OBLIGATIONS AND CONTRACTS |

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Contents
Title 1 | Obligations.............................................................................................................................................................................................. 2
Chapter 1 | General Provisions........................................................................................................................................................................ 2
Art. 1156.................................................................................................................................................................................................... 2
Roman Law Origins...................................................................................................................................................................................... 2
Essential Elements....................................................................................................................................................................................... 2
Kinds............................................................................................................................................................................................................. 3
Sources of Obligation................................................................................................................................................................................... 3
Art. 1157.................................................................................................................................................................................................... 3
Exclusivity or Non-Exclusivity of Enumeration............................................................................................................................................ 3
Sagrada Orden v. Nacoco..................................................................................................................................................................... 3
Public Offers................................................................................................................................................................................................. 4
Law................................................................................................................................................................................................................ 4
Art. 1158.................................................................................................................................................................................................... 4
Contracts...................................................................................................................................................................................................... 4
Art. 1159.................................................................................................................................................................................................... 4
People’s Car Inc. v. Commando Security Agency................................................................................................................................4
Quasi-contracts............................................................................................................................................................................................ 5
Art. 1160.................................................................................................................................................................................................... 5
Crime/Delict.................................................................................................................................................................................................. 5
Art. 1161.................................................................................................................................................................................................... 5
Quasi-delicts................................................................................................................................................................................................. 5
Art. 1162.................................................................................................................................................................................................... 5
Jose Cangco v. Manila Railroad Co..................................................................................................................................................... 5
LRTA v. Navidad.................................................................................................................................................................................... 7
LG Foods Corporation v. Hon. Agraviador........................................................................................................................................... 9
Vicarious Liability....................................................................................................................................................................................... 10

Title 1 | Obligations Criticisms:

 Codes should refrain from defining and leave those to

Chapter 1 | General Provisions tribunals, treatises, and teachers.
Art. 1156  Definition is seen only from the debt side.
o “There is no debt without a credit, and the credit
An obligation is a juridical necessity to give, to do or not to do. is an asset in the patrimony of the creditor just as
(n) the debt is a liability of the obligor.”

Notes: Alternative Definitions:

 Resembles Art. 1088 of Spanish Civil Code:  Manresa: An obligation is a legal relation created between
o “Every obligation consists in giving, doing, or not one person (the creditor) and another (the debtor), in
doing a certain thing” which the latter is bound to comply with a prestation
 The definition stresses the element of a juridical necessity which the former has a right to demand from him.
by adopting Sanchez Roman’s short definition of  Ramos: A juridical relation whereby a person (called the
obligation. creditor) may demand from another (called the debtor) the
observance of a determinate conduct, and, in case of
breach, may obtain satisfaction from the assets of the
latter.
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 Diaz Pairo: A juridical relation whereby a person should Early Roman Society:
engage or refrain from engaging in a certain activity for
the satisfaction of the private interest of another who, in The term ligatio would be literal, debtor would be put to chains
case of non-fulfillment of such duty, may obtain from the upon breach, sold into slavery or even chopped to pieces.
patrimony of the former, through a proper judicial
proceeding, the very prestation due, or, in default thereof,
the economic value that it represents.
The law of obligations eventually evolved and became more
o Contains ALL the essential elements: subjects,
refined and humane.
prestation, remedy/right to seek resource.

Essential Elements
Characteristics of Obligations:
Four elements:
1. It represents an exclusively private interest.
2. It creates ties which are by nature transitory. 1) Active subject (creditor in obligations to give/obligee
 Because obligations are extinguished. But in obligations to do).
the period is relative; could be seconds (e.g., 2) Passive subject (debtor in obligations to give/obligor
buying coke) and could be years (e.g., in obligations to do).
partnership, lease). 3) Object (prestation).
3. It involves the power to make the juridical tie 4) Legal bond (vinculum juris).
defective in case of non-fulfillment through
satisfaction of the debtor’s property.

Active and Passive Subject:

Roman Law Origins

 Both elements 1 and 2 must be determinate or
determinable at the time of the constitution of the
Definition in the Institutes:
obligation.
 When determinate/determinable:
“An obligation is a legal tie, by which we are bound to the
o Subjects are completely and definitely identified
performance of something, in accordance with the laws of the
at the moment at the constitution of the
State.”
obligation.
o One party is determined at the time of the
constitution and the other is to be determined
Related Terms: subsequently in accordance with a criterion
Ligare To bind, tie, fasten. initially established.
Vinculum Chain, shackles, bond  At the time of the birth of the obligation,
Nexum An entwining or a fastening payee is not yet known but the
Contractus Drawing together obligation is valid.
Loosening of chains or o Subjects are determined on the basis of their
Solutio
simply means performance relation to a thing and changes based on
changes in ownership.

The terms used above all connote a bond or a tying together.

This is in keeping with the personal binding of a debtor to the
creditor.

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Kinds
Object or Prestation:
The three species of obligations:
 As to element 3, the object or prestation constitutes an
act, or conduct, or activity, or abstention. This is also  To give;
called an object of obligation.  To do; and
o E.g., in a contract of sale for a car, the delivery  Not to do.
itself is the object / prestation. The car is the o Subsumed the obligation “not to give.”
object of the prestation.

Personal vs. Real Obligations:

Requisites of an Object/a Prestation:
 Obligations to give are called real obligations.
1) Licit (Arts. 1347 and 1409 [1])  Obligations to do are called personal obligations.
2) Possible (Arts. 1348 and 1409[5])
3) Determinate or determinable (Arts. 1349 and 1409[6])
Sources of Obligation
Art. 1157
Vinculum Juris:
Obligations arise from:
 This is the central element; the very essence of an
obligation. (1) Law;
 What compels the debtor to perform. (2) Contracts;
 What makes the obligation demandable and enforceable (3) Quasi-contracts;
in the court of law. (4) Acts or omissions punished by law; and
 Entering into an obligation is voluntary, but to perform it is (5) Quasi-delicts. (1089a)
involuntary because of the binding and coercive force
provided by the vinculum juris.

Notes:

Other Elements: The Institutes had the quattuor species or four sources of
obligation
 Causa which refers to the reason for the obligation.
 Form which refers to the external manifestations or bases 1) Ex contractu (from contract);
from which the obligation arises. 2) Quasi ex contractu (from those resembling contract);
3) Ex maleficio (crime); and
4) Quasi ex maleficio (from those resembling crime).

Ang Yu v. CA summarized the elements into the

Exclusivity or Non-Exclusivity of Enumeration
following:
Sagrada Orden v. Nacoco
 Vinculum Juris (juridical tie) - efficient cause;
 Object – prestation or conduct required to be observed; Facts:
 Subject persons – active subject (obligor) and passive
subject (obligee).

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This is an action for recovery of a piece of real property and
the rentals for its occupation and use. The land belongs to the
plaintiff, in whose name the title was registered before the war.
Jan. 4, 1943: The land was acquired by Taiwan Tekkosho.
After liberation from the Japanese occupation, the Alien
Property Custodian of the USA (APC of USA) took possession,
control, and custody thereof based on the Trading with the
Enemy Act.
Under a custodianship agreement, the same property came to
the possession of Copra Export Mgt. Company (CEMC). The
same came to the possession of NACOCO after CEMC vacated
the property. NACOCO was authorized to do repairs on the
warehouse on the land. Defendant leased out part of the
warehouse to one Dioscoro Sarile.
Sagrada Orden brought an action to annul the sale to Taipei
Tekkosho and to recover possession. The trial did not happen
because the parties presented a joint petition that the sale was
void because it was executed under threats, duress, and
intimidation. It was therefore ordered that the title of Taipei
Tekkosho be cancelled and the title be reissued to the plaintiff.
NACOCO was also given a period upon which to recover its
equipment in the property.
The court also gave the plaintiff the right to recover from
NACOCO reasonable rentals for the use and occupation of the
premises.
The present action is for the recovery of reasonable rentals
from August 1946 to the date that the property was vacated.
Defendant:
 It does not contest the rate. Rather, it contests the
propriety of the award of recovery of rentals prior to Feb.
28, 1949 (the date specified in the judgment in Civil Case
No. 5007.
 It interposes a defense that it occupied the premises in
good faith, hence, is under no obligation to pay rent for its
use of occupation.
Judgment appealed from:
 Plaintiff’s right to recover rent form August 1946.
 Plaintiff has always been the owner of the property.
 APC of USA never acquired the right to the property. It was
only held in trust.
 The trial court also held that the defendant cannot have
better rights that its predecessor.
 Since the defendant has used the property and subleased
a portion of it, it must pay reasonable rentals.
Issue and Holding:
Is NACOCO liable to pay reasonable rent? NO.
NACOCO had use the property with the express permission of
the APC of USA.
Court stated that to be held liable, its obligations must arise
from any of the four sources of obligations, namely, law,
contract or quasi-contract, crime, or negligence based on
Article 1089 of the Spanish Civil Code.
There is no offense committed by the defendant evinced by
the permission granted to it.
There was also no negligence on its part.
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There is also no privity to the of contract or obligation as
between the APC of USA and Taiwan Tekkosho.
Notes:

 Law as ultimate source:

The Alien Property Administration had the control and o Law is the ultimate source of all obligations.
administration of the property not as successor to the o Without law, there is no legal tie.
interests of the enemy holder of the title, the Taiwan  Law as a proximate source:
Tekkosho, but by express provision of law. It is also not a o Law is both the sole ultimate source and one of
trustee of the plaintiff, but of the US Government. It had the various proximate sources of obligations.
absolute control of the property as trustee of the Government o Many obligations arise directly or proximately
of the US. from law.
o Examples:
 Tax obligations
 Arising from family relations (e.g.,
Court further discusses that it is unable to find a provision of marriage and filiation)
law or any principle of quasi-contract or of equity upon which  Law and administrative regulations
to base the claim. concerning the environment
 Labor laws
Defendant-appellant entered into possession without any  Election laws
expectation of liability for such use and occupation, it is only
fair and just that it may not be held liable therefor. And as to
the rents it collected from its lessee, the same should accrue Contracts
to it as a possessor in good faith, as this Court has already
expressly held.
Art. 1159

Obligations arising from contracts have the force of law

between the contracting parties and should be complied with
Public Offers in good faith. (1091a)

 A public promise of a reward, e.g. reward for returning a

lost thing.
 Are they legally binding?
Notes:
o They do not fall under any of the sources of
obligations.  Article fused the concept of stricti juris or pacta sunt
 German Code recognizes this (Auslobüng, “unilateral servanda (agreements should be complied with; taken
public promise”) as a source of obligation and binds the from jus civile) and bona fides (compliance in good faith,
offeror to pay the reward to anyone who performs the act. taken from jus honorarium).
 Acknowledged in the case of De la Rosa v. BPI, but the
Court assumed that there was a contract between the
parties.
Law Pacta sunt servanda: This refers to the principle that a contract
is a law between parties and that they shall be bound to
Art. 1158
comply with what they have agreed upon.

Obligations derived from law are not presumed. Only those

expressly determined in this Code or in special laws are
demandable, and shall be regulated by the precepts of the law
which establishes them; and as to what has not been foreseen,
by the provisions of this Book. (1090) Compliance in good faith:

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People’s Car Inc. v. Commando Security Agency
Facts:
Under a Guard Service Contract, Commando Security Agency
undertook "to safeguard and protect the business premises of
(plaintiff) from theft, pilferage, robbery, vandalism and all other
unlawful acts of any person or persons prejudicial to the
interest of (plaintiff)."
Apr. 5, 1970: Defendant’s security guard, without any authority,
consent, approval, knowledge, or orders, brought out of the
compound of the plaintiff a car belonging to one of its
customers, abandoning his post. While driving the car, he lost
control of it, causing the car to fall into a ditch.
As a result of the wrongful act, the car suffered extensive
damage in the amount of P7,079 besides the car rental value
of P1,410 for a car the plaintiff had to rent to make available
for the use of its customer.
Plaintiff: Invoked par. 5 of the contract. This means that
defendant assumed "sole responsibility for the acts done
during their watch hours" by its guards.
Defendant: Invoked par. 4. This states that its liability "shall not
exceed one thousand (P1,000.00) pesos per guard post."
Issue and Holding:
Should the liability of the defendant be based on par. 4? NO.
Par. 4 is inapplicable based on the stipulated facts of the case.
It specifically states that the defendant would answer for the
amount of loss that would be incurred through the negligence
of its guards. It also does not involve the property of the
plaintiff.
As plaintiff had duly discharged its liability to the third party,
its customer, Joseph Luy, for the undisputed damages of
P8,489.10 caused said customer, due to the wanton and
unlawful act of defendant's guard, defendant in turn was
clearly liable under the terms of par. 5 of their contract to
indemnify plaintiff in the same amount.
Plaintiff was in law liable to its customer for the damages
caused the customer's car, which had been entrusted into its
custody. Plaintiff therefore was in law justified in making
good such damages and relying in turn on defendant to honor
its contract and indemnify it for such undisputed damages,
which had been caused directly by the unlawful and wrongful
acts of defendant's security guard in breach of their contract.
As ordained in Article 1159, Civil Code, "obligations arising
from contracts have the force of law between the contracting
parties and should be complied with in good faith."
Quasi-contracts
Art. 1160
Obligations derived from quasi-contracts shall be subject to
the provisions of Chapter 1, Title XVII, of this Book. (n)
Notes:
 The provisions on quasi-contracts are found in Arts. 2142
to 2175 of the Civil Code.
 The Spanish Civil Code recognizes two kinds of quasi
contracts:
o Negotiorum Gestio (inofficious manager): Those
who take charge of the property or business of
another without any power or authority from the
latter is obliged to continue it.
o Solutio Indebiti (payment of what is not due):
Those receive something when they have no right
to demand it is obliged to make restitution or
return it.
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Culpa Aquiliana, Culpa Contractual, Civil Liability from Crime:
Crime/Delict Overlapping Concepts & Resulting Problems:

