
ineffective novation but instead a mere assignment of credit.
Even so, FEBTC had the right to collect the full value of the
credit from Diaz, ubject to the terms as originally agreed upon
in the Promissory Note.
C. Petitioner bank as assignee of respondents credit is entitled
to the full interest rate of 20% in the computation of debt of
Diaz as stipulated in the August 26, 1983 agreement. However,
since there was a valid tender f payment made on November
14, 1988, the accrual of interest shall stop at that date. Thus,
Diaz should pay FEBTC the principal amount of P 1,067,000
plus accrued interet thereon at 20% until November 14, 1988
less interest payments given to PaBc from December 1986-July
8, 1988. After that, interest should be computed at 12% per
annum until full payment.
D. The petition is hereby denied. The decision of the CA is
affirmed with the following modifications: respondent Diaz
Realty is ordered to pay FEBTC its principal obligation
amounting to P 1,067,000 with interest thereon computed ar
20% per annum until November 14, 1988 less any interest
payments made to PaBC. Thereafter, interest shall be
computed at 12% per annum until fully paid.
Southeastern College Inc vs CA
Facts:
After a typhoon a complaint of culpa aquiliana was filed
against the School for the reason that one of their buildings
was considered a structural hazard and the reason of
inhabitability of the nearby houses .The complaint is rooted to
the claim that the school has a defective roofing structure and
that they have been remiss on the maintenance of such
building. The school (petitioner) averred that subject school
building had withstood several devastating typhoons and
other calamities in the past, without its roofing or any portion
thereof giving way; that it has not been remiss in its
responsibility to see to it that said school building, which
houses school children, faculty members, and employees, is
"in tip-top condition"; and furthermore, typhoon "Saling" was
"an act of God and therefore beyond human control" such that
petitioner cannot be answerable for the damages wrought
thereby, absent any negligence on its part.
Issue:
Whether or not the destruction of the nearby houses was
caused by a fortuitous event.
Held:
It was held that petitioner has not been shown negligent or at
fault regarding the construction and maintenance of its school
building in question and that typhoon "Saling" was the
proximate cause of the damage suffered by private
respondents' house.
SAMSON VS. COURT OF APPEALS
OBLIGATION TO INVESTIGATE OR TO FOLLOW LEADS
FACTS:
Private respondent Angel Santos and his store, Santos & Sons,
Inc. are the lessees of a commercial unit of a building owned
by Susana Realty Corporation. Susana Realty informed Santos
that the lease contract will no longer be renewed upon
expiration. Petitioner Manolo Samson, on the other hand,
offered to buy the store from Santos and to lease the subject
premises and said offer was accepted by Santos. Samson
tendered a down payment and both he and Santos agreed that
the balance shall be paid upon renewal of the lease contract
between Santos and Susana Realty. Santos however, failed to
renew his lease over the premises and so Susana realty
demanded that the store vacate the leased premises.
Consequently, petitioner Samson then filed an action for
damages against private respondent. Petitioner claimed that
he was defrauded by respondent Samson who misrepresented
himself so as to induce petitioner in purchasing the store and
the leasehold right of private respondent. The trial court
rendered its judgment in favour of Samson. On appeal to the
CA, the appellate court modified the trial courts decisions
after it found that the Santos did not exercise fraud or bad faith
in its dealings with petitioner. Samson elevated the case to the
Supreme Court.
ISSUE: Whether or not Samson was correct in imputing bad
faith on the part of Santos.
HELD: The Supreme Court says NO. Indeed, petitioner had
every opportunity to verify the status of the lease contract of
private respondent with Susana Realty. As held by this Court in
the case of Caram, Jr. v. Laureta, the rule caveat emptor
requires the purchaser to be aware of the supposed title of the
vendor and he who buys without checking the vendor's title
takes all the risks and losses consequent to such failure. In the
case at bench, the means of verifying for himself the status of
private respondent's lease contract with Susana Realty was
open to petitioner. Nonetheless, no effort was exerted by
petitioner to confirm the status of the subject lease right. He
cannot now claim that he has been deceived.
Dioquino v. Laureano
Facts:
Attorney Pedro Dioquino, a practicing lawyer of Masbate, is
the owner of a car. On March 31, 1964, he went to the office
of the MVO, Masbate, to register the same. Attorney Dioquino
requested the defendant Federico Laureano to introduce him
to one of the clerks in the MVO Office, who could facilitate the
registration of his car and the request was graciously attended
to. Defendant Laureano rode on the car of Atty. Dioquino on
his way to the P.C. Barracks at Masbate. While about to reach
their destination, the car driven by plaintiff's driver and with
defendant Federico Laureano as the sole passenger was
stoned by some 'mischievous boys,' and its windshield was
broken. The defendant Federico Laureano refused to file any
charges against the boy and his parents because he thought
that the stone-throwing was merely accidental and that it was
due to force majeur. Laureano refused to pay for the damaged
done to the windshield and challenged the case for judicial
adjudication. there is no question that the plaintiff tried to
convince the defendant Federico Laureano just to pay the
value of the windshield and he even came to the extent of
asking the wife to convince her husband to settle the matter
amicably but the defendant Federico Laureano refused to
make any settlement, clinging [to] the belief that he could not
be held liable because a minor child threw a stone accidentally
on the windshield and therefore, the same was due to force
majeur. Including in the action filed the wife, Aida Leaureano,
and the father, Juanito Laureano.
Issue:
(1) Whether or not there was fortuitous event and Federico
Laureano is liable to pay for damages.
(2) Whether or not the plaintiff is liable for damages for
including Federico Laureanos wife and father.
Held:
(1) The express language of Art. 1174 of the present Civil Code
states that "Except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the
nature of the obligation requires the assumption of risk, no
person shall be responsible for those events which could not
be, foreseen, or which, though foreseen were inevitable."
Authorities of repute are in agreement, more specifically
concerning an obligation arising from contract "that some
extraordinary circumstance independent of the will of the
obligor, or of his employees, is an essential element of a caso
fortuito." 5 If it could be shown that such indeed was the case,
liability is ruled out. There is no requirement of "diligence
beyond what human care and foresight can provide." 6 The
throwing of the stone by the child was clearly unforeseen or if
foreseen, was inevitable. Hence, the law being what it is, such
a belief on the part of defendant Laureano was justified and he
shall not be held liable for the damages caused to the car.
(2) No moral damages should be awarded against the parties.
Mistaken as plaintiff apparently was, it cannot be concluded
that he was prompted solely by the desire to inflict needless
and unjustified vexation on them. Considering the equities of
the situation, plaintiff having suffered a pecuniary loss which
while resulting from a fortuitous event, perhaps would not
have occurred at all had not defendant Federico Laureano
borrowed his car, we, feel that he is not to be penalized further
by his mistaken view of the law in including them in his
complaint. Well-worth paraphrasing is the thought expressed
in a United States Supreme Court decision as to the existence
of an abiding and fundamental principle that the expenses
adnannoyance of litigation form part of the social burden of
living in a society which seeks to attain social control through
law.
Jarco Marketing Corporation vs. CA, 117 SCAD 818, 321
SCRA 375 (1999)
Facts:
On May 9, 1983, Criselda Aguilar and her daughter
Zhieneth were at Syvels Department Store. While Criselda
was signing her credit card slip at the payment and
verification counter, she felt a sudden gust of wind and
heard a loud thud. When she looked behind her, she saw
her 6-year-old daughter on the floor, her body pinned by
the bulk of the stores gift-wrapping counter. Zhieneth
was rushed to the Makati Medical Center where she was
operated on. The next day she lost her speech and died
fourteen (14) days after the accident.
The cause of her death was attributed to the injuries
she sustained. The medical certificate showed Zhieneths
diagnoses including severe shock, hemorrhage, rupture,
hematoma and contusion of the lungs.
Private respondents demanded upon petitioners
the reimbursement of the hospitalization, medical bills
and wake and funeral expenses which they had incurred,
which petitioners refused. Private respondents then filed
a complaint for damages, Php 157,522.86 for actual
damages, Php 300,000 for moral damages, Php 20,000
for attorneys fees and an unspecified amount for loss of
income and exemplary damages.
Petitioners denied any liability for the injuries the
death of Zhieneth. They contended that Criselda was
negligent in exercising care and diligence over her
daughter by allowing her to freely roam around in a store
filled with glassware and appliances. According to
petitioners, the child, as well, was guilty of contributory
negligence since she climbed the counter, triggering its
eventual collapse on her. Petitioners also emphasized
that the counter was made of sturdy wood with a strong
support; it never fell nor collapsed for the past fifteen
years since its construction.
Jarco Marketing Corporation maintained that it
observed the diligence of a good father of a family in the
selection, supervision and control of its employees. The
other petitioners likewise observed due care and
diligence in the performance of their duties and
countered that the complaint was malicious for which
they suffered besmirched reputation and mental
anguish. They sought the dismissal of the complaint and
an award of moral and exemplary damages and attorneys
fees in their favor.
Issues:
1. Whether the death of Zhieneth was accidental or
attributable to negligence
2. Whether in case of negligence, should the same be
attributed to private respondents for maintaining a
defective counter or to Criselda and Zhieneth for failing
to exercise due and reasonable care while inside the store
premises
Held:
1. The Supreme Court ruled that the death of Zhieneth
was no accident. An accident pertains to an unforeseen
event in which no fault or negligence attaches to the
defendant. It is a fortuitous circumstance, event or
happening; an event happening without any human
agency, or if happening wholly or partly through human
agency, an event which under the circumstances is
unusual or unexpected by the person to whom it
happens.
2. Petitioners are guilty of negligence, for, after several
reminders given by former employees to have the
wrapping counter fixed because it was shaky and not
nailed to the ground, they did not even attempt to have
it fixed. It was only nailed to the ground after the
accident. Petitioners miserably failed to discharge the
due diligence required of a good father of a family.
The Supreme Court ruled that even the childs death be
attributed as contributory negligence and assume that
she climbed over the counter, no injury should have
occurred if the counter was stable and sturdy for a frail
six-year old could not have caused the counter to
collapse. The physical analysis of the counter by both the
trial court and Court of Appeals shows that the counter
was unstable and towards the customer waiting area and
its base was not secured.
Criselda too, should be absolved from any
contributory negligence. Initially, Zhieneth held on to
Criseldas waist, and later to the latters hand. Criselda
momentarily released the childs hand from her clutch
when she signed her credit card slip. At this precise
moment, it was reasonable and usual for Criselda to let
go of her child. Further, at the time Zhieneth was pinned
down by the counter, she was just a foot away from her
mother; and the gift-wrapping counter was just four
meters away from Criselda. The time and distance were
both significant. Zhieneth was near her mother and did
not loiter as petitioners would want to impress upon
us. She even admitted to the doctor who treated her at
the hospital that she did not do anything; the counter just
fell on her.
Rulings:
1. Trial court
The trial court dismissed the complaint and
counterclaim after finding that the preponderance of the
evidence favored petitioners. It ruled that the proximate
cause of the fall of the counter on Zhieneth was her act
of clinging to it. It believed petitioners witnesses who
testified that the child clung to the counter, thereafter
