TORTS SET 1 CASES NAGUIAT, doing business under the name and style SERGIO F. NAGUIAT ENT., INC.

, & CLARK FIELD TAXI, INC., vs NLRC NATIONAL ORGANIZATION OF WORKINGMEN and its members, LEONARDO T. GALANG, et al., FACTS: Naguiat is the president and a stockholder of Clark Field Taxi, Inc. (CFT). Due to the phase-out of the US bases in the country, Clark Air Base was closed and the taxi drivers of CFTI were separated from service. The drivers filed a complaint for the payment of sep. pay due to the termination/phase-out. NLRC held Naguiat and the company solidarily liable for the payment of sep. pay. ISSUE: WON Naguait should be held solidarily liable with CFTI. YES. HELD: Under the Corporation Code, Naguait is liable bec: (1) he actively managed the business; (2) there was evidence that CFTI obtained reasonably adequate insurance; and (3) there was a corporate tort in this case. Our jurisprudence is wanting to the definite scope of corporate tort. Essentially, tort consists in the violation of a right given or the omission of a duty imposed by law. Simply stated, it is a breach of legal duty.

arrangement, the PNB branch manager revised it by increasing the lease amount to P2.80 per picul for a total of P2,800. Such increase was agreed to by both Rita and Jacobo.However, when it was presented to the Board of Directors for approval, they further increasedthe amount to P3.00 per picul. Jacobo asked for the reconsideration but he was denied thesame. The matter stood as it was until Jacobo informed Rita and PNB that he had lost interestin pursuing the deal. In the meantime, the debt of Rita with the PNB matured. Since she had asurety agreement with the Philippine American General Insurance Co. Inc. (Philamgen), thelatter paid her outstanding debt. Philamgen in turn demanded from Rita the amount whichthey paid the bank. Instead of paying the bank, Rita claimed that she told Philamgen that shedid not consider herself indebted to the bank since she had an agreement with Jacobo Tuazon. When such was discontinued, she failed to realized the income with which she couldhave paid her creditors. Philamgen filed a complaint for the collection of sum of moneyagainst Rita. Rita implicated PNB as a third party defendant claiming that her failure to paywas due to the fault or negligence of PNB. Issue: WON PNB is liable for the damage caused to Rita. Held: sugar quota was due to thedisapproval of the lease by the Board of Directors of the petitioner, thus PNB should beheld liable. The Board justified the increase to P 3.00 per picul by saying that it was the prevalent rateat that time. However, there was no proof that any other person was willing to lease thesugar quota allotment of Rita for a price higher than P2.80 per picul. Just because thereare isolated transactions where the lease price was P3.00 per picul does not mean thatthere are always ready takers. or disapproving the proposed leasesince the quota was mortgaged to the bank, the latter certainly cannot escape itsresponsibility of observing precaution and vigilance which the circumstances of the case justly demanded in approving or disapproving the lease of said sugar quota. l Code, [e]very person must in the exercise of his rightsand the performance of his duties, act with justice, give everyone his due and observehonesty and good

PHILIPPINE NATIONAL BANK, petitioner, vs. THE COURT OF APPEALS, RITA GUECO TAPNIO, CECILIO GUECO and THE PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY, INC., Rita Gueco Tapnio had an export sugar quota of 1,000 piculs for the agricultural year 1956-1957. Since, she did not need it, she agreed to allow Mr. Jacobo Tuazon to use the said quotafor consideration of 2,500. Her sugar cannot be exported without sugar quota allotments.Sometimes, however a planter harvests less sugar than her quota so her excess quota is usedby her mother who pays for it. This is her arrangement with Mr. Tuazon. At the time of theagreement, she was indebted to PNB of San Fernando, Pampanga. Her indebtedness wasknown as a crop loan and was secured by her sugar crop, and since her quota was mortgagedto PNB, her arrangement with Mr. Tuazon had to be approved by the bank. Upon presentmentof the lease

faith. This the petitioner failed to do. As a consequence, Art. 21 states,[a]ny person who willfully causes loss or injury to another in a manner that is contrary tomorals, good customs or public policy shall compensate the latter for the damage. On the liability of the corporation, the court ruled that, [a] corporation is civilly liable inthe sa me manner as natural persons for torts, because generally speaking, the rulesgoverning the liability of a principal or master for a tort committed by an agent or servantare the same whether the principal or master be a natural person or artificial person. All of the authorities agree that a principal or master is liable for every tort which he expresslydirects or authorizes, and this is just as true of a corporation as of a natural person. Acorporation, is liable therefore, whenever a tortuous act is committed by an officer oragent under express direction or authority from the stockholders or members acting as abody, or generally, from the directors as the governing body.NOTE: CLV tells us that it is clear from the ruling of the Court in this case that not everytortuous act committed by an officer can be ascribed to the corporation as its liability, for it isreasonable to presume that in the granting of authority by the corporation to its agent, such agrant did not include a direction to commit tortuous acts against third parties. Only when thecorporation has expressly directed the commission of such tortuous act, would the damagesresulting therefrom be ascribable to the corporation. And such a direction by the corporation,is manifested either by its board adopting a resolution to such effect, as in this case, orhaving taken advantage of such a tortuous act the corporation, through its board, expresslyor impliedly ratifies such an act or is estopped from impugning such an act.Our jurisprudence is wanting as to the definite scope of corporate tort. Essentially,tort consists in the violation of a right given or the omission of a duty imposed by law; abreach of a legal duty. The failure of the corporate employer to comply with the law-imposedduty under the Labor Code to grant separation pay to employees in case of cessation of operations constitutes tort and its stockholder who was actively engaged in the managementor operation of the business should be held personally liable. Q: When is a corporation liable for tort?A: A corporation is liable for tort when: (a) the act is committed by an officer or agent (2) underexpress direction of authority from the stockholders or

members acting as a body or through theBoard of Directors. Q: How can authority given to the agent of the corporation be determined?A: Either by: (a) such direction by the corporation is manifested, by its board adopting aresolution to such effect (b) by having takien advantage of such a tortious act, the corporationthrough its board, has expressly or impliedly ratified such an act or estopped from impugning thesame. Q: What is a derivative suit?A: Since, the act of the board is essentially that of the corporation and therefore corporate assetscannot escape enforcement of the award of damage to the tort victim. As a remedy, thestockholders may institute a derivative suit against the responsible board members and officersfor the damages suffered by the corporation as a result of the tort suit.

