Case 1

GSIS vs COA
Facts: GSIS granted several benefits to its
employees. The COA subsequently disallowed
some of them. As a result, the employees had
to return the benefits they received to GSIS.
The law provides that retirement benefits are
exempt from attachment, garnishment, levy,
and execution. Section 39 of RA 8291 exempts
benefits
from
judicial
processes,
and
unconditionally exempts benefits from quasijudicial
and
administrative
processes,
including COA disallowances, as well as all
financial obligations of the member. Hence,
retirement benefits cannot be diminished by
COA disallowances.
Issue: Can the COA Disallowances be deducted
from retirement benefits?
Ruling: Yes. The COA disallowances would have
been deducted from their salaries, had they
not retired before such deductions could be
effected. The respondents then had an
obligation to return the amounts received
under the principle of solutioindebiti. The
delivery of benefits to respondents under an
erroneous interpretaton of the law granting
benefits gave rise to an actionable obligation
for them to return the same.
Under Article 2154 of the Civil COde, if
something is received and unduly delivered
through mistake when there is no right to
demand it, the obligation to return the thing
arises. Payment by reason of mistake in the
construction or application of a doubtful or
difficult question of law also comes within the
scope of solutioindebiti.
---------------------------------------------------------------------------------------------------------------------------------------Case 2
Siga-an v. Villanueva (2009)
Facts:
Respondent filed a complaint for sum of
money against petitioner. Respondent claimed
that petitioner approached her inside the
Philippine Navy Office (PNO) and offered to
loan her the amount of P540,000.00 of which
the loan agreement was not reduced in

writing and there was no stipulation as to

the payment of interest for the loan.
Respondent issued a check worth P500,000.00
to petitioner as partial payment of the loan.
She then issued another check in the amount
of P200,000.00 to petitioner as payment of the
remaining balance of the loan of which the
excess amount of P160,000.00 would be
applied as interest for the loan. Not satisfied
with the amount applied as interest, petitioner
insisted her to pay additional interest and
threatened to block or disapprove her
transactions with the PNO if she would not
comply with his demand. (because all the
transactions of respondent with the PNO were
subject to the approval of petitioner as
comptroller of the PNO). She paid additional
amounts in cash and checks as interests for
the loan. She asked petitioner for receipt for
the payments but was told that it was not
necessary as there was mutual trust and
confidence between them. According to her
computation, the total amount she paid
to petitioner for the loan and interest
accumulated
to
P1,200,000.00.
The RTC rendered a Decision holding that
respondent made an overpayment of her loan
obligation to petitioner and that the latter
should refund the excess amount to the
former. It said that respondents obligation
was only to pay the loaned amount of
P540,000.00, and that the alleged interests
due should not be included in the computation
of respondents total monetary debt because
there was no agreement between them
regarding payment of interest. It concluded
that since respondent made an excess
payment to petitioner in the amount of
P660,000.00through mistake, (since interest
is only payable/demandable if: there is a
stipulation as to the amount and it was put in
writing) petitioner should return the said
amount to respondent pursuant to the
principle of solutioindebiti (something is
received when there is no right to
demand it, and it was unduly delivered
through mistake, the obligation to return
it
arises).
(sorrytaaskaauang
facts
maonipinakamubongaako
ma
gamangamasabtan
pa
siya.
Daghanimportantenga details besayaw pa
leader!)
Issue:

Was there overpayment made by Villanueva?

Ruling:
Yes.
There are two types of interest: monetary and
compensatory.
Monetary
interest:
Interest
is
a
COMPENSATION fixed by the PARTIES for the
use or forbearance of money. (kanang interest
sautang) Compensatory: Interest imposed by
LAW or by COURTS as PENALTY or INDEMNITY.
(kanang interest sa WALA nakabayadugutang).
For monetary interest to be demandable, it
has to be: 1. Express stipulation for the
payment of interest; and 2. The agreement for
the payment of interest was reduced in
writing. (this case involves an issue
regarding monetary interest)
In this case, there was no agreement between
the parties as to the interest. As explained by
Villanueva, the presented promissory note was
in her handwriting because Sigaan told her to
copy it and she did it because she feared the
threats of Sigaan to block her deals with the
Phil Navy. Clearly there was NO CONSENT to
the payment of interest, she was forced. The
principle of SolutioIndebiti applies to this case.
Since Villanueva paid an excess of P160,000
as she was under no duty to make such
payment because there was no express
stipulation in writing concerning the interest.
The payment was a clear mistake. Since
petitioner received something when
there was no right to demand it, he has
an obligation to return it.

Base for the exclusive use of the US Defense

Communications Agency. In turn, Globe
promised to pay Philcomsat monthly rentals
for each leased circuit involved. That year also
marked the expiration of the Military Bases
Agreement between the Philippines and US. So
when Senate voted against extending the term
of the RP-US Military Bases Agreement,
withdrawal of all US military forces from Subic
Naval Base was set for December 1992. Globe
then notified Philcomsat of its intention to
discontinue the use of the earth station
effective November 1992 in view of the
withdrawal of US military personnel from Subic
Naval Base. They invoked Section 8 of the
Agreement as basis for their exemption from
non-compliance, since such failure results
directly or indirectly from force majeure or
fortuitous event. However, Philcomsat replied
with an expectation to receive payments from
Globe for the stipulated rentals for the
remaining terms of the Agreement, making
reference to Section 7 of the Agreement. When
Globe refused to heed the demand for
payment, Philcomsat filed a complaint with
against Globe.
Issue:
Is Section 8 of the Agreement contrary to
Article 1174 of the Civil Code in defining force
majeure?
Ruling:

Philippine
Communications
Satellite
Corporation vs. Globe Telecom, Inc., 429 SCRA
153(2004)

No. Article 1174 of the Civil Code, which

exempts an obligor from liability on account of
fortuitous events or force majeure, does not
only refer to events that are unforeseeable,
but also to those which are foreseeable, but
inevitable. A fortuitous event under Article
1174 may either be an act of God, or natural
occurrences such as floods or typhoons, or an
act of man, such as riots, strikes or wars. Not
being contrary to law, morals, good customs,
public order, or public policy, Section 8 of the
Agreement which Philcomsat and Globe freely
agreed upon has the force of law between
them. (Article 1306, 1159 of the Civil Code)

GR No. 147324

Additional Information:

Facts:

Globe may be exempt from non-compliance

with its obligation to pay rentals under Section
8, if the concurrence of the following elements
is established: (1) the event must be
independent of the human will; (2) the

---------------------------------------------------------------------------Case 3

On May 1991, Philcomsat and Globe entered

into a 5-year Agreement whereby the former
obligated itself to establish, operate and
provide an earth station within the Subic Naval

occurrence must render it impossible for the

debtor to fulfill the obligation in a normal
manner; and (3) the obligor must be free of
participation in, or aggravation of, the injury to
the creditor.
---------------------------------------------------------------------------Case 4

the rights of action as opposed to meager

conclusions of fact and law. For example, to
claim your right to the Office of the President
through a petition or complaint must have a
source of this right, OTHERWISE, you cannot
state a cause of action. In the case at bar,
the allocation of IPO shares in the resolution
were merely customs/practice which is not a
source of a legally demandable
or
enforceable right (customs are not laws).

Makati Stock Exchange vs. Campos

Facts
Miguel Campos (Campos) worked for a while
with Makati Stock Exchange Inc. (MKSE). As
the only remaining incorporator, Campos was
recognized as lifetime Chairman Emeritus by
the Board of Governors of MKSE on Feb 9,
1989. The resolution also gave him Initial
Public Offering (IPOs) benefits of 25% of the
shares between stock exchanges divided
among the members. On June 3, 1993
Resolution, he
was booted
out from
subscribing to the IPOs. Now, Campos, having
died, represented by his wife wants damages
and claims right for the IPOs.