the structure and the girl fell with the structure falling on
top of her, pinning her stomach. In contrast, none of
private respondents witnesses testified on how the
counter fell. The trial court also held that Criseldas
negligence contributed to Zhieneths accident.
Private respondents appealed the decision,
attributing as errors of the trial court its findings that: (1)
the proximate cause of the fall of the counter was
Zhieneths misbehavior; (2) Criselda was negligent in her
care of Zhieneth; (3) petitioners were not negligent in the
maintenance of the counter; and (4) petitioners were not
liable for the death of Zhieneth.
2. Court of Appeals
The Court of Appeals reversed the appealed
judgment. It found that petitioners were negligent in
maintaining a structurally dangerous counter. The
counter was shaped like an inverted L with a top wider
than the base. It was top heavy and the weight of the
upper portion was neither evenly distributed nor
supported by its narrow base. Thus, the counter was
defective, unstable and dangerous. Two former
employees of petitioners had already previously brought
to the attention of the management the danger the
counter could cause but the latter ignored their concern.
The Court of Appeals declared that Zhieneth, who
was below seven (7) years old at the time of the incident,
was absolutely incapable of negligence or other tort. It
reasoned that since a child under nine (9) years could not
be held liable even for an intentional wrong, then the six-
year old Zhieneth could not be made to account for a
mere mischief or reckless act. It also absolved Criselda of
any negligence, finding nothing wrong or out of the
ordinary in momentarily allowing Zhieneth to walk while
she signed the document at the nearby counter.
The Court of Appeals awarded the following:
1. Php 50,000.00 by way of compensatory damages
for the death of Zhieneth Aguilar, with legal
interest (6% p.a.) from 27 April 1984;
2. Php 99,420.86 as reimbursement for
hospitalization expenses incurred; with legal
interest (6% p.a.) from 27 April 1984;
3. Php 100,000.00 as moral and exemplary
damages;
4. Php 20,000.00 in the concept of attorneys fees;
and
5. Costs.
PEOPLE v FALLORINA
Facts:
A trial court convicted the respondent of murder, qualified by
treachery and aggravated by abuse of public position for the
killing of an 11-year old boy. The prosecution in that case
alleged that he intentionally shot the victim for playing on the
rooftop of the carenderia. The defendant however denied the
allegation saying that it was no fault or intention on his part.
respondent alleged that his gun accidentally went off after
hitting the ground when he lost his balance thus hitting the
victim.
Issue:
WON the respondent can avail of the exempting circumstance
of Accident.
Ruling:
No, the respondent cannot claim accident as a defense.
1. He failed to prove his claim with clear and convincing
evidence (gun hitting the ground, hole on the roof evidences
that his gun went off accidentally)
*an accident is an occurrence that happens outside the sway
of our will and although it comes about through some act of
our will it lies beyond the bounds of humanly foreseeable
consequences thus if the consequences are plainly foreseeable
it will be a case of negligence
*elements of the exempting circumstance of accident:
1. person performing lawful act
2. WITH DUE CARE
3. causes injury by mere accident
4. without fault or intention of causing it
2. His refusal to surrender and hiding himself for 3 days to
prevent arrest belies his claim that the death of the victim was
accidental and that he was not negligent
3. His uttering of invectives at the victim and his playmate
before the victim was shot proves his act was deliberate
and intentional
PAL V. CA (1981)
SUMMARY: There was gross negligence by PAL for allowing
Capt. Bustamante to fly on that fateful day of the accident,
even if he was sick, having tumor on his nose. No one will
certify the fitness to fly a plane of one suffering from the
disease. One month prior to the crash-landing, when the pilot
was preparing to land in Daet, private respondent warned him
that they were not in the vicinity of Daet but above the town
of Ligao. The dizziness, headaches and general debility of
private respondent were after-effects of the crash-landing.
And therefore there is causal connection between the accident
and said after-effects. The negligence of PAL is clearly a quasi-
delict and therefore Art.2219(2) is applicable, justifying the
recovery of moral damages. Even from the standpoint of the
petitioner that there is an employee-employer relationship
between it and private respondent arising from the
contract of employment, private respondent is still
entitled to moral damages in view of the finding of bad faith or
malice, applying the provisions of Article 2220.
FACTS:
December 1950, he complained toPAL through its
authorized official about the slow reaction and poor
judgment of Captain Bustamante. Notwithstanding said
complaint, defendant allowed the pilot to continue flying.
January 8, 1951: Jesus V. Samson flew as co-pilot on a
regular flight from Manila to Legaspi with stops at Daet,
Camarines Norte and Camarines Sur, with Captain
Bustamante as commanding pilot of a PAL C-47 plane
on attempting to land the plane at Daet airport, Captain
Bustamante due to his very slow reaction and poor
judgment overshot the airfield and as a result,
notwithstanding the diligent efforts of the Samson to
avert an accident, the airplane crashlanded beyond the
runway; that the jolt caused the head of the plaintiff to hit
and break through the thick front windshield of the
airplane causing him severe brain concussion, wounds
and abrasions on the forehead with intense pain
instead of expert and proper medical treatment called for
by the nature and severity of his injuries, PAL simply
referred him to a company physician, a general medical
practitioner, who limited the treatment to the exterior
injuries without examining the severe brain concussion
several days after the accident, PAL called back the
Samson to active duty as co-pilot, and was never given
any examination
he had been having periodic dizzy spells and had been
suffering from general debility and nervousness
December 21, 1953: he was discharged due to
his physical disabilityCFI: PAL to pay the Samson
P1988,000.00 as unearned income or damages
P50,000.00 for moral damages
P20,000.00 as attorneys fees
P5,000.00 as expenses of litigation
CA: modified entitled to the legal rate of interest n
unearned income
ISSUE: W/N PAL was negligent and was liable extraordinary diligence as prescribed in Articles 1733 and
1755.

