SAN ILDEFONSO LINES, INC., and EDUARDO JAVIER vs. COURT OF APPEALS

(Thirteenth Division) and PIONEER INSURANCE and SURETY CORPORATION

G.R. No.119771. 24 Apr 1998.

FACTS: At around 3:30 in the afternoon of June 24, 1991, a Toyota Lite Ace Van

being driven by its owner Annie U. Jao and a passenger bus of herein petitioner

San Ildefonso Lines, Inc. (hereafter, SILI) figured in a vehicular mishap at the

intersection of Julia Vargas Avenue and Rodriguez Lanuza Avenue in Pasig, Metro

Manila, totally wrecking the Toyota van and injuring Ms. Jao and her two (2)

passengers in the process.

A criminal case was thereafter filed with the Regional Trial Court of Pasig on

September 18, 1991 charging the driver of the bus, herein petitioner Eduardo

Javier, with reckless imprudence resulting in damage to property with multiple

physical injuries.

About four (4) months later, or on January 13, 1992, herein private respondent

Pioneer Insurance and Surety Corporation (PISC), as insurer of the van and

subrogee, filed a case for damages against petitioner SILI with the Regional Trial

Court of Manila, seeking to recover the sums it paid the assured under a motor

vehicle insurance policy as well as other damages, totaling P564,500.00

(P454,000.00 as actual/compensatory damages; P50,000.00 as exemplary

damages; P50,000.00 as attorney's fees; P10,000.00 as litigation expenses; and

P500.00 as appearance fees.)

ISSUEs: 1) If a criminal case was filed, can an independent civil action based on

quasi-delict under Article 2176 of the Civil Code be filed if no reservation was

made in the said criminal case?

2) Can a subrogee of an offended party maintain an independent civil action

during the pendency of a criminal action when no reservation of the right to file

an independent civil action was made in the criminal action and despite the fact

that the private complainant is actively participating through a private prosecutor

in the aforementioned criminal case?

RULING: WHEREFORE, premises considered, the assailed decision of the Court of

Appeals dated February 24, 1995 and the Resolution dated April 3, 1995 denying

the motion for reconsideration thereof are hereby REVERSED and SET ASIDE. The

"MANIFESTATION AND MOTION TO SUSPEND CIVIL PROCEEDINGS" filed by

petitioners is GRANTED.

RATIO: Now that the necessity of a prior reservation is the standing rule that shall

govern the institution of the independent civil actions referred to in Rule 111 of

the Rules of Court, past pronouncements that view the reservation requirement

as an "unauthorized amendment" to substantive law - i.e., the Civil Code, should

no longer be controlling. There must be a renewed adherence to the time-

honored dictum that procedural rules are designed, not to defeat, but to

safeguard the ends of substantial justice. And for this noble reason, no less than

the Constitution itself has mandated this Court to promulgate rules concerning

the enforcement of rights with the end in view of providing a simplified and

inexpensive procedure for the speedy disposition of cases which should not

diminish, increase or modify substantive rights. Far from altering substantive

rights, the primary purpose of the reservation is, to borrow the words of the

Court in "Caños v. Peralta"

Clearly then, private respondent PISC, as subrogee under Article 2207 of the Civil

Code, is not exempt from the reservation requirement with respect to its

damages suit based on quasi-delict arising from the same act or omission of

petitioner Javier complained of in the criminal case. As private respondent PISC

merely stepped into the shoes of Ms. Jao (as owner of the insured Toyota van),

then it is bound to observe the procedural requirements which Ms. Jao ought to

follow had she herself instituted the civil case.

RAFAEL REYES TRUCKING CORPORATION, Petitioner, vs. PEOPLE OF THE PHILIPPINES and ROSARIO P.DY (for herself and on behalf of the minors Maria Luisa, Francis Edward, Francis Mark and FrancisRafael, all surnamed Dy), Respondents

. FACTS: The defendant Rafael Reyes Trucking Corporation is a domestic corporation engaged in the business of transporting beer products for the San Miguel Corporation (SMC for short) from the latters San Fernando, Pampangaplant to its various sales outlets in Luzon. Among its fleets of vehicles for hire is the white truck trailer driven byRomeo Dunca y Tumol, a duly licensed driver. Aside from the Corporations memorandum to all its drivers andhelpers to physically inspect their vehicles before each trip, the SMCs Traffic Investigator-Inspector certified theroadworthiness of this White Truck trailer. In addition to a professional drivers license, it also conducts a rigidexamination of all driver applicants before they are hired.In the early morning of June 20, 1989, the White Truck driven by Dunca left Tuguegarao, Cagayan bound to SanFernando, Pampanga loaded with 2,000 cases of empty beer "Grande" bottles. Seated at the front right seat besidehim was Ferdinand Domingo, his truck helper ("pahinante" in Pilipino). At around 4:00 oclock that same morningwhile the truck was descending at a slight downgrade along the national road at Tagaran, Cauayan, Isabela, itapproached a damaged portion of the road covering the full width of the trucks right lane going south and about sixmeters in length. These made the surface of the road uneven because the potholes were about five to six inchesdeep. The left lane parallel to this damaged portion is smooth. As narrated by Ferdinand Domingo, beforeapproaching the potholes, he and Dunca saw the Nissan with its headlights on coming from the opposite direction. They used to evade this damaged road by taking the left lance but at that particular moment, because of theincoming vehicle, they had to run over it. This caused the truck to bounce wildly. Dunca lost control of the wheelsand the truck swerved to the left invading the lane of the Nissan. As a result, Duncas vehicle rammed the incomingNissan dragging it to the left shoulder of the road and climbed a ridge above said shoulder where it finally stopped. The Nissan was severely damaged and its two passengers, namely: Feliciano Balcita and Francisco Dy, Jr. diedinstantly from external and internal hemorrhage and multiple fractures.For the funeral expenses of Francisco Dy, Jr. her widow spent P651,360.00. At the time of his death he was 45 yearsold. He was the President and Chairman of the Board of the Dynamic Wood Products and Development Corporation(DWPC), a wood processing establishment, from which he was receiving an income of P10,000.00 a month. In theArticles of Incorporation of the DWPC, the spouses Francisco Dy, Jr. and Rosario Perez Dy appear to be stockholdersof 10,000 shares each with par value of P100.00 per share out of its outstanding and subscribed capital stock of 60,000 shares valued at P6,000,000.00. Under its 1988 Income Tax Returns the DWPC had a taxable net income of P78,499.30. Francisco Dy, Jr. was a La Salle University graduate in Business Administration, past president of thePasay Jaycees, National Treasurer and President of the Philippine Jaycees in 1971 and 1976, respectively, and WorldVice-President of Jaycees International in 1979. He was also the recipient of numerous awards as a civic leader. Hischildren were all studying in prestigious schools and spent about P180,000.00 for their education in 1988

