ARTICLES 1156-1177-page1

Ang Yu Asuncion vs CA
G.R. No. 109125, December 2, 1994
FACTS:
Petitioners allege that they are tenants or lessees of residential and commercial saces o!ned by
defendants in "ngin #treet, $inondo, %anila since 19&5 and that on se'eral occasions before "ctober 9,
19(), defendants informed laintiffs that they are offering to sell the remises and are gi'ing them
riority to ac*+ire the same. D+ring the negotiations, $obby ,+ -n.ieng offered a rice of P)/million
!hile etitioners made a co+nter offer of P5/million. "n "ctober 24, 19(), etitioners as0ed the
resondents to secify the terms and conditions of the offer to sell. Petitioners no! raise that since
resondents failed to secify the terms and conditions of the offer to sell and beca+se of information
recei'ed that the latter !ere abo+t to sell the roerty, laintiffs !ere comelled to file the comlaint to
comel defendants to sell the roerty to them.
1he trial co+rt fo+nd that the resondents2 offer to sell !as ne'er acceted by the etitioners for the
reason that they did not agree +on the terms and conditions of the roosed sale, hence, there !as no
contract of sale at all. 1he ,o+rt of 3eals affirmed the decision of the lo!er co+rt. 1his decision !as
bro+ght to the #+reme ,o+rt by etition for re'ie! on certiorari !hich s+bse*+ently denied the aeal
on %ay ), 1991 4for ins+fficiency in form and s+bstance5.
"n No'ember 15, 1990, !hile ,3/G.R. ,6 No. 2112& !as ending consideration by this ,o+rt, the ,+
-n.ieng so+ses e7ec+ted a Deed of #ale transferring the roerty in *+estion to herein resondent $+en
Realty and De'eloment ,ororation, for P15,000,000.00. "n 8+ly 1, 1991, resondent as the ne! o!ner
of the s+b.ect roerty !rote a letter to the etitioners demanding that the latter 'acate the remises. "n
8+ly 1), 1991, the etitioners !rote a rely to resondent cororation stating that the latter bro+ght the
roerty s+b.ect to the notice of lis endens regarding ,i'il ,ase No. (9/4105( annotated on 1,1 No.
105254:1/((1 in the name of the ,+ -n.iengs.
1he lessees filed a %otion for ;7ec+tion dated 3+g+st 29, 1991 of the Decision in ,i'il ,ase No. (9/
4105( as modified by the ,o+rt of 3eals in ,3/G.R. ,6 No. 2112&.
"n 3+g+st &0, 1991, the R1, ordered the ,+ -n.iengs to e7ec+te the necessary Deed of #ale of the
roerty in litigation in fa'or of laintiffs 3ng <+ 3s+ncion, =eh 1iong and 3rth+r Go for the
consideration of P15 %illion esos in recognition of etitioners2 right of first ref+sal and that a ne!
1ransfer ,ertificate of 1itle be iss+ed in fa'or of the b+yer. 1he co+rt also set aside the title iss+ed to
$+en Realty ,ororation for ha'ing been e7ec+ted in bad faith. "n #etember 22, 1991, the 8+dge iss+ed
a !rit of e7ec+tion.
"n 04 December 1991, the aellate co+rt, on aeal to it by ri'ate resondent, set aside and declared
!itho+t force and effect the abo'e *+estioned orders of the co+rt a *+o.
ISSUE:
>hether or not $+en Realty can be bo+nd by the !rit of e7ec+tion by 'irt+e of the notice of lis endens,
carried o'er on 1,1 No. 195(1) iss+ed in the name of $+en Realty, at the time of the latter2s +rchase of
the roerty on 15 No'ember 1991 from the ,+ -n.iengs.
HELD:
>e affirm the decision of the aellate co+rt.
?n the la! on sales, the so/called 4right of first ref+sal5 is an inno'ati'e .+ridical relation. Needless to
oint o+t, it cannot be deemed a erfected contract of sale +nder 3rticle 145( of the ,i'il ,ode.
?n a right of first ref+sal, !hile the ob.ect might be made determinate, the e7ercise of the right, ho!e'er,
!o+ld be deendent not only on the grantor2s e'ent+al intention to enter into a binding .+ridical relation
!ith another b+t also on terms, incl+ding the rice, that ob'io+sly are yet to be later firmed +. Prior
thereto, it can at best be so described as merely belonging to a class of rearatory .+ridical relations
go'erned not by contracts @since the essential elements to establish the 'inc+l+m .+ris !o+ld still be
indefinite and inconcl+si'eA b+t by, among other la!s of general alication, the ertinent scattered
ro'isions of the ,i'il ,ode on h+man cond+ct.
1he final .+dgment in ,i'il ,ase No. (9/4105(, it m+st be stressed, has merely accorded a 4right of first
ref+sal5 in fa'or of etitioners. 1he conse*+ence of s+ch a declaration entails no more than !hat has
heretofore been said. ?n fine, if, as it is here so con'eyed to +s, etitioners are aggrie'ed by the fail+re of
ri'ate resondents to honor the right of first ref+sal, the remedy is not a !rit of e7ec+tion on the
.+dgment, since there is none to e7ec+te, b+t an action for damages in a roer for+m for the +rose.
B+rthermore, $+en Realty, not ha'ing been imleaded in ,i'il ,ase No. (9/4105(, cannot be held s+b.ect
to the !rit of e7ec+tion iss+ed by resondent 8+dge, let alone o+sted from the o!nershi and ossession
of the roerty, !itho+t first being d+ly afforded its day in co+rt.
LDT v! aguio
Fac"s:
1. 1elecoms comany PCD1 @PetitionerA has 29 e7changes and resondent Pag+io !as the head of the
Garnet ;7change. 1he etitioner cond+cted a erformance e'al+ation !hich !as criticiDed by the
resondent d+e to an alleged +nfair criteria +sed. Desite this, Garnet e7change obtained the to rating.
#+bse*+ently, Pag+io !as transferred to another center based on a finding of ins+bordination. 3ggrie'ed,
resondent filed a comlaint for illegal dismissal !hich !as later amended to one for illegal demotion.
Cabor 3rbiterE Dismissed the comlaint and +held the 'alidity of the transfer
NCR,E Re'ersed the C3 decision and held that the transfer is +nla!f+l
,3E 3ffirmed.
#! Fence this etition. Petitioner contended that the transfer !as not a demotion.
Issue: >:N there !as a 'alid transfer
RULI$%: No, the transfer constit+tes a demotion. 1he e7ercise of management rerogati'e has its limits.
?t cannot be +tiliDed to circ+m'ent the la!s and +blic olicy on labor and social .+stice. ?t m+st be
e7ercised !ith fair lay and .+stice. 1he emloyer m+st sho! that the transfer is not +nreasonable,
incon'enient or re.+dicial to the emloyee. Not does it in'ol'e a demotion in the ran0 or dimin+tion of
salaries or other benefits.
S&LEDAD CARI& '! LE&$&RA 'AL(&$TE
GR No. 151())
#etember 9, 2004
FACTS:
Resondent Ceonora 6almonte is a !edding coordinator. %ichelle del Rosarioand 8on #ierra engaged her
ser'ices for their ch+rch !eddinng on "ctober 10, 199). 3tabo+t 4&0 m on that day, 6almonte !ent to
the %anila Fotel and !hen she arri'ed at#+ite &2)/3, se'eral ersons !ere already there incl+ding
#oledad ,ario, the a+nt of the bride.
3fter reorting to the bride, 6almonte !ent o+t of the s+ite to go to the recetionhall to gi'e the meal
allo!ance to the band and to ay the s+liers. -on entering thes+ite, 6almonte noticed the eole
staring at her and it !as at this .+nct+re that #oledad,ario allegedly +ttered the follo!ing !ords to
6almonteE G ?0a! lang ang l+mabas ng0!arto, nasaan ang dala mong bagH #aan 0a +m+ntaH ?0a! lang
ang l+mabas ng 0!arto,i0a! ang 0+m+ha.G ?t t+rned o+t that after 6almonte left the room to attend to her
d+ties, etitioner disco'ered that the ieces of .e!elry !hich she laced inside the comfort roomin a
aer bag !ere lost and these incl+de diamond rings, earrings, bracelet and diamongnec0lace !ith a total
'al+e of abo+t 1% esos. 6almonte !as allegedly bodily searched,interrogated and trailed by the olice
officers, b+t the etitioner 0et on saying the !ordsG #iya lang ang l+mabas ng 0!arto G. 6almonteIs car
!as also searched b+t the searchyielded nothing.
Be! days after the incident, etitioner recei'ed a letter from 6almonte demandinga formal letter of
aology !hich she !anted to be circ+lated to the ne!ly!edsI relati'esand g+ests to redeem her smeared
re+tation b+t the etitioner did not resond. 6almontefiled a s+it for damages.
1he trial co+rt dismissed the comlaint and r+led that !hen so+ght in'estigationfor the loss of her
.e!elry, she !as merely e7ercising her right and if damage res+lts froma erson e7ercising his legal right,
it is damn+m abs*+e in.+ria. ?t added that no roof !as resented by 6almonte to sho! that etitioner
acted malicio+sly and in bad faith in ointing to her as the c+lrit.
1he ,3 r+led o+t differently and oined that 6almonte has clearly establishedthat she !as singled o+t by
the etitioner as the one resonsible for the loss of her .e!elry. Fo!e'er, the co+rt find no s+fficient
e'idence to .+stify the a!ard of act+aldamages.Fence, this etition.
Regino v angasinan Co))ege o* Science an+ Tec,no)og-
FACTS:
Petitioner =hristine Rea %. Regino !as a first year com+ter science st+dent at Resondent Pangasinan
,olleges of #cience and 1echnology @P,#1A. Reared in a oor family, Regino !ent to college mainly
thro+gh the financial s+ort of her relati'es. D+ring the second semester of school year 2001/2002, she
enrolled in logic and statistics s+b.ects +nder Resondents Rachelle 3. Gam+rot and ;lissa $aladad,
resecti'ely, as teachers.
?n Bebr+ary 2002, P,#1 held a f+nd raising camaign d+bbed the 4Ra'e Party and Dance Re'ol+tion,5
the roceeds of !hich !ere to go to the constr+ction of the school2s tennis and 'olleyball co+rts. ;ach
st+dent !as re*+ired to ay for t!o tic0ets at the rice of P100 each. 1he ro.ect !as allegedly
imlemented by recomensing st+dents !ho +rchased tic0ets !ith additional oints in their test scoresJ
those !ho ref+sed to ay !ere denied the oort+nity to ta0e the final e7aminations.
Binancially straed and rohibited by her religion from attending dance arties and celebrations, Regino
ref+sed to ay for the tic0ets. "n %arch 14 and %arch 15, 2002, the sched+led dates of the final
e7aminations in logic and statistics, her teachers // Resondents Rachelle 3. Gam+rot and ;lissa $aladad
// allegedly disallo!ed her from ta0ing the tests. 3ccording to etitioner, Gam+rot made her sit o+t her
logic class !hile her classmates !ere ta0ing their e7aminations. 1he ne7t day, $aladad, after anno+ncing
to the entire class that she !as not ermitting etitioner and another st+dent to ta0e their statistics
e7aminations for failing to ay for their tic0ets, allegedly e.ected them from the classroom. Petitioner2s
leas ostensibly !ent +nheeded by Gam+rot and $aladad, !ho +nrelentingly defended their ositions as
comliance !ith P,#12s olicy.
"n 3ril 25, 2002, etitioner filed, as a a+er litigant, a ,omlaintK5L for damages against P,#1,
Gam+rot and $aladad. ?n her ,omlaint, she rayed for P500,000 as nominal damagesJ P500,000 as
moral damagesJ at least P1,000,000 as e7emlary damagesJ P250,000 as act+al damagesJ l+s the costs of
litigation and attorney2s fees.
"n %ay &0, 2002, resondents filed a %otion to DismissK)L on the gro+nd of etitioner2s fail+re to
e7ha+st administrati'e remedies. 3ccording to resondents, the *+estion raised in'ol'ed the
determination of the !isdom of an administrati'e olicy of the P,#1J hence, the case sho+ld ha'e been
initiated before the roer administrati'e body, the ,ommission of Figher ;d+cation @,F;DA.
?n her ,omment to resondents2 %otion, etitioner arg+ed that rior e7ha+stion of administrati'e
remedies !as +nnecessary, beca+se her action !as not administrati'e in nat+re, b+t one +rely for
damages arising from resondents2 breach of the la!s on h+man relations. 3s s+ch, .+risdiction lay !ith
the co+rts.
"n 8+ly 12, 2002, the R1, dismissed the ,omlaint for lac0 of ca+se of action.
ISSUES:
4>hether or not the rincile of e7ha+stion of administrati'e remedies alies in a ci'il action
e7cl+si'ely for damages based on 'iolation of the h+man relation ro'isions of the ,i'il ,ode, filed by a
st+dent against her former school.
4>hether or not there is a need for rior declaration of in'alidity of a certain school administrati'e olicy
by the ,ommission on Figher ;d+cation @,F;DA before a former st+dent can s+ccessf+lly maintain an
action e7cl+si'ely for damages in reg+lar co+rts.
4>hether or not the ,ommission on Figher ;d+cation @,F;DA has e7cl+si'e original .+risdiction o'er
actions for damages based +on 'iolation of the ,i'il ,ode ro'isions on h+man relations filed by a
st+dent against the school.5K9L
M3ll of the foregoing oint to one iss+e // !hether the doctrine of e7ha+stion of administrati'e remedies
is alicable. 1he ,o+rt, ho!e'er, sees a second iss+e !hich, tho+gh not e7ressly raised by etitioner,
!as imliedly contained in her PetitionE !hether the ,omlaint stated s+fficient ca+se@sA of action.
RULI$%:
E.,aus"ion o* A+/inis"0a"ive Re/e+ies-
Resondents anchored their %otion to Dismiss on etitioner2s alleged fail+re to e7ha+st administrati'e
remedies before resorting to the R1,. 3ccording to them, the determination of the contro'ersy hinge on
the 'alidity, the !isdom and the roriety of P,#12s academic olicy. 1h+s, the ,omlaint sho+ld ha'e
been lodged in the ,F;D, the administrati'e body tas0ed +nder Re+blic 3ct No. 9922 to imlement the
state olicy to 4rotect, foster and romote the right of all citiDens to affordable *+ality ed+cation at all
le'els and to ta0e aroriate stes to ens+re that ed+cation is accessible to all.5K10L
Petitioner co+nters that the doctrine finds no rele'ance to the resent case since she is raying for
damages, a remedy beyond the domain of the ,F;D and !ell !ithin the .+risdiction of the co+rts.K11L
Petitioner is correct. Birst, the doctrine of e7ha+stion of administrati'e remedies has no bearing on the
resent case. ?n Bactoran 8r. '. ,3,K12L the ,o+rt had occasion to el+cidate on the rationale behind this
doctrineE
41he doctrine of e7ha+stion of administrati'e remedies is basic. ,o+rts, for reasons of la!, comity, and
con'enience, sho+ld not entertain s+its +nless the a'ailable administrati'e remedies ha'e first been
resorted to and the roer a+thorities ha'e been gi'en the aroriate oort+nity to act and correct their
alleged errors, if any, committed in the administrati'e for+m. 7 7 7.K1&L5
Petitioner is not as0ing for the re'ersal of the olicies of P,#1. Neither is she demanding it to allo! her
to ta0e her final e7aminationsJ she !as already enrolled in another ed+cational instit+tion. 3 re'ersal of
the acts comlained of !o+ld not ade*+ately redress her grie'ancesJ +nder the circ+mstances, the
conse*+ences of resondents2 acts co+ld no longer be +ndone or rectified.
#econd, e7ha+stion of administrati'e remedies is alicable !hen there is cometence on the art of the
administrati'e body to act +on the matter comlained of.K14L 3dministrati'e agencies are not co+rtsJ
they are neither art of the .+dicial system, nor are they deemed .+dicial trib+nals.K15L #ecifically, the
,F;D does not ha'e the o!er to a!ard damages.K1)L Fence, etitioner co+ld not ha'e commenced her
case before the ,ommission.
1hird, the e7ha+stion doctrine admits of e7cetions, one of !hich arises !hen the iss+e is +rely legal
and !ell !ithin the .+risdiction of the trial co+rt.K19L Petitioner2s action for damages ine'itably calls for
the alication and the interretation of the ,i'il ,ode, a f+nction that falls !ithin the .+risdiction of the
co+rts.
$i11o Ho"e) (ani)a vs! Re-es
GR No. 154259, Bebr+ary 2(, 2005
FACTS:
Petitioners Ni00o Fotel %anila and R+by Cim assailed the decision of the ,o+rt of 3eals in re'ersing
the decision of R1, of N+eDon ,ity. ,3 held etitioner liable for damages to Roberto Reyes a0a
43mang $isaya5, an entertainment artist.
1here are t!o 'ersions of the storyE
%r. ReyesE "n the e'e of "ctober 1&, 1994, %r. Reyes !hile ha'ing coffee at the lobby of Ni00o Fotel
!as aroached by Dr. 6iolet Bilart, a friend se'eral years bac0. 3ccording to %r. Reyes, Dr. Bilart
in'ited him to .oin a birthday arty at the entho+se for the hotel2s former General %anager, %r.
1s+r+o0a. Plaintiff agreed as Dr. Bilart agreed to 'o+ch for him and carried a bas0et of fr+its, the latter2s
gift. Fe Fe lined + at the b+ffet table as soon as it !as ready b+t to his great shoc0, shame and
embarrassment, R+by Cim, Fotel2s ;7ec+ti'e #ecretary, as0ed him to lea'e in a lo+d 'oice eno+gh to be
heard by the eole aro+nd them. Fe !as as0ed to lea'e the arty and a %a0ati oliceman accomanied
him to ste/o+t the hotel. 3ll these time, Dr Bilart ignored him adding to his shame and h+miliation.
%s. R+by CimE #he admitted as0ing %r. Reyes to lea'e the arty b+t not in the manner claimed by the
laintiff. %s. Cim aroached se'eral eole incl+ding Dr. Bilart2s sister, %s. Oenaida Br+to, if Dr. Bilart
did in'ite him as the catain !aiter told %s. Cim that %r. Reyes !as !ith Dr. Bilart2s gro+. #he !asn2t
able to as0 it ersonally !ith Dr. Bilart since the latter !as tal0ing o'er the hone and doesn2t !ant to
interr+t her. #he as0ed %r. Reyes to lea'e beca+se the celebrant secifically ordered that the arty
sho+ld be intimate consisting only of those !ho art of the list. #he e'en as0ed olitely !ith the laintiff
to finish his food then lea'e the arty.
D+ring the laintiff2s cross/e7amination, he !as as0ed ho! close !as %s. Cim !hen she aroached him
at the b+ffet table. %r. Reyes ans!ered 4'ery close beca+se !e nearly 0issed each other5. ,onsidering
the close ro7imity, it !as %s. Cim2s intention to relay the re*+est only be heard by him. ?t !as %r.
Reyes !ho made a scene ca+sing e'erybody to 0no! !hat haened.
ISSUE: >hether or not etitioners acted ab+si'ely in as0ing %r. Reyes to lea'e the arty.
HELD:
#+reme ,o+rt held that etitioners did not act ab+si'ely in as0ing %r. Reyes to lea'e the arty. Plaintiff
failed to establish any roof of ill/moti'e on the art of %s. Cim !ho did all the necessary reca+tions to
ens+re that %r. Reyes !ill not be h+miliated in re*+esting him to lea'e the arty. ,onsidering almost 20
years of e7erience in the hotel ind+stry, %s. Cim is e7erienced eno+gh to 0no! ho! to handle s+ch
matters. Fence, etitioners !ill not be held liable for damages bro+ght +nder 3rticle 19 and 20 of the
,i'il ,ode.