M. H. WYLIE and CAPT. JAMES WILLIAMS, petitioners, vs. AURORA I. RARANG and THE HONORABLE INTERMEDIATE APPELLATE COURT, respondents. Petitioners Wylie and Williams were the assistant administrative officer and commandingofficer, respectively, of the US Naval base in Subic. Respondent Aurora Rarang was an employee inthe Office of the Provost Marshal assigned as the merchandise control guard.Wylie, as one of his inquiry was published saying thatconfiscated goods were being consumed/ used for personal benefit by the merchandise controlinspector and that a certain Rarang, being the onlyperson named Auring in the said office, went to press an action for damages against Wylie and Williamsand the US Naval Base. (That Rarang was indeed the Auring mentioned in the inquiry was provenby the apology letter issued by Wylie for the inadvertent publication.)She alleged that the article constituted false, injurious, and malicious defamation and libel tending toimpeach her honesty, virtue and reputation exposing her to public hatred, contempt and ridicule.Defendants alleged that (1) defendants acted in performance of their official functions as officersof the US Navy and are thus immune from suit (2) US Naval Base is immune from suit being aninstrumentality of the US

Government and (3) the RTC has no jurisdiction over the subject matter andthe parties involved. Lower court ruling: defendants pay damages because acts were not official acts of the USgovernment, but personal and tortious acts (which are not included in the rule that a sovereign against US Naval Base was dismissed. ISSUES1. WON officials of the US Naval Base inside Philippine Territory, in discharge of their official duties, areimmune from suit.2. Are US officers who commit a crime or tortious act while discharging official functions still coveredby the principle of state immunity from suit? HELD1. Yes, they are immune.Ratio Officers of the US Navy as instrumentalities of the US government are immune from suit (but onlywhen they are acting/ discharging their official functions.Art.XVI, sec.3 of 1987 constitution provides that state may not be sued without its consent. Buteven without this affirmation, court is still bound by the doctrine of incorporation. Thedoctrine is applicable not only to suits against the state but also to complaints filedagainst officials for acts allegedly performed by them in discharge of their official duties.The traditional rule of immunity excepts a State from being sued in the courts of another Statewithout its consent or waiver. This rule is a necessary consequence of the principles of independenceand equality of States. Because the activities of states have multiplied, it has been necessary todistinguish (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends only toacts jure imperii.There is no question, therefore, that the petitioners actively participated in screening thefeatures and articles in the POD as part of their official functions.Under the rule that U.S. officials in the performance of their official functions are immune fromsuit, then it should follow that the petitioners may not be held liable for the questioned publication.It is to be noted, however, that the petitioners were sued in their personal capacities for their allegedtortious acts in publishing a libelous article.2. No.Ratio. Our laws and, we presume, those of the United States do not allow the commission of crimes in the name of official duty. The general rule is that public officials can be heldpersonally accountable for acts claimed to have been

performed in connection with officialduties where they have acted ultra vires or where there is showing of bad faith. Immunity from suitcannot institutionalize irresponsibility and non-accountability nor grant a privileged status notclaimed by any other official of the Republic.Under Art. 2176 of the civil code, whoever by act or omission, causes damage to another, therebeing 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 a quasi-delict and isgoverned by the provisions of this Chapter.Indeed the imputation of theft contained in the POD dated February 3, 1978 is adefamation against the character and reputation of the private respondent. Petitioner Wyliehimself admitted that the Office of the Provost Marshal explicitly recommended the deletion of thename Auring if the article were published. The petitioners, however, were negligentbecause under their direction they issued the publication without deleting the name "Auring."Such act or omission is ultra vires and cannot be part of official duty. It was a tortious act whichridiculed the private respondent. The petitioners, alone, in their personal capacities are liable forthe damages they caused the private respondent

GASHEM SHOOKAT BAKSH, petitioner, vs. HON. COURT OF APPEALS and MARILOU T. GONZALES, respondents. Petitioner Gashem Shookat Baksh was an Iranian citizen, exchange student taking a medical course in Dagupan City, who courted private respondent Marilou Gonzales, and promised to marry her. On the condition that they would get married, she reciprocated his love. They then set the marriage after the end of the school semester. He visited Marilous parents to secure their approval of marriage. In August 1987, he forced her to live with him, which she did. However, his attitude toward her changed after a while; he would maltreat and even threatened to kill her, from which she sustained injuries. Upon confrontation with the barangay captain, he repudiated their marriage agreement, saying that he was already married to someone living in Bacolod. Marilou then filed for damages before the RTC. Baksh denied the accusations but asserted that

he told her not to go to his place since he discovered her stealing his money and passport. The RTC ruled in favor of Gonzales. The CA affirmed the RTC decision. ISSUES: Whether or not breach of promise to marry is an actionable wrong. Whether or not Art. 21 of the Civil Code applies to this case. Whether or not pari delicto applies in t his case. HELD: The existing rule is that a breach of promise to marry per se is not an actionable wrong. This, notwithstanding, Art. 21 is designed to expand the concept of torts or quasi-delict in this jurisdictions by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in the statute books. Art. 21 defines quasi-delict: 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 quasi-delict and is governed by the (Civil Code). It is clear that petitioner harbors a condescending if not sarcastic regard for the private respondent on account of the latters ignoble birth, inferior educational background, poverty and, as perceived by him, dishonorable employment. From the beginning, obviously, he was not at all moved by good faith and an honest motive. Thus, his profession of love and promise to marry were empty words directly intended to fool, dupe, entice, beguile and deceive the poor woman into believing that indeed, he loved her and would want her to be his life partner. His was nothing but pure lust which he wanted satisfied by a Filipina who honestly believed that by accepting his proffer of love and proposal of marriage, she would be able to enjoy a life of ease and security. Petitioner clearly violated the Filipino concept of morality and so brazenly defied the traditional respect Filipinos have for their women. It can even be said that the petitioner committed such deplorable acts in blatant disregard of Article 19 of the Civil Code which directs every person to act with justice, give everyone his due, and observe honesty and good faith in the exercise of his right and in the performance of his obligations.

No foreigner must be allowed to make a mockery of our laws, customs and traditions. She is not in pari delicto with the petitioner. Pari delicto means in equal fault. At most, it could be conceded that she is merely in delicto. Equity often interfered for the relief of the less guilty of the parties, where his transgression has been brought about by the imposition of undue influence of the party on whom the burden of the original wrong principally rests, or where his consent to the transaction was itself procured by fraud.

PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, vs. THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO At about 1:30 a.m. on November 15, 1975, private respondent Leonardo Dionisio was on his way home from cocktails and dinner meeting with his boss. He was proceeding down General Lacuna Street when he saw a Ford dump truck parked askew, partly blocking the way of oncoming traffic, with no lights or early warning reflector devices. The truck was driven earlier by Armando Carbonel, a regular driver of the petitioner company. Dionisio tried to swerve his car to the left, but it was too late. He suffered some physical injuries and nervous breakdown. Dionision filed an action for damages against Carbonel and Phoenix Insurance. Petitioners countered the claim by imputing the accident to respondents own negligence in driving at high speed without curfew pass and headlights, and while intoxicated. The trial court and the Court of Appeals ruled in favor of private respondent. Issue: Whether the collision was brought about by the way the truck was parked, or by respondents own negligence Held: We find that private respondent Dionisio was unable to prove possession of a valid curfew pass during the night of the accident and that the preponderance of evidence shows that he did not have such a pass during that night. It is the petitioners' contention that Dionisio purposely shut off his headlights even before he reached the intersection so as not to be detected by the police in the police precinct which he (being

a resident in the area) knew was not far away from the intersection. We believe that the petitioners' theory is a more credible explanation than that offered by private respondent Dionisio, i.e., that he had his headlights on but that, at the crucial moment, these had in some mysterious if convenient way malfunctioned and gone off, although he succeeded in switching his lights on again at "bright" split seconds before contact with the dump truck. We do not believe that this evidence is sufficient to show that Dionisio was so heavily under the influence of liquor as to constitute his driving a motor vehicle per se an act of reckless imprudence. The conclusion we draw from the factual circumstances outlined above is that private respondent Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster than he should have been. Worse, he extinguished his headlights at or near the intersection of General Lacuna and General Santos Streets and thus did not see the dump truck that was parked askew and sticking out onto the road lane. Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the legal and proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel. The collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the truck driver's negligence. The distinctions between "cause" and "condition" which the 'petitioners would have us adopt have already been "almost entirely discredited. If the defendant has created only a passive static condition which made the damage possible, the defendant is said not to be liable. But so far as the fact of causation is concerned, in the sense of necessary antecedents which have played an important part in producing the result it is quite impossible to distinguish between active forces and passive situations, particularly since, as is invariably the case, the latter are the result of other active forces which have gone before. Even the lapse of a considerable time during which the "condition" remains static will not necessarily affect liability. "Cause" and "condition" still find occasional mention in the decisions; but the distinction is now almost entirely discredited. So far as it has any validity at all, it must refer to the type of case where the forces set in operation by the defendant have come to rest in a position of apparent safety, and some new force

intervenes. But even in such cases, it is not the distinction between "cause" and "condition" which is important but the nature of the risk and the character of the intervening cause. We believe, secondly, that the truck driver's negligence far from being a "passive and static condition" was rather an indispensable and efficient cause. The improper parking of the dump truck created an unreasonable risk of injury for anyone driving down General Lacuna Street and for having so created this risk, the truck driver must be held responsible. In our view, Dionisio's negligence, although later in point of time than the truck driver's negligence and therefore closer to the accident, was not an efficient intervening or independent cause. The defendant cannot be relieved from liability by the fact that the risk or a substantial and important part of the risk, to which the defendant has subjected the plaintiff has indeed come to pass. Foreseeable intervening forces are within the scope original risk, and hence of the defendant's negligence. The courts are quite generally agreed that intervening causes which fall fairly in this category will not supersede the defendant's responsibility. Thus, a defendant who blocks the sidewalk and forces the plaintiff to walk in a street where the plaintiff will be exposed to the risks of heavy traffic becomes liable when the plaintiff is run down by a car, even though the car is negligently driven; and one who parks an automobile on the highway without lights at night is not relieved of responsibility when another negligently drives into it. We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently respondent Dionisio may recover damages though such damages are subject to mitigation by the courts. Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it

has been in Article 2179 of the Civil Code of the Philippines. Under Article 2179, the task of a court, in technical terms, is to determine whose negligence the plaintiff's or the defendant's - was the legal or proximate cause of the injury. The relative location in the continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is only one of the relevant factors that may be taken into account. Of more fundamental importance are the nature of the negligent act or omission of each party and the character and gravity of the risks created by such act or omission for the rest of the community. Our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them among the members of society. To accept the petitioners' proposition must tend to weaken the very bonds of society. We believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages awarded by the respondent appellate court, except the award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs shall be borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the reduced award of damages made by the respondent appellate court.

damages for loss of employment opportunities, mental suffering and inferiority complex caused by the scar on her forehead. Respondents raised in defense force majeure and the waiver signed by petitioner. The trial court upheld the validity of the waiver and dismissed the complaint. The appellate court ruled that the waiver was invalid, but also that the petitioner is not entitled to damages. Issues: (1) Whether there was a valid waiver (2) Whether the respondent was negligent (3) Whether the petitioner is entitled to actual and moral damages Held: (1) We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner. A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. The circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling from the effects of the vehicular accident when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances, there appears substantial doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent. Finally, because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. To uphold a supposed waiver of any right to claim damages by an injured passenger,

REYNALDA GATCHALIAN, petitioner, vs. ARSENIO DELIM and the HON. COURT OF APPEALS, respondents. On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned by respondents. While the bus was running along the highway, a snapping sound was heard, and after a short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The passengers were confined in the hospital, and their bills were paid by respondents spouse on July 14. Before Mrs. Delim left, she had the injured passengers sign an already prepared affidavit waiving their claims against respondents. Petitioner was among those who signed. Notwithstanding the said document, petitioner filed a claim to recover actual and moral

under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. We believe such a purported waiver is offensive to public policy. (2) In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." To overcome this presumption, the common carrier must show to the court that it had exercised extraordinary diligence to present the injuries. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence. A common carrier is bound to carry its passengers safely "as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the circumstances". The records before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver. (3) At the time of the accident, she was no longer employed in a public school. Her employment as a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for substitute teachers. She could not be said to have in fact lost any employment after and by reason of the accident. She may not be awarded damages on the basis of speculation or conjecture. Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was

before the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante. Moral damages may be awarded where gross negligence on the part of the common carrier is shown. Considering the extent of pain and anxiety which petitioner must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as attorney's fees is in fact even more modest.

JOSUE ARLEGUI, petitioner, vs. HON. COURT OF APPEALS and SPOUSES GIL AND BEATRIZ GENGUYON, respondents. Residential Apartment Unit no. 15 was leased for more than 20 years by Serafia Real Estate, Inc. tospouses Gil and Beatriz. In 1984, Alberto Barretto (one of the owners of Serafia) informed the tenants of the apartment bldg. that Serfia and its assets had already been assigned and transferred to A.B. Barretto.The tenants formed an organization called Barretto Apartment Tenant Association to represent them innegotiations with A.B. Barretto Enterprises for the purchase of the apartment units. Josue Arlegui waselected vice president and Mateo Tan Lu as auditor of the association. Genguyons were later surprised tolearn that the unit they were leasing had been sold to Mateo Tan Lu. Genguyons continued to occupy thepremises and paid rentals. They were then informed that Mateo Tan sold the apartment to Josue Arlegui.Arlegui demanded Genguyons to vacate the premises. ISSUE: Whether or not a constructive trust existed HELD: The petitioner denies that a constructive trust was created and maintains that there was no fraudcommitted. He neither received money from the Genguyons, nor was he unjustly enriched. However, therecords show that the Genguyons, along with the other tenants and members of the association,contributed money to enable the officers to negotiate with the Barrettos. Besides, constructive

trusts donot only arise out of fraud or duress, but also by abuse of confidence, in order to satisfy the demands of justice.The petitioner also argues that the Genguyons failed to prove the existence of an implied or constructivetrust. We disagree. There is ample documentary and testimonial evidence to establish the existence of afiduciary relationship between them, and that petitioners subsequent acts betrayed the trust andconfidence reposed on him.It is further argued that no implied trust, as defined under Article 1456 of the New Civil Code, was createdbecause the petitioner did not acquire the subject property through mistake or fraud. Nevertheless, theabsence of fraud or mistake on the part of the petitioner does not prevent the court from ruling that animplied or constructive trust was created nonetheless A constructive trust, otherwise known as a trust ex maleficio, a trust ex delicto, a trust de son tort, aninvoluntary trust, or an implied trust, is a trust by operation of law which arises contrary to intention and ininvitum, against one who, by fraud, actual or constructive, by duress or abuse of confidence, bycommission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionablemeans, or who in any way against equity and good conscience, either has obtained or holds the legalright to property which he ought not, in equity and good conscience, hold and enjoy. It is raised by equityto satisfy the demands of justice. However, a constructive trust does not arise on every moral wrong inacquiring or holding property or on every abuse of confidence in business or other affairs; ordinarily sucha trust arises and will be declared only on wrongful acquisitions or retentions of property of which equity,in accordance with its fundamental principles and the traditional exercise of its jurisdiction or inaccordance with statutory provision, takes cognizance. It has been broadly ruled that a breach of confidence, although in business or social relations, rendering an acquisition or retention of property byone person unconscionable against another, raises a constructive trust.*There was a breach of trust by the officers. SC annulled the sale of the apartment and ordered Arlegui toexecute deed of conveyance to Genguyon spouses

PACIFIC MERCHANDISING CORPORATION, plaintiffappellee, vs. CONSOLACION INSURANCE & SURETY CO., INC., defendant-appellee, 1. That on the 19th day of October, 1962, a Writ of Execution as isstica Iy the Court of First Instance of Manila under Civil Case No. 49691, entitled Pacific Merchandising Corporation vs. Leo Enterprises, Inc., a copy of the said Writ of Execution is attached as ANNEX Ato the complaint; 2. That by virtue of the aforesaid Writ of Execution, the Sheriff of Manila levied and attached the following: 'l. Second Hand AUTOMATICKET Machine No. MG-31833;and '2. Cinema Projectors Complete, trademark SIMPLEX PEERLESS MAGNARC NOS. 52625 and 62387' which items were advertised for sale on March 2, 1963, copy of Notice of sale attached as ANNEX 'B' to the Complaint; 3. That Atty. Greg V. Pajarillo was appointed on March 2, 1963 as Receiver of all the assets, properties and equipment of Paris Theatre, olwrated by Leo Enterprises, Inc. under Civil Case No. 50201 entitled Gregorio V. Pajarillo vs. Leo Enterprises, Inc.; 4. That the sale at public auction of the above described properties was postponed and was later cancelled due to thc representation of Atty. Greg V. Pajarillo as Receiver of Paris Theatre operated by Leo Enterprises, Inc. in which he undertook the 1anient of the judgment rendered in favor of the plaintiff against Leo Enterprises, Inc. as Ier undertaking dated March 11, 1963, copy of which is attached as ANNEX 'C' to the complaint; 5. That on or about hie third of March, 1963, thirdparty defendant Pajarillo approached the third-party plaintiff and applied for a surety bond in the amount of P5,000.00 to be rated in favor of the abovenamed plaintiff in order to guarantee to said plaintiff the payment of obligations in its favor by the Leo Enterprises, Inc.; 6. That the bond applied for was in fact executed in favor of the pIaintiff rith third-party defendant Pajarillo as principal and third-party plaintiff as surety in the context of the allegations of the preceding paragraph and a copy of the said bond is attached a ANNEX 'A' to the third party complaint; 7. That to protect thirrd party plaintiff against damage and injury, the third party defendant Pajarillo executed in favor of the former an INDEMNITY AGREEMENT, copy of which is attached

as ANNEX 'B' to third party complaint; tlie trms of which aie incorporated by reference; 8. That the plaintiff received from hie aid principal, Greg V. Pajarillo the sum of P2,000.00 leaving a balance of P2,562.88 still unpaid aside from interest at the rate of 1% per month and atto lnen s f cluiaient to 25% of tht amount due as provided for in said undertaking (ANNEX 'C' to tlie complaint); 9. That on July 1, 1963, a decision was rendered tne court of First Instance of Manila in Civil case No. 50201, copy of' which is attached its ANNEX 'A' to Answer to Third Party Complaint, by virtue of which Greg V. Pajarillo, as said Received stololcl making payments to plaintiff; 10. That the said decision in Civl Case No. 50201 dated July 1, 1963 was appealed lix defendant Leo Enterprises, Inc. to the court of Appeals and that the records kere eleattd to the aid ApiIiat court on August 27, 1963; 11. That on October 9, 1963, plaintiff's counsel demanded from the said principal, Greg V. Paiarillo, the payment of the installments corresponding to the months of May, June, July, August and September, 1963, which remain unpaid in spite of said demand, copy of said letter being, attached as ANNEX 'E' to the complaint; 12. That the defendant was duly notified of the demand made on the principal, Greg V. Pajarillo and in spite of said notice the defendant has failed and refused to pay the unpaid obligation; 13. That on December 19, 1963, plaintiff's counsel demanded from the defendant the payment of the unpaid obligation of the principal, Greg V. Pajarillo but refused and failed to pay the same in spite of said demand; 14. That when reminded by third-party plaintiff regarding his obligations in favor of the plaintiff, the third-party defendant, Greg V. Pajarillo replied that he no longer was bound to pay because he had ceased to be the receiver of Paris Theatre operated by Leo Enterprises, Inc. by virtue of the decision of the Court in Civil Case No. 50201 cited above, and for this reason, third- party plaintiff refused to pay the demand of the plaintiff 2 ISSUE: Whether or not third party defendant-appellant Gregorio V. Pajarillo is, under the facts and circumstances obtaining, liable to plaintiff for the unpaid amount claimed. Upon the resolution of this issue will in turn depend the liability of defendantthird-party plaintiff Consolacion Insurance & surety Co., Inc. under the Surety Bond, on the basis of which

it was ordered by the court a quo to pay the amount involved to plaintiff-appellee. RULING: 1. A receiver is not an agent or representative of any party to the action. He is an officer of the court exercising his functions in the interest of neither plaintiff nor defendant, but for the common benefit of all the parties in interest. 3 He performs his duties "subject to the control of the Court," and every question involved in the receivership may be determined by the court taking cognizance of the receivership proceedings. 4 Thus, "a receiver, strictly speaking, has no right or power to make any contract binding the property or fund in his custody or to pay out funds in his hands without the authority or approval of the court ... . 5 As explained by Justice Moran, speaking for the Court in a 1939 case 6 ... The custody of the receiver is the custody of the court. His acts and possession are the acts and possession of the court, and his contracts and liabilities are, in contemplation of law, the contracts and liabilities of the court. As a necessary consequence, receiver is f subject to the control and supervision of the court at every step in his management of the property or funds placed in his hands. ... 7 He cannot operate independently of the court, and cannot enter into any contract without its approval. 2. In the case at bar, appellant Pajarillo does not dispute the fact that he never secured the court's approal of either the agreement of March 11, 1963, with Pacific Merchandising Corporation or of his Indemnity Agreement with the Consolacion Insurance & Surety Co., Inc. on March 14, 1963, in consideration of the performance bond submitted by the latter to Pacific Merchandising Corporation to guarantee the payment of the obligation. As the person to whom the possession of the theater and its equipment was awarded by the court in Civil Case No. 50201, it was certainly to his personal profit and advantage that the sale at public auction of the liquipment of the theater was prevented by his execution of the aforesaid agreement and submission of the afore-mentioned bond. In order to bind the property or fund in his hands as receiver, he should have applied for and obtained from the court authority to enter into the aforesaid contract. 9 Unauthorized contracts of a receiver do not bind the court in charge of receivership. They are the receiver's own contracts and are not recognized by the courts as contracts of the receivership. 10 Consequently, the aforesaid agreement and

undertaking entered into by appellant Pajarillo not having been approved or authorized by the receivership court should, therefore, be considered as his personal undertaking or obligation. Certainly, if such agreements were known by the receivership court, it would not have terminated the receivership without due notice to the judgment creditor as required by Section 8 of Rule 59 of the Rules of Court. This must be assumed because of the legal presumption that official duty has been regularly performed. 11 Indeed, if it were true that he entered into the agreement and undertaking as a receiver, he should have, as such receiver, submitted to the court an account of the status of the properties in his hands including the outstanding obligations of the receivership. 12 Had he done so, it is reasonable to assume that the judgment creditor would have opposed the termination of the receivership, unless its claim was paid. Having failed to perform his duty, to the prejudice of the creditor, appellant should not be permitted to take advantage of his own wrong. The judgment creditor having been induced to enter into the aforesaid agreement by appellant Pajarillo it was the duty of the latter to comply with is end of the bargain. He not only failed to perform his undertaking, but now attempts to evade completely his liability. Under such circumstances, appellant is not entitled to equitable relief. No ground for equitable relief can be found in a case where a party has not only failed to perform the conditions upon which he alone obtained the execution of the contract, but where it is clear that he never, at any time, intended to perform them. 13 3. Moreover, it will be recalled that the obligation due the Pacific Merchandising Corporation represented the cost of materials used in the construction of the Paris Theatre. There can not be any question that such improvements, in the final analysis, redounded to the advantage and personal profit of appellant Pajarillo because the judgment in Civil Case No. 50201, which was in substance affirmed by the Appellate Court, ordered that the "possession of the lands, building equipment, furniture, and accessories ..." of the theater be transferred to said appellant as owner thereof. As the trial court aptly observed "... it is only simple justice that Pajarillo should pay for the said claim, otherwise he would be enriching himself without paying plaintiff for the cost of certain materials that went into its construction. ... It is argLicd however, that he did so only as a receiver of Leo Pajarillo by virtue of the judgment in Civil Case No. 50201 all of

the properties of Leo Enterprises, Inc. passed on to Pajarillo by virtue of the judgment in Civil Case No. %201 ...". This Roman Law principle of "Nemo Cum alterious detrimento locupletari protest" is embodied in Article 22 (Human Relations), 14 and Articles 2142 to 2175 (QuasiContracts) of the New Civil Code. Long before the enactment of this Code, however, the principle of unjust enrichment which is basic in every legal system, was already expressly recognized in this jurisdiction. As early as as 1903, in Perez v. Pomar, 15 this Court ruled that where one has rendered services to another, and these services are accepted by the latter, in the absence of proof that the service ",as rendered gratuitously, it is but just that he should pay a reasonable remuneration therefore because "it is a wellknown principle of law, that no one should be permitted to enrich himself to the damage of another." Similarly in 1914, this Court declared that in this jurisdiction, even in the absence of statute," ... under the general principle that one person may not enrich himself at the expense of another, a judgment creditor would not be permitted to retain the purchase price of land sold as the property of the judgment debtor after it has been made to appear that the judgment debtor had no title to the land and that the purchaser had failed to secure title thereto ... 16 The foregoing equitable principle which springs from hie fountain of good conscience are applicable to the case at bar. ACCORDINGLY, in view of the foregoing, the judgment unirilleal is httcf AFFIRMED. Costs against appellant.

BPI EXPRESS CARD CORPORATION, petitioner, vs. COURT OF APPEALS and RICARDO J. MARASIGAN, respondents. Marasigan was the holder of a BPI credit card. Due to his delinquency in payment, immediate demand was given by BPI to pay account. Marasigan issued a postdated check. The check was there after kept in custiody by BPI and card was temporarily suspended. And o n a relevant date, Marasigan after eating in Caf Adriatico tried to use his card to pay but it was dishonored. HELD:

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The issuance of the postdated check was not effective payment on the part of Marasigan and thus, the bank was justified in suspending temporarily his use of the credit card. A check is only a substit ute for money and not money, and the delivery of such instrument does n't itself operate as payment.

When a breach of promise to marry is actionable under Article 21, moral damages may be awarded under Art. 2219 (10) of the Civil Code. Exemplary damages may also be awarded under Art. 2232 of the Code where it is proven that the defendant clearly acted in wanton, reckless and oppressive manner.

BEATRIZ P. WASSMER, plaintiff-appellee, FRANCISCO X. VELEZ, defendant-appellant.

vs.

FACTS: Respondent Francisco Velez and petitioner Beatriz Wassmer were lovers who set their marriage for Sept. 4, 1954. On Sept. 2, however, Francisco left for Cagayan de Oro, leaving Beatriz with a note that his mother was approved to the marriage. A day before the supposed wedding, on Sept. 3, Francisco telegrammed Beatriz that nothing changed and that he assured her of his return and love. Francisco did not appear after all nor words were heard from him again; despite the fact that preparations were all made. They applied for a marriage license on Aug. 23, and was issued thereof; invitations were printed and distributed to friends and relatives; dresses and other apparel were already bought; the two bought a matrimonial bed; bridal showers were given and gifts received. Beatriz then filed damages for breach of promise to marry. ISSUE: Whether or not breach of promise to marry is an actionable wrong. HELD: Mere breach of promise to marry is not an actionable wrong. But to formally set a wedding and go through all the preparations and publicity, and to walk out of it when the matrimony is about to be solemnized, is quite different. This is palpably and unjustifiably contrary to customs for which Francisco must be held answerable for damages in accordance with Art. 21 of the Civil Code. Under Art. 2232 of the Civil Code, the conditions precedent is that the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

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TORTS SET 2 CASES CIRIACO ROBLES vs. YAP WING. the plaintiff was employee by defendant in its contracting business; that on July 6, 1961 at about 1:30 p.m. while plaintiff was dismantling lumber brace in the construction of a bodega which defendant undertook to construct, defendant negligently failed to provide safety measures within the construction premises, as a result of which a piece of lumber fell and hit plaintiff on the head, causing him physical injuries; that immediately thereafter plaintiff was taken to a medical clinic, where he remained unconscious for several hours; that defendant defrayed Plaintiff's medical expenses; that since then plaintiff was unable to work, thereby losing his expected earning at an average of P39.00 a week or a total of P2,340.00, more or less, up to the filing of the complaint; that because of the physical injuries sustained by plaintiff due to defendant's negligence, he suffered mental anguish, anxiety, fright and pain; and that because he was compelled to hire the services of a lawyer he is entitled to recover attorney's fees. Issue: whether or not the trial court erred in dismissing plaintiff's complaint on the ground of lack of jurisdiction. Ruling: Before the enactment of Republic Act No. 772 (amending Act No. 3428), which took effect on June 20, 1952, claims for compensation under the Workmen's Compensation Act were cognizable by the regular courts but since then, as provided in Section 46 therefore as amended, "the Workmen's Compensation Commission shall have jurisdiction to hear and decide claims for compensation under the Compensation Act, subject to appeal to the Supreme court ..." In relation to this, Section 5 of the Act provides that "the rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and, remedies accruing to an employee, his personal representation dependents or nearest of kin against the employer under the Civil Code or other laws, because of said injury ..." . The Workmen's Compensation Act provides for two exceptions. The first is in section 6, which gives the injured employee the option to claim compensation

benefits against his employer under the Act or to sue the third person who caused the injury for damages in the regular courts. The other exception is in Section 42, which refers to small private employers, in which case claims for compensation by reason of accident or injury shall be governed by the provisions of Act No. 1874 or by those of the Civil Code. The instant case does not fall under any of the exceptions. Appellant contends that his claim is not for compensation under the Workmen's Corporation Law but one for damages under Article 1711 of the New Civil Code. The contention is without merit. Article 1711 provides for the payment by employers of compensation for the death of or injuries to their employees as well as for illness or disease arising out of and in the course of the employment, which provision is essentially the same as that of Section 2 of the Workmen's Compensation Act. The fact that Article 1711 of the Civil Code appears to cover appellant's claim is not decisive of the question: it should still be prosecuted in accordance with the Workmen's Compensation Act by virtue of Section 5 thereof which makes the rights and remedies granted by said Act exclusive, as well as by virtue of Article 2196 of the Civil Code itself, which provides: . ART. 2196. The rules under this Title are without prejudice to special provisions on damages formulated elsewhere in this Code. Compensation for workmen and other employees in case of death, injury or illness is regulated by special laws ... (emphasis supplied) . The suggestion has been made that there is in this case a claim for moral damages suffered by the plaintiff as a result of the negligence of the defendant and that such damages do not come within the purview of the Workmen's Compensation Act. It should be pointed out first, that the negligence alleged in the complaint consists of the defendant's failure "to provide safety measures within the construction premises," the nature of which negligence is precisely covered by Section 4-A of the same Act, which makes the employer liable to pay additional compensation (of 50%) to the claimantemployee for failure "to install and maintain safety appliances, or take other precautions for the prevention of accident or occupational disease." Secondly, the alleged negligence was not a quasidelict inasmuch as there was a pre-existing contractual relation of employer and employee between the parties (Art. 2176, Civil Code); and in breaches of contract moral damages may be

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recovered only where the defendant acted fraudulently or in bad faith (Art. 2220), and neither fraud nor bad faith is alleged in the complaint here. In any event, whether or not such an allegation, in relation to the breach of a contract of employment by the employer, resulting in injury to an employee or laborer, would justify a claim for moral damages and place it within the jurisdiction of ordinary courts is a question which we do not decide in this case, not being the issue involved. In view of all the foregoing, the order appealed from is affirmed, without costs. Dizon, Zaldivar and Barredo, JJ., concur.

recognized as a result of long usage constitute of a legally enforceable claim of one person against another. The decision of CA was MODIFIED by reducing the awards for exemplary and moral damages to P20,000 to each respondent. The decision of the appellate court is affirmed.

MAGBANUA vs. JUNSAY facts: Petitioner Rosemarie Magbanua, who worked as a housemaid in the residence of complainant and herein respondent Pilar S. Junsay was charged as a co-accused with the crime of Robbery for conspiring, confederating and mutually helping one another, with intent to gain and with the use of force upon things by then and there making a hole on the lower portion of the kitchens door of the house of the herein offended party, Dra. Pilar S. Junsay, situated at Bata Subdivision, Bacolod City, through which opening made (sic) them, said accused gained entrance thereto and once inside the said house, did, then and there willfully, unlawfully and feloniously take, rob and carry away with them, assorted jewelries and cash, valued all in all in the amount of P29,624.00, Pesos, Philippine Currency, to the damage and prejudice of the herein offended party in the aforementioned amount The case for the prosecution relied on an alleged confession made by petitioner Rosemarie, admitting her participation in the crime of Robbery. The defense contested the admissibility of the confession, and averred that the same was made under duress. On 20 December 1985, the RTC, Branch XLI of Bacolod City, rendered a Decision,4 acquitting petitioner Rosemarie of the crime of Robbery. On 9 March 1987, petitioner Rosemarie, assisted by Artemio Taborada, and together with co-petitioner Conrado Magbanua (Rosemaries father) filed with the RTC, Branch 51, Bacolod City, a Complaint for Damages7 against respondent Pilar, assisted by her husband Vicente Junsay, Ibarra Lopez, and Juanito Jacela. Respondent Pilar was the employer of petitioner Rosemarie, while respondents Ibarra and Juanito were members of the police force of Bacolod City, and assigned at the Police Station in Taculing, Bacolod City.

RELLOSA vs. PELLOSIS FACTS: Respondents were lessees of a panel of land owned by Marta Reyes located at San Pascual St., Malate, Manila. After the demise of Marta, Victor Reyes, her son, inherited the land. Victor informed the respondents that they would have a right of first refusal to buy the land. In 1989, without the knowledge of respondents, the land was sold to petitioner Cynthia Ortega who was able to ultimately secure title to the property in her name. On May 25, 1989, Cynthia Ortega filed petition for condemnation of the structures on the land. The office of building Official issued a resolution ordering the demolition of the houses of respondents on November 27, 1989. Copies were received by respondents on December 7, 1989 and on December 12, the day respondents filed an appeal contesting the order, petitioners proceeded with the demolition of the house. Respondents filed case before Manila RTC which was dismissed. On appeal, CA reversed the decision and ordered petitioners to pay respondents for moral and exemplary damages and attorneys fees. ISSUE: Whether the CA ruling in favor of respondents tenable. RULING: The court rules for affirmance of the assailed decision. A right to power, privilege or immunity guaranteed under a constitution, statute or decisional law or

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The Complaint, alleged, inter alia, that by reason of respondents false, malicious, and illegal actuations in filing Criminal Case No. 28 for Robbery against petitioner Rosemarie, the latter suffered untold pain, shame, humiliation, worry, and mental anguish, which if assessed in monetary terms will not be less than P200,000.00.8 It was further alleged therein that Conrado, Rosemaries father, lost his job and hi s entire family suffered.9 Petitioners maintained that Rosemarie suffered physical pain and mental torture due to the filing of the false criminal charge against her.10 They sought moral and exemplary damages, including attorneys fees and litigation expenses, as well as loss of earnings and expenses incurred in connection with Rosemaries defense in Criminal Case No. 28 for Robbery.11 They similarly prayed for payment of the expenses incurred in the prosecution of the instant case. Respondent Pilar filed a Motion to Dismiss,13 on the ground that the cause of action is barred by the Statute of Limitations, as crystallized in Article 114614 of the Civil Code. From the time the cause of action arose to the filing of the Complaint, four years and eight months had already lapsed. Petitioners filed an Opposition to the Motion to Dismiss,15 contending that their cause of action is not for damages based on the physical injuries suffered by Rosemarie during the investigation of the criminal case nor the violation of her rights for the indignities foisted upon her by the respondents from 18 July 1982, and several days thereafter.16 They posited that the damages sought are for the malicious prosecution of Rosemarie. Petitioners postulated that as the Complaint for Damages is for malicious prosecution, the prescriptive period should be counted from the date of Rosemaries acquittal in Criminal Case No. 28, or on 20 December 1985, and not from 18 July 1982, the date when respondents injured the rights of Rosemarie. From the time judgment in Criminal Case No. 28 was rendered to the filing of the Complaint in the instant case, not more than one year and three months had passed.18 Issue: whether petitioners are entitled to damages for malicious prosecution. Ruling:

before we could resolve said issue, we should first determine whether the filing of a criminal case for Robbery against petitioner Rosemarie constituted malicious prosecution. It is petitioners submission that the prosecution of petitioner Rosemarie was founded upon baseless accusations.34 Petitioners posit that the charges were based on false affidavits and false police reports, without which the criminal case against petitioner Rosemarie would not have been filed.35 Petitioners further decry the maltreatment which petitioner Rosemarie allegedly suffered from the hands of respondents. According to petitioners, Rosemarie was maltreated to extract a confession from her, and to make her admit to a crime she did not commit. They reasoned that petitioner Rosemarie, who was then a minor, an uneducated farm girl, and a stranger in Bacolod City, was subjected to torture and inhumane treatment.36 Petitioners contend further that respondent Pilar employed her privileged status in the society as a medical doctor; and her corespondents Ibarra and Juanito utilized their positions as members of the Bacolod City Police to secure an admission from petitioner Rosemarie.37 In this jurisdiction, the term "malicious prosecution " has been defined as "an action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein."38 While generally associated with unfounded criminal actions, the term has been expanded to include unfounded civil suits instituted just to vex and humiliate the defendant despite the absence of a cause of action or probable cause.39 The statutory basis for a civil action for damages for malicious prosecution are found in the provisions of the New Civil Code on Human Relations and on damages particularly Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8). To constitute malicious prosecution, however, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution.

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This Court has drawn the four elements that must be shown to concur to recover damages for malicious prosecution. Therefore, for a malicious prosecution suit to prosper, the plaintiff must prove the following: (1) the prosecution did occur, and the defendant was himself the prosecutor or that he instigated its commencement; (2) the criminal action finally ended with an acquittal; (3) in bringing the action, the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice -an improper or a sinister motive.41 The gravamen of malicious prosecution is not the filing of a complaint based on the wrong provision of law, but the deliberate initiation of an action with the knowledge that the charges were false and groundless.42 We shall proceed to determine whether in the prosecution of petitioner Rosemarie for the crime of Robbery, all four elements were in attendance. It is not disputed that the first and second elements are present. The prosecution of petitioner Rosemarie for the crime of robbery did occur, and respondents Pilar, Ibarra and Juanito instigated its commencement. On 20 December 1985, the RTC, Branch XLI, Bacolod City, rendered a Decision acquitting Rosemarie Magbanua on the ground of insufficiency of evidence. Anent the question of whether the prosecutor acted without probable cause in bringing the action against petitioner Rosemarie, we find no reason to depart from the conclusions reached by the RTC and the Court of Appeals. The filing of Criminal Case No. 28 for Robbery was not without probable cause. Indeed, during the investigation petitioner Rosemarie admitted her participation in the commission of the incident complained of. The investigation report, which prompted the filing of the Information for Robbery against petitioner Rosemarie showed that she admitted to receiving instruction from her coaccused Ernesto Fernandez and a certain Gudo to leave the barrel belt of the kitchen door unlocked,46 so her co-accused can gain entry to the house of respondent Pilar. Moreover, she admitted that after her co-accused had taken the pieces of jewelry owned by respondent Pilar, they gave her a necklace which she kept in a shoulder bag. During

the investigation, she was shown the said necklace, and she positively identified the same to be the necklace her co-accused had given her.47 On the basis of the said admission, the Office of the Prosecutor found basis and probable cause to file the appropriate Information with the RTC against petitioner Rosemarie and her co-accused Ernesto Fernandez and a certain Gudo. The inadmissibility of the aforesaid admission on the ground that the same was extracted under duress was an evidentiary matter, which does not detract from the fact that based on petitioner Rosemaries admission, there was reason for the respondents to believe that the suit was not unfounded, and that the crime was committed. Finally, in an action to recover damages based on malicious prosecution, it must be established that the prosecution was impelled by legal malice. There is necessity of proof that the suit was so patently malicious as to warrant the award of damages under Articles 19 to 21,48 of the Civil Code, or that the suit was grounded on malice or bad faith.49 Moreover, it is a doctrine well-entrenched in jurisprudence that the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution, for the law would not have meant to impose a penalty on the right to litigate.50 Applying the rule to the case at bar, we affirm the findings of the RTC and the Court of Appeals that there was no proof of a sinister design on the part of the respondents to vex or humiliate petitioner Rosemarie by instituting the criminal case against her and her co-accused. Respondent Pilar who was robbed of her valuable belongings can only be expected to bring the matter to the authorities. There can be no evil motive that should be attributed to one, who, as victim of a crime institutes the necessary legal proceedings. At the risk of redundancy, we stress that the proscription against the imposition of penalty on the right to litigate must not be violated. Mere filing of a suit does not render a person liable for malicious prosecution should he be unsuccessful, for the law could not have meant to impose a penalty on the right to litigate.51 There was no other explanation or motive as to why respondents would institute baseless prosecution of petitioner Rosemarie. No evidence was shown that there was bad blood between respondent Pilar and petitioner Rosemarie prior to the supposed robbery.

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We also do not find the actuations of respondents Ibarra and Juanito to be impelled by legal malice. Their commencement of the action against petitioner Rosemarie and her co-accused was pursuant to their duties as police officers. The same was made subsequent to the report of respondent Pilar of the commission of the crime, and the investigation on the person of petitioner Rosemarie. Even then, mistakes committed by a public officer are not actionable absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith,52 which was not established in the case at bar. Moreover, as was clear from the outset, the instant case is a suit seeking damages for malicious prosecution, and not for the violations and maltreatment that respondents allegedly committed against petitioner Rosemarie in extracting the admission from her. At any rate, the RTC had ruled that the instant case is not an action on the injuries allegedly suffered by petitioner Rosemarie, but rather for malicious prosecution. Otherwise, an action seeking damages for her injuries should have been deemed prescribed.53 WHEREFORE, the Appeal is DENIED.

discipline. Petitioners on othe other hand claimed their son was under school custody because he went to school to comply with a requirement for graduation (submission of Physics reports). ISSUE: WON Collegio de San Jose-Recoletos should be held liable. HELD: The time Alfredo was fatally shot, he was in the custody of the authorities of the school notwithstanding classes had formally ended when the incident happened. It was immaterial if he was in the school auditorium to finish his physics requirement. What was important is that he was there for a legitimate purpose. On the other hand, the rector, high school principal and the dean of boys cannot be held liable because none of them was the teacher-in-charge as defined in the provision. Each was exercising only a general authority over the students and not direct control and influence exerted by the teacher placed incharge of particular classes. In the absence of a teacher- in charge, dean of boys should probably be held liable considering that he had earlier confiscated an unlicensed gun from a student and later returned to him without taking disciplinary action or reporting the matter to the higher authorities. Though it was clear negligence on his part, no proof was shown to necessarily link this gun with the shooting incident. Collegio San Jose-Recoletos cannot directly be held liable under the provision because only the teacher of the head of school of arts and trade is made responsible for the damage caused by the student. Hence, under the facts disclosed, none of the respondents were held liable for the injury inflicted with Alfredo resulting to his death. Petition was denied.

Amadora vs. CA FACTS: Alfredo Amadora, while in the auditorium of the school, was mortally hit by a gun by Pablito Daffon resulting to the formers death. Daffon was convicted of homicide through reckless imprudence. The victims parents, herein petitioners, filed a civil action for damages against Colegio de San Jose-Recoletos, its rectors, high school principal, dean of boys, the physics teacher together with Daffon and 2 other students. Complaints against the students were dropped. Respondent Court absolved the defendants completely and reversed CFI Cebus decision for the following reasons: 1. Since the school was an academic institution of learning and not a school of arts and trades 2. That students were not in the custody of the school since the semester has already ended 3. There was no clear identification of the fatal gun, and 4. In any event, defendants exercised the necessary diligence through enforcement of the school regulations in maintaining

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TORTS SET 5 CASES VALENZUELA VS. CA FACTS: A case was filed by Ma. Lourdes Valenzuela, which was an action to recover damages based on quasidelict, for serious physical injuries sustained in a vehicular accident on June 24, 1990. During the accident, Valenzuelas left leg was severed up to the middle of her thigh, with only some skin and muscle connected to the rest of the body so she had to be amputated. She was confined in the hospital for twenty days and was eventually fitted with an artificial leg. The lower court found Richard Li, the person driving the Mitsubishi Lancer, guilty of gross negligence and liable for damages under 2176 of the Civil Code. Alexander Commercial Inc., Lis employer, was also found jointly and severally liable. Upon appeal, CA agreed with the decision of the lower court regarding the liability of Li. However, CA absolved the liability of Alexander Commercial Inc. CA also reduced the claim for moral damages. ISSUE: Should Alexander Commercial Inc. be held jointly and severally liable? RULING: Yes. The Court agreed with the CA that the relationship of the employer and employee was not based on the principle of respondent superior, which held the master liable for acts of the servant, but that of pater familias, in which the liability ultimately fell upon the employer for his failure to exercise the diligence of a good father of the family in the selection and supervision of his employees. Under the concept of pater familias embodied by Article 2180, the employer may be relieved from any liability upon showing that he exercised the diligence of a good father of the family. Once the evidence is introduced showing that the employer exercised the required amount of care, half of the employers burden is overcome. However, the question of diligent supervision depends on the circumstances of employment.

In the instant case, Li, as an Assistant Manager of the company, admitted that his functions did not require him to scrupulously keep normal office hours as he performs social and work-related functions. The service car assigned to Li, therefore, enabled both to put up the front of a highly successful entity, increasing the latters goodwill before its clientele. It also facilitated meeting between Li and its clients by providing the former with a convenient mode of travel. Assuming that he really came from his officemates place as Li claimed, the same could give rise to speculation that he and his officemate had just been from a work-related function, or they were together to discuss sales and other work related strategies. Moreover, Alexander Commercial Inc. had not demonstrated to the satisfaction of the court that it exercised the care and diligence of a good father of the family in entrusting its company car to Li. No allegations were made as to whether or not the company took the steps necessary to determine or ascertain the driving proficiency and history of Li to whom it gave full and unlimited use of a company car. Not having been able to overcome the burden of demonstrating that should be absolved of liability for entrusting its company car to Li, said company based on the principle of bonus pater familias, ought to be jointly and severally liable with Li for the injuries sustained by Valenzuela during the accident. Thus, the decision of the CA was modified with the effect of reinstating the decision of the RTC.

LARRY ESTACION vs. BERNARDO Facts: Noe Bernardo was a passenger of jeepney driven by Geminiano Quinquillera , owned byrespondent Cecilia Bandoquillo, Noe hung or stood on the left rear carrier of the vehicle. The jeepney stopped by the right shoulder of the road to pick up passengers. Suddenly, an Isuzucargo truck, owned by petitioner and driven by Gerosano, which was traveling in the samedirