Gutierrez vs Gutierrez

Facts:
On February 2, 1930, a passenger truck and an automobile of private ownership collided while
attemptingto pass each other on the Talon bridge on the Manila South Road in the municipality
of Las Pias. Thediver of the car is an 18 y/o boy, son of the cars owners. It was found by the
trial court that both the boyand the driver of the autobus were negligent by which neither of them
were willing to slow up and give theright of way to the other. Plaintiff is the passenger of the bus
who as a result of the incident fractured hisright leg to his damage and prejudice. Thus, plaintiff
sued the boy, his parents as owners of the car, thebus driver and its owner for damages. The
trial court ruled in favor of plaintiff.Hence, this appeal.
Issue:
How should civil liability be imposed upon parties in the case at bar?
Held:
The case is dealing with the civil liability of parties for obligations which arise from fault or
negligence.For the boy, it is his father who is liable (based on culpa aquiliana) to the plaintiff
because of the followingconditions; first, the car was of general use of the family, second, the
boy was authorized or designatedby his father to run the car, third, at the time of the
collision the car is used for the purpose not of the childs pleasure but that of the other
members of the car owners family members. The theory of the law isthat the running of the
machine by a child to carry other members of the family is within the scope of theowners
business, so that he is liable for the negligence of the child because of the relationship of
master and servant.For the chauffer and the bus owner (based on culpa contractual), their
liability rests upon the contract (thesafety that is assured by the operator upon the passenger)
whereas that degree of care expected fromthe chauffer is lacking.

General Milling Corp. Vs SPS. Librado Ramos and Remedios Ramos

DECISION
VELASCO, JR., J.:

The Case

This is a petition for review of the April 15, 2010 Decision of the Court of Appeals
(CA) in CA-G.R. CR-H.C. No. 85400 entitled Spouses Librado Ramos &
Remedios Ramos v. General Milling Corporation, et al., which affirmed the May
31, 2005 Decision of the Regional Trial Court (RTC), Branch 12 in Lipa City, in
Civil Case No. 00-0129 for Annulment and/or Declaration of Nullity of
Extrajudicial Foreclosure Sale with Damages.

The Facts

On August 24, 1989, General Milling Corporation (GMC) entered into a Growers
Contract with spouses Librado and Remedios Ramos (Spouses Ramos). Under the
contract, GMC was to supply broiler chickens for the spouses to raise on their land
in Barangay Banaybanay, Lipa City, Batangas.[1] To guarantee full compliance, the
Growers Contract was accompanied by a Deed of Real Estate Mortgage over a
piece of real property upon which their conjugal home was built. The spouses
further agreed to put up a surety bond at the rate of PhP 20,000 per 1,000 chicks
delivered by GMC. The Deed of Real Estate Mortgage extended to Spouses Ramos
a maximum credit line of PhP 215,000 payable within an indefinite period with an
interest of twelve percent (12%) per annum.[2]
The Deed of Real Estate Mortgage contained the following provision:

WHEREAS, the MORTGAGOR/S has/have agreed to guarantee and secure the

full and faithful compliance of [MORTGAGORS] obligation/s with the
MORTGAGEE by a First Real Estate Mortgage in favor of the MORTGAGEE,
over a 1 parcel of land and the improvements existing thereon, situated in the
Barrio/s of Banaybanay, Municipality of Lipa City, Province of Batangas,
Philippines, his/her/their title/s thereto being evidenced by Transfer Certificate/s
No./s T-9214 of the Registry of Deeds for the Province of Batangas in the amount
of TWO HUNDRED FIFTEEN THOUSAND (P 215,000.00), Philippine
Currency, which the maximum credit line payable within a x x x day term and to
secure the payment of the same plus interest of twelve percent (12%) per annum.

Spouses Ramos eventually were unable to settle their account with GMC.
They alleged that they suffered business losses because of the negligence of GMC
and its violation of the Growers Contract.[3]

On March 31, 1997, the counsel for GMC notified Spouses Ramos that GMC
would institute foreclosure proceedings on their mortgaged property.[4]

On May 7, 1997, GMC filed a Petition for Extrajudicial Foreclosure of Mortgage.

On June 10, 1997, the property subject of the foreclosure was subsequently sold by
public auction to GMC after the required posting and publication. [5] It was
foreclosed for PhP 935,882,075, an amount representing the losses on chicks and
feeds exclusive of interest at 12% per annum and attorneys fees. [6] To complicate
matters, on October 27, 1997, GMC informed the spouses that its Agribusiness
Division had closed its business and poultry operations.[7]

On March 3, 2000, Spouses Ramos filed a Complaint for Annulment and/or

Declaration of Nullity of the Extrajudicial Foreclosure Sale with Damages. They
contended that the extrajudicial foreclosure sale on June 10, 1997 was null and
void, since there was no compliance with the requirements of posting and
publication of notices under Act No. 3135, as amended, or An Act to Regulate the
Sale of Property under Special Powers Inserted in or Annexed to Real Estate
Mortgages. They likewise claimed that there was no sheriffs affidavit to prove
compliance with the requirements on posting and publication of notices. It was
further alleged that the Deed of Real Estate Mortgage had no fixed term. A prayer
for moral and exemplary damages and attorneys fees was also included in the
complaint.[8] Librado Ramos alleged that, when the property was foreclosed, GMC
did not notify him at all of the foreclosure.[9]

During the trial, the parties agreed to limit the issues to the following: (1) the
validity of the Deed of Real Estate Mortgage; (2) the validity of the extrajudicial
foreclosure; and (3) the party liable for damages.[10]

In its Answer, GMC argued that it repeatedly reminded Spouses Ramos of their
liabilities under the Growers Contract. It argued that it was compelled to foreclose
the mortgage because of Spouses Ramos failure to pay their obligation. GMC
insisted that it had observed all the requirements of posting and publication of
notices under Act No. 3135.[11]
The Ruling of the Trial Court
Holding in favor of Spouses Ramos, the trial court ruled that the Deed of Real
Estate Mortgage was valid even if its term was not fixed. Since the duration of the
term was made to depend exclusively upon the will of the debtors-spouses, the trial
court cited jurisprudence and said that the obligation is not due and payable until
an action is commenced by the mortgagee against the mortgagor for the purpose of
having the court fix the date on and after which the instrument is payable and the
date of maturity is fixed in pursuance thereto.[12]

The trial court held that the action of GMC in moving for the foreclosure of the
spouses properties was premature, because the latters obligation under their
contract was not yet due.

The trial court awarded attorneys fees because of the premature action taken by
GMC in filing extrajudicial foreclosure proceedings before the obligation of the
spouses became due.

The RTC ruled, thus:

 WHEREFORE, premises considered, judgment is rendered as follows:

1. The Extra-Judicial Foreclosure Proceedings under docket no. 0107-97 is

hereby declared null and void;

2. The Deed of Real Estate Mortgage is hereby declared valid and legal for
all intents and puposes;

3. Defendant-corporation General Milling Corporation is ordered to pay

Spouses Librado and Remedios Ramos attorneys fees in the total amount of P
57,000.00 representing acceptance fee of P30,000.00 and P3,000.00 appearance
fee for nine (9) trial dates or a total appearance fee of P 27,000.00;

4. The claims for moral and exemplary damages are denied for lack of
merit.

IT IS SO ORDERED.[13]

The Ruling of this Court

Can the CA consider matters not alleged?

GMC asserts that since the issue on the existence of the demand letter was not
raised in the trial court, the CA, by considering such issue, violated the basic
requirements of fair play, justice, and due process.[18]

In their Comment,[19] respondents-spouses aver that the CA has ample authority to

rule on matters not assigned as errors on appeal if these are indispensable or
necessary to the just resolution of the pleaded issues.