In"es"a"e Es"a"e o* ",e La"e Rica0+o ! 0es2i"e0io3 S0! vs! Cou0" o* Appea)s
Fac"s:
Petition for re'ie! on certiorari of the decision of the ,o+rt of 3eals.
Presbiterio, #r. entered into t!o contracts !ith resondent ,anoso regarding the negotiation of !ith Cand
$an0 of the Philiines and %inistry of 3grarian Reform for the sale of the former2s Facienda %aria in
North ,otabato and the other being the arrangement of comensation for resondent ,anoso +on the
f+lfillment of the obligation +on the 120/day eriod gi'en to him, 19.5P of the roceeds of the sale shall
be aid to ,anoso.
3 art of the roceeds !ere released and ,anoso !as not gi'en his share. ,anoso files a s+it against
Presbiterio, #r. Presbiterio, #r. contends that ,anoso had no right to be comensated since he defa+lted
!hen he failed to f+lfill the obligation in 120 days.
Issue: >hether ,anoso lost his right to be comensated since he failed to f+lfill the obligation !ithin 120
days, albeit the late comliance.
He)+:
1. "bligations arising from contracts ha'e the force of la! bet!een the arties and sho+ld be
comlied !ith in good faith. 3 recirocal obligation arose bet!een the arties, albeit the late comliance
of ,anoso, he is still entitled to comensation. %oreo'er, Presbiterio, #r. initially a+thoriDed the release of
f+nds for ayment to ,anoso, establishing the comlete accetance of the same to the f+llfilment of
,anoso2s obligation.
2. 1he collection of roceeds !as not among the sti+lations of the arties, ,anoso had already
f+lfilled his art of the obligation to negotiate the sale of said Facienda %aria.
&. Rescission of the contract is not ermitted for slight or ca+sal breach. No s+bstantial breach has
been committed in the case at bar. #+bstantial comliance is in order, and ,anoso has f+lfilled the
obligation in good faith.
(e"0o (ani)a T0anspo0" Co0po0a"ion an+ Apo)ina0io A4oc vs! C!A! an+ Co)! Sa2a)2u0o e" a)
G.R.No. 1410(9 013+g+st2002
FACTS &F THE CASE:
Cast December 24 19() Blorentina #abalb+ro and her comanions !ere ma0ing their !ay to $aclaran to
b+y foodst+ffs for Noche $+ena. Blorentina #abalb+ro and her comanions !aited for the traffic light to
t+rn red so that they co+ld cross the street to ta0e a ride to $aclaran. -on crossing the street d+ring the
red light, Blorentina #abalb+ro !as hit by a fast mo'ing %%1, b+s, dri'en by 3olinario 3.oc.
%s. #abalb+ro !as then ta0en by the dri'er and cond+ctress of the %%1, b+s to #an 8+an de Dios
hosital. 1he 'ictim !as not able to regain conscio+sness and she s+cc+mbed to her in.+ries on 8an+ary
0&, 19(9. 1he 1rial co+rt decided in fa'or of #abalb+ro et. al and ordered %%1, to ay damages.
%%1, then aealed the case to the ,o+rt of 3eals !hich affirmed the decision of the trial co+rt.
ISSUES &F THE CASE:
>as the R1, and ,3 correct in ordering %1,, to ay damages to the laintiffH
/ <es, 3ccording to the #.,. both co+rts are correct in a!arding damages to the laintiff.
/ ;'en tho+gh %%1, arg+es that the ro7imate ca+se of the 'ictim2s death is her negligence th+s
re*+esting the co+rt to aly 3rt 2199 of the ci'il code, instead of 3rt 219), the #., +held the findings
of the trial co+rts that the dri'er and %%1, had been negligent in its d+ties and it is this negligence that
led to the death of the 'ictim th+s sho!ing that 3rt 219) is the more alicable ro'ision in this case.
/ 3lso %%1, is liable for the death of the 'ictim d+e to 3rt 21(0 of the ci'il code, !herein the obligation
imosed by 3rticle 219) is demandable not only for one2s o!n acts or omissions/, b+t also for those of
ersons for !hom one is resonsible.
/ ?t sho+ld be sho!n that !hene'er an emloyee2s negligence ca+ses damage or in.+ry to another, there
instantly arises a res+mtion .+ris tant+m that there !as negligence on the art of the emloyer, either in
the selection of the emloyee @c+la in eligiendoA or the s+er'ision o'er him after the selection @c+la in
'igilandoA. Fence, to escae solidary liability for a *+asi/delict committed by his emloyee, an emloyer
m+st reb+t the res+mtion by resenting con'incing roof that in the selection and s+er'ision of his
emloyee, he has e7ercised the care and diligence of a good father of a family. ?n the resent case,
etitioner %%1, failed to reb+t the res+mtion of negligence on its art.
HELD:
1he Decision of the ,o+rt of 3eals is affirmed.
"bligations and ,ontracts 1ermsE
,-CP3 3N-?C?3N3/ refers to acts or omissions !hich ca+se damage to another, there being fa+lt or
negligence on the art of the defendant, !ho is obliged by la! to ay for the damages done.
3rt 219) of the ,i'il ,ode is alied if there2s no re/e7isting contract+al relation bet!een the arties.
3ltho+gh the #+reme ,o+rt has already held that a *+asi/ delict can occ+r e'en if there is a contract+al
relation, since the act that lead to the brea0ing a contract may also be a tort.
%E&R%E 5! 6ATCHELDER vs! THE CE$TRAL 6A$7 &F THE HILII$ES
G.R. No. C/25091
%arch 29, 1992
Fac"s:
%onetary $oard Resol+tion No. (59 re*+ires Biliino and 3merican resident contractors for constr+ctions
in -.#. military bases in the Philiines to s+rrender to the ,entral $an0 their dollar earnings +nder their
resecti'e contracts b+t !ere entitled to +tiliDe 90P of their s+rrendered dollars for imortation at the
referred rate of commodities for +se !ithin oro+tside said -.#. military bases. Resol+tion )95 moreo'er,
denies their right to reac*+ire at the referred rate ninety er cent @90PA of the foreign e7change the sold
or s+rrendered earnings to ,entral $an0 for the +rose of determining !hether the imorts against
roceeds of contracts entered into rior to 3ril 25, 19)0 are classified as dollar/to/dollar transactions or
not. George $atchelder, an 3merican ,itiDen ermanently residing in the Philiines !ho is engaged in
the ,onstr+ction $+siness, s+rrendered to the ,entral $an0 his dollar earnings amo+nting to -.#.
Q199,9)).00. Fe comels ,entral $an0 of the Philiines to resell to himQ190,210.)0 at the referred rate
of e7change of t!o Philiine esos for one 3merican dollar, more secifically P2.00&95 !hich !as
denied by the co+rt. Fe then contended that said decision failed to consider that if there !as no contract
obligating the ban0 to resell to him at the referred rate, the .+dgment of the lo!er co+rt can and sho+ld
ne'ertheless be s+stained on the basis of there being s+ch an obligation arising from la!.
Issue:
>hether or not ,entral $an0 has the obligation arising from la! to resell the-#Q154,094.5) to
$atchelder at the referred rate.
He)+:
,entral $an0 !as intended to attain basic ob.ecti'es in the field of c+rrency and finance.
4?t shall be the resonsibility of the ,entral $an0 of the Philiines to administer the monetary and
ban0ing system of the Re+blic. ?t shall be the d+ty of the ,entral $an0 to +se the o!ers granted to it
+nder this 3ct to achie'e the follo!ing ob.ecti'esE @aA to maintain monetary stability in the PhiliinesJ
@bA to reser'e the international 'al+e of the eso and the con'ertibility of the eso into other freely
con'ertible c+rrenciesJ and @cA to romote a rising le'el of rod+ction, emloyment and real income in the
Philiines. G?t is, of co+rse, tr+e that obligations arise from 1A la!J 2A contractsJ &A *+asi/contractsJ4A
acts or omissions +nished by la! and 5A *+asi/delicts. "ne of the so+rces an obligation then is a la!. 3
legal norm co+ld so re*+ire that a artic+lar arty be chargeable !ith a restation or +nderta0ing to gi'e
or to deli'er or to do or to render some ser'ice. ?t is an indisensable re*+isite tho+gh that s+ch a
ro'ision, th+s in fact e7ists. 1here m+st be a sho!ing to that effect.3s early as 1909 in Pelayo '. Ca+ron,
,o+rt thro+gh 8+stice 1orres, categorically declaredE G"bligation arising from la! are not res+med.G Bor
in the lang+age of 8+stice #treet in Ce+ng$en '. "I$rien, a 191( decision, s+ch an obligation is Ga
creation of the ositi'e la!.G 1hey are ordinarily traceable to code or stat+te. ?t is tr+e tho+gh, as noted in
the motion forreconsideration follo!ing Peole '. N+e Po Cay, that a ,entral $an0 circ+lar may ha'e the
force and effect of la!, esecially !hen iss+ed in +rs+ance of its *+asi/legislati'e o!er. 1hat of itself,
ho!e'er, is no .+stification to concl+de that it has thereby ass+med an obligation.
A0"u0o e)a-o vs (a0ce)o Lau0on3 E"! A)!
Fac"s: "ct. 1&, 190), nighttime R 3rt+ro Pelayo, a hysician based in ,eb+, !as called to the ho+se of
%arcelo Ca+ron S 8+ana 3bella @defendantsA in #an Nicolas. 1heir da+ghter/in/la! !as abo+t to gi'e
birth S they re*+ested him to render medical assistance. #ince it !as a diffic+lt birth, he had to erform a
s+rgery to remo'e the fet+s +sing forces. Fe also remo'ed the afterbirth. Fe finished all of these +ntil
the follo!ing morning.