HELD:
YES. affirmed with slight modification in that the correct
amount of compensatory damages is P204,000.00
Even the doctors presented by PAL admit vital facts about
the brain injury. Dr. Bernardo and Dr. Reyes admits that
due to the incident, the plaintiff continuously complained
of his fainting spells, dizziness and headache everytime he
flew as a co-pilot and everytime he went to the clinic no
less than 25 times
We also find the imputation of gross negligence by
respondent court to PAL for having allowed Capt. Delfin
Bustamante to fly on that fateful day of the accident on
January 8, 1951 to be correct
Bustamante was sick. He admittedly had tumor of the
nasopharynx (nose)
The fact that the complaint was not in writing does not
detract anything from the seriousness thereof,
considering that a miscalculation would not only cause
the death of the crew but also of the passengers.
One month prior to the crash-landing, when the pilot was
preparing to land in Daet, plaintiff warned him that they
were not in the vicinity of Daet but above the town of
Ligao. The plane hit outside the airstrip. In another
instance, the pilot would hit the Mayon Volcano had not
Samson warned him.
At least, the law presumes the employer negligent
imposing upon it the burden of proving that it exercised
the diligence of a good father of a family in the supervision
of its employees.
PAL would want to tie Samson to the report he signed
about the crash-landing. The report was prepared by his
pilot and because the latter pleaded that he had a family
too and would have nowhere to go if he lost his job,
Samsons compassion would not upturn the truth about
the crash-landing
Article 2205 of the New Civil Code of the Philippines damages
may be recovered for loss or impairment of earning capacity in
cases of temporary or permanent personal injury."
Art. 1711. Owners of enterprises and other employers are
obliged to pay compensation for the death or injuries to their
laborers, workmen, mechanics or other employees, even
though the event may have been purely accidental or entirely
due to a fortuitous cause, if the death or personal injury arose
out of and in the course of the employment. The employer is
also liable for compensation if the employee contracts any
illness or disease caused by such employment or as the result
of the nature of the employment. If the mishap was due to the
employees own notorious negligence, or voluntary act, or
drunkenness, the employer shall not be liable for
compensation. When the employees lack of due care
contributed to his death or injury, the compensation shall be
equitably reduced.
Art. 1712. If the death or injury is due to the negligence of a
fellow-worker, the latter and the employer shall be solidarily
liable for compensation. If a fellow-workers intentional or
malicious act is the only cause of the death or injury, the
employer shall not be answerable, unless it should be shown
that the latter did not exercise due diligence in the selection or
supervision of the plaintiffs fellow-worker.
Articles 1169, 2209 and 2212 of the Civil Code govern when
interest shall be computed.
The correct amount of compensatory damages upon
which legal interest shall accrue from the filing of the
complaint is P204,000.00 as herein computed and not
P198,000.00