Art. 1161 Jose Cangco v. Manila Railroad Co.

Civil obligations arising from criminal offenses shall be Facts:

governed by the penal laws, subject to the provisions of Article
Cangco, was employed by Manila Railroad Company as clerk.
2177, and of the pertinent provisions of Chapter 2, Preliminary
He lived in San Mateo, Rizal, located upon the line of the
Title, on Human Relations, and of Title XVIII of this Book,
defendant railroad company. He rode daily by train to the
regulating damages. (1092a)
company's office in Manila, used a train pass, supplied by the
company.

Notes:

On Jan. 20, 1915, on his way to work at 7-8 pm, he arose from
 See Rule 111 (Prosecution of Civil Action) of the Revised
his seat in the second class-car and, making, his exit through
Rules of Criminal Procedure.
the door, took his position upon the steps of the coach, seizing
 Crime (except those termed as victimless crimes) have
the upright guardrail with his right hand for support.
two aspects:
o Public: It is an offense against the Sovereign,
Cangco stepped off from train to platform, but one or both of
which through its ancient and elaborate system
his feet came in contact with a sack of watermelons (placed
of criminal justice metes out punishment.
there for delivery to the market because it was watermelon
o Private: It is within the bound of civil law and is
season and claimed he did not see it as the accident happened
concerned with civil indemnification of the civil
between 7-8 pm), his feet slipped, and he fell violently on the
liability.
platform. He rolled from the platform and was drawn under the
 Art. 100 of the Revised Penal Code states that “[e]very
moving car, where his right arm was badly crushed and
person criminally liable for a felony is also civilly liable.”
lacerated. The car moved forward six meters before it came to
o When a crime results to an injury to a person or
a full stop.
property, the injured party may seek redress for
the injury done.
o Cause of action would be the civil action arising
from the crime. Cangco was drawn from under the car unconscious. He was
 NB: In certain cases, the same felonious act can result to a brought to a hospital in Manila where his arm was amputated.
quasi-delict or a breach of contract. The result was unsatisfactory, and he was carried to another
o The injured party can elect which cause of action hospital where the member was again amputated higher up
to pursue, but subject to the restriction for double near the shoulder. He expended the sum of P790.25 in
or multiple recovery. medical and surgical fees and for other expenses in
connection with the process of his curation.

Quasi-delicts
Art. 1162
CFI, in plaintiff’s case for damages, ruled that although
negligence was attributable to the defendant by reason of the
Obligations derived from quasi-delicts shall be governed by the
fact that the sacks of melons were so placed as to obstruct
provisions of Chapter 2, Title XVII of this Book, and by special
passengers passing to and from the cars, nevertheless, the
laws. (1093a)
plaintiff himself had failed to use due caution in alighting from
the coach and was therefore precluded form recovering.