SICD (Securities, Investigation and

Clearing Dept.) decision
-

TRO for the 1993 Resolution,

denial of MR

SEC en banc decision

-

nullified the SICD decision,

and dismissal

nullified SEC en banc

CA decision

Issue
W/ N MKSE has an obligation to respect the
right of subscription of Campos for the IPOs?
Ruling
Art. 1157 enumerates the sources of
obligations: (1) law, (2) contracts, (3) quasicontracts, (4) acts or omissions punished by
law, (5) quasi-delicts. A pleading (complaint or
petition) must assert the root of the obligation
from these five. They must be ultimate facts to

To wit, in Justice Chico-Nazariosponencia the

terms right and obligation in respondents
Petition are not magic words that would
automatically lead to the conclusion that such
Petition sufficiently states a cause of action.
NOTES
The word normally is further emphasized by
the SC in the Board resolution further
augmenting the fact that the Chair Emeritus
position is merely customary and not anchored
under legal basis. Refer back to the full text to
scrutinize the provisions o the Resolution and
you will surmise that it only specifies the
creation of Chairman position and no mention
of conferring rights to receive IPO allocations.
---------------------------------------------------------------------------Case 5
Deganos v. People
Facts:
Private Complainants Atty. Jose
Bordador and Lydia Bordador his wife are
engaged in the business of selling jewelries
and gold bars. The Accused Aida Luz and
NarcisoDegaos are brothers and sisters and
are relatives of Atty. Jose Bordador. Both
Accused are selling jewelries and gold for the
Complainants as early as march 16, 1986 on
the agreement that if they could not pay it in
cash, they should pay it after one month or
return the unsold jewelry within the said
period. Their practice was Aida would call
Lydia to place an order and Narciso would go
to Lydia to pick up the said order and sign a
"Katibayan at Kasunduan". The phrase "for
Brigida Luz" and for "Evely Aquino" were
written on the receipts so that in case Narciso
fails to pay for the items covered therein, they
would have someone to collect from. They
were able to pay only up to a certain point.

However from April 27, 1987 to July 20, 1987

they defaulted and failed to return the
jewelries amounting P725,000.00.Upon oral
and written demands there of Brigida refused
to pay stating that it was Narciso who incurred
the indebtedness for the items were given to
him without her request thereof, while Narciso
admitted that he is the only one who was
indebted to the complainants and he already
made partial payments in the amount
53.307.00.
The Ruling of the RTC on June 23, 1999, found
Narciso guilty of estafa sentencing him to
suffer twenty years of reclusion temporal and
acquitting Brigida Luz for insufficiency of
evidence.
The Decision of the CA affirmed the decision of
the RTC with modification that he be
sentenced to indeterminate penalty of
imprisonment of four 4 years and two 2
months prison correccional in its medium
period, as minimum, to twenty 20 years
reclusion temporal as maximum.
Issues:
I
the honorable court a quo erred in not finding
that the agreement between the private
complainant lydiaborador and the accused was
one of sale on credit.
II
the honorable court a quo erred in not finding
that novation had converted the liability of the
accused into a civil one.
Ruling:

Degaos contends that his agreement with the

complainants relative to the items of jewelry
and gold subject of the amended information
as embodied in the relevant Kasunduan at
Katibayan was a sale on credit, not a
consignment to sell on commission basis.
The contention of Degaos is devoid of factual
and legal bases.
The text and tenor of the relevant Kasunduan
at Katibayan follow:
KASUNDUAN AT KATIBAYAN
x xxx

Akongnakalagdasaibabanito
ay
nagpapatunaynatinanggapkokayGinang LYDIA
BORDADOR
ngCalvario,
Meycauayan,
Bulacanangmgahiyas
(jewelries)
[sic]
nanatatalasaibabanitoupangipagbilikosakapak
ananngnasabingGinang.
Angpagbibilhankosanasabingmgahiyas
ay
akingibibigaysanasabingGinang,
saloobng
__________
araw
at
anghindimabili
ay
akingisasaulisakanyasaloob
din
ngnasabingtaningnapanahonsamabutingkalag
ayankatuladngakingtanggapin.
Angbilangkabayaran o pabuyasa akin ay
anomanghalaganaakingmapalabisnamgahalag
angnakatalasaibabanito.
Ako
ay
walangkarapatangmagpautang o kaya ay
magpalakosaibangtaongnasabingmga hiyas.9
x xxx
Based on the express terms and tenor of the
Kasunduan at Katibayan ,Degaos received
and accepted the items under the obligation to
sell them in behalf of the complainants
("angmgahiyas
(jewelries)
nanatatalasaibabanitoupangipagbilikosakapak
ananngnasabingGinang"), and he would be
compensated with the overprice as his
commission ("Angbilangkabayaran o pabuyasa
akin
ay
anomanghalaganaakingmapalabisnamgahalag
angnakatalasaibabanito.").
Plainly,
the
transaction was a consignment under the
obligation to account for the proceeds of sale,
or to return the unsold items. As such, he was
the agent of the complainants in the sale to
others of the items listed in the Kasunduan at
Katibayan.
In contrast, according the first paragraph of
Article 1458 of the Civil Code, one of the
contracting parties in a contract of sale
obligates himself to transfer the ownership of
and to deliver a determinate thing, while the
other party obligates himself to pay therefor a
price certain in money or its equivalent.
Contrary to the contention of Degaos, there
was no sale on credit to him because the
ownership of the items did not pass to him.

II
Degaos claims that his partial payments to
the complainants novated his contract with
them from agency to loan, thereby converting

his liability from criminal to civil. He insists

that his failure to complete his payments prior
to the filing of the complaint-affidavit by the
complainants notwithstanding, the fact that
the complainants later required him to make a
formal
proposal
before
the
barangay
authorities on the payment of the balance of
his outstanding obligations confirmed that
novation had occurred.
The CA rejected the claim of Degaos, opining
as follows:
Likewise untenable is the accused-appellants
argument that novation took place when the
private complainants accepted his partial
payments before the criminal information was
filed in court and therefore, his criminal
liability was extinguished.
Novation is not one of the grounds prescribed
by the Revised Penal Code for the
extinguishment of criminal liability.1wphi1 It
is well settled that criminal liability for estafa
is not affected by compromise or novation of
contract, for it is a public offense which must
be
prosecuted
and
punished
by
the
Government on its own motion even though
complete reparation should have been made
of the damage suffered by the offended party.
A criminal offense is committed against the
People and the offended party may not waive
or extinguish the criminal liability that the law
imposes for the commission of the offense.
The criminal liability for estafa already
committed is not affected by the subsequent
novation of the contract.
Novation is not a ground under the law to
extinguish criminal liability. Article 89 (on total
extinguishment)16 and Article 94 (on partial
extinguishrnent)17 of the Revised Penal Code
list down the various grounds for the
extinguishment of criminal liability. Not being
included in the list, novation is limited in its
effect only to the civil aspect of the liability,
and, for that reason, is not an efficient defense
in estafa. This is because only the State may
validly waive the criminal action against an
accused.18 The role of novation may only be
either to prevent the rise of criminal liability,
or to cast doubt on the true nature of the
original basic transaction, whether or not it
was such that the breach of the obligation
would not give rise to penal responsibility, as
when money loaned is made to appear as a

deposit, or other similar disguise is resorted

to.19
Although the novation of a contract of agency
to make it one of sale may relieve an offender
from an incipient criminal liability, that did not
happen here, for the partial payments and the
proposal to pay the balance the accused made
during the barangay proceedings were not at
all incompatible with Degafios liability under
the agency that had already attached. Rather
than converting the agency to sale, therefore,
he even thereby confirmed his liability as the
sales agent of the complainants.
VHEREFORE, the Court AFFIRMS the decision
of the Court of Appeals promulgated on
September 23, 2003; and ORDERS petitioner
to pay the costs of suit.
---------------------------------------------------------------------------------------------------------------------------------------Case 6
ANG YU ASUNCION VS. COURT OF
APPEALS

FACTS:
The plaintiffs were tenants or lessees of
residential and commercial spaces owned by
defendants in Binondo, Manila. On several
conditions defendants informed the plaintiffs
that they are offering to sell the premises and
are giving them priority to acquire the same
(right of first refusal). During negotiations,
Bobby Cu Unjieng offered a price of P6-million
while plaintiffs made a counter of offer of P5million. Plaintiff then asked the defendants to
put their offer in writing to which the
defendants acceded. In reply to defendants
letter, plaintiffs wrote, asking that they specify
the terms and conditions of the offer to sell.
When the plaintiffs did not receive any reply,
they sent another letter with the same
request. Since defendants failed to specify the
terms and conditions of the offer to sell and
because of information received that the
defendants were about to sell the property,
plaintiffs were compelled to file the complaint
to compel defendants to sell the property to
them.