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 all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in Articles 1734, and 1745, Nos. 5, 6, and 7,
while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passenger
safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard
for all the circumstances.
Art. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed
La Mallorca v. CA, Beltran

FACTS:

Respondent Beltran spouses and their 3 minor daughters

boarded La Mallorca bus. Upon reaching Anao, Pampanga, bus
stopped to let passengers get off. The Beltran family alighted
and stayed on the pedestrian side of the road 4-5 meters away
from the bus. Mariano Beltran (father) went back to the bus to
get his other bayong but his daughter followed him
unnoticed by him.

The bus suddenly started to move forward without the

customary go signal from the conductor. Mariano Beltran
jumped from the running board of bus but his daughter was
run over and died.

The Beltran respondents filed suit for P6,000 to cover moral

damages and actual damages for the death of the child.

CA reversed RTC ruling and held plaintiff (petitioner) guilty of

quasi-delict and was liable for damages for negligence of their
driver and increased damages to P6,000 from P3,000 as per
RTC.

Issues:
Was La Mallorca guilty of quasi-delict and liable for damages?

Ruling:

YES. Relation of carrier and passenger does not cease at the

moment the passenger alights the carriers vehicle at a place
selected by the carrier at the point of destination BUT
continues until the passenger has had a reasonable time or a
reasonable opportunity to leave the carriers premises.
Reasonable time or delay is determined from circumstances.
The presence of said passengers near the bus was reasonable
and therefore, Beltran family was to be considered still as
passengers of La Mallorca bus and entitled to protection under
the contract of carriage.

The negligence of the employee (the driver) gave rise to the

presumption that La Mallorca did not exercise the diligence of
a good father of the family in the selection and supervision of
its employees.

Increasing the damages to P6,000 cannot be sustained as

respondents did not appeal monetary award for damages for
the death of their daughter.

Decision: La Mallorca was sentenced to pay P3,000 for moral

damages and P400 for actual damages for the death of the
child .