In Diamonon v. Department of Labor and Employment,[20] We explained that an

appellate court has a broad discretionary power in waiving the lack of assignment
of errors in the following instances:

(a) Grounds not assigned as errors but affecting the jurisdiction of the
court over the subject matter;

(b) Matters not assigned as errors on appeal but are evidently plain or
clerical errors within contemplation of law;

(c) Matters not assigned as errors on appeal but consideration of which is

necessary in arriving at a just decision and complete resolution of the case or to
serve the interests of a justice or to avoid dispensing piecemeal justice;
 (d) Matters not specifically assigned as errors on appeal but raised in the
trial court and are matters of record having some bearing on the issue submitted
which the parties failed to raise or which the lower court ignored;

(e) Matters not assigned as errors on appeal but closely related to an error
assigned;

(f) Matters not assigned as errors on appeal but upon which the
determination of a question properly assigned, is dependent.

Paragraph (c) above applies to the instant case, for there would be a just and
complete resolution of the appeal if there is a ruling on whether the Spouses
Ramos were actually in default of their obligation to GMC.

Was there sufficient demand?

We now go to the second issue raised by GMC. GMC asserts error on the part of
the CA in finding that no demand was made on Spouses Ramos to pay their
obligation. On the contrary, it claims that its March 31, 1997 letter is akin to a
demand.

We disagree.

There are three requisites necessary for a finding of default. First, the obligation is
demandable and liquidated; second, the debtor delays performance; and third, the
creditor judicially or extrajudicially requires the debtors performance.[21]

According to the CA, GMC did not make a demand on Spouses Ramos but merely
requested them to go to GMCs office to discuss the settlement of their account. In
spite of the lack of demand made on the spouses, however, GMC proceeded with
the foreclosure proceedings. Neither was there any provision in the Deed of Real
Estate Mortgage allowing GMC to extrajudicially foreclose the mortgage without
need of demand.

Indeed, Article 1169 of the Civil Code on delay requires the following:

Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfilment of their
obligation.
 However, the demand by the creditor shall not be necessary in order that delay
may exist:

(1) When the obligation or the law expressly so declares; x x x

As the contract in the instant case carries no such provision on demand not being
necessary for delay to exist, We agree with the appellate court that GMC should
have first made a demand on the spouses before proceeding to foreclose the real
estate mortgage.

Development Bank of the Philippines v. Licuanan finds application to the instant

case:

The issue of whether demand was made before the foreclosure was
effected is essential. If demand was made and duly received by the respondents
and the latter still did not pay, then they were already in default and foreclosure
was proper. However, if demand was not made, then the loans had not yet become
due and demandable. This meant that respondents had not defaulted in their
payments and the foreclosure by petitioner was premature. Foreclosure is valid
only when the debtor is in default in the payment of his obligation.[22]

In turn, whether or not demand was made is a question of fact.[23] This petition filed
under Rule 45 of the Rules of Court shall raise only questions of law. For a
question to be one of law, it must not involve an examination of the probative
value of the evidence presented by the litigants or any of them. The resolution of
the issue must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact. [24] It need not be reiterated that this
Court is not a trier of facts.[25] We will defer to the factual findings of the trial court,
because petitioner GMC has not shown any circumstances making this case an
exception to the rule.

WHEREFORE, the petition is DENIED. The CA Decision in CA-G.R.

CR-H.C. No. 85400 is AFFIRMED.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice

TERESITA J. LEONARDO-DE CASTRO ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

AT T E S TAT I O N

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson
 C E R T I F I C AT I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

FACTS:
On November 16, 1959, the NAMARCO and the
FEDERATION entered into a Contract of Sale stipulating
among others that Two Hundred Thousand Pesos
(P200,000.00) be paid as part payment, and
FEDERATION deposits with the NAMARCO upon signing
of the items and/or merchandise a cash basis payment
upon delivery of the duly indorsed negotiable shipping
document covering the same. To insure payment of the
goods by the FEDERATION, the NAMARCO accepted
three domestic letters of credit which is an accepted draft
and duly executed trust receipt approved by the Philippine
National Bank.

Upon arrival of the goods in Manila in January,

1960, the NAMARCO billed FEDERATION Statement of
Account for P277,357.91, covering shipment of the 2,000
cartons of PK Chewing Gums, 1,000 cartons of Juicy Fruit
Chewing Gums, and 500 cartons of Adams Chicklets;
Statement of Account of P135,891.32, covering shipment of
the 168 cartons of Blue Denims; and Statement of Account
of P197,824.12, covering shipment of the 183 bales of
Khaki Twill, or a total of P611,053.35. Subsequently, it was
received by FEDERATION on January 29, 1960. However,
on March 2, 1960 FEDERATION filed a complaint against
Namarco for undelivery of some items contained in the
contract of sale. FEDERATION refuses to pay
acknowledge the domestic letters of credit until full
delivery is done by NAMARCO.

ISSUE:
Should FEDERATION be obliged to pay the
amount of the merchandise even if there was still
incomplete delivery of items by NAMARCO?

RULING:
Yes. The right of the NAMARCO to the cost of the
goods existed upon delivery of the said goods to the
FEDERATION which, under the Contract of Sale, had to
pay for them. Therefore, the claim of the NAMARCO for
the cost of the goods delivered arose out of the failure of
the FEDERATION to pay for the said goods, and not out of
the refusal of the NAMARCO to deliver the other goods to
the FEDERATION. Furthermore, FEDERATIONs nonpayment
would result to it being unjustly enriched.
However, the lower court erred in imposing interest at the
legal rate on the amount due, "from date of delivery of the
merchandise", and not from extra-judicial demand. In the
absence of any stipulations on the matter, the rule is that
the obligor is considered in default only from the time the
obligee judicially or extra-judicially demands fulfillment of
the obligation and interest is recoverable only from the
time such demand is made. There being no stipulation as
to when the aforesaid payments were to be made, the
FEDERATION is therefore liable to pay interest at the legal
rate only from June 7, 1960, the date when NAMARCO
made the extra-judicial demand upon said party.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22272 June 26, 1967

ANTONIA MARANAN, plaintiff-appellant,

vs.
PASCUAL PEREZ, ET AL., defendants.
PASCUAL PEREZ, defendant appellant.

Pedro Panganiban for plaintiff-appellant.

Magno T. Bueser for defendant-appellant.

BENGZON, J.P., J.:

Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual Perez
when he was stabbed and killed by the driver, Simeon Valenzuela.

Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas. Found guilty, he was
sentenced to suffer imprisonment and to indemnify the heirs of the deceased in the sum of P6,000. Appeal from
said conviction was taken to the Court of Appeals. 1wph1.t

On December 6 1961, while appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's mother,
filed an action in the Court of First Instance of Batangas to recover damages from Perez and Valenzuela for the
death of her son. Defendants asserted that the deceased was killed in self-defense, since he first assaulted the
driver by stabbing him from behind. Defendant Perez further claimed that the death was a caso fortuito for
which the carrier was not liable.

The court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages against defendant
Perez. The claim against defendant Valenzuela was dismissed. From this ruling, both plaintiff and defendant
Perez appealed to this Court, the former asking for more damages and the latter insisting on non-liability.
Subsequently, the Court of Appeals affirmed the judgment of conviction earlier mentioned, during the pendency
of the herein appeal, and on May 19, 1964, final judgment was entered therein. (Rollo, p. 33).

Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884, that
the carrier is under no absolute liability for assaults of its employees upon the passengers. The attendant facts
and controlling law of that case and the one at bar are very different however. In the Gillaco case, the
passenger was killed outside the scope and the course of duty of the guilty employee. As this Court there
found:

x x x when the crime took place, the guard Devesa had no duties to discharge in connection with the
transportation of the deceased from Calamba to Manila. The stipulation of facts is clear that when
Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union)
trains, and he was at Paco Station awaiting transportation to Tutuban, the starting point of the train that
he was engaged to guard. In fact, his tour of duty was to start at 9:00 two hours after the commission
of the crime. Devesa was therefore under no obligation to safeguard the passengers of the Calamba-
Manila train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. The
position of Devesa at the time was that of another would be passenger, a stranger also awaiting
transportation, and not that of an employee assigned to discharge any of the duties that the Railroad
had assumed by its contract with the deceased. As a result, Devesa's assault can not be deemed in
law a breach of Gillaco's contract of transportation by a servant or employee of the carrier. . . .
(Emphasis supplied)

Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands
the carrier had entrusted the duty of executing the contract of carriage. In other words, unlike the Gillaco case,
the killing of the passenger here took place in the course of duty of the guilty employee and when the employee
was acting within the scope of his duties.

Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the
present Civil Code, did not impose upon common carriers absolute liability for the safety of passengers against
wilful assaults or negligent acts committed by their employees. The death of the passenger in the Gillaco case
was truly a fortuitous event which exempted the carrier from liability. It is true that Art. 1105 of the old Civil Code
on fortuitous events has been substantially reproduced in Art. 1174 of the Civil Code of the Philippines but both
articles clearly remove from their exempting effect the case where the law expressly provides for liability in
spite of the occurrence of force majeure. And herein significantly lies the statutory difference between the old
and present Civil Codes, in the backdrop of the factual situation before Us, which further accounts for a
different result in theGillaco case. Unlike the old Civil Code, the new Civil Code of the Philippines expressly
makes the common carrier liable for intentional assaults committed by its employees upon its passengers, by
the wording of Art. 1759 which categorically states that

Common carriers are liable for the death of or injuries to passengers through the negligence or willful
acts of the former's employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers.
The Civil Code provisions on the subject of Common Carriers 1 are new and were taken from Anglo-American
Law.2 There, the basis of the carrier's liability for assaults on passengers committed by its drivers rests either
on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the
passenger safely.3

Under the first, which is the minority view, the carrier is liable only when the act of the employee is within the
scope of his authority and duty. It is not sufficient that the act be within the course of employment only.4

Under the second view, upheld by the majority and also by the later cases, it is enough that the assault
happens within the course of the employee's duty. It is no defense for the carrier that the act was done in
excess of authority or in disobedience of the carrier's orders. 5 The carrier's liability here is absolute in the sense
that it practically secures the passengers from assaults committed by its own employees. 6

As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows the rule based on the
second view. At least three very cogent reasons underlie this rule. As explained in Texas Midland R.R. v.
Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, and Haver v. Central Railroad Co., 43 LRA 84, 85: (1) the special
undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the
exercise of the high degree of care prescribed by the law, inter alia from violence and insults at the hands of
strangers and other passengers, but above all, from the acts of the carrier's own servants charged with the
passenger's safety; (2) said liability of the carrier for the servant's violation of duty to passengers, is the result
of the formers confiding in the servant's hands the performance of his contract to safely transport the
passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by law;
and (3) as between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence
of the carrier's employees against passengers, since it, and not the passengers, has power to select and
remove them.

Accordingly, it is the carrier's strict obligation to select its drivers and similar employees with due regard not
only to their technical competence and physical ability, but also, no less important, to their total personality,
including their patterns of behavior, moral fibers, and social attitude.

Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjudged the defendant
carrier liable pursuant to Art. 1759 of the Civil Code. The dismissal of the claim against the defendant driver
was also correct. Plaintiff's action was predicated on breach of contract of carriage 7 and the cab driver was not
a party thereto. His civil liability is covered in the criminal case wherein he was convicted by final judgment.

In connection with the award of damages, the court a quo granted only P3,000 to plaintiff-appellant. This is the
minimum compensatory damages amount recoverable under Art. 1764 in connection with Art. 2206 of the Civil
Code when a breach of contract results in the passenger's death. As has been the policy followed by this Court,
this minimal award should be increased to P6,000. As to other alleged actual damages, the lower court's
finding that plaintiff's evidence thereon was not convincing,8 should not be disturbed. Still, Arts. 2206 and 1764
awardmoral damages in addition to compensatory damages, to the parents of the passenger killed to
compensate for the mental anguish they suffered. A claim therefor, having been properly made, it becomes the
court's duty to award moral damages.9 Plaintiff demands P5,000 as moral damages; however, in the
circumstances, We consider P3,000 moral damages, in addition to the P6,000 damages afore-stated, as
sufficient. Interest upon such damages are also due to plaintiff-appellant. 10

Wherefore, with the modification increasing the award of actual damages in plaintiff's favor to P6,000, plus
P3,000.00 moral damages, with legal interest on both from the filing of the complaint on December 6, 1961 until
the whole amount is paid, the judgment appealed from is affirmed in all other respects. No costs. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.