alone. The trial court rendered a joint decision finding the accused Romeo Dunca y de Tumol guilty beyond reasonabledoubt of the crime of Double Homicide through Reckless Imprudence with violation of the Motor Vehicle Law (Rep.Act No. 4136), and appreciating in his favor the mitigating circumstance of voluntary surrender without anyaggravating circumstance to offset the same, the Court sentences him to suffer two (2) indeterminate penalties of four months and one day of arresto mayor as minimum to three years, six months and twenty days as maximum; toindemnify the Heirs of Francisco Dy. Jr. in the amount of P3,000,000.00 as compensatory damages, P1,000,000.00as moral damages, and P1,030,000.00 as funeral expenses; Ordering the plaintiff in Civil Case No. Br. 19-424 to paythe defendant therein actual damages in the amount of P84,000.00; and Ordering the dismissal of the complaint inCivil Case No. Br. 19-424.Petitioner and the accused filed a notice of appeal from the joint decision.On the other hand, private respondentsmoved for amendment of the dispositive portion of the joint decision so as to hold petitioner subsidiarily liable forthe damages awarded to the private respondents in the event of insolvency of the accused. The trial court rendered a supplemental decision ordering the defendant Reyes Trucking Corporation subsidiarilyliable for all the damages awarded to the heirs of Francisco Dy, Jr., in the event of insolvency of the accused butdeducting therefrom the damages of P84,000.00 awarded to said defendant.Petitioner filed with the trial court a supplemental notice of appeal from the supplemental decision. During thependency of the appeal, the accused jumped bail and fled to a foreign country. The Court of Appeals dismissed theappeal of the accused in the criminal case and rendered an amended decision affirming that of the trial court.Petitioner filed a motion for reconsideration of the amended decision. The Court of Appeals denied petitionersmotion for reconsideration for lack of merit. Hence, this petition for review.

ISSUES: 1. May petitioner as owner of the truck involved in the accident be held subsidiarily liable for the damagesawarded to the offended parties in the criminal action against the truck driver despite the filing of a separate civilaction by the offended parties against the employer of the truck driver?2. May the Court award damages to the offended parties in the criminal case despite the filing of a civilaction against the employer of the truck driver; and in amounts exceeding that alleged in the information forreckless imprudence resulting in homicide and damage to property?RULING: 1. Rafael Reyes Trucking Corporation, as employer of the accused who has been adjudged guilty in thecriminal case for reckless imprudence, can not be held subsidiarily liable because of the filing of the separate civilaction based on quasi delict against it. In view of the reservation to file, and the subsequent filing of the civil actionfor recovery of civil liability, the same was not instituted with the criminal action. Such separate civil action was

forrecovery of damages under Article 2176 of the Civil Code, arising from the same act or omission of the accused. Innegligence cases, the aggrieved party has the choice between (1) an action to enforce civil liability arising fromcrime under Article 100 of the Revised Penal Code; and (2) a separate action for quasi delict under Article 2176 of the Civil Code of the Philippines. Once the choice is made, the injured party can not avail himself of any otherremedy because he may not recover damages twice for the same negligent act or omission of the accused. This isthe rule against double recovery.In other words, "the same act or omission can create two kinds of liability on thepart of the offender, that is, civil liability ex delicto , and civil liability quasi delicto " either of which "may be enforcedagainst the culprit, subject to the caveat under Article 2177 of the Civil Code that the offended party can notrecover damages under both types of liability." In the instant case, the offended parties elected to file a separatecivil action for damages against petitioner as employer of the accused, based on quasi delict , under Article 2176 of the Civil Code of the Philippines. Private respondents sued petitioner Rafael Reyes Trucking Corporation, as theemployer of the accused, to be vicariously liable for the fault or negligence of the latter. Under the law, thisvicarious liability of the employer is founded on at least two specific provisions of law.The first is expressed inArticle 2176 in relation to Article 2180 of the Civil Code, which would allow an action predicated on quasi-delict tobe instituted by the injured party against the employer for an act or omission of the employee and wouldnecessitate only a preponderance of evidence to prevail. Here, the liability of the employer for the negligentconduct of the subordinate is direct and primary, subject to the defense of due diligence in the selection andsupervision of the employee. The enforcement of the judgment against the employer in an action based on Article2176 does not require the employee to be insolvent since the nature of the liability of the employer with that of theemployee, the two being statutorily considered joint tortfeasors, is solidary. The second, predicated on Article 103of the Revised Penal Code, provides that an employer may be held subsidiarily civilly liable for a felony committedby his employee in the discharge of his duty. This liability attaches when the employee is convicted of a crime donein the performance of his work and is found to be insolvent that renders him unable to properly respond to the civilliability adjudged. Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules of CriminalProcedure, when private respondents, as complainants in the criminal action, reserved the right to file the