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Issue and Holding:
Is the respondent liable for damages? YES, directly from the
defendant.
The foundation of the legal liability of the defendant is the
contract of carriage, and that the obligation to respond for the
damage which plaintiff has suffered arises, if at all, from the
breach of that contract by reason of the failure of defendant to
exercise due care in its performance. That is to say, its liability
is direct and immediate, differing essentially, in legal viewpoint
from that presumptive responsibility for the negligence of its
servants, imposed by article 1903 of the Civil Code, which can
be rebutted by proof of the exercise of due care in their
selection and supervision.
 In other words, Article 1903 of the Civil Code is not
applicable to obligations arising ex contractu, but only to
extra-contractual obligations — or to use the technical
form of expression, that article relates only to culpa
aquiliana and not to culpa contractual.
Every legal obligation must of necessity be extra-contractual
or contractual.
Extra-contractual obligation has its source in the breach or
omission of those mutual duties which civilized society
imposes upon it members, or which arise from these relations,
other than contractual, of certain members of society to others,
generally embraced in the concept of status. Breach of these
general duties whether due to willful intent or to mere
inattention, if productive of injury, give rise to an obligation to
indemnify the injured party.
 The fundamental distinction between obligations of this
character and those which arise from contract, rests upon
the fact that in cases of non-contractual obligation it is
the wrongful or negligent act or omission itself which
creates the vinculum juris, whereas in contractual
relations the vinculum exists independently of the breach
of the voluntary duty assumed by the parties when
entering into the contractual relation.
The position of a natural or juridical person who has
undertaken by contract to render service to another (as in this
case), is wholly different from that to which article 1903
relates.
 When the sources of the obligation upon which plaintiff's
cause of action depends is a negligent act or omission,
the burden of proof rests upon plaintiff to prove the
negligence — if he does not his action fails. But when the
facts averred show a contractual undertaking by
defendant for the benefit of plaintiff, and it is alleged that
plaintiff has failed or refused to perform the contract, it is
not necessary for plaintiff to specify in his pleadings
whether the breach of the contract is due to willful fault
or to negligence on the part of the defendant, or of his
servants or agents. Proof of the contract and of its
nonperformance is sufficient prima facie to warrant a
recovery.
As it is not necessary for the plaintiff in an action for the
breach of a contract to show that the breach was due to the
negligent conduct of defendant or of his servants, even
though such be in fact the actual cause of the breach, it is
obvious that proof on the part of defendant that the
negligence or omission of his servants or agents caused the
breach of the contract would not constitute a defense to the
action. If the negligence of servants or agents could be
invoked as a means of discharging the liability arising from
contract, the anomalous result would be that person acting
through the medium of agents or servants in the performance
of their contracts, would be in a better position than those
acting in person.
As held in various cases previously decided by the Court, in no
case has the court ever decided that the negligence of the
defendant's servants has been held to constitute a defense to
an action for damages for breach of contract.
 The contract of defendant to transport plaintiff carried
with it, by implication, the duty to carry him in safety and
to provide safe means of entering and leaving its trains
(Art. 1258). That duty, being contractual, was direct and
immediate, and its non-performance could not be excused
by proof that the fault was morally imputable to
defendant's servants.
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 We are of the opinion that a fair compensation for the
damage suffered by him for his permanent disability is
[Not relevant to the topic] the sum of P2,500, and that he is also entitled to recover
of defendant the additional sum of P790.25 for medical
It may be admitted that had plaintiff waited until the train had attention, hospital services, and other incidental
come to a full stop before alighting, the particular injury expenditures connected with the treatment of his injuries.
suffered by him could not have occurred.

In this particular instance, that the train was barely moving

when plaintiff alighted is shown conclusively by the fact that it LRTA v. Navidad
came to stop within six meters from the place where he
stepped from it. Thousands of person alight from trains under Facts:
these conditions every day of the year, and sustain no injury
Oct 14, 1993: At about 7:30 PM, Nicanor Navidad, then drunk,
where the company has kept its platform free from dangerous
entered the EDSA LRT station after buying a token. While
obstructions. There is no reason to believe that plaintiff would
standing on the platform, Junelito Escartin, the security guard
have suffered any injury whatever in alighting as he did had it
assigned to the area approached Nicanor.
not been for defendant's negligent failure to perform its duty
to provide a safe alighting place.

An altercation/misunderstanding between the two ensued and

led into a fist fight. No evidence was adduced as to who
The test by which to determine whether the passenger has
started the fight, who between the two gave the first blow or
been guilty of negligence in attempting to alight from a
how Nicanor fell on the tracks.
moving railway train, is that of ordinary or reasonable care. It
is to be considered whether an ordinarily prudent person, of the
age, sex and condition of the passenger, would have acted as
the passenger acted under the circumstances disclosed by the
At the exact moment that Nicanor fell, an LRT train, operated
evidence. This care has been defined to be, not the care which
by Rodolfo Roman, was coming in. The train hit Nicanor and
may or should be used by the prudent man generally, but the
killed him.
care which a man of ordinary prudence would use under
similar circumstances, to avoid injury." (Thompson,
Commentaries on Negligence, Vol. 3, Sec. 3010.)
The heirs of Nicanor (his wife and children) filed a complaint
 In determining the question of contributory negligence in for damages against Escartin, Roman, LRTA, Metro Transit,
performing such act — that is to say, whether the and Prudent (Security Agency of Escartin), for the death of
passenger acted prudently or recklessly — the age, sex, Nicanor.
and physical condition of the passenger are
circumstances necessarily affecting the safety of the
passenger, and should be considered.
The trial court held Prudent and Escartin liable.