The Trial Court dismissed the case and

held that the Unjiengs offer to sell was never
accepted by the Petitioners for the reason that
they did not agree upon the terms and
conditions of the proposed sale, meaning,
there was no contract of sale at all. But, the
lower court ruled that should the defendants
subsequently offer their property for sale at a
price of P11-million or below, plaintiffs will
have the right of first refusal. This decision
was
affirmed
by
the
CA.
In the meantime, in 1990, the property was
sold to De Buen Realty, Private Respondent in
this case. The title to the property was
transferred to the name of De Buen and the
Petitioners were asked to vacate the premises.
Because of this, petitioners filed a motion for
execution of the CA judgement. At first, CA
directed the Sheriff to execute an order
directing the Unjiengs to issue a Deed of Sale
in the Petitioners favor and nullified the sale
to De Buen Realty. But then, the CA reversed
itself when the Private Respondents Appealed.

viewed demandability of the obligation are the

active (oblige) and the passive (obligor)
subjects.

ISSUE:
Whether or not the Contract of Sale is
perfected by the grant of a Right of First
Refusal?

Case 7

RULING:
No. A Right of First Refusal is not a Perfected
Contract of Sale under Art. 1458 or an option
under Par. 2 Art 1479 or an offer under Art.
1319. In a Right of First Refusal, only the
object of the contract is determinate. This
means that no vinculum juris is created
between the seller-offeror and the buyerofferee the exercise of the right, however,
would be dependent not only on the selleroffers intention to enter into a binding
juridical relation with another but also on
terms, including the price, that obviously are
yet to be later firmed up.
Additional Info:
An obligation is a juridical necessity to give, to
do or not to do (Art. 1156, Civil Code). The
obligation is perfected upon the concurrence
of
these
essential
elements:
(a) the vinculum juris or juridical tie which is
the efficient cause established by the various
sources of obligations; (b) the object which is
the prestation or conduct, required to
observed; and (c) the subject-persons who,

Among the sources of an obligation is a

contract (Art. 1157), which is a meeting of
minds between two persons whereby one
binds himself, with respect to the other, to
give something or to render some service. A
contract undergoes various stages that include
its negotiation or preparation, its perfection
and,
finally,
its
consummation.
Until the contract is perfected, it cannot, as an
independent source of obligation, serve as a
binding juridical relation. In sales, the contract
is perfected when a person, called the seller,
obligates himself, for a price certain, to deliver
and to transfer ownership of a thing or right to
another, called the buyer, over which the
latter
agrees.
----------------------------------------------------------------------------

SSS vs. Moonwalk Development and

Housing Corporation
FACTS:
Plaintiff SSS approved the application of
Defendant Moonwalk fora loan of P30,000,000
for the purpose of developing and constructing
a
housing
project.
Out
of
P30,000,000 approved loan, the sum of
P9,595,000 was released to defendant
Moonwalk. A third Amendment Deed of
Mortgage was executed for the payment of the
amount of P9,595,000. Moonwalk made a total
payment of P23,657,901.84 to SSS for the loan
principal of P12,254,700. After settlement of
the account, SSS issued to Moonwalk the
release of Mortgage for Moonwalks Mortgaged
properties. In letter to Moonwalk, SSS
alleged that it committed an honest mistake in
releasing defendant. That Moonwalk has still
12% penalty for failure to pay on time the
amortization, which is in the penal clause of
the contract. Moonwalks counsel told SSS that
it had completely paid its obligation to SSS
and therefore there is no recovery of any
penalty.
ISSUE:

Is the penalty demandable even after the

extinguishment of the principal obligation?

for a writ of preliminary attachment against

petitioner ASIAKONSTRUCT.

HELD:

Issue:

No. There has been a waiver of the penal

clause, as it was not demanded before the full
obligation was fully paid and extinguished.
Default begins from the moment the
creditor demands the performance of the
obligation. In this case, although there were
late amortizations there was no demand made
by SSS for the payment of the penalty hence,
Moonwalk is not in delay in the payment of the
penalty. No delay occurred and there was no
occasion
when
the
penalty
became
demandable and enforceable. Since there was
no default in the performance of the main
obligation-payment of the loan- SSS was never
entitled to recover any penalty. If the demand
for the payment of the penalty was made prior
to the extinguishment of the obligation, which
are: 1. e principal obligation 2. The interest of
12% on the principal obligation 3.The penalty
of 12% for late payment for after demand,
Moonwalk would be in delay and therefore
liable for the penalty.

Whether or not there is a genuine issue as to a

material fact which rules out the propriety of a
summary judgment.

_______________________________________________
Case 8
Asia Development Construction v Philippine
Commercial International Bank
Gr No. 153827 April 25, 2006
Facts:
ASIAKONSTRUKT
obtained
credit
accommodations from PCIBANK amounting to
US$4,487,000.00.
These
credit
accommodations are covered by promissory
notes. Prompt and faithful payment of such
was secured by deeds of assignment executed
by ASIAKONSTRUKT in favor of PCIBANK to
secure payment of the principal amount and
interest and bank charges.
However, the promissory notes were not fully
paid despite their having become due and
demandable and despite repeated verbal and
written
demands
were
made
upon
ASIAKONSTRUKT. It failed and refused to pay
its outstanding obligations to PCIBANK.
On February 1999, respondent PCIBANK filed a
complaint for a sum of money with a prayer

Ruling:
NO. Under Rule 35 of the 1997 Rules of
Procedure, as amended, except as to the
amount of damages, when there is no genuine
issue as to any material fact and the moving
party is entitled to a judgment as a matter of
law, summary judgment may be allowed.
Summary or accelerated judgment is a
procedural technique aimed at weeding out
sham claims or defenses at an early stage of
litigation thereby avoiding the expense and
loss of time involved in a trial.
Under the Rules, summary judgment is
appropriate when there are no genuine issues
of fact which call for the presentation of
evidence in a full-blown trial. Even if for them
the pleadings appear to raise issues, when the
affidavits, depositions and admissions show
that such issues are not genuine, then
summary judgment as prescribed by the Rules
must ensue as a matter of law. The
determinative factor in a motion for summary
judgment is the presence or absence of a
genuine issue as to any material fact.
_______________________________________________
Case 9
ANSAY vs. BOARD OF DIRECTORS, G.R. NO. L13667,
April
29,
1960.
Facts: This was about the employees of the
National Development Company. They asked
for a 20% Christmas Bonus from 1954-1955.
The demanded Christmas Bonus was not given
in the past.
Issue: WON the company has a legal obligation
to give bonuses?
Ruling: No. A bonus is 1) an act of liberality
and the court has no power to command the
company to be liberal and 2) the employees
themselves admit that the company has no
legal obligation to give them bonuses, but the

employees reason that they should be given

bonuses out of a moral obligation. Under Art.
1423 of the New Civil Code, the Court has no
power to compel someone to comply with a
moral obligation. Under Art. 1423 of the New
Civil Code, there are two types of obligations:
civil or natural. The basis for civil is positive
laws, while the basis for natural obligations is
equity and natural law. So you cant make
someone comply with natural obligations
under the law, BUT if the person voluntarily
complied, then that person cannot take it
back. The person who was paid can retain the
money or whatever was given him, after that
voluntary act. In this case, there was no
voluntary act by the company.
Notes from the case:
-Legally, a bonus cannot be demanded, but it
can if its part of the wage or salary.
-But even if it is not part of the salary or wage,
it can still be demanded, provided that it was
given in the past.
But these two circumstances are not present
in the case.
---------------------------------------------------------------------------Case 10
DBP vsConfesor
Facts: On Feb. 10, 1940, spouses Confessor
and JovitaVillafuerte obtained a loan from DBP
(Php2000) evidenced in a promissory note that
they will pay jointly in 10 years. The debt has
not been paid even after 10 years and
Confesor, alone, signed a second promissory
note on April 11, 1961 acknowledging the loan
and promising to pay on or before June
15,1961. The same has not been paid and DBP
filed a complaint on Sep 11, 1970 in the City
Court of Iloilo. Said court ruled in favor of DBP;
an appeal was filed in the Court of First
Instance of Iloilo and the decision of the lower
court was reversed. DBP now filed for MR and
contends that the lower court failed to
recognize that Confesor is still liable, either in
his personal capacity or otherwise because the
right to prescription may be renounced or
waived.
Issue:

Is DBP correct in contending that Confesor

waived his right to prescription by executing
the second promissory note?
Ruling:
Yes, DBP is correct. First, there is no doubt that
the first promissory note has already
prescribed. However, when executing the
second
promissory
note,
Confesor
acknowledges
the
debt
and
expressly
renounced and waived his right to prescription
covering the first note. (Art. 1112). The statute
of limitations such as prescription only bars
the remedy of DBP but not the debt itself.
Therefore, when the first note prescribed, DBP
has been barred from remedy. However, the
execution of the second promissory note
reanimates the remedy. Thus, spouses are
liable and decision of CoFI is reversed and
decision of City Court is reinstated.
Note:
Lower court ruled that consent from wife is
needed to alienate any real property of the
conjugal partnership under Art. 166 (Only
husband
Confesor
signed
the
second
promissory note). However, SC disagrees and
ruled that the husband, as the administrator of
the conjugal partnership, all debts contracted
by him are chargeable to the conjugal
partnership as long as it is for the benefit of
the conjugal partnership, under Art 165, which
is applicable to the present case.
Case 11
ABS-CBN
vs.
OFFICE
OF
THE
OMBUDSMAN, G.R. NO. 133347 April 23,
2010
Facts:
This is Motion for Reconsideration filed by
petitioners Eugenio, Jr., Oscar and Augusto
Almeda, all surnamed Lopez, in their capacity
as officers and on behalf of petitioner ABS-CBN
Broadcasting
Corporation
(ABS-CBN),
regarding the Courts decision in G.R. No.
133347, dismissing their petition for certiorari
because of the absence of grave abuse of
discretion in the Ombudsman Resolution
which, in turn, found no probable cause to
indict respondents for the following violations
of the Revised Penal Code (RPC): (1) Article
298 Execution of Deeds by Means of Violence
or Intimidation; (2) Article 315, paragraphs

1[b], 2[a], and 3[a] Estafa; (3) Article 308

Theft; (4) Article 302 Robbery; (5) Article 312
Occupation of Real Property or Usurpation of
Real Rights in Property; and (6) Article 318
Other Deceits.
The assailed Decision disposed of the case on
two (2) points: (1) the dropping of respondents
Roberto S. Benedicto and Salvador (Buddy)
Tan as respondents in this case due to their
death, consistent with our rulings in People v.
Bayotas[ and Benedicto
v.
Court
of
Appeals; and (2) the Courts finding that the
Ombudsman did not commit grave abuse of
discretion in dismissing petitioners criminal
complaint against respondents.
Issue:
WON criminal complaint may continue
and be prosecuted as an independent civil
action?
Ruling:
1. Death of an accused pending appeal of his
conviction extinguishes his criminal liability as
well as the civil liability based solely thereon.
As opined by Justice Regalado, in this regard,
the death of the accused prior to final
judgment terminates his criminal liability
and only the civil liability directly arising from
and based solely on the offense committed,
i.e., civil liability ex delicto in sensostrictiore.
2. Corollarily, the claim for civil liability
survives notwithstanding the death of
accused, if the same may also be predicated
on a source of obligation other than delict.
Article 1157 of the Civil Code enumerates
these other sources of obligation from which
the civil liability may arise as a result of the
same act or omission:
a) Law
b) Contracts
c) Quasi-contracts
d) xxxxxxxxx
e) Quasi-delicts
3. Where the civil liability survives, as
explained in Number 2 above, an action for
recovery thereof may be pursued but only by
filing a separate civil action and subject to

Section 1, Rule 111 of the 1985 Rules on

Criminal Procedure as amended. This separate
civil action may be enforced either against the
executor/administrator or the estate of the
accused, depending on the source of
obligation upon which the same is based as
explained above.

4. Finally, the private offended party need not

fear a forfeiture of his right to file this separate
civil action by prescription, in cases where
during the prosecution of the criminal action
and prior to its extinction, the private offended
party instituted together therewith the civil
action. In such case, the statute of limitations
on the civil liability is deemed interrupted
during the pendency of the criminal case,
conformably with provisions of Article 1155 of
the Civil Code, that should thereby avoid any
apprehension on a possible [de]privation of
right by prescription.
From the foregoing, it is quite apparent that
Benedicto, Tan, and Gonzales, who all died
during the pendency of this case, should be
dropped as party respondents. If on this score
alone,
our
ruling
does
not
warrant
reconsideration. We need not even delve into
the explicit declaration in Benedicto v. Court of
Appeals.[8]
Second, and more importantly, we dismissed
the petition for certiorari filed by petitioners
because they failed to show grave abuse of
discretion on the part of the Ombudsman
when he dismissed petitioners criminal
complaint against respondents for lack of
probable cause. We reiterate that our inquiry
was limited to a determination of whether the
Ombudsman committed grave abuse of
discretion when he found no probable cause to
indict respondents for various felonies under
the
RPC.
The
invocation
of
our certiorari jurisdiction over the act of a
constitutional
officer,
such
as
the
Ombudsman, must adhere to the strict
requirements provided in the Rules of Court
and in jurisprudence. The determination of
whether there was grave abuse of discretion
does not, in any way, constitute a novel
question of law.
---------------------------------------------------------------------------

Case 12
SEVERINO SALEN and ELENA SALBANERA,
plaintiffs vs. JOSE BALCE, defendant
G.R. No. L-14414. 27 April 1960.

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

Facts:

Case 13

Plaintiffs are the legitimate parents of Carlos

Salen who died from wounds caused by
GumersindoBalce,
a
legitimate
son
of
defendant who was then single, minor below
18 yrs old and was living with defendant. As a
result of C. Salen's death, G. Balce was
accused and convicted of homicide and was
sentenced to imprisonment and to pay the
amount of Ps2,000.00. Plaintiffs brought this
action against defendant before CFI to recover
the sum of Ps2,000.00, with legal interest.
Defendant, in his answer, set up the defense
that the law upon which plaintiffs predicate
their right to recover does not here apply for
the reason that law refers to quasi-delicts and
not to criminal cases. CFI sustained the theory
of
defendant.

METROPOLITAN
BANK
AND
TRUST
COMPANY vs. ANA GRACE ROSALES AND
YO YUK TO

Issue:
Whether defendant can be held subsidiary
liable to pay the indemnity of Ps2, 000.00
which his son was sentenced to pay in the
criminal case filed against him
Ruling:
YES. The particular law that governs this case
is Article 2180, the pertinent portion of which
provides: "The father and, in case of his death
or incapacity, the mother, are responsible for
damages caused by the minor children who
lived in their company." To hold that this
provision does not apply to the instant case
because it only covers obligations which arise
from quasi-delicts and not obligations which
arise from criminal offenses, would result in
the absurdity that while for an act where mere
negligence intervenes the father or mother
may stand subsidiarily liable for the damage
caused by his or her son, no liability would
attach if the damage is caused with criminal
intent. Verily, the void that apparently exists in
the Revised Penal Code is subserved by this
particular provision of our Civil Code, as may
be gleaned from some recent decisions of this
Court which cover equal or identical cases.

G.R. No. 183204, January 13, 2014

Facts
In 2000, respondents opened a Joint Peso
Account with petitioners Pritil-Tondo Branch. In
2002, Rosales accompanied her client Liu,
applying for a retirees visa from the Philippine
Leisure and Retirement Authority (PLRA), to
petitioners branch in Escolta to open a
savings account, as required by the PLRA. On
March 3, 2003, respondents opened a Joint
Dollar Account at the Pritil-Tondo Branch. On
July 31, 2003, petitioner issued a Hold Out
order against respondents accounts, and soon
after, filed a criminal case for Estafa through
False Pretences, Misrepresentation, Deceit,
and Use of Falsified Documents against
Rosales for the unauthorized and fraudulent
withdrawal from Lius dollar account. The
Office of the City Prosecutor of dismissed the
criminal case for lack of probable cause.
On September 10, 2004, respondents filed
before the Regional Trial Court (RTC) of Manila
a Complaint for Breach of Obligation and
Contract with Damages because, without any
explanation, petitioner issued the Hold out
order which did not allow respondents to
withdraw from their deposits. While the case
for breach of contract was being tried, the City
Prosecutor of Manila reversed the dismissal of
the case and an information was filed charging
respondent Rosales with Estafa. On January
15, 2007, the RTC found petitioner liable for
damages for breach of contract as it is the
duty of petitioner to release the deposit to
respondents as the act of withdrawal of a bank
deposit is an act of demand by the creditor. On
April 2, 2008, the CA affirmed the ruling of the
RTC but deleted the award of actual damages.
Issue

Whether or not petitioner bank breached its

contract with respondents in issuing a Hold
out against the latter

securities of Depositor, and to apply the

proceeds to the payment of any Depositors
obligations heretofore mentioned.
x xx x

Ruling

JOINT ACCOUNT

Yes. The Hold out clause in the Application

and Agreement for Deposit Account***, in
which the petitioner anchors its right to
withhold respondents deposits, does not apply
to the present case. Said clause applies only if
there is a valid and existing obligation arising
from any of the sources of obligation
enumerated in Article 1157 of the Civil Code,
to wit: law, contracts, quasi-contracts, delict,
and quasi-delict. In this case, petitioner failed
to show that respondents have an obligation to
it under any law, contract, quasi-contract,
delict, or quasi-delict.

x xxx

Additionally, the criminal case (pending, no

final
judgment
of
conviction
against
respondent) was non-existent at the time the
Hold out issue was ordered; that is to say,
there was no legal basis for the issuance of
such since Rosales was not liable under any of
the five sources of obligation. Thus, petitioner
is guilty of breach of contract when it
unjustifiably refused to release respondents
deposit despite demand. Having breached its
contract with respondents, petitioner is liable
for damages.

Notes:

***Application
and
Agreement
Deposit Account reads:

for

Authority to Withhold, Sell and/or Set Off:

The Bank is hereby authorized to withhold as
security for any and all obligations with the
Bank, all monies, properties or securities of
the Depositor now in or which may hereafter
come into the possession or under the control
of the Bank, whether left with the Bank for
safekeeping or otherwise, or coming into the
hands of the Bank in any way, for so much
thereof as will be sufficient to pay any or all
obligations incurred by Depositor under the
Account or by reason of any other transactions
between the same parties now existing or
hereafter contracted, to sell in any public or
private sale any of such properties or

The Bank may, at any time in its discretion and

with or without notice to all of the Depositors,
assert a lien on any balance of the Account
and apply all or any part thereof against any
indebtedness, matured or unmatured, that
may then be owing to the Bank by any or all of
the Depositors. It is understood that if said
indebtedness is only owing from any of the
Depositors, then this provision constitutes the
consent by all of the depositors to have the
Account answer for the said indebtedness to
the extent of the equal share of the debtor in
the amount credited to the Account.

Bank deposits, which are in the nature

of a simple loan or mutuum, must be
paid upon demand by the depositor.
[Metropolitan Bank and Trust Company,
The vs. Rosales, 713 SCRA 75(2014)]

Banks are expected to exercise greater

care and prudence than others in their
dealings because their business is
impressed
with
public
interest.
(Metropolitan
Bank
&
Trust
Co.
[Metrobank] vs. Tobias III, 664 SCRA 165
[2012])

---------------------------------------------------------------------------------------------------------------------------------------Case 14
Joseph Saludaga v. FEU and Edilberto De
Jesus, his capacity as the President of
FEU
GR 179337. 2008
FACTS: Saludaga was accidentally shot by
Rosete, a security guard employed by FEU
under the security agency named Galaxy.
Saludaga was brought to the hospital while
Rosete was brought to the hospital. Due to
lack of charges against Rosete, the police

released him. Later on, Saludaga filed a

complaint against FEU since the school was
obligated to provide students with a safe and
secure environment and an atmosphere
conducive for learning. FEU then filed a ThirdParty Complaint against Galaxy to indemnify
them of whatever cost will be incurred.
The trial court ruled that FEU and de Jesus are
liable towards Saludaga. In turn, Galaxy and its
president, Imperial, are liable to FEU and de
Jesus. However, the Court of Appeals reversed
the decision. Hence the present petition.

requirements and follow the rules and

regulations.

Personal liability of a corporate

director, trustee or officer along
(although not necessarily) with the
corporation may so validly attach, as a
rule, only when:
1

He asssents to a patently unlawful

act of the corporation, or when he is
guilty of bad faith or gross
negligence in directing its affairs or
when there is a conflict of interest
resulting
in
damages
to
the
corporation, its stockholders or other
persons;

He consents to the issuance of

watered down stocks or who, having
knowledge
thereof,
does
not
forthwith file with the corporate
secretary
his
written
objection
thereto;

He agrees to hold himself personally

and
solidarily liable with the
corporation; and

He is made by a specific provision of

law personally answerable for his
corporate action.

ISSUE:
Who is liable for the damages which the Court
will pronounce?
RULING:
The Court held that FEU is solidarily liable for
the damages incurred by Saludaga. FEU must
pay
for
the
hospital
bills
with
the
corresponding interest declared; temperate
damages; moral damages; attorneys fess and
litigation expenses. De Jesus is not liable since
he is not part the exceptions when an
individual is attached to the liabilities of the
corporation.1
Since Galaxy provided FEU with an unqualified
security guard, they are made liable to the
damages that FEU pays to Saludaga. Imperial,
the president of Galaxy, is solidarily liable
because the Court finds it that he was grossly
negligent with managing the security agency.
Imperial also assured Saludaga that Galaxy
will
shoulder
the
payments
for
his
hospitalization but it was not fulfilled.
ADDITIONAL INFO: DILI NI QUASI-DELICT
NA CASE; MORE ON KINSA DYUD ANG
NAAY TULUBAGON AKA LIABILITY FOR
THE DAMAGES. So, GALAXY AND IMPERIAL
kay liable to FEU (without de Jesus). In turn,
FEU kay liable to Saludaga.

The
moment
that
an
academic
institution
accepts
students
for
enrollment, a contract is established
between them. There is a bilateral
obligation since the school provides the
student with education which he might
find useful later in his life while the
student
follows
the
academic

(P.S.: This is corporation law pero just in case

mu ask si Dean ngananungdili ma liable si De
Jesus
kaytungodnangawalasiyamusulodaningamga
exception.)
Art. 1170 Those who in performance of their
obligations are guilty of fraud, negligence,
or delay, and those who in any manner
contravene the tenor thereof, are liable
for DAMAGES.
---------------------------------------------------------------------------------------------------------------------------------------Case 15
MERALCO vs. Ramoy
March 4, 2008

G.R. No. 158911

FACTS:
In the year 1987, the National Power
Corporation (NPC) filed with the MTC Quezon

City a case for ejectment (recovery of

possession) against several persons allegedly
illegally occupying its properties in Baesa,
Quezon City. Among the defendants in the
ejectment case was LeoncioRamoy, one of the
plaintiffs in the case at bar. On April 28, 1989
the MTC rendered judgment for MERALCO to
demolish or remove the building and structure
they built on the land of the plaintiff and to
vacate the premises. On June 20, 1999 NPC
wrote to MERALCO requesting the immediate
disconnection of electric power supply to all
residential and commercial establishments
beneath the NPC transmission lines along
Baesa, Quezon City. In a letter dated August
17, 1990 MERALCO requested NPC for a joint
survey to determine all the establishments
which are considered under NPC property. In
due time, the electric service connection of the
plaintiffs was disconnected. During the ocular
inspection ordered by the Court, it was found
out that the residence of the plaintiffs-spouses
was indeed outside the NPC property.
ISSUES:
(1) WON the Court of Appeals gravely erred
when it found MERALCO negligent when it
disconnected the subject electric service
of respondents.
(2)WON the Court of Appeals gravely erred
when it awarded moral and exemplary
damages
and
attorneys
fees
against
MERALCO under the circumstances that the
latter acted in good faith in the disconnection
of the electric services of the respondents.
RULING:
(1) NO. The Court agrees with the CA that
under the factual milieu of the present
case, MERALCO failed to exercise the
utmost degree of care and diligence
required of it, pursuant to Articles 1170
& 1173 of the Civil Code. It was not
enough for MERALCO to merely rely on
the Decision of the MTC without
ascertaining whether it had become
final and executory. Verily, only upon
finality of the said Decision can it be
said
with
conclusiveness
that
respondents have no right over the
subject property, thus, are not entitled
to the services of MERALCO. The utmost
care and diligence required of MERALCO
necessitates such great degree of

prudence on its part, and failure to

exercise the diligence required means
that MERALCO was at fault and
negligent in the performance of its
obligation. This being so, MERALCO is
liable for damages under Article 1170 of
the Civil Code.

(2) NO. The award of moral damages must

be anchored to a clear showing that
respondent actually experienced mental
anguish,
besmirched
reputation,
sleepless nights, wounded feelings or
similar injury. There was no better
witness
to
this
experience
than
respondent himself. In the present case,
MERALCO wilfully caused injury to
LeoncioRamoy by withholding from him
and his tenants the supply of electricity
to which they were entitled under the
Service Contract. This is contrary to
public policy because, MERALCO, being
a vital public utility, is expected to
exercise utmost care and diligence in
the performance of its obligation. Thus,
MERALCOs failure to do so is
tantamount
to
bad
faith.
Thus,
respondent LeoncioRamoy, who testified
as to his wounded feelings, may be
awarded moral damages. However, with
regard to exemplary damages, Article
2232 of the Civil Code provides that in
contracts and quasi-contracts, the court
may award exemplary damages if the
defendant, in this case MERALCO, acted
in a wanton, fraudulent, reckless,
oppressive, or malevolent manner. The
Court finds that MERALCO fell short of
exercising the due diligence required,
but its actions cannot be considered
wanton, fraudulent, reckless, oppressive
or malevolent.
Thus, in this case,
exemplary damages should not be
awarded.
Since
the
Court
does not deem it proper to award
exemplary damages in this case, then
the CA's award for attorney's fees
should likewise be deleted following
Article 2208 of the Civil Code.
----------------------------------------------------------------------------------------------------------------------------------Case 16

Cruz vs Tuazon
As requested by the family of TelesforoDeudor,
Cruz
(petitioner)
made
permanent
improvements on the said land having an area
of more or less 20 quinones. In 1952, Tuason&
Co. availed of Cruz services as an
intermediary with the Deudors, to work for the
amicable settlement in a civil case. The said
case involved 50 quiones of land, of which the
20 quiones of formed part of the land. On
1963, a compromise agreement between the
Deudors and Tuason& Co. was entered and
was approved by court. Cruz alleged that
Tuason& Co. promised to convey him the
3,000 sq. meters of land occupied by him
which was part of the 20 quiones of land
within 10 years from the date of signing of the
compromise agreement between the Deudors
and the latter as consideration of his services.
The land was not conveyed to him by Tuason&
Co. Cruz further alleged that Tuason& Co. was
unjustly enriched at his expense since they
enjoyed the benefits of the improvements he
made on the land acquired by the latter.

Whether or not a presumed quasicontract be emerged as against one

part when the subject matter thereof is
already covered by a contract with
another party.
Is Tuason& Co. obliged to reimburse
Cruz for the improvements on the land?

Ruling:
ART. 2142. Certain lawful voluntary and
unilateral acts give rise to the juridical
relation of quasi-contract to the end that no
one shill be unjustly enriched or benefited
at the expense of another.
1

While it is true that there was no

agreement between plaintiff and
defendants
herein
for
the
improvement of the 50 quinones
since the latter are presently
enjoying and utilizing the benefits
brought about through plaintiff's
labor and expenses, defendants
should pay and reimburse him
therefor under the principle that 'no
one may enrich himself at the
expense of another.' In this posture,
the complaint states a cause of
action against the defendants.

----------------------------------------------------------------------------------------------------------------------------------Case 17
SAME CASE, ASUNCION V. CA

Issue:
1

any actual agreement between the

parties concerned.

It is obvious that a presumed quasicontract cannot emerge as against

one party when the subject matter is
already covered by an existing
contract
with
another
party.
Predicated on the principle that no
one should be allowed to unjustly
enrich himself at the expense of
another, Article 2124 creates the
legal fiction of a quasi-contract
precisely because of the absence of

----------------------------------------------------------------------------------------------------------------------------------Case 18
SORRY, WALA.
----------------------------------------------------------------------------------------------------------------------------------Case 19
SORRY, WALA.
----------------------------------------------------------------------------------------------------------------------------------Case 20
PERLA
COMPANIA
DE
SEGUROS,
INC.,
petitioner,vs.
HONORABLE
COURT
OF
APPEALS
and
MILAGROS
CAYAS
FACTS:
Milagros
Cayas
was
the
registered owner of a Mazda bus
which
was
insured
with
Perla
Compania
de
Seguros,
Inc.

(PCSI).On
December
17,
1978,
the
bus figured in an accident in Naic,
Cavite.19-year
old
Edgardo
Perea,
sued Cayas for damages; while three
others, namely: Rosario del Carmen,
Ricardo
Magsarili
and
Charlie
Antolin, agreed to a settlement of
P4,000.00
each
with
Cayas.At
the
pre-trial,
Cayas
failed
to
appear
and hence, she was declared as in
default.
The
court
rendered
a
decision
in
favor
of
Perea.Consequently,
Cayas
filed
a
complaint for a sum of money as it
was
within
its
contractual
liability
under
the
insurance
policy,and
damages against PCSI in the Court
of
First
Instance
of
Cavite.The
court ordered
PCSI to pay Cayas
P50,000
as
compensation
for
the
injured passengers, P5,000 as moral
damages and P5,000 as attorney's
fees.PCSI appealed to the Court of
Appeals, which, affirmed in toto the
lower
court's
decision.
Its
motion
for
reconsideration
having
been
denied
by
said
appellate
court,
PCSI
filed
the
instant
petition
seeking to limit its liability only to
the
payment
made
by
private
respondent to Perea and only up to
the
amount
of
P12,000.00;
and
denying
liability
for
the
payments
made by to the other 3 injured
passengers.
ISSUE:
WON
PCSI
reimburse Cayas the
by
lower

is
liable
to
amount ordered
court.

RULING:No.The
insurance
policy
involved
explicitly
limits
petitioner's
liability to P12,000 per person and
to P50,000 per accident.In the case
at bar, the insurance policy clearly
and
categorically
placed
petitioner's liability for all damages
arising out of death or bodily injury
sustained by one person as a result
of
any
one
accident
at
P12,000.00.Under
the
law,Section
377 of Presidential Decree No. 612
(which
was
retained
by
P.D.
No.
1460, the Insurance Code of 1978),
the minimum liability is P12,000 per
passenger.
Petitioner's
liability

under
the
insurance
contract
not
being
less
than
P12,000.00,
and
therefore
not
contrary
to
law,
morals, good customs, public order
or
public
policy,
said
stipulation
must be upheld as effective, valid
and
binding
as
between
the
parties.It
being
specifically
required
that
petitioner's
written
consent be first secured before any
payment in settlement of any claim
could be made, private respondent
is
precluded
from
seeking
reimbursement
of
the
payments
made to del Carmen, Magsarili and
Antolin in view of her failure to
comply with the condition contained
in
the
insurance
policy.
Clearly,
the
fundamental
principle
that contracts are respected as the
law between the contracting parties
finds
application
in
the
present
case.
The
decision
of
the
Court
of
Appeals is hereby modified in that
petitioner shall pay Milagros Cayas
the
amount
of
Twelve
Thousand
Pesos
(P12,000.
00)
plus
legal
interest
from
the
promulgation
of
the decision of the lower court until
it is fully paid and attorney's fees
in the amount of P5,000.00.
---------------------------------------------------------------------------------------------------------------------------------------Case 21
LEUNG BEN VS. P. J. OBRIEN
FACTS: On December 12, 1917, an action was
instituted in the Court of First Instance of
Manila by P.J. OBrien to recover the sum of
P15,000 alleged to have been lost by Leung
Ben to the defendant in a series of gambling,
banking, and percentage games conducted
during the two or three months prior to the
institution of the suit. The plaintiff asked for an
attachment against the property of the
defendant, on the ground that the latter was
about to depart from the Philippines with
intent
to
defraud
his
creditors.
This
attachment was issued and the sheriff
attached the sum of P15,000 which had been
deposited by the OBrien with the International
Banking Corporation. The provision of law

under which this attachment was issued

requires that there should be a cause of action
arising upon contract, express or implied. The
contention of the petitioner is that the
statutory action to recover money lost at
gaming is not such an action as is
contemplated in this provision, and he insists
that the original complaint shows on its face
that the remedy of attachment is not available
in aid thereof; that the Court of First Instance
acted in excess of its jurisdiction in granting
the writ of attachment; that the petitioner has
no plain, speedy, and adequate remedy by
appeal or otherwise; and that consequently
the writ of certiorari supplies the appropriate
remedy for this relief.
ISSUE: Whether or not the statutory obligation
to restore money won at gaming is an
obligation arising from contract, express or
implied.
RULING: Yes.
Upon
general
principles,
recognized both in the civil and common law,
money lost in gambling and voluntarily paid by
the loser to the winner cannot, in the absence
of statute, be recovered in a civil action. But
Act No. 1757 of the Philippine Commission,
which defines and penalizes several forms of
gambling, contains numerous provisions
recognizing the right to recover money lost in
gambling. It must therefore be assumed that
the action of plaintiff was based upon the right
to recovery given by section 7 of said Act,
which declares that an action may be brought
against the banker by any person losing
money at a banking or percentage game. (see
Tolentino, p64)
According to the Civil Code obligations are
supposed to be derived either from (1) the
law, (2) contracts and quasi-contracts, (3) illicit
acts and omission, or (4) acts in which
negligence is present.The obligations which in
the Code are indicated as quasi-contracts, as
well as those arising ex lege, are in the
common la system, merged into the category
of obligations imposed by law, and all are
denominated implied contracts. In the case at
bar, the duty of OBrien to refund the money
which he won from Leung Ben was a duty
imposed by statute. It therefore arose ex lege.
Furthermore, it was a duty to return a certain
sum which had passed from OBrien to Leung
Ben. By all the criteria which the common law

supplies, this a duty in the nature of debt and

is properly classified as an implied contract.
---------------------------------------------------------------------------------------------------------------------------------------Case 22
ARTURO PELAYO VS. MAURICIO LAURON
Facts: Oct. 13, 1906, nighttime Dr. Pelayo,
was called to the house of spouses Marcelo
Lauron& Juana Abella (defendants). Their
daughter-in-law was about to give birth & they
requested him to render medical assistance.
Since it was a difficult birth, he had to perform
a surgery to remove the fetus using forceps.
He also removed the afterbirth. He finished all
of these until the following morning. He visited
the patient several times the following day.
Consequently, a medical bill of 500 pesos was
demanded by Pelayo from the spouses in
exchange for the services he performed but
they refused and made the assertion that they
should not be the ones to pay but instead it
should be their daughter-in-laws husband.
Thus he filed a case praying for a judgment in
his favor against defendants for the sum of
P500.00 + costs along with other relief that
may be deemed proper.
CFI: Defendants absolved due to lack of
sufficient evidence to establish right of action.
Issue: Whether or not the spouses are to be
held liable for the payment of the medical bill
of their daughter-in-law?
RULING: No. Obligations arising from law are
not presumed. Those expressly determined in
the code or in special laws, etc., are the only
demandable ones. Obligations arising from
contracts have legal force between the
contracting parties and must be fulfilled in
accordance with their stipulations. (Arts. 1090
and 1091.) The rendering of medical
assistance in case of illness is among the
mutual obligations to which spouses are
bound by way of mutual support. (Arts.
142 & 143, CC) The party bound to give
support should therefore be liable for all the
expenses including the fees of the physician.
Thus, it is the husbands obligation to pay
Pelayo and not the defendants. The husband
would still be liable even if his parents were
the one who called & requested for Pelayos

assistance. The defendants are not under any

obligation to pay the fees claimed (An
obligation according to CC Art. 1089 is created
by law, contracts, quasi-contracts, & by illicit
acts & omissions or by those in which any kind
of fault/negligence occurs.).
--------------------------------------------------------------------------------------------------------------------------------------Case 23
DIANA VS. BATANGAS TRANSPORTATION,
CO.
FACTS:
On June 21, 1945, Truck No. 14 belonging to
the defendant Batangas Transportation, Co.
driven by Vivencio Bristol ran into a ditch at
Bay, Laguna resulting in the death of Florenio
Diana and other passengers. Plaintiffs were
the heirs of Diana. Bristol was charged and
convicted of multiple homicide through
reckless imprudence where he was ordered to
indemnify the heirs of the deceased in the
amount of Php 2,000. When the decision
became final, a writ of execution was issued in
order that the indemnity may be , but the
sheriff filed a return stating that the accused
had no visible leviable property. The present
case (civil case No. 9221) was started when
defendant failed to pay the indemnity under
its subsidiary liability under article 103 of the
Revised Penal Code.
Defendant filed a motion to dismiss on the
ground that there was another action pending
between the same parties for the same cause
(civil case No. 8023) in which the same
plaintiffs sought to recover from the same
defendant the amount of P4,500 as damages
resulting from the death of Florenio Diana, who
died while on board a truck of defendant due
to the negligent act (culpa aquiliana) of the
driver
Vivencio
Bristol.
Plaintiffs filed a written opposition to the
motion to dismiss. The lower court, having
found the motion well founded, dismissed the
complaint, without special pronouncement as
to costs, and their motion for reconsideration
having been denied, plaintiffs took the present
appeal.

ISSUE:
Did the lower court correctly dismiss
the complaint on the sole ground that there
was another action pending between the same
parties
for
the
same
cause?
RULING:
No. The present case (civil case No.
9221) stemmed from a criminal case in which
the driver of the defendant was found guilty of
multiple
homicide
through
reckless
imprudence and was ordered to pay an
indemnity of P2,000 for which the defendant
was made subsidiarily liable under article 103
of the Revised Penal Code. While the other
case (civil case No. 8023) was an action for
damages based on culpa aquiliana which
underlies the civil liability predicated on
articles 1902 to 1910 of the old Civil Code.
These two cases involved two different
remedies. As this court aptly said: "Aquasidelict or culpa aquiliana is a separate legal
institution under the Civil Code, with a
substantivity all its own, and individuality that
is entirely apart and independent from a delict
or crime. * * *. A distinction exists between the
civil liability arising from a crime and the
responsibility for cuasi-delictos or culpa extracontractual. The same negligent act causing
damages may produce civil liability arising
from a crime under article 100 of the Revised
Penal Code, or create an action for cuasidelito or culpa extra-contractual under articles
1902-1910
of
the
Civil
Code.
It was a mistake to say that the
present action should be dismissed, because
of the pendency of another action between the
same parties involving the same cause.
Evidently, both cases involved different causes
of action.
---------------------------------------------------------------------------------------------------------------------------------------Case 24
SORRY, WALA.
---------------------------------------------------------------------------------------------------------------------------------------Case 25

Elcano vs Hill
77 SCRA 100 May 26, 1977
Article 1162 Obligations arising from quasi
delicts
FACTS: Reginald Hill, a minor, legally married
but living with his father, Atty. Marvin Hill with
whom he was getting subsistence, killed
AgapitoElcano. After due trial, Reginald was
acquitted on the ground that his act was not
criminal because of "lack of intent to kill,
coupled with mistake." Thus, Spouses Elcano
appealed, filing a civil action against Reginald
and his dad (Marvin Hill) for damages based
on Article 2180 of the Civil Code. Hill argued
that the civil action is barred by his sons
acquittal in the criminal case; and that his civil
liability as a parent has been extinguished by
the fact that his son is already an emancipated
minor by reason of his marriage.
ISSUES:
(1) Whether or not the present civil action for
damages is already barred by the acquittal of
Reginald.
(2) Whether or not Atty. Marvin Hill has a
vicarious liability being the father of a minor
child who committed a delict.
HELD: No. The acquittal of Reginald Hill in the
criminal case has not extinguished his liability
for quasi-delicts, hence the acquittal is not a
bar to the instant action against him. To find
the accused guilty in a criminal case, proof
beyond reasonable doubt is required unlike in
civil cases, preponderance of evidence is
sufficient. The concept of culpa acquiliana
includes acts which are criminal in character or
in violation of the penal law, whether voluntary
or negligent. Also, Art 2177 CC provides that
Responsibility for fault or negligence is
separate and distinct from the civil liability
arising from negligence under the Penal Code.
However, plaintiff cannot recover damages
twice for the same act or omission.
While it is true that parental authority is
terminated upon emancipation of the child
(ART 327CC), and under Art 397, emancipation
takes place by marriage of the minor, such
emancipation is not absolute and full. Reginald
although married, was living with his father
and still dependent from the latter. ART 2180

applies to Atty. Marvin Hill notwithstanding the

emancipation by marriage of Reginald.
Additional Info:
Article 1162, simply says, "Obligations derived
from quasi-delicto shall be governed by the
provisions of Chapter 2, Title XVII of this Book,
(on quasi-delicts) and by special laws." More
precisely, a new provision, Article 2177 of the
new code provides:
ART. 2177. Responsibility
for
fault
or
negligence under the preceding article is
entirely separate and distinct from the civil
liability arising from negligence under the
Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of
the defendant.
---------------------------------------------------------------------------------------------------------------------------------------Case 26
GASHEEM SHOOKAT BAKSH VS HON.
COURT OF APPEALS, 219 SCRA 115 (1993)
FACTS:
GashemShookatBaksh, an Iranian citizen, was
an exchange student taking medical course at
the Lyceum Northwestern College in Dagupan
City. Private respondent, Marilou Gonzales on
the other hand, was an employee at Mabuhay
Luncheonette, a high school graduate and of
good moral character and reputation duly
respected in her community.
The two met at a party on August 3, 1986 and
later on became inseparable lovers. Not long
after, Baksh proposed to marry Marilou which
she willingly accepted.
Even before their engagement, Baksh and
private respondent were already living
together. In the course of their cohabitation,
Baksh attitude towards her changed. She was
maltreated. As a result, private respondent
decided to leave. Thereafter, she filed a
complaint against Baksh who renounced their
marriage agreement and asked her not to live
with him anymore, because he was already
married to someone living in Bacolod.

ISSUE:
Was private respondent entitled to damages?

was hospitalized for 20 days and

eventually fitted with an artificial leg.

RULING:
Yes. Article 2176 of the Civil Code, which
defines
a
quasi-delict
thus:

Li denied he was negligent, as he argued that

because of the rain, his visibility was affected
and the road was wet; he claimed he was
temporarily blinded by another car coming
from the opposite direction, so he instinctively
swerved to the right to avoid collision. He
argued that Valenzuela was the one negligent,
as she was not a licensed driver.

"Whoever by act or omission causes damage

to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing
contractual relation between the parties, is
called aquasi-delict and is governed by the
provisions
of
this
Chapter."
limited to negligent acts or omissions and
excludes the notion of willfulness or
intent. Quasi-delict, known in Spanish legal
treatises as culpa aquiliana, is a civil law
concept while torts is an Anglo-American or
common law concept. Tortsis much broader
than culpa aquiliana because it includes not
only negligence, but international criminal acts
as well such as assault and battery, false
imprisonment and deceit. In the general
scheme of the Philippine legal system
envisioned by the Commission responsible for
drafting the New Civil Code, intentional and
malicious acts, with certain exceptions, are to
be governed by the Revised Penal Code, while
negligent acts or omissions are to be covered
by
Article
2176
of
the
Civil
Code.
----------------------------------------------------------------------------------------------------------------------------------------

Lower court held Li guilty of gross negligence

and liable for damages under Art. 2176 of the
Civil Code.
ISSUES
1

Is Valenzuela
negligence?

Can Alexander Commercial Inc. be

jointly and severally liable under Art.
2180 of the Civil Code?

guilty

of

contributory

HELD
1

No. The general rule is that contributory

negligence is the conduct on the part of
the injured party, contributing as a legal
cause to the harm he or she has
suffered, which falls below the standard
to which he or she is required for his
own protection. In this case, the court
recognized that as an emergency rule,
an individual who finds himself or
herself in a situation of danger without
the luxury of time to decide what means
he or she must apply to avoid
impending danger, is not guilty of
negligence. When faced with dangerous
situations, the law does not require the
same standard of thoughtful and
reflective care from persons confronted
by unusual and threatening conditions.
As this case may be, Valenzuela,
suddenly crippled by a flat tire on a
rainy night, will not be faulted for
stopping at a point which is both
convenient for her to do so and which is
not a hazard to other motorists.

Yes. General rule is that negligence is

the conduct which creates an undue risk
of harm to others; it is the failure to
observe that degree of care, precaution,
and vigilance which the circumstances
justly demand, whereby such other

Case 27
VALENZUELA V CA
FACTS: The case involves an action to recover
damages based on quasi-delict. Valenzuela,
plaintiff, was driving a Mitsubishi Lancer
heading towards Manila. Before reaching A.
Lake St., she noticed something was wrong
with her tires so she stopped at a lighted place
where there were people. After verifying that
her rear right tire was flat, she parked along
the sidewalk, put her emergency lights on,
alighted from the car and opened her trunk for
tools. She was suddenly bumped by another
Mitsubishi Lancer driven by Li, defendant hired
by Alexander Commercial Inc., whose impact
threw Valenzuela against the windshield of the
Lis car. Her left leg was severed up to the
middle of her thigh with only some skin and
sucle connected to the rest of her body. She

was

person suffers injury. The law on

employer-employee relationships states
that the liability of an employer for the
negligence of his employee is not based
on the principle of respondeat superior,
but that of pater familias. The employer
is expected to exert due diligence
required from a good father of the
family in selection and supervision of his
employees. This primary liability is
embodied in Art. 2180 in relation to Art.
2176.
The
question
of
diligent
supervision
depends
on
the
circumstances of employment. If there
was, it would have been relieved of
liability. In this case, the company failed
to demonstrate the due care and
diligence required. Based on the
principle of bonus pater familias, it
ought to be jointly and severally liable
for injuries caused to a third person.
ADDITIONAL INFORMATION
Award for damages must be commensurate to
the suffering inflicted. In this case, because
there was psychological pain, damage and
injury, the resultant anxiety, sleeplessness,
mental and physical pain are inestimable, the
award of P1M, instead of P500K is justifiable.
Lis allegations were never corroborated and
were obviously self-serving.
---------------------------------------------------------------------------------------------------------------------------------------Case 28
THE MANILA
appellant,

RAILROAD

CO.,

plaintiff-

vs.
LA
COMPAIA
defendant-appellee.
THE ATLANTIC GULF
defendant-appellant.

TRANSATLANTICA,
&

PACIFIC

CO.,

Facts:
The Manila Railroad Company had two
locomotive boilers in the steamship Alicante
which belongs to the CompaiaTransatlantica
de Barcelona (Steamship Company). Because
their
equipment
was
insufficient,
the

Steamship Company had to employ the

Atlantic, Gulf and Pacific Company (hereafter
called the Atlantic Company) for assistance in
discharging the boilers out of the ships hold,
as they were having probably the best
equipment of any contracting company in the
city for this purpose. The man in charge
named Leyden failed in his first attempt at
transfer. The sling was adjusted improperly,
and the boiler fell to the bottom of the ships
hold. The boiler was lifted again but a bolt
broke, and the boiler fell again.
The boiler was found to be so badly damaged,
that it had to be reshipped to England, where
it was rebuilt and then returned to Manila.
Total damages amounted to P23,343.29 from
repairs, expenses, and loss of the use of the
boiler. An action was instituted by the Railroad
Company against the Steamship Company,
where the latter caused the Atlantic Company
to be brought as a co-defendant.
The judge of the Court of First Instance gave
judgment in favor of the plaintiff against the
Atlantic Company, but absolved the Steamship
Company from the complaint, the lower court
finding that the mishap was due to the gross
negligence of one Leyden. The plaintiff has
appealed from the action of the court in failing
to give judgment against the Steamship
Company, while the Atlantic company has
appealed from the judgment against it.
Issue:
W/N the Steamship Company is liable to the
plaintiff by reason of having delivered the
boiler in question in a damaged condition and
is the Atlantic company liable to be made to
respond to the Steamship Company for the
amount the latter may be required to pay to
the plaintiff for the damage done?
Ruling:
Yes. The judgment entered in the Court of First
Instance must, therefore be reversed not only
with respect to the judgment entered in favor
of the plaintiff directly against the Atlantic
company but also with respect to the
absolution of the Steamship company and the
further failure of the court to enter judgment
in favor of the latter against the Atlantic
Company.

The Steamship Company is liable to the

plaintiff for the injury done to the boiler while
it was being discharged from the ship, they
have the duty to carry it and to carry it safely.
The Steamship Company also cannot escape
liability just because it employed an
independent contractor to discharge the
boilers, and that the employed contractor had
been negligent. (Art 1103&1104)
As to the liability of Atlantic Company to
Steamship Company, Art 1103 of the Civil
Code provides that liability arising from
negligence is demandable in the fulfilment of
all kinds of obligations. Even if the Atlantic
company may have made a reservation as to
its responsibility for the damage that might
occur (that the risk in the discharge of the
boilers was assumed by Steamship Company),
this does not relieve them from the duty of
exercising reasonable skill and care. It is their
duty
to
exercise
due
care
in
the
accomplishment of the work; and no
reservation whereby the person rendering the
services
seeks
to
escape
from
the
consequences of a violation of this obligations
can viewed with favor. Altantic Company
cannot also apply Article 1903 which would
cease their liability if they proved that they
exercised the diligence of a good father of the
family in the selection of Leyden, because
those are applicable only when there is
absence of agreement, and not from
obligations arising from contract.
The Railroad Company can only recover
damages from the Steamship Company since
it is with this company that the contract of
affreightment was made, not from Atlantic
Company for lack of privity.
The Compaa Transatlantic de Barcelona
should be and is hereby adjudged to pay to

the Manila Railroad Company the sum of

twenty nine thousand three hundred forty
three pesos and twenty nine centavos
(P23,343.29) with interest from May 11, 1914,
until paid; and when this judgment is satisfied,
the Compaia Transatlantic de Barcelona is
declared to be entitled to recover the same
amount from the Atlantic & Pacific Gulf
Company, against whom judgment is to this
end hereby rendered in favor of the
CompaiaTransatlantica de Barcelona.