separatecivil action, they waived other available civil actions predicated on the same act or omission of the accused-driver.Such civil action includes the recovery of indemnity under the Revised Penal Code, and damages under Articles 32,33, and 34 of the Civil Code of the Philippines arising from the same act or omission of the accused. The intention of private respondents to proceed primarily and directly against petitioner as employer of accused truck driverbecame clearer when they did not ask for the dismissal of the civil action against the latter based on quasidelict. Consequently, the Court of Appeals and the trial court erred in holding the accused civilly liable, andpetitioner-employer of the accused subsidiarily liable for damages arising from crime ( ex delicto ) in the criminalaction as the offended parties in fact filed a separate civil action against the employer based on quasidelict resulting in the waiver of the civil action ex delicto. It might be argued that private respondents ascomplainants in the criminal case withdrew the reservation to file a civil action against the driver (accused) andmanifested that they would pursue the civil liability of the driver in the criminal action. However, the withdrawal isineffective to reverse the effect of the reservation earlier made because private respondents did not withdraw thecivil action against petitioner based on quasi delict. In such a case, the provision of Rule 111, Section 1, paragraph3 of the 1985 Rules on Criminal Procedure is clear that the reservation to file or the filing of a separate civil actionresults in a waiver of other available civil actions arising from the same act or omission of the accused. Rule 111,Section 1, paragraph 2 enumerated what are the civil actions deemed waived upon such reservation or filing, andone of which is the civil indemnity under the Revised Penal Code. Rule 111, Section 1, paragraph 3 of the 1985Rules on Criminal Procedure specifically provides: "A waiver of any of the civil actions extinguishes the others. Theinstitution of, or the reservation of the right to file, any of said civil actions separately waives the others."Therationale behind this rule is the avoidance of multiple suits between the same litigants arising out of the same actor omission of the offender. The restrictive phraseology of the section under consideration is meant to cover allkinds of civil actions, regardless of their source in law, provided that the action has for its basis the same act oromission of the offender. However, petitioner as defendant in the separate civil action for damages filed against it,based on quasi delict , may be held liable thereon. Thus, the trial court grievously erred in dismissing plaintiffs civilcomplaint. And the Court of Appeals erred in affirming the trial courts decision. Unfortunately

private respondentsdid not appeal from such dismissal and could not be granted affirmative relief.The Court, however, in exceptionalcases has relaxed the rules "in order to promote their objectives and assist the parties in obtaining just, speedy,and inexpensive determination of every action or proceeding" or exempted "a particular case from the operation of the rules." Invoking this principle, we rule that the trial court erred in awarding civil damages in the criminal caseand in dismissing the civil action. Apparently satisfied with such award, private respondent did not appeal from the

dismissal of the civil case. However, petitioner did appeal. Hence, this case should be remanded to the trial court sothat it may render decision in the civil case awarding damages as may be warranted by the evidence.2. The award of damages in the criminal case was improper because the civil action for the recovery of civil liabilitywas waived in the criminal action by the filing of a separate civil action against the employer. As enunciatedin Ramos vs. Gonong, "civil indemnity is not part of the penalty for the crime committed." The only issue broughtbefore the trial court in the criminal action is whether accused Romeo Dunca y de Tumol is guilty of recklessimprudence resulting in homicide and damage to property. The action for recovery of civil liability is not includedtherein, but is covered by the separate civil action filed against the petitioner as employer of the accused truck-driver. In this case, accused-driver jumped bail pending his appeal from his conviction. Thus, the judgmentconvicting the accused became final and executory, but only insofar as the penalty in the criminal action isconcerned. The damages awarded in the criminal action was invalid because of its effective waiver. Thepronouncement was void because the action for recovery of the civil liability arising from the crime has beenwaived in said criminal action. With respect to the issue that the award of damages in the criminal action exceededthe amount of damages alleged in the amended information, the issue is de minimis. At any rate, the trial courterred in awarding damages in the criminal case because by virtue of the reservation of the right to bring a separatecivil action or the filing thereof, "there would be no possibility that the employer would be held liable because insuch a case there would be no pronouncement as to the civil liability of the accused. As a final note, the Courtreiterate that "the policy against double recovery requires that only one action be maintained for the same act oromission whether the action is brought against the employee or against his employer. The injured party mustchoose which of the available causes of action for damages he will bring.

Light Rail Transit Authority v Navidad – fist fight in a railway station between a drunk passenger and security guard. Navidad, the passenger fell on the tracks and died when he was run over by the moving train. A common carrier, both from the nature of its business and for reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of passengers. The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. The statutory provisions render a common carrier liable for death of or injury to passengers: (a) through the negligence or wilful acts of its employees or (b) on account of wilful acts or negligence of other passengers or of strangers if the common carriers employees through the exercise of due diligence could have prevented or stopped the act or omission.

In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not been shown. When an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply. [1-1]LIGA vs. ALLEGRO 1) LIGA vs. ALLEGRO RESOURCES575 SCRA 310 (Art. 1159)Facts:· Ortigas & Company, Limited Partnership entered into a

leasea g r e e m e n t w i t h L a P a z I n v e s t m e n t & R e a l t y C o r p o r a t i o n wherein the former leased to the latter its parcel of land locatedi n S a n J u a n . L a P a z c o n s t r u c t e d t h e G r e e n h i l l s S h o p p i n g Arcade and divided it into several stalls and subleased them toother people. One of the sub-lessees was Edsel Liga (Liga),who obtained the leasehold right to Unit No. 26, Level A of theGSA.· As the lease expired, the stallholders made several attemptsto have their leasehold rights extended.· A l l e g r o R e s o u r c e s b e c a m e t h e n e w l e s s e e . A s t h e n e w lessee, Allegro offered to sublease Unit No. 26, Level A toL i g a . T h e y e n t e r e d i n t o a l e a s e a g r e e m e n t d u b b e d R e n t a l I n f o r m a t i o n i n w h i c h L i g a a g r e e d t o p a y r en t a l o f P 4 0 K monthly. She also agreed to pay the back rentals due Ortigas.Liga also gave P40K as one month advance rental and another P 4 0 K a s o n e m o n t h s e c u r i t y d e p o s i t a s p r o v i d ed i n t h e agreement.· Liga failed to pay the subsequent due rent. Despite repeateddemands from Allegro, Liga had failed to pay her rentals for thesubleased property, as well as the back rentals from January to August 2001 due Ortigas.Issues:1. WON Liga should pay to Ortigas back rentals covering theperiod 1 January 2001 to 31 August 2001? NO2. WON Liga should pay to Allegro back rentals in the amountof P40K a month starting from 1 September 2001 until suchtime as she vacates the leased property? YES3. WON Liga should pay to Allegro the amount of P20K asattorney's fees and the costs of suit? YESHeld:1. (1) Ortigas is not a party to this case, whether as plaintiff or o t h e r w i s e . I t i s b a s i c t h a t n o r e l i e f c a n b e e x t e n d e d i n a judgment to a stranger or one who is not a party to a case. (2)Allegro cannot justify the award as a legal representative by virtue of a provision in its lease agreement with Ortigas. Allegrodid not aver in its complaint that it was acting as Ortigas's legalrepresentative and seeking the back rentals due Ortigas. (3)There is no allegation or prayer in the complaint that Allegrowas seeking the collection of the back rentals due Ortigas.2. The Court cannot countenance the obstinate refusal of Ligat o p a y P 4 0 K a m o n t h t o A l l e g r o s i n c e s h e h a d a l r e a dy acquiesced to pay such rental rate when she signed the RentalI n f o r m a t i o n . I t i s f u n d a m e n t a l t h a t a c o n t r a c t i s t he l a w between the parties. Obligations arising from contracts have the force of law between the contracting parties and should becomplied with in good faith.

It is a general principle of law that no one may be permitted tochange his mind or disavow and go back upon his own acts, or to proceed contrary thereto, to the prejudice of the other party.Likewise, it is settled that if the terms of the contract clearlye x p r e s s t h e i n t e n t i o n o f t h e c o n t r a c t i n g p a r t i e s , t h e l i t er a l meaning of the stipulations would be controlling.3. Law and jurisprudence support the award of attorney's feesand costs of suit in favor of Allegro. Attorney's fees and costsof litigation are awarded in instances where "the defendantacted in gross and evident bad faith in refusing to satisfy theplaintiff's plainly valid, just and demandable claim." Havingdelivered possession over the leased property to Liga, Allegroh a d a l r e a d y p e r f o r m e d i t s o b l i g a t i o n u n d e r th e l e a s e agreement. Liga should have exercised fairness and good j u d g m e n t i n d e a l i n g w i t h A l l e g r o b y r e l i g i o u s l y p a y i n g t he agreed monthly rental of P40,000.00

MAKATI STOCK EXCHANGE, INC., vs. MIGUEL V. CAMPOS,G.R. No. 138814 , April 16, 2009FACTS:Respondent Miguel V. Campos filed a petition with the Securities, Investigation and Clearing Department(SICD) of the Securities and Exchange Commission (SEC) against the petitioners Makati Stock Exchange, Inc. (MKSE)The petition sought: (1) to nullify the Resolution dated 3 June 1993 of the MKSE Board of Directors, whichallegedly deprived him of his right to participate equally in the allocation of Initial Public Offerings (IPO) of corporations registered with MKSE; (2) the delivery of the IPO shares he was allegedly deprived of, for which hewould pay IPO prices;.SICD granted the issuance of a Temporary Restraining Order to enjoin petitioners from implementing orenforcing the resolution of the MKSE. they also issued a writ of preliminary injunction for the implementation orenforcement of the MKSE Board Resolution in question.On March 11,1994, petitioners filed a motion to dismiss on the following grounds: (1) Petition becamemoot due to the cancellation of the license of the MKSE (2) The SICD had no jurisdiction over the petition and (3)the petition failed to state a cause of action. However, the SICD denied petitioner s motion to dismiss.ISSUE:Whether or not the petition failed to state a cause of action.HELD:The petition filed by respondent Miguel Campos should be dismissed for failure to state a cause of action.A cause of action is the act or omission by which a party violates a right of another.It contains three essential elements: 1) the legal right of the plaintiff 2) the correlative obligation of thedefendant and 3) the

act or omission of the defendant in violation of said legal right. If these elements are absent,the complaint will be dismissed on the ground of failure to state a cause of action. Furthermore, the petition filedby respondent failed to lay down the source or basis of respondent s right and/or petitioner s obligation.Article 1157 of the Civil Code, provides that Obligations arise from: law, Contracts, Quasi Contracts, Actsor omissions punished by law and quasi delicts. Therefore an obligation imposed on a person and thecorresponding right granted to another, must be rooted in at least one of these five sources.The mere assertion of a right and claim of an obligation in an initiatory pleading, whether a Complaint orPetition, without identifying the basis or source thereof, is merely a conclusion of fact and law. A pleading shouldstate the ultimate facts essential to the rights of action or defense asserted, as distinguished from mereconclusions of fact or conclusions of law.The Respondent merely quoted in his Petition the MKSE Board Resolution, passed sometime in 1989,granting him the position of Chairman Emeritus of MKSE for life. However, there is nothing in the said Petitionfrom which the Court can deduce that respondent, by virtue of his position as Chairman Emeritus of MKSE, wasgranted by law, contract, or any other legal source, the right to subscribe to the IPOs of corporations listed in thestock market at their offering prices.

Chaves vs.Gonzales April 30, 1970[GRN L-27454 April 30, 1970]ROSENDO O. CHAVES, plaintiff-appellant, vs. FRUCTUOSO GONZALES, defendant-appellee. The appealed judgment, which is brief, is hereunder quoted in full:"In the early part of July, 1963 , the plaintiff delivered to the defendant, who is a typewriter repairer, a portable typewriter for routinecleaning and servicing. The defendant was not able to finish the job after some time despite repeated reminders made by theplaintiff. The defendant merely gave assurances, but failed to comply with the same. In October, 1963, the defendant asked fromthe plaintiff the sum of P6.00 for the purchase of spare parts, which amount the plaintiff gave to the defendant.On October 26, 1963, after getting exasperated with the delay of the repair of the typewriter, the plaintiff went to the house of thedefendant and asked for the return of the typewriter. The defendant delivered the typewriter in a wrapped package. On reachinghome, the plaintiff examined the typewriter returned to him by the defendant and found out that the same was inshambles, with the interior cover and some parts and screws missing. On October 29, 1963, the plaintiff sent a letter to thedependant formally demanding the return missing parts, the interior cover and the sum of P6.00 (Exhibit D). The following day,

thedefendant returned to the plaintiff some of the missing parts, the interior cover and the P6.00 ."On August 29, 1964, the plaintiff had his typewriter repaired by Freixas Business Machines, and the repair job cost him a total of P89.85 , including labor and materials (Exhibit C)."On August 23, 1965, the plaintiff commenced this action before the City Court of Manila,demanding from the defendant thepayment of P90.00 as actual and compensatory damages, P100.00 for temperate damages, P500.00 for moral damages, and P500.00as attorney's fees."In his answer as well as in his testimony given before this court, the defendant made no denilas of the facts narrated above, exceptthe claim of the plaintiff that the typewriter was delivered to the defendant through a certain Julio Bocalin, which the defendantdenied allegedly because the typewriter was delivered to him personally by the plaintiff."The repair done on the typewriter by Freixas Business Machines with the total cost of P89.85 should not, however, be fullychargeable against the defendant. The repair invoice, Exhibit C, shows that the missing parts had a total value of only P31.10."WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiff the sum of P31.10, and the costs of suit."SO ORDERED." The error of the court a quo, according to the plaintiff-appellant, Rosendo O. Chaves, is that it awarded only the value of themissing parts of the typewriter, instead of the whole cost of labor and material that went into the repair of themachine, as provided for in Article 1167 of the Civil Code, reading as follows :"Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost."This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed thatwhat has been poorly done be undone."(so sabi nung may ari nung typewriter dapat daw di lang yung binayad nya sa missing parts (P31.10), dapat daw yung buong costnung labor + damages pa)On the other hand, the position of the defendant-appellee, Fructuoso Gonzales, is that he is not liable at all, not even for the sum of P31.10 because his contract with plaintiff-appellant did not contain a period, so that plaintiff appellant did not containa period, so that plaintiff-appellant should have first filed a petition for the court to fix the period, under Article 1197of the Civil Code, within which the defendant-appellee could be held liable for breach of contract. (lah naman daw timeperiod so lah pa breach)Because the plaintiff appealed directly to the Supreme Court and the appellee did not interpose any appeal, the facts, as found by thetrial court, are now conclusive and non reviewable.1(Summary ng facts from trial court: kasi daw direct action xa to the SC so what has been presented to the trial court would be usedby the SC as basis) The appealed judgment states that the "plaintiff delevered to the defendant . . .

a portable typewriter for routine cleaning andservicing "; that the "defendant was not able to finish the job after some time despite repeated reminders made by the plaintiff";that the "defendant merely gave assurances, but failed to comply with the same"; and that "after getting exasperated with the delayof the repair of the typewriter," the plaintiff went to the house of the defendant and asked for its return, which was done. Theinferences derivable from these findings of fact are that the appellant and the appellee had a perfected contract for cleaningand servicing a typewriter;that, they intended that the defendant was to finish it at some future time, although suchtime was not specified; and that such time had, passed without the work having been accomplished,for thedefendant returned the typewriter cannibalized and unrepaired, which in itself is a breach of his obligation, withoutdemanding that he should be given more time to finish the job, or compensation for the work he had already done.The time for compliance having evidently expired, andthere being a breach of contract by non-performance, it wasacademic for the plaintiff to have first petitioned the court to fix a period for the performance of the contract beforefiling his complaint in this case. Defendant cannot invoke Article 1197 of the Civil Code for he virtually admittednonperformance by returning the typewriter that he was obliged to repair in a non-working condition, with essentialparts missing. The fixing of a period would thus be a mere formality and would serve no purpose that to delay (cf. Tiglao, et al. v. Manila Railroad Co., 98 Phil. 181). (So sabi ng courts there ws a perfected contract between the 2 parties and thatthere was a breach of contract by nonperformance, and it was unnecessary to fix the time)It is clear that the defendant-appellee contravened the tenor of his obligation because he not only did not repair the typewriter but returned it "in shambles," according to the appealed decision. For such contravention, as appellant contends, he is liableunder Article 1167 of the Civil Code, jam quot, for the cost of executing the obligation in a proper manner. The cost of theexecution of the obligation in this case should be the cost of the labor or service expended in teh repair of thetypewriter, which is in the amount of P58.75, because the obligation or contract was to repair it . (so contravention of thetenor in the case, aside from non-performance, is the returning of the typewriter in shambles. Cost dapat na singilin sa tagagawa ngtypewriter e ung cost ng labor since un ung pinapagawa sa kanya na di naman nya ginawa)In addition, the defendant-appellee is likewise liable, under Article 1170 of the Code , for the cost of the missing parts,in the amount P31.10, for in his obligaiton to repair

the typewriter he was bound, but failed or neglected, to return itin the same condition it was when he received it. (kelangan rin bayad yung P31.10 kasi he breached his contract by notpreserving the thing which is

asked for him to perform on – kumbaga he failed in preserving the thing which he is supposed to

deliver) Appellant's claims for moral and temperate damages and attorney's fees were, however

correctly rejected by the trial court, for thesewere not alleged in his complaint (Record on Appeal,

pages 105).

Claims for damages and attorney's fees must be pleaded,and the existence of, the actual basis thereof must be proved .2 (so ung ibang damages dapat alleged in the complaint to berecognized by the courts…) The appealed judgment thus made no findings on these claims, nor on the fraud or malice charged to the appellee. As no findings of fact were made on damages and attorney's fees, there is no factual basis upon which to make an award therefor. Appellant is boundby such judgment of the court, a quo, by reason of his having resorted directly to the Supreme Court on questions of law.IN VIEW OF THE FOREGOING REASONS, the appealed judgment is hereby modified, by ordering the defendants-appellee to pay, as heis hereby ordered to pay, the plaintiff-appellant the sum of P89.85, with interest at the legal rate from the filing of the complaint.Costs in all instances against appellee Fructuoso Gonzales.Concepcion, C.J., Dizon, Makalintal, Zaldivar, Ruiz Castro, Fernando, Teehankee and Villamor, JJ., concur.Barredo J., did not take part. Judgment modified.So ang ruling sa Chavez v. Gonzales, they granted the plea of the owner of the typewriter that the whole cost of repair (labor + spareparts) be paid by the typewriter mechanic who damaged the typewriter aside from not cleaning and fixing it, therefore theperformance of the supposed function of the mechanic was performed on his costs) PANTALEON v AMERICAN EXPRESS INTERNATIONAL, INC Ponente: Tinga, J.Date: May 8, 2009 RATIO DECIDENDI: Moral damages avail in cases of breach of contract where thedefendant acted fraudulently or in bad faith. QUICK FACTS: Petitioner purchased items when he was in the States using his AmExcredit card. During three particular instances, clearance of his purchase took too longand under those circumstances caused him moral shock, mental anguish, seriousanxiety, wounded feelings and social humiliation. FACTS:

Name of Offended party (petitioner): Polo S. PantaleonName of respondent: American Express International, Inc.-The petitioner, lawyer Polo Pantaleon, his wife, daughter and son joined an escortedtour of Western Europe organized by Trafalgar Tours of Europe, Ltd., in October of 1991. -The tour group arrived in Amsterdam in the afternoon of 25 October 1991, thesecond to the last day of the tour. As the group had arrived late in the city, theyfailed to engage in any sight-seeing so they agreed that they would start early thenext day to see the entire city before ending the tour.-The following day, the last day of the tour, the group arrived at the Coster DiamondHouse. The group had agreed that the visit to Coster should end by 9:30 a.m. toallow enough time to take in a guided city tour of Amsterdam.- While in the diamond house, led to the store’s showroom to allow them to selectitems for purchase. Mrs. Pantaleon decided to buy a 2.5 karat diamond brilliant cut,and she found a diamond close enough in approximation. Mrs. Pantaleon alsoselected for purchase a pendant and a chain, all of which totaled U.S. $13,826.00.-Pantaleon presented his American Express credit card together with his passport tothe Coster sales clerk. This occurred at around 9:15 a.m., or 15 minutes before thetour group was slated to depart from the store. The sales clerk took the card’simprint, and asked Pantaleon to sign the charge slip. The charge purchase was thenreferred electronically to respondent’s Amsterdam office at 9:20 a.m.-clearance took too long. At 9:40am, Pantaleon asked the store clerk to cancel thesale to avoid further delaying and inconveniencing the tour group. At around 10:00a.m, 30 minutes after the tour group was supposed to have left the store, Costerdecided to release the items even without respondent’s approval of the purchase.-due to the delay, the city tour of Amsterdam was to be canceled due to lack of remaining time. The spouses Pantaleon allegedly offered their apologies but weremet by their tourmates with stony silence and visible irritation. Mrs. Pantaleon endedup weeping, while her husband had to take a tranquilizer to calm his nerves.-two instances similar to the Castor incident happened. • purchased golf equipment amounting to US $1,475.00 using his AmEx card,but he cancelled his credit card purchase and borrowed money instead from afriend, after more than 30 minutes had transpired without the purchasehaving been approved used the card to purchase children’s shoes worth $87.00 at a store in Boston,and

it took 20 minutes before this transaction was approved by respondent.

Petitioners:

after coming back to Manila, sent a letter demanding an apology for the"inconvenience, humiliation and embarrassment he and his family thereby suffered"for respondent’s refusal to provide credit authorization for the aforementionedpurchases. Respondent: refused to give an apology, sent a letter stating among others that thedelay in authorizing the purchase from Coster was attributable to the circumstancethat the charged purchase of US $13,826.00 "was out of the usual charge purchasepattern established." RTC : petitioner instituted an action for damages. Petitioner won. • Court awarded P 500,000.00 as moral damages, P 300,000.00 as exemplarydamages, P 100,000.00 as attorney’s fees, and P 85,233.01 as expenses of litigation. • normal approval time for purchases was "a matter of seconds." Based on thatstandard, respondent had been in clear delay with respect to the three subjecttransactions. CA: reversed the award of damages in favor of Pantaleon, holding that respondenthad not breached its obligations to petitioner. • delay was not attended by bad faith, malice, or gross negligence. • respondent "had exercised diligent efforts to effect the approval" of thepurchases, which were "not in accordance with the charge pattern" petitionerhad established for himself ISSUE:

1)WON has committed a breach of its obligations.2)WON respondent is liable for damages. DECISION: Petition granted. CA decision set aside. HELD: 1 ) T h e r e w a s a b r e a c h . -Notwithstanding the popular notion that credit card purchases are approved "withinseconds," there really is no strict, legally determinative point of demarcation on howlong must it take for a credit card company to approve or disapprove a customer’spurchase, much less one specifically contracted upon by the parties. Yet this is one of those instances when "you’d know it when you’d see it," and one hour appears to bean awfully long, patently unreasonable length of time to approve or disapprove acredit card purchase.-the respondent has the right, if not the obligation, to verify whether the credit it isextending upon on a particular purchase was indeed contracted by the cardholder,and that the cardholder is within his means to make such transaction. The culpablefailure of respondent herein is not the failure to timely approve petitioner’s purchase,but the more elemental failure to timely act on the same, whether favorably orunfavorably. • Respondent should have promptly informed petitioner the reason for the delay, and duly advised him that resolving the same could take some time sothat

petitioners will know WON to continue with the purchases2 ) Y E S . -

Moral damages avail in cases of breach of contract where the defendant

actedfraudulently or in bad faith, and the court should find that under the

circumstances,such damages are due.-in this case, there was bad faith and unjustified

neglect of respondent, attributablein particular to the "dilly-dallying"

of respondent’s Manila credit authorizer, Edgardo Jaurique. This, to the Court’s

mind, amounts to a wanton and deliberate refusal tocomply with its contractual

obligations, or at least abuse of its rights, under thecontract.-The delay

committed by defendant was clearly attended by unjustified neglect andbad faith,

since it alleges to have consumed more than one hour to simply go overplaintiff’s

past credit history with defendant, his payment record and his credit andbank

references, when all such data are already stored and readily available from

itscomputer and the fact that there were no delinquencies in the plaintiff’s

account

-It should be emphasized that the reason why petitioner is entitled todamages is not simply because respondent incurred delay, but because thedelay, for which culpability lies under Article 1170, led to the particularinjuries under Article 2217 of the Civil Code for which moral damages areremunerative. In this case, it was sufficiently shown that the incident gave rise tothe moral shock, mental anguish, serious anxiety, wounded feelings and socialhumiliation to the petitioner. • Amount should be commensurate to the loss or injury suffered. Petitioner’soriginal prayer for P 5,000,000.00 for moral damages is excessive under thecircumstances, and the amount awarded by the trial court of P 500,000.00 inmoral damages more seemly. 1avvphi1 -Likewise, we deem exemplary damages available under the circumstances, and theamount of P 300,000.00 appropriate. There is similarly no cause though to disturb thedetermined award of P 100,000.00 as attorney’s fees, and P 85,233.01 as expenses of litigation ANGELES VS. CALASANZ 135 SCRA 323FACTS:On December 19, 1957, defendants-appellants Ursula Torres Calasanz and plaintiffs-appelleesBuenaventura Angeles and Teofila Juani entered into a contract to sell a piece of land located in Cainta,Rizal for the amount of P3,920.00 plus 7% interest per annum. The plaintiffs-appellees made a downpayment of P392.00 upon the execution of the contract. They promised to pay the balance in monthlyinstalments of P41.20 until fully paid, the instalment being due and payable on the 19th day of eachmonth. The plaintiffs-appellees paid the monthly instalments until July 1966, when their aggregatepayment already amounted to P4,533.38.On December 7, 1966, the defendants-appellants

wrote the plaintiffs-appellees a letter requesting theremittance of past due accounts. On January 28, 1967, the defendants-appellants cancelled the said contract because the plaintiffs failed to meet subsequent payments. The plaintiffs’ letter with their plea for reconsideration of the said cancellation was denied by the defendants.The plaintiffs-appellees filed a case before the Court of First Instance to compel the defendant toexecute in their favour the final deed of sale alleging inter alia that after computing all subsequentpayments for the land in question, they found out that they have already paid the total amountincluding interests, realty taxes and incidental expenses. The defendants alleged in their answer that theplaintiffs violated par. 6 of the contract to sell when they failed and refused to pay and/or offer to paymonthly instalments corresponding to the month of August, 1966 for more than 5 months, therebyconstraining the defendants to cancel the said contract.The Court of First Instance rendered judgment in favour of the plaintiffs, hence this appeal.ISSUE:Has the Contract to Sell been automatically and validly cancelled by the defendants-appellants?RULING:No. While it is true that par.2 of the contract obligated the plaintiffs-appellees to pay the defendants the um of P3,920 plus 7% interest per annum, it is likewise true that under par 12 the seller is obligated totransfer the title to the buyer upon payment of the said price.The contract to sell, being a contract of adhesion, must be construed against the party causing it. TheSupreme Court agree with the observation of the plaintiffs-appellees to the effect that the terms of acontract must be interpreted against the party who drafted the same, especially where suchinterpretation will help effect justice to buyers who, after having invested a big amount of money, arenow sought to be deprived of the same thru the prayed application of a contract clever in itsphraseology, condemnable in its lopsidedness and injurious in its effect which, in essence, and itsentirety is most unfair to the buyers.Thus, since the principal obligation under the contract is only P3,920.00 and the plaintiffs-appellees havealready paid an aggregate amount of P4,533.38, the courts should only order the payment of the fewremaining instalments but not uphold the cancellation of the contract. Upon payment of the balance of P671.67 without any interest thereon, the defendant must immediately execute the final deed of sale infavour of the plaintiffs and execute the necessary transfer of documents, as provided in par.12 of the contract.

ROQUE VS. LAPUS96 SCRA 741FACTS:Sometime in 1964, plaintiff and defendant entered into an agreement of sale covering Lots 1, 2 and 9, Block 1, of said property, payable in 120 equal monthly installments atthe rate of P16.00, P15.00 per square meter, respectively. In accordance with said agreement, defendant paid to plaintiff the sum of P150.00 as deposit and the further sumof P740.56 to complete the payment of four monthly installments covering the months of July, August, September, and October, 1954 On January 24, 1955, defendant requested plaintiff that he be allowed to abandon and substitute Lots 1, 2 and 9, the subject with Lots 4 and 12, Block 2 of the RockvilleSubdivision, which are corner lots, to which request plaintiff graciously acceded. The evidence discloses that defendant proposed to plaintiff modification of their previouscontract to sell because he found it quite difficult to pay the monthly installments on the three lots, and besides the two lots he had chosen were better lots, being cornerlots. In addition, it was agreed that the purchase price of these two lots would be at the uniform rate of P17.00 per square meter payable in 120 equal monthly installments,with interest at 8% annually on the balance unpaid. Pursuant to this new agreement, defendant occupied and possessed Lots 4 and 12, and enclosed them, including theportion where his house now stands, with barbed wires and adobe walls. However, aside from the deposit of P150.00 and the amount of P740.56, which were paid undertheir previous agreement, defendant failed to make any further payment on account of the agreed monthly installments for the two lots in dispute, under the new contractto sell. Plaintiff demanded upon defendant not only to pay the stipulated monthly installments in arrears, but also to make up-to-date his payments, but defendant refusedto comply with plaintiff's demands.On or about November 3, 1957, plaintiff demanded upon defendant to vacate the lots in question and to pay the reasonable rentals thereon at the rate of P60.00 per monthfrom August, 1955. On January 22, 1960, petitioner Felipe C, Roque filed the complaint against defendant NicanorLapuz for rescission and cancellation of the agreement of sale between them involving the two lots in question and prayed that judgment be rendered ordering the rescission and cancellation of the agreement of sale, thedefendant to vacate the two parcels of land and remove his house therefrom and to pay to the plaintiff the reasonable rental thereof at the rate of P60.00 a month fromAugust 1955 until such time as he shall have vacated the premises, and to pay the sum of P2,000.00 as attorney's fees, costs of the suit and award such other relief orremedy as may be deemed just and equitable in the premises.The Court of Appeals rendered its decision that the defendant NicanorLapuz is granted a period of ninety (90) days from entry

hereof within which to pay the balance.Hence, this appeal.ISSUE:Can private respondent be entitled to the Benefits of the third paragraph of Article 1191, New Civil Code, for the fixing of periodRULING:No. Respondent as obligor is not entitled to the benefits of paragraph 3 of Art. 1191, NCC Having been in default and acted in bad faith, he is not entitled to the new periodof 90 days from entry of judgment within which to pay petitioner the balance of P11,434.44 with interest due on the purchase price of P12,325.00 for the two lots. To allowand grant respondent an additional period for him to pay the balance of the purchase price, which balance is about 92% of the agreed price, would be tantamount toexcusing his bad faith and sanctioning the deliberate infringement of a contractual obligation that is repugnant and contrary to the stability, security and obligatory force of contracts. Moreover, respondent's failure to pay the succeeding 116 monthly installments after paying only 4 monthly installments is a substantial and material breach onhis part, not merely casual, which takes the case out of the application of the benefits of pa paragraph 3, Art. 1191, N.C.C.Pursuant to Art. 1191, New Civil Code, petitioner is entitled to rescission with payment of damages which the trial court and the appellate court, in the latter's originaldecision, granted in the form of rental at the rate of P60.00 per month from August, 1955 until respondent shall have actually vacated the premises, plus P2,000.00 asattorney's fees. The Court affirmed the same to be fair and reasonable. The Court also sustained the right of the petitioner to the possession of the land, ordering therebyrespondent to vacate the same and remove his house therefrom.

AYSON-SIMON VS. ADAMOS 131 SCRA 439

AYSON-SIMON VS. ADAMOS AND FERIA G.R. NO. L-39378 AUGUST 28, 1984 FACTS: Defendants, Nicolas Adamos and Vicente Feria, purchased two lots forming part of the Piedad Estate in Quezon City, from Juan Porciuncula. Thereafter, the successors-in-interest of the latter filed Civil Case No. 174 for annulment of the sale and the cancellation of TCT No. 69475, which had been issued to defendants-appellants by

virtue of the disputed sale. The Court rendered a Decision annulling the saleThe said judgment was affirmed by the Appellate Court and had attained finality. Meanwhile, during the pendency of the case above, defendants sold the said two lots to Petitioner Generosa Ayson-Simon for Php3,800.00 plus Php800.00 for facilitating the issuance of the new titles in favor of petitioner. Due to the failure of the defendants to deliver the said lots, petitioner filed a civil case for specific performance. The trial court rendered judgment to petitioner’s favor. However, defendants could not deliver the said lots because the CA had already annulled the sale of the two lots in Civil Case No. 174. Thus, petitioner filed another civil case for the rescission of the contract. Defendants were contending that petitioner cannot choose to rescind the contract since petitioner chose for specific performance of the obligation. Also, even though petitioner can choose to rescind the contract, it would not be possible, because it has already prescribed. ISSUES: 1. Can petitioner choose to rescind the contract even after choosing for the specific performance of the obligation? 2. Had the option to rescind the contract prescribed? RULING: 1. Yes. The rule that the injured party can only choose between fulfillment and rescission of the obligation, and cannot have both, applies when the obligation is possible of fulfillment. If, as in this case, the fulfillment has become impossible, Article 1191 allows the injured party to seek rescission even after he has chosen fulfillment. 2. No. Article 1191 of the Civil Code provides

that the injured party may also seek rescission, if the fulfillment should become impossible. The cause of action to claim rescission arises when the fulfillment of the obligation became impossible when the Court of First Instance of Quezon City in Civil Case No. 174 declared the sale of the land to defendants by Juan Porciuncula a complete nullity and ordered the cancellation of Transfer Certificate of Title No. 69475 issued to them. Since the two lots sold to plaintiff by defendants form part of the land involved in Civil Case No. 174, it became impossible for defendants to secure and deliver the titles to and the possession of the lots to plaintiff. But plaintiff had to wait for the finality of the decision in Civil Case No. 174, According to the certification of the clerk of the Court of First Instance of Quezon City (Exhibit "E-2"), the decision in Civil Case No. 174 became final and executory "as per entry of Judgment dated May 3, 1967 of the Court of Appeals." The action for rescission must be commenced within four years from that date, May 3, 1967. Since the complaint for rescission was filed on August 16, 1968, the four year period within which the action must be commenced had not expired.