The evidence shows that the plaintiff, at the time of the

accident, was earning P25 a month as a copyist clerk, and that
the injuries he has suffered have permanently disabled him
from continuing that employment. His expectancy of life,
according to the standard mortality tables, is approximately
thirty-three years.
CA modified by exonerating Prudent and Escartin and holding
LRTA and Roman liable.
 There was nothing to link the security agency to the death
of Navidad. It failed to show that Escartin inflicted fist
blows upon the victim and the evidence merely
established the fact of death of Navidad by reason of his
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having been hit by the train owned and managed by the
LRTA and operated at the time by Roman.
 It ruled that the contract of carriage had already existed
when Navidad entered the place where passengers were
supposed to be after paying the fare and getting the
corresponding token therefor.
 Failed to show expert evidence to establish the fact that
the application of emergency brakes could not have
stopped the train.
Issue and Holding:
W/N LRTA was already bound by a contract of carriage. YES.
Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the
trip but for so long as the passengers are within its premises
and where they ought to be in pursuance to the contract of
carriage.
Statutory provisions render a common carrier liable for death
of or injury to passengers through the negligence or willful
acts of its employees or on account of willful acts or
negligence of other passengers or of strangers if the common
carrier’s employees through the exercise of due diligence
could have prevented or stopped the act or omission.
In case of such death or injury, a carrier is presumed to have
been at fault or been negligent, and by simple proof of injury,
the passenger is relieved of the duty to still establish the fault
or negligence of the carrier or of its employees and the
burden shifts upon the carrier to prove that the injury is due to
an unforeseen event or to force majeure.
Herein, Navidad, having paid his token, was already on the
station where the train is supposed to make nest, and thus
was in a contract of carriage with LRTA.
In the discharge of its commitment to ensure the safety of
passengers, a carrier may choose to hire its own employees or
avail itself of the services of an outsider or an independent
firm to undertake the task. LRTA failed to exercise the high
diligence required of the common carrier.
W/N Prudent (Security Agency) bears liability. NO.
The Court is concluded by the findings of fact by the CA which
it found no reason to review nor reverse.
If at all, that liability could only be for tort under the provisions
of Article 2176 and related provisions, in conjunction with
Article 2180. The employer’s liability is negligence or fault on
the part of the employee Once such fault is established, the
employer can then be made liable on the basis of the
presumption juris tantum that the employer failed to exercise
diligentissimi patris familias in the selection and supervision
of its employees. The liability is primary and can only be
negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been
shown
The liability of a common carrier and an independent
contractor is solidary. “In fine, a liability for tort may arise even
under a contract, where tort is that which breaches the
contract. Stated differently, when an act which constitutes a
breach of contract would have itself constituted the source of
a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort,
thereby allowing the rules on tort to apply.”
W/N Rodolfo (train driver) bears liability. NO.
There was no showing Rodolfo himself is guilty of any
culpable act or omission.
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The contractual tie between the LRT and Navidad is not itself
a juridical relation between the latter and Roman; thus, Roman
can be made liable only for his own fault or negligence.
W/N the award of nominal damages is proper. NO.
Nominal damages cannot co-exist with compensatory
damages.
Outline-Compendium of Rules Governing Overlap of Culpa
Contractual, Culpa Aquiliana, and Civil Liability Arising from
Delict:
Assume the hypothetical problem which posits that a
passenger of a bus has suffered injury. The passenger has the
option of suing under the three causes of action:
1) Breach of contract/culpa contractual
2) Quasi-delict/culpa aquiliana
3) Civil liability arising from crime/delito o falta
Culpa Contractual:
 Who should be sued: The employer/owner/operator alone
should alone be sued.
o The employee/driver cannot be held liable.
 FGU v. Sarmiento:
o The mere proof of existence of the contract
justifies a corresponding right of relief.
o A breach confers upon the injured party a valid
cause for recovery of what has been lost or
suffered.
o The employee cannot be ordered to pay the
injured party because the driver is not a party to
the contract of carriage, and thus cannot be held
liable under the agreement since a contract can
only bind the parties who have entered into it.
 Res inter alios acta aliis neque nocet
prodest.
 Hence, a civil action as against the
driver can only be based on culpa
aquiliana. This would require proof of
negligence or fault on the part of the
defendant.
 Quantum of proof required: Mere breach raises a
rebuttable presumption of fault or negligence.
o Fortuitous event as a ground for exculpation is a
matter of defense and should be proved.
 RCPI v. Verchez:
o Breach of contract is what the liability is
anchored on, thus there is presumption of
negligence or fault.
Culpa Aquiliana:
 Who should be sued: Against the employer alone, the
employee alone, or both of them as solidary obligors.
 Cerezo v. Tuazon:
o There is an expeditious way to make the liability
effective. This would be based on Art. 2180
which allows for the injured party to sue the
employer for primary and direct responsibility.
 Quantum of proof required: Employee’s fault or negligence
must be proved with preponderance of evidence.
o The employer’s fault or negligence is disputably
presumed.
 He may be liable through either culpa in
eligendo (negligence in selection) or
culpa in vigilando (negligence in
supervision).
 Mercury Drug v. De Leon:
o The presumption is rebutted by a clear showing
that the employer has exercised the care and
diligence of a good father of the family.
 Yambao v. Zuñiga:
o The rebuttal mist be of adequate and convincing
proof of the exercise of care and diligence of a
good father of a family in selection and
supervision.
Delito o Culpa:
 Who should be sued: The employee should be sued, since
he is the person sought to be held criminally liable.
o A final conviction shall make him liable for the
civil liability arising from the crime.
o Insolvency would cause the employer to pay the
civil indemnity.
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 This liability is a subsidiary liability but
absolute. It cannot be evaded through
proof of diligence in selection or
supervision.
 Quantum of proof required: There must be proof beyond
reasonable doubt.
Distinction Between Civil Liability Arising from Culpa Aquiliana
and from Delict:
LG Foods Corporation v. Hon. Agraviador
Facts:
Feb. 26, 1996: Charles, 7-year-old son of respondent spouses
Vallejera, died after being hit by a Ford Fiera van owned by
petitioners and driven by their employee, Vincent Norman
Yeneza.
Yeneza was charged with “Reckless Imprudence Resulting to
Homicide” but before the trial concluded, he committed
suicide. Bacolod City MTCC dismissed the criminal case.
Jun. 23, 1999: Spouses Vallejera filed a complaint for damages
(civil case) at Bacolod City RTC against petitioners as
employers of the deceased driver, alleging that as employers,
they failed to exercise due diligence in the selection and
supervision of their employees.
Defendants denied liability for the death of the Vallejeras' son,
claiming that they had exercised the required due diligence in
the selection and supervision of their employees.
Defendants filed a Motion to Dismiss, arguing that the
complaint is basically a "claim for subsidiary liability against
an employer" under Art. 103 of RPC. Hence, there must first be
a judgment of conviction against their driver as a condition to
hold them liable. Since the driver died during the pendency of
the criminal action, the sine qua non condition for their
subsidiary liability was not fulfilled, hence the lack of cause of
action on the part of the plaintiffs.
Defendants also argue that since the plaintiffs did not make a
reservation to institute a separate action for damages when
the criminal case was filed, the damage suit in question is
deemed instituted with the criminal action, which was already
dismissed.
Sep. 4, 2001: Bacolod City RTC denied Motion to Dismiss.
Petitioners filed for certiorari at CA.
Apr. 25, 2003: CA denied the petition for certiorari and upheld
the trial court’s order.
CA: The complaint neither represents nor implies that the
responsibility charged was the petitioner's subsidiary liability
under Art. 103 of RPC. It does not allege the basic elements for
such a liability (the conviction of the accused employee and his
insolvency).
In fact, a civil action to enforce subsidiary liability separate and
distinct from the criminal action would be unnecessary.
Vallejeras’ complaint for damages exacts responsibility for
fault or negligence under Art. 2176 of the Civil Code, which is
entirely separate and distinct from the civil liability arising
from negligence under Art. 103 of the Revised Penal Code.
Verily, therefore, the liability under Art. 2180, Civil Code, is
direct and immediate, and not conditioned upon prior recourse
against the negligent employee or prior showing of the latter's
insolvency.
Issue and Holding:
W/N Vallejeres’ cause of action in their complaint for damage is
founded on Art. 103 of the Revised Penal Code (delict) or
derived from Art. 2180 of the Civil Code (quasi-delict). ART.
2180 OF CIVIL CODE (QUASI-DELICT).
Upon examination of spouses Vallejeres’ complaint for
damages, none of its allegations suggest, even remotely, that
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petitioners are being made to account for their subsidiary
liability under Art. 103 of RPC.
As correctly pointed out by both the RTC and CA, the complaint
did not even aver the basic elements for the subsidiary
liability of an employer under Article 103, such as the prior
conviction of the driver in the criminal case filed against him
nor his insolvency.
While the complaint did not explicitly state that Vallejeras were
suing the defendants for damages based on quasi-delict, it is
clear from the allegations of the complaint that quasi-delict
was their choice of remedy against petitioners.
The complaint only alleged as follows:
 That the mishap was due to the gross fault and negligence
of defendant's employee, who drove said vehicle,
recklessly, negligently and at a high speed without regard
to traffic condition and safety of other road users and
likewise to the fault and negligence of the owner
employer, herein defendants LG Food Corporation who
failed to exercise due diligence in the selection and
supervision of his employee, Vincent Norman Yeneza y
Ferrer;
 That defendant LG Foods Corporation is civilly liable for
the negligence/imprudence of its employee since it failed
to exercise the necessary diligence required of a good
father of the family in the selection and supervision of his
employee, Vincent Norman Yeneza y Ferrer which
diligence if exercised, would have prevented said incident.
An act or omission causing damage to another may give rise to
two separate civil liabilities on the part of offender. Victims of
negligence or their heirs have a choice between:
(1) Action to enforce civil liability arising from crime (culpa
criminal) under Art. 100 of RPC,
(2) Action for quasi-delict (culpa aquiliana) under Art. 2176 to
2194 of Civil Code.
The choice is with the plaintiff and not with the defendant who
cannot ask for the dismissal of the plaintiff's cause of action
based on the defendant's perception that the plaintiff should
have opted to file a claim under Article 103 of RPC.
If the action chosen is for culpa criminal, the plaintiff can hold
the employer subsidiarilly liable only upon proof of prior
conviction of its employee and the convicted employees’
insolvency.
On the other hand, if, as in the present case, the action chosen
is for quasi-delict, the liability of the employer is direct or
immediate. It is not conditioned upon prior recourse against
the negligent employee and a prior showing of insolvency of
such employee. The plaintiff may hold the employer liable for
the negligent act of its employee, subject to the employer's
defense of exercise of the diligence of a good father of the
family.
Here, the complaint sufficiently alleged that the death of the
couple's minor son was caused by the negligent act of the
petitioners' driver; and that the petitioners themselves were
civilly liable for the negligence of their driver for failing "to
exercise the necessary diligence required of a good father of
the family in the selection and supervision of [their] employee,
the driver, which diligence, if exercised, would have prevented
said accident."
The obligation imposed by Article 2176 is demandable not
only for one's own acts or omissions, but also for those of
persons for whom one is responsible. Thus, the employer is
liable for damages caused by his employees and household
helpers acting within the scope of their assigned tasks, even
though the former is not engaged in any business or industry.
SC also notes that petitioners’ repeated mention of Art. 2180
of the Civil Code and defense that "they had exercised due
diligence in the selection and supervision of [their]
employees" is an acknowledgment that the respondents'
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cause of action is one for quasi-delict under Art. 2180 of the
Civil Code and not under Art. 103 of RPC.

Petitioners' reliance on Maniago v. CA to argue that the

complaint should have been dismissed for the spouses
Vallejeras’ failure to make a reservation to institute a separate
civil action for damages when the criminal case against the
driver was filed is obviously misplaced.

In Maniago, the civil case was filed while the criminal case
against the employee was still pending. Here, the criminal case
against the employee driver was prematurely terminated due to
his death – meaning the case was dismissed without any
pronouncement having been made therein. It is as if there was
no criminal case to speak of in the first place. And for the
petitioners to insist for the conviction of their driver as a
condition sine qua non to hold them liable for damages is to
ask for the impossible.

Damages:

 The extent and kind of damage shall depend on the cause

of action chosen.
 Six categories: (1) actual, (2) moral, (3) nominal, (4)
temperate, (5) liquidated, and (6) exemplary.

Vicarious Liability

 Quasi-delictual liability of employers in cases of injury or

damage caused by the fault or negligence of their
employees
 The rationale is explained in Victory Liner v Heirs of
Malecdan:
o This is a deliberate allocation of a risk.
o They are placed upon the employer because the
tort is sure to happen in the conduct of the
employer’s enterprise and that the employer is
better able to absorb the liability.
o This would result in the greatest incentive to the
employer to be careful of the selection,
instruction, and supervision of employees.

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