Fe 'isited the atient se'eral times the follo!ing day. 8+st S e*+itable 'al+e for the ser'ices he renderedE
P500.00. >itho+t any good reason, defendants ref+sed to ay said amo+nt. 1h+s he filed a case raying
for a .+dgment in his fa'or against defendants for the s+m of P500.00 T costs along !ith other relief that
may be deemed roer.
1he Defendants alleged that their da+ghter/in/la! died in conse*+ence of the childbirth. 3lso, that their
son S da+ghter/in/la! li'ed indeendently S her gi'ing birth in their ho+se !as only accidental. 1hey
rayed that they be absol'ed.
,B?E Defendants absol'ed d+e to lac0 of s+fficient e'idence to establish right of action.
ISSUE: >"N the defendants are bo+nd to ay the bill for the ser'ices Pelayo has rendered.
HELD: N". ,B? .+dgment affirmed.
R31?"E Rendering of medical assistance in case of illness is among the m+t+al obligations to !hich
so+ses are bo+nd by !ay of m+t+al s+ort. @3rts. 142 S 14&, ,,A 1he arty bo+nd to gi'e s+ort
sho+ld therefore be liable for all the e7enses incl+ding the fees of the hysician. 1h+s, it is the h+sband2s
obligation to ay Pelayo and not the defendants. 1he h+sband !o+ld still be liable e'en if his arents
!ere the one !ho called S re*+ested for Pelayo2s assistance. 1he defendants are not +nder any obligation
to ay the fees claimed @3n obligation according to ,, 3rt. 10(9 is created by la!, contracts, *+asi/
contracts, S by illicit acts S omissions or by those in !hich any 0ind of fa+lt:negligence occ+rs.A. 1here
!as no contract bet!een Pelayo S the defendants th+s they can2t be comelled to ay him.
(o0)a vs Co0a8on 6e)/on"e
F%U Insu0ance Co0po0a"ion vs! %!! Sa0/ien"o T0uc1ing Co0po0a"ion an+ La/2e0" E0o)es
G.R. No. 141910
3+g+st ), 2002
FACTS:
G.P. #armiento 1r+c0ing ,ororation @GP#A +ndertoo0 to deli'er on 8+ne 1(, 1994, &0 +nits of ,ond+ra
#.D. !hite refrigerators aboard its ?s+D+ tr+c0 dri'en by Cambert ;roles, to the ,entral C+Don 3liances
in Dag+an ,ity. >hile tra'ersing the North Di'ersion Road along %c3rth+r high!ay in $arangay
3n+ol, $amban, 1arlac, it collided !ith an +nidentified tr+c0, ca+sing it to fall into a dee canal,
res+lting in damage to the cargoes.
BG-, an ins+rer of the shiment, aid the 'al+e of the co'ered cargoes @P204,450.00A to ,oncecion
?nd+stries, ?nc.,. $eing s+brogee of ,??2s rights S interests, BG-, in t+rn, so+ght reimb+rsement from
GP#. #ince GP# failed to heed the claim, BG- filed a comlaint for damages S breach of contract of
carriage against GP# and ;roles !ith the R1,. ?n its ans!er, resondents asserted that GP# !as only the
e7cl+si'e ha+ler of ,?? since 19((, and it !as not so engaged in b+siness as a common carrier.
Resondents f+rther claimed that the ca+se of damage !as +rely accidental.
GP# filed a motion to dismiss the comlaint by !ay of dem+rrer to e'idence on the gro+nd that etitioner
had failed to ro'e that it !as a common carrier.
1he R1, granted the motion to dismiss on 3ril &0, 199). ?t s+bse*+ently dismissed the comlaint
holding that GP# !as not a common carrier defined +nder the la! S e7isting .+risr+dence. 1he
s+bse*+ent motion for reconsideration ha'ing been denied, BG- interosed an aeal to the ,3. 1he ,3
re.ected the BG-2s aeal S r+led in fa'or of GP#. ?t also denied etitioner2s motion for reconsideration.
ISSUES:
1. >"N GP# may be considered a common carrier as defined +nder the la! S e7isting .+risr+dence.
2. >"N GP#, either as a common carrier or a ri'ate carrier, may be res+med to ha'e been negligent
!hen the goods it +ndertoo0 to transort safely !ere s+bse*+ently damaged !hile in its rotecti'e
c+stody S ossession.
&. >hether the doctrine of Res isa lo*+it+r is alicable in the instant case.
HELD:
1! 1he #, finds the concl+sion of the R1, and the ,3 to be amly .+stified. GP#, being an e7cl+si'e
contractor S ha+ler of ,oncecion ?nd+stries, ?nc., rendering:offering its ser'ices to no other indi'id+al
or entity, cannot be considered a common carrier. ,ommon carriers are ersons, cororations, firms or
associations engaged in the b+siness of carrying or transorting assengers or goods or both, by land,
!ater, or air, for hire or comensation, offering their ser'ices to the +blic, !hether to the +blic in
general or to a limited clientele in artic+lar, b+t ne'er on an e7cl+si'e basis. 1he tr+e test of a common
carrier is the carriage of assengers:goods, ro'iding sace for those !ho ot to a'ail themsel'es of its
transortation ser'ice for a fee. Gi'en acceted standards, GP# scarcely falls !ithin the term 4common
carrier.5
#! GP# cannot escae from liability. ?n c+la contract+al, the mere roof of the e7istence of the contract
S the fail+re of its comliance .+stify, rima facie, a corresonding right of relief. 1he la! !ill not ermit
a arty to be set free from liability for any 0ind of miserformance of the contract+al +nderta0ing or a
contra'ention of the tenor thereof. 3 breach +on the contract confers +on the in.+red arty a 'alid ca+se
for reco'ering that !hich may ha'e been lost:s+ffered. 1he remedy ser'es to reser'e the interests of the
romisee that may incl+de hisE
a. ;7ectation interest R interest in ha'ing the benefit of his bargain by being +t in as good a osition as
he !o+ld ha'e been in had the contract been erformedJ
b. Reliance interest R interest in being reimb+rsed for loss ca+sed by reliance on the contract by being +t
in as good a osition as he !o+ld ha'e been in had the contract not been madeJ
c. Restit+tion interest R interest in ha'ing restored to him any benefit that he has conferred on the other
arty.
3greements can accomlish little +nless they are made the basis for action. 1he effect of e'ery infraction
is to create a ne! d+ty, or to ma0e recomense to the one !ho has been in.+red by the fail+re of another
to obser'e his contract+al obligation +nless he can sho! e7ten+ating circ+mstances, li0e roof of his
e7ercise of d+e diligence @normally that of the diligence of a good father of a family or, e7cetionally by
sti+lation or by la! s+ch as in the case of common carriers, that of e7traordinary diligenceA or of the
attendance of fort+ito+s e'ent, to e7c+se him from his ens+ing liability.
3 defa+lt on, or fail+re of comliance !ith, the obligation gi'es rise to a res+mtion of lac0 of care S
corresonding liability on the art of the contract+al obligor the b+rden being on him to establish
other!ise. GP# has failed to do so.
;roles, on the other hand, may not be ordered to ay etitioner !itho+t concrete roof of his
negligence:fa+lt. 1he dri'er, not being a arty to the contract of carriage bet!een etitioner2s rincial
and defendant, may not be held liable +nder the agreement. 3 contract can only bind the arties !ho ha'e
entered into it or their s+ccessors !ho ha'e ass+med their ersonality:.+ridical osition. ,onsonantly !ith
the a7iom res inter alios acta aliis ne*+e nocet rodest, s+ch contract can neither fa'or nor re.+dice a
third erson. Petitioner2s ci'il action against the dri'er can only be based on c+la a*+iliana, !hich !o+ld
re*+ire the claimant for damages to ro'e the defendant2s negligence:fa+lt.
9! Res isa lo*+it+r holds a defendant liable !here the thing !hich ca+sed the in.+ry comlained of is
sho!n to be +nder the latter2s management and the accident is s+ch that, in the ordinary co+rse of things,
cannot be e7ected to haen if those !ho ha'e its management:control +se roer care. ?n the absence of
the defendant2s e7lanation, it affords reasonable e'idence that the accident arose from !ant of care. ?t is
not a r+le of s+bstanti'e la! and does not create an indeendent gro+nd of liability. ?nstead, it is regarded
as a mode of roof, or a mere roced+ral con'enience since it f+rnishes a s+bstit+te for, and relie'es the
laintiff of, the b+rden of rod+cing secific roof of negligence. 1he ma7im simly laces the b+rden of
going for!ard !ith the roof on the defendant.
Fo!e'er, resort to the doctrine may only be allo!ed !henE
@aA the e'ent is of a 0ind !hich does not ordinarily occ+r in the absence of negligenceJ
@bA other resonsible ca+ses are s+fficiently eliminated by the e'idence @incl+des the cond+ct of the
laintiff and third ersonsAJ and
@cA the indicated negligence is !ithin the scoe of the defendant2s d+ty to the laintiff.
1h+s, it is not alicable !hen an +ne7lained accident may be attrib+table to one of se'eral ca+ses, for
some of !hich the defendant co+ld not be resonsible.
Res isa lo*+it+r generally finds rele'ance !hether or not a contract+al relationshi e7ists bet!een the
laintiff and the defendant, for the inference of negligence arises from the circ+mstances and nat+re of the
occ+rrence and not from the nat+re of the relation of the arties. Ne'ertheless,for the doctrine to aly,
the re*+irement that resonsible ca+ses @other than those d+e to defendant2s cond+ctA m+st first be
eliminated sho+ld be +nderstood as being confined only to cases of +re @non/contract+alA tort since
ob'io+sly the res+mtion of negligence in c+la contract+al immediately attaches by a fail+re of the
co'enant or its tenor.
"n the other hand, !hile the tr+c0 dri'er, !hose ci'il liability is redicated on c+la ac*+iliana, can be
said to ha'e been in control S management of the 'ehicle, it is not e*+ally sho!n that the accident has
been e7cl+si'ely d+e to his negligence. ?f it !ere so, the negligence co+ld allo! res isa lo*+it+r to
roerly !or0 against him. Fo!e'er, clearly this is not the case.
A0"ic)es 1156-1177- page#
$os"0a+a/us 'i))anueva vs 0isci))a an+ Lean+0o Do/ingo
@GR No 144294, #et 20, 200), ,oronaA
3lication of the Registered "!ner R+le
1he registered o!ner of a 'ehicle is directly and rincially resonsible for any accident, in.+ry or death
ca+sed by the oeration of the 'ehicle in the streets and high!ays.
1he +rose is to rotect the +blic in general and for easy identification of the ersons !ho co+ld be
held resonsible for the in.+ry s+stained.
3ddend+mE
;7traordinary diligence is re*+ired to common carriers in transorting goods and assengers
ReasonsE
1. nat+re of the b+siness
2. +blic olicy
Registered o!ner rimarily and solidarily liable !ith dri'er +nder the =3$?1 #<#1;%. =abit system is
contrary to +blic olicyJ therefore, 'oid and ine7istent.
Ce0e8o vs! Tua8on
GR No. 1415&(, %arch 2&, 2004
Post +nder case digests, Remedial Ca! at 1h+rsday, 8an+ary 2), 2012 Posted by #chiDohrenic %ind
Fac"s:
3 assenger b+s collided !ith a tricycle some!here in Pamanga. 1he tricycle dri'er 1+aDon filed a
comlaint for damages against %rs. ,ereDo, as o!ner of the b+s line, and her h+sband 3ttorney 8+an
,ereDo. 1+aDon also filed a motion to litigate as a a+er !hich !as granted by the trial co+rt.
#+bse*+ently, the trial co+rt iss+ed s+mmons against 3tty. ,ereDo and %rs. ,ereDo @4the ,ereDo
so+ses5A at the %a0ati address stated in the comlaint. Fo!e'er, the s+mmons !as ret+rned +nser'ed as
the ,ereDo so+ses no longer held office nor resided in %a0ati. 1he trial co+rt iss+ed alias s+mmons
against the ,ereDo so+ses at their address in ,amiling, 1arlac. 1he alias s+mmons and a coy of the
comlaint !ere finally ser'ed on 20 3ril 1994 at the office of 3tty. ,ereDo, !ho !as then !or0ing as
1arlac Pro'incial Prosec+tor. 3tty. ,ereDo reacted angrily on learning of the ser'ice of s+mmons +on his
erson. 3tty. ,ereDo allegedly told #heriff >illiam ,anlasE 4P+nyeta, ano ang g+sto mong mangyariH
G+sto mong hindi 0a ma0alabas ng b+hay ditoH 1eritoryo 0o ito. >ala 0a sa teritoryo mo.5
1he records sho! that the ,ereDo so+ses articiated in the roceedings before the trial co+rt. 3nother
la!yer, 3tty. 6alera, e'en reresented the so+ses. 1he ,ereDo so+ses did not file an ans!er and +on
motion of 1+aDon, they !ere declared in defa+lt. 3 coy of the decision !as recei'ed on 8+ne 25 and %rs.
,ereDo filed a Petition from Relief of 8+dgment on 8+ly 10. 3tty. 6alera also denied ha'ing recei'ed a
coy of a decision.
Issue: >hether or not Petition for Relief from 8+dgment !as the roer remedy for a arty declared in
defa+lt.
He)+: 1he ,o+rt r+led in the N;G31?6;. 1he remedies a'ailable to a arty declared in defa+ltE
1he defendant in defa+lt may, at any time after disco'ery thereof and before .+dgment, file a motion
+nder oath to set aside the order of defa+lt on the gro+nd that his fail+re to ans!er !as d+e to fra+d,
accident, mista0e or e7c+sable negligence, and that he has a meritorio+s defense @#ec. &, R+le 1( Kno!
#ec. &@bA, R+le 9LAJ
?f the .+dgment has already been rendered !hen the defendant disco'ered the defa+lt, b+t before the same
has become final and e7ec+tory, he may file a motion for ne! trial +nder #ection 1 @aA of R+le &9J
?f the defendant disco'ered the defa+lt after the .+dgment has become final and e7ec+tory, he may file a
etition for relief +nder #ection 2 Kno! #ection 1L of R+le &(J and
Fe may also aeal from the .+dgment rendered against him as contrary to the e'idence or to the la!,
e'en if no etition to set aside the order of defa+lt has been resented by him @#ec. 2, R+le 41A. @;mhasis
addedA
%oreo'er, a etition for certiorari to declare the n+llity of a .+dgment by defa+lt is also a'ailable if the
trial co+rt imroerly declared a arty in defa+lt, or e'en if the trial co+rt roerly declared a arty in
defa+lt, if gra'e ab+se of discretion attended s+ch declaration.
%rs. ,ereDo co+ld ha'e ta0en ad'antage of the abo'ementioned remedies. %oreo'er, she also had the
alternati'e of filing +nder R+le )5 a etition for certiorari assailing the order of defa+lt !ithin )0 days
from notice of the .+dgment. 3n order of defa+lt is interloc+tory, and an aggrie'ed arty may file an
aroriate secial ci'il action +nder R+le )5. ?n a etition for certiorari, the aellate co+rt may declare
'oid both the order of defa+lt and the .+dgment of defa+lt. ,learly, %rs. ,ereDo had e'ery oort+nity to
a'ail of these remedies !ithin the reglementary eriods ro'ided +nder the R+les of ,o+rt. Fo!e'er,
%rs. ,ereDo oted to file a etition for relief from .+dgment, !hich is a'ailable only in e7cetional cases.
3 etition for relief from .+dgment sho+ld be filed !ithin the reglementary eriod of )0 days from
0no!ledge of .+dgment and si7 months from entry of .+dgment.
LI%HT RAIL TRA$SIT AUTH&RITY : R&D&LF& R&(A$3 ve0sus
(AR;&RIE $A'IDAD3 Hei0s o* ",e La"e $ICA$&R $A'IDAD : RUDE$T SECURITY
A%E$CY
FACTS:
Nicanor Na'idad, then dr+n0, entered the ;D#3 CR1 station after +rchasing a 4to0en5 @reresenting
ayment of the fareA. >hile Na'idad !as standing on the latform near the CR1 trac0s, 8+nelito ;scartin,
the sec+rity g+ard assigned to the area aroached him. 3 mis+nderstanding or an altercation bet!een the
t!o aarently ens+ed that led to a fist fight. No e'idence, ho!e'er, !as add+ced to indicate ho! the
fight started or !ho, bet!een the t!o, deli'ered the first blo! or ho! Na'idad later fell on the CR1
trac0s. 3t the e7act moment that Na'idad fell, an CR1 train, oerated by etitioner Rodolfo Roman, !as
coming in. Na'idad !as str+c0 by the mo'ing train, and he !as 0illed instantaneo+sly. 1he !ido! of
Nicanor, %ar.orie Na'idad, along !ith her children, filed a comlaint for damages against 8+nelito
;scartin, Rodolfo Roman, the CR13, the %etro 1ransit "rganiDation, ?nc. @%etro 1ransitA, and Pr+dent
for the death of her h+sband. 1rial co+rt r+led in fa'or Na'idad2s !ife and against the defendants Pr+dent
#ec+rity and 8+nelito ;scartin . CR13 and Rodolfo Roman !ere dismissed for lac0 of merit. ,3 held
CR13 and Roman liable, hence the etition.
ISSUE: >hether or not there !as a erfected contract of carriage bet!een Na'idad and CR13
HELD:
3BB?R%;D !ith %"D?B?,31?"N b+t only in that @aA the a!ard of nominal damages is D;C;1;D and
@bA etitioner Rodolfo Roman is absol'ed from liability
,ontract of carriage !as deemed created from the moment Na'idad aid the fare at the CR1 station and
entered the remises of the latter, entitling Na'idad to all the rights and rotection +nder a contract+al
relation. 1he aellate co+rt had correctly held CR13 and Roman liable for the death of Na'idad in
failing to e7ercise.
A0"ic)es 1156-1177 < page=
$C v! CA
Fac"s:
3t the height of the tyhoon 4=ading5, a flash flood co'ered the to!ns near the 3ngat Dam, ca+sing
deaths and destr+ctions to residents and their roerties. Resondents blamed the tragedy to the rec0less
and imr+dent oening of the & floodgates by etitioner, !itho+t rior !arning to the residents !ithin the
'icinity of the dam. Petitioners denied the allegations and contended that they ha'e 0et the !ater at a
safe le'el, that the oening of floodgates !as done grad+ally, that it e7ercises diligence in the selection of
its emloyees, and that !ritten !arnings !ere sent to the residents. ?t f+rther contended that there !as no
direct ca+sal relationshi bet!een the damage and the alleged negligence on their art, that the residents
ass+med the ris0 by li'ing near the dam, and that !hat haened !as a fort+ito+s e'ent and are of the
nat+re of damn+m abs*+e in.+ria.
Issues:
@1A >hether the etitioner can be held liable e'en tho+gh the coming of the tyhoon is a fort+ito+s e'ent
@2A >hether a notice !as sent to the residents
@&A >hether the damage s+ffered by resondents is one of damn+m abs*+e in.+ria
He)+:
@1A 1he obligor cannot escae liability, if +on the haening of a fort+ito+s e'ent or an act of God, a
corresonding fra+d, negligence, delay or 'iolation or contra'ention in any manner of the tenor of the
obligation as ro'ided in 3rticle 1190 of the ,i'il ,ode !hich res+lts in loss or damage. ;'en if there
!as no contract+al relation bet!een themsel'es and ri'ate resondents, they are still liable +nder the la!
on quasi-delict. 3rticle 219) of the ,i'il ,ode e7licitly ro'ides G!hoe'er by act or omission ca+ses
damage to another there being fa+lt or negligence is obliged to ay for the damage done.G 3ct of God or
force majeure, by definition, are e7traordinary e'ents not foreseeable or a'oidable, e'ents that co+ld not
be foreseen, or !hich, tho+gh foreseen, are ine'itable. ?t is therefore not eno+gh that the e'ent sho+ld not
ha'e been foreseen or anticiated, as is commonly belie'ed, b+t it m+st be one imossible to foresee or to
a'oid. 1he rincile embodied in the act of God doctrine strictly re*+ires that the act m+st be occasioned
solely by the 'iolence of nat+re. F+man inter'ention is to be e7cl+ded from creating or entering into the
ca+se of the mischief. >hen the effect is fo+nd to be in art the res+lt of the articiation of man, !hether
d+e to his acti'e inter'ention or neglect or fail+re to act, the !hole occ+rrence is then h+maniDed and
remo'ed from the r+les alicable to the acts of God. ?n the case at bar, altho+gh the tyhoon G=adingG
!as an act of God, etitioners can not escae liability beca+se their negligence !as the ro7imate ca+se
of the loss and damage.
@2A 1he letter itself, addressed merely G1" 3CC ,"N,;RN;DG, !o+ld not stri0e one to be of serio+s
imortance, s+fficient eno+gh to set alarm and ca+se eole to ta0e reca+tions for their safetyIs sa0e. 1he
notices !ere not deli'ered, or e'en addressed to resonsible officials of the m+nicialities concerned !ho
co+ld ha'e disseminated the !arning roerly. 1hey !ere deli'ered to ordinary emloyees and
olicemen. 3s it haened, the said notices do not aear to ha'e reached the eole concerned, !hich
are the residents beside the 3ngat Ri'er. 1he laintiffs in this case definitely did not recei'e any s+ch
!arning. ?ndeed, the methods by !hich the defendants allegedly sent the notice or !arning !as so
ineffect+al that they cannot claim, as they do in their second assignment of error, that the sending of said
notice has absol'ed them from liability.
@&A >e cannot gi'e credence to etitionersI third assignment of error that the damage ca+sed by the
oening of the dam !as in the nat+re of damnum absque injuria, !hich res+oses that altho+gh there
!as hysical damage, there !as no legal in.+ry in 'ie! of the fort+ito+s e'ents. 1here is no *+estion that
etitioners ha'e the right, d+ty and obligation to oerate, maintain and reser'e the facilities of 3ngat
Dam, b+t their negligence cannot be co+ntenanced, ho!e'er noble their intention may be. 1he end does
not .+stify the means, artic+larly beca+se they co+ld ha'e done other!ise than sim+ltaneo+sly oening
the sill!ays to s+ch e7tent. Needless to say, etitioners are not entitled to co+nterclaim.
%L&6E TELEC&(3 I$C!3 pe"i"ione03
vs!
HILII$E C&((U$ICATI&$ SATELLITE C&R&RATI&$3 0espon+en"!
Fac"s:
Globe 1elecom, ?nc., formerly 0no!n as Globe %c=ay ,able and Radio ,ororation installed and
config+red comm+nication facilities for the e7cl+si'e +se of the -# Defense ,omm+nications 3gency
@-#D,3A in ,lar0 3ir $ase and #+bic Na'al $ase. Globe 1elecom later contracted the Philiine
,omm+nications #atellite ,ororation @PhilcomsatA for the ro'ision of the comm+nication facilities. 3s
both comanies entered into an 3greement, Globe obligated itself to oerate and ro'ide an ?$# #tandard
$ earth station !ith ,+bi Point for the +se of the -#D,3. 1he term of the contract !as for )0 months, or
fi'e @5A years. ?n t+rn, Globe romised to ay Philcomsat monthly rentals for each leased circ+it in'ol'ed.
3s the saga contin+es, the Philiine #enate assed and adoted #enate Resol+tion No. 141 and decided
not to ratify the 1reaty of Briendshi, ,ooeration and #ec+rity, and its #+lementary 3greements to
e7tend the term of the +se by the -# of #+bic Na'al $ase, among others. ?n other !ords, the RP/-#
%ilitary $ases 3greement !as s+ddenly terminated.
$eca+se of this e'ent, Globe notified Philcomsat of its intention to discontin+e the +se of the earth station
effecti'e 0( No'ember 1992 in 'ie! of the !ithdra!al of -# military ersonnel from #+bic Na'al $ase
after the termination of the RP/-# %ilitary $ases 3greement.
3fter the -# military forces left #+bic Na'al $ase, Philcomsat sent Globe a letter in 199& demanding
ayment of its o+tstanding obligations +nder the 3greement amo+nting to -#Q4,910,1&).00 l+s interest
and attorney2s fees. Fo!e'er, Globe ref+sed to heed Philcomsat2s demand. "n the other hand, the latter
!ith the Regional 1rial ,o+rt of %a0ati a ,omlaint against Globe, ho!e'er, Globe filed an 3ns!er to
the ,omlaint, insisting that it !as constrained to end the 3greement d+e to the termination of the RP/-#
%ilitary $ases 3greement and the non/ratification by the #enate of the 1reaty of Briendshi and
,ooeration, !hich e'ents constit+ted force ma.e+re +nder the 3greement. Globe e7lained that the
occ+rrence of said e'ents e7emted it from aying rentals for the remaining eriod of the 3greement.
Bo+r years after, the trial co+rt its decision b+t both arties aealed to the ,o+rt of 3eals.
Issues:
1. >hether or not the non/ratification by the #enate of the 1reaty of Briendshi, ,ooeration and #ec+rity
and its #+lementary 3greements constit+tes force ma.e+re !hich e7emts Globe from comlying !ith
its obligations +nder the 3greementJ
2. >hether Globe is not liable to ay the rentals for the remainder of the term of the 3greementJ and
&. >hether Globe is liable to Philcomsat for e7emlary damages.
He)+:
Decision on Issue No. 1: Fortuitous Event under Article 117
1he aellate co+rt r+led that the non/ratification by the #enate of the 1reaty of Briendshi, ,ooeration
and #ec+rity, and its #+lementary 3greements, and the termination by the Philiine Go'ernment of
the RP/-# %ilitary $ases 3greement effecti'e &1 December 1991 as stated in the Philiine
Go'ernment2s Note 6erbale to the -# Go'ernment, are acts, directions, or re*+ests of the Go'ernment of
the Philiines !hich constit+te force ma.e+re.
Fo!e'er, the ,o+rt of 3eals r+led that altho+gh Globe so+ght to terminate Philcomsat2s ser'ices by 0(
No'ember 1992, it is still liable to ay rentals for the December 1992, amo+nting to -#Q92,2&(.00 l+s
interest, considering that the -# military forces and ersonnel comletely !ithdre! from ,+bi Point only
on &1 December 1992.
No re'ersible error !as committed by the ,o+rt of 3eals in iss+ing the assailed DecisionJ hence the
etitions are denied.
3rticle 1194, !hich e7emts an obligor from liability on acco+nt of fort+ito+s e'ents or force ma.e+re,
refers not only to e'ents that are +nforeseeable, b+t also to those !hich are foreseeable, b+t ine'itableE
3 fort+ito+s e'ent +nder 3rticle 1194 may either be an Gact of God,G or nat+ral occ+rrences s+ch as floods
or tyhoons,24 or an Gact of man,G s+ch as riots, stri0es or !ars.
Philcomsat and Globe agreed in #ection ( of the 3greement that the follo!ing e'ents shall be deemed
e'ents constit+ting force ma.e+reE
1. 3ny la!, order, reg+lation, direction or re*+est of the Philiine Go'ernmentJ
2. #tri0es or other labor diffic+ltiesJ
&. ?ns+rrectionJ
4. RiotsJ
5. National emergenciesJ
). >arJ
9. 3cts of +blic enemiesJ
(. Bire, floods, tyhoons or other catastrohes or acts of GodJ
9. "ther circ+mstances beyond the control of the arties.
,learly, the foregoing are either +nforeseeable, or foreseeable b+t beyond the control of the arties. 1here
is nothing in the en+meration that r+ns contrary to, or e7ands, the concet of a fort+ito+s e'ent +nder
3rticle 1194.
1he #+reme ,o+rt agrees !ith the ,o+rt of 3eals and the trial co+rt that the abo'ementioned
re*+isites are resent in the instant case. Philcomsat and Globe had no control o'er the non/rene!al of the
term of the RP/-# %ilitary $ases 3greement !hen the same e7ired in 1991, beca+se the rerogati'e to
ratify the treaty e7tending the life thereof belonged to the #enate. Neither did the arties ha'e control o'er
the s+bse*+ent !ithdra!al of the -# military forces and ersonnel from ,+bi Point in December 1992.
Decision on Issue No. !: E"em#tion of $lobe from %a&in' (entals for t)e Facilit&
1he #+reme ,o+rt finds that the defendant is e7emted from aying the rentals for the facility for the
remaining term of the contract. 3s a conse*+ence of the termination of the RP/-# %ilitary $ases
3greement @as amendedA the contin+ed stay of all -# %ilitary forces and ersonnel from #+bic Na'al
$ase !o+ld no longer be allo!ed, hence, laintiff !o+ld no longer be in any osition to render the ser'ice
it !as obligated +nder the 3greement.
1he ,o+rt of 3eals !as correct in r+ling that the haening of s+ch fort+ito+s e'ents rendered Globe
e7emt from ayment of rentals for the remainder of the term of the 3greement.
Decision on Issue No *: No E"em#lar& Dama'es
;7emlary damages may be a!arded in cases in'ol'ing contracts or *+asi/contracts, if the erring arty
acted in a !anton, fra+d+lent, rec0less, oressi'e or male'olent manner.
?n the resent case, it !as not sho!n that Globe acted !antonly or oressi'ely in not heeding
Philcomsat2s demands for ayment of rentals. ?t !as established d+ring the trial of the case before the trial
co+rt that Globe had 'alid gro+nds for ref+sing to comly !ith its contract+al obligations after 1992.
Ru)ing:
>F;R;B"R;, the Petitions are D;N?;D for lac0 of merit. 1he assailed Decision of the ,o+rt of
3eals in ,3/G.R. ,6 No. )&)19 is 3BB?R%;D.
#" "RD;R;D.
F%U Insu0ance Co0po0a"ion v! CA
FACTS:
3nco ;nterrises ,omany @3N,"A, a artnershi bet!een 3ng G+i and ,o 1o, !as engaged in
the shiing b+siness oerating t!o common carriers
o %:1 3N," t+gboat
o D:$ C+cio barge / no engine of its o!n, it co+ld not mane+'er by itself and had to be
to!ed by a t+gboat for it to mo'e from one lace to another.
#etember 2& 1999E #an %ig+el ,ororation @#%,A shied from %anda+e ,ity, ,eb+, on board
the D:$ C+cio, for to!age by %:1 3N,"E
o 25,000 cases Pale Pilsen and &50 cases ,er'eDa Negra / consignee #%,2s $eer
%ar0eting Di'ision @$%DA/;stancia $eer #ales "ffice, ;stancia, ?loilo
o 15,000 cases Pale Pilsen and 200 cases ,er'eDa Negra / consignee #%,2s $%D/#an 8ose
$eer #ales "ffice, #an 8ose, 3nti*+e
#etember &0, 1999E D:$ C+cio !as to!ed by the %:1 3N," arri'ed and %:1 3N," left the
barge immediately
o 1he clo+ds !ere dar0 and the !a'es !ere big so #%,2s District #ales #+er'isor,
Bernando %acab+ag, re*+ested 3N,"2s reresentati'e to transfer the barge to a safer
lace b+t it ref+sed so aro+nd the midnight, the barge s+n0 along !ith 29,210 cases of
Pale Pilsen and 500 cases of ,er'eDa Negra totalling to P1,&4),199
>hen #%, claimed against 3N," it stated that they agreed that it !o+ld not be liable for any
losses or damages res+lting to the cargoes by reason of fort+ito+s e'ent and it !as agreed to be
ins+red !ith BG- for 20,000 cases or P(5(,500
3N," filed against BG-
o BG- alleged that 3N," and #%, failed to e7ercise ordinary diligence or the diligence
of a good father of the family in the care and s+er'ision of the cargoes
R1,E 3N," liable to #%, and BG- liable for 5&P of the lost cargoes
,3 affirmed
ISSUE: >:N BG- sho+ld be e7emted from liability to 3N," for the lost cargoes beca+se of a
fort+ito+s e'ent and negligence of 3N,"
HELD: <;#. 3ffirmed !ith modification. 1hird/arty comlainant is dismissed.
3rt. 19&&. ,ommon carriers, from the nat+re of their b+siness and for reasons of +blic olicy
are bo+nd to obser'e e7traordinary diligence in the 'igilance o'er the goods and for the safety of
the assengers transorted by them, according to all the circ+mstances of each case.
#+ch e7traordinary diligence in 'igilance o'er the goods is f+rther e7ressed in 3rticles 19&4, 19&5, and
1945 Nos. 5, ), and 9 . . .
3rt. 19&4. ,ommon carriers are resonsible for the loss, destr+ction, or deterioration of the
goods, +nless the same is d+e to any of the follo!ing ca+ses onlyE
@1A Blood, storm, earth*+a0e, lightning, or other nat+ral disaster or calamityJ
. . .
3rt. 19&9. ?n order that the common carrier may be e7emted from resonsibility, the nat+ral
disaster m+st ha'e been the ro7imate and only ca+se of the loss. Fo!e'er, the common carrier
m+st e7ercise d+e diligence to re'ent or minimiDe loss before, d+ring and after the occ+rrence of
flood, storm, or other nat+ral disaster in order that the common carrier may be e7emted from
liability for the loss, destr+ction, or deterioration of the goods . . .
,aso fort+ito or force ma.e+re
o e7traordinary e'ents not foreseeable or a'oidable, e'ents that co+ld not be foreseen, or
!hich tho+gh foreseen, !ere ine'itable
o not eno+gh that the e'ent sho+ld not ha'e been foreseen or anticiated, as is commonly
belie'ed b+t it m+st be one imossible to foresee or to a'oid / not in this case
other 'essels in the ort of #an 8ose, 3nti*+e, managed to transfer to another
lace
1o be e7emted from resonsibility, the nat+ral disaster sho+ld ha'e been the ro7imate and only
ca+se of the loss. 1here m+st ha'e been no contrib+tory negligence on the art of the common
carrier.
o there !as blatant negligence on the art of %:1 3N,"2s cre!members, first in lea'ing
the engine/less barge D:$ C+cio at the mercy of the storm !itho+t the assistance of the
t+gboat, and again in failing to heed the re*+est of #%,2s reresentati'es to ha'e the
barge transferred to a safer lace
>hen e'idence sho! that the ins+red2s negligence or rec0lessness is so gross as to be s+fficient to
constit+te a !illf+l act, the ins+rer m+st be e7onerated.
3N,"2s emloyees is of s+ch gross character that it amo+nts to a !rongf+l act !hich m+st
e7onerate BG- from liability +nder the ins+rance contract
o both the D:$ C+cio and the %:1 3N," !ere blatantly negligent
Sc,/i"8 T0anspo0" : 60o1e0age Co0po0a"ion vs! T0anspo0" 'en"u0e3 Inc! >=5? SCRA 557@
FACTS:
Petitioner, !ho !as in charge of sec+ring re*+isite clearances, recei'e the cargoes from the shiside and
deli'er it to the consignee Cittle Giant #teel Pie ,ororation !areho+se at ,ainta, RiDal, hired the
ser'ices of resondent 1ransort 6ent+re ?ncororation @16?A2s t+gboat for the hot rolled steel sheets in
coil. ,oils !ere +nloaded to the barge b+t there !as no t+gboat to +ll the barge to the ier. D+e to strong
!a'es ca+sed by aroaching storm, the barge !as abandoned. Cater, the barge casiDed !ashing &9 coils
into the sea. ,onsignee !as e7ec+ted a s+brogation receit by ?nd+strial ?ns+rance after the former2s
filing of formal claim. ?nd+strial ?ns+rance filed a comlaint against both etitioner and resondent
herein. 1he trial co+rt held that etitioner and resondent 16? !ere .ointly and se'erally liable for the
s+brogation.
ISSUE:
>hether or not the loss of cargoes !as d+e to fort+ito+s e'ent.
RULI$%:
N". ?n order, to be considered a fort+ito+s e'entE @1A the ca+se of the +nforeseen and +ne7ected
occ+rrence, or the fail+re of the debtor to comly !ith his obligation, m+st be indeendent of h+man !illJ
@2A it m+st be imossible to foresee the e'ent !hich constit+te the caso fortuito, or if it can be foreseen it
m+st be imossible to a'oidJ @&A the occ+rrence m+st be s+ch as to render it imossible for the debtor to
f+lfill his obligation in any mannerJ and @4A the obligor m+st be free from any articiation in the
aggra'ation of the in.+ry res+lting to the creditor.
Petitioner and resondent 16? !ere .ointly and se'erally liable for the amo+nt of aid by the consignee
l+s interest com+ted from the date of decision of the trial co+rt.
,i)ippines F0ee 0ess3 Inc! vs! Cou0" o* Appea)s >=79 SCRA 69A@
FACTS:
Petitioner, thr+ 1eodoro Cocsin, #r., filed a case of 3nn+lment of #ale of its b+ilding, lot and rinting
machineries d+ring the regime of %artial Ca! to ri'ate resondent then reresented by late $:Gen.
%enDi on Bebr+ary 2), 19(9. Petitioner contends that there !as 'itiated consent and gross inade*+acy of
+rchase rice d+ring its sale on "ctober 2&, 199&. 1he trial co+rt dismissed etitioner2s comlaint and
granted ri'ate resondent2s co+nterclaim. ?t !as ele'ated to the ,o+rt of 3eals b+t !as also dismissed
for lac0 of merit.
ISSUE: >hether or not the action for ann+lment has already rescribed.
RULI$%:
<;#. 3rticle &91 of the ,i'il ,ode ertinently reads 41he action for ann+lment shall be bro+ght !ithin
fo+r years. 1his eriod shall beginE ?n cases of intimidation, 'iolence or +nd+e infl+ence, from the time
the defect of consent ceases 7 7 75.
K1he #+reme ,o+rtL cannot accet the etitioners2 contention that the eriod d+ring !hich a+thoritarian
r+le !as in force had interr+ted rescrition and that the same began to r+n only on Bebr+ary 25, 19(),
!hen the 3*+ino go'ernment too0 o!er. ?t is tr+e that +nder 3rticle 1154 Kof the ,i'il ,odeL 777
fort+ito+s e'ents ha'e the effect of tolling the eriod of rescrition. Fo!e'er, Kthe #+reme ,o+rtL
cannot say, as a +ni'ersal r+le, that the eriod from #etember 21, 1992 thro+gh Bebr+ary 25, 19()
in'ol'es a force majeure. Plainly, Kthe #+reme ,o+rtL can not bo7 in the 4dictatorial5 eriod !ithin the
term !itho+t distinction, and !itho+t, by necessity, s+sending all liabilities, ho!e'er demandable,
inc+rred d+ring that eriod, incl+ding erhas those ordered by this ,o+rt to be aid.
Eas"e0n S,ipping vs CA
%R $o! A7=1#3 1# ;u)- 1AA=
#9= SCRA 7?
FACTS:
1!o fiber dr+ms !ere shied o!ned by ;astern #hiing from 8aan. 1he shiment as ins+red
!ith a marine olicy. -on arri'al in %anila +nto the c+stody of metro Port #er'ice, !hich e7ceted to
one dr+m, said to be in bad order and !hich damage !as +n0no!n the %ercantile ?ns+rance ,omany.
3llied $ro0erage ,ororation recei'ed the shiment from %etro, one dr+m oened and !itho+t seal.
3llied deli'ered the shiment to the consignee2s !areho+se. 1he latter e7ceted to one dr+m !hich
contained sillages !hile the rest of the contents !as ad+lterated:fa0e. 3s conse*+ence of the loss, the
ins+rance comany aid the consignee, so that it became s+brogated to all the rights of action of
consignee against the defendants ;astern #hiing, %etro Port and 3llied $ro0erage. 1he ins+rance
comany filed before the trial co+rt. 1he trial co+rt r+led in fa'or of laintiff an ordered defendants to ay
the former !ith resent legal interest of 12P er ann+m from the date of the filing of the comlaint. "n
aeal by defendants, the aellate co+rt denied the same and affirmed in toto the decision of the trial
co+rt.
ISSUE:
@1A >hether the alicable rate of legal interest is 12P or )P.
@2A >hether the ayment of legal interest on the a!ard for loss or damage is to be com+ted from the time
the comlaint is filed from the date the decision aealed from is rendered.
HELD:
@1A1he ,o+rt held that the legal interest is )P com+ted from the decision of the co+rt a *+o.
>hen an obligation, not constit+ting a loan or forbearance of money, is breached, an interest on the
amo+nt of damaes a!arded may be imosed at the discretion of the co+rt at the rate of )P er ann+m. No
interest shall be ad.+dged on +nli*+idated claims or damages e7cet !hen or +ntil the demand can be
established !ith reasonable certainty.
>hen the .+dgment of the co+rt a!arding a s+m of money becomes final and e7ec+tor, the
rate of legal interest shall be 12P er ann+m from s+ch finality +ntil satisfaction, this interim eriod
being deemed to be by then an e*+i'alent to a forbearance of money.
1he interest d+e shall be 12P P3 to be com+ted fro defa+lt, 8 or ;8D.
@2A Brom the date the .+dgment is made. >here the demand is established !ith reasonable
certainty, the interest shall begin to r+n from the time the claim is made .+dicially or ;8 b+t !hen s+ch
certainty cannot be so reasonably established at the time the demand is made, the interest shll begin to r+n
only from the date of .+dgment of the co+rt is made.
@&A 1he ,o+rt held that it sho+ld be com+ted from the decision rendered by the co+rt a *+o.
SA(A%UITA 6UILDERS v $6
(ini +iges":
#amag+ita loaned money from PN$. PN$ +nilaterally increased rates of interest in the
loan !:o informing #amag+ita. PN$ cl a i me d t he y !er e a +t hor i D e d t o do i t a s t he r e
!a s a c l a +s e i n t he agreement that they may do so. $esides, -s+ry la! !as no longer in forceU #,
said N"V PN$ cannot do soJ it !ill 'iolate m+t+ality of contracts +nder1 & 0 ( . $ e s i d e s , # ,
m a y i n t e r ' e n e ! h e n a m o + n t o f i n t e r e s t i s +nconscionable.
Fac"s: #amag+ita sec+red a loan from PN$ in an aggregate amo+nt of (% esos, mortgaging the
roerties of #amag+ita2s resident and chairman of the boa r d. #a ma g+i t a al s o e 7e c +t e d
s e 'er a l r omi s s or y not es d+e on different dates @ayment datesA. 1he first romissory
note had 19.5Pinterest rate. 1he 2
nd
and &
rd
had 21.5P. a +niform cla+se therein ermitted PN$ to
increase the rate 4!ithin the limits allo!ed by la! at any time deending on !hate'er
olicy it may adot in the f+t+re 7 7 7,5 !itho+t e'en gi'ing rior notice to etitioners.
1here !as also a cla+se in the romissory note that stated that if the same is not aid 2
years after release then it shall be con'erted to a medi+m term loan R and the interest rate for s+ch loan
!o+ld aly. Cater on, #amag+ita defa+lted on its ayments and failed to comly !ith obligations on
romissory notes. #amag+ita th+s re*+ested for a 90 day e7tension to ay the loan. 3gain they
defa+lted, so they as0ed for loan restr+ct+ring. ?t artly aid the loan and romised to ay the
balance later on. 3G3? N t he y f a i l e d t o a y s o PN$ e 7t r a . +di c i a l l y f or e c l os e d t he
mortgaged roerties. ?t !as sold for 10%. PN$ claimed that #amag+ita o!ed it 12% so they filed a
case in co+rt as0ing samag+ita to ay for deficiency.R1, fo+nd that #amag+ita !as
a+tomatically entitled to the debt relief ac0age of PN$ and r+led that the latter had no ca+se of
action against the former. ,3 re'ersed, saying #amag+ita !as not entitled, th+s ordered
them to ay the deficiency R 3eal U >ent to #,. #amag+ita claims the loan !as bloated s o t he y
don2 t r ea l l y o!e PN$ a nymor e , b+t i t . +s t o'ercharged themV
IssuesBRu)ing:
>:N the loan acco+nts are bloatedE <;#. 1here is no deficiencyJ there is act+ally an
o'erayment of more than &% based on the com+tation of the #,. >hether PN$ co+ld +nilaterally
increase interest ratesE N"
RatioE
#amag+ita2s accessory d+ty to ay interest did not gi'e PN$ +nrestrained freedom to charge any rate
other than that !hich !as agreed +on. No interest shall be d+e, +nless e7ressly sti+lated in !riting. ?t
!o+ld be the D e ni t h of f a r c i c a l i t y t o s e c i f y a nd agr e e +on r a t es t ha t c o+l d be
s+bse*+ently +graded at !him by only one arty to the agreement. 1he 4+ni l at e r al
de t er mi na t i on a nd i mos i t i on5 of i ncr e a s e d r at e s i s 4'iolati'e of the rincile of
m+t+ality of contracts ordained in 3rticle 1&0(of the ,i'il ,ode.5 "ne/sided imositions do not
ha'e the force of la! bet!een the arties, beca+se s+ch imositions are not based on the
arties2 essential e*+ality. 3ltho+gh escalation cla+ses are 'alid in maintaining fiscal stabilit y
and retaining the 'al+e of money on long/term contracts, gi'ing resondent an +nbridled right to ad.+st
the interest indeendently and +!ardly !o+ld comletely ta0e a!ay from etitioners the 4right to assent
to an imortant modification in their agreement5 and !o+ld also negate the element
of m+t+ality in their contracts. 1he cla+se cited earlier made the f+lfillment of the contracts
4deendent e7cl+si'ely +on the +ncontrolled !ill5 of resondent and !as therefore 'oid.
$esides, the ro forma romissory notes ha'e the character of a contract d2 adhesion, 4!here the
arties do n o t b a r g a i n o n e * + a l f o o t i n g , t h e !e a 0 e r a r t y 2 s K t h e
d e b t o r 2 s L articiation being red+ced to the alternati'e Wto ta0e it or lea'e it.25,i r c +l a r t hat
l i f t e d t he c ei l i ng of i nt e r e s t r a t es of +s +r y l a ! di d not a+thoriDe either arty to
+nilaterall y raise the interest rate !itho+t the other2s consent. the interest ranging from 2)
ercent to &5 ercent in the statements of acco+nt // 4m+st be e*+itably red+ced for being
ini*+ito+s, +nconscionable and e7orbitant.5 Rates fo+nd to be ini*+ito+s or +nconscionable are 'oid, as if
it there !ere no e7ress contract thereon. 3bo'e all, it is +ndo+btedly against +blic olicy to charge
e7cessi'ely for the +se of money.
Li)i2e", Sunga-C,an vs La/2e0"o C,ua an+ Hono0a2)e Cou0" o* Appea)s
FACTS: ?n 1999, ,h+a and 8acinto #+nga 'erbally agreed to form a artnershi for the sale and
distrib+tion of #hellane CPGs. 1heir b+siness !as 'ery rofitable b+t in 19(9 8acinto died. -on 8acinto2s
death, his da+ghter Cilibeth too0 o'er the b+siness as !ell as the b+siness assets. ,h+a then demanded for
an acco+nting b+t Cilibeth 0et on e'ading him. ?n 1992 ho!e'er, Cilibeth ga'e ,h+a P2000. #he said
that the same reresents a artial aymentJ that the rest !ill come after she finally made an acco+nting.
#he ne'er made an acco+nting so in 1992, ,h+a filed a comlaint for 4>inding - of Partnershi 3ffairs,
3cco+nting, 3raisal and Reco'ery of #hares and Damages !ith >rit of Preliminary 3ttachment5
against Cilibeth.
Cilibeth in her defense arg+ed among others that ,h+a2s action has rescribed.
ISSUE: >hether or not ,h+a2s claim is barred by rescrition.
HELD: No. 1he action for acco+nting filed by ,h+a three @&A years after 8acinto2s death !as !ell !ithin
the rescribed eriod. 1he ,i'il ,ode ro'ides that an action to enforce an oral contract rescribes in si7
@)A years !hile the right to demand an acco+nting for a artner2s interest as against the erson contin+ing
the b+siness accr+es at the date of dissol+tion, in the absence of any contrary agreement. ,onsidering that
the death of a artner res+lts in the dissol+tion of the artnershi, in this case, it !as after 8acinto2s death
that ,h+a as the s+r'i'ing artner had the right to an acco+nt of his interest as against Cilibeth. ?t bears
stressing that !hile 8acinto2s death dissol'ed the artnershi, the dissol+tion did not immediately
terminate the artnershi. 1he ,i'il ,ode e7ressly ro'ides that +on dissol+tion, the artnershi
contin+es and its legal ersonality is retained +ntil the comlete !inding + of its b+siness, c+lminating in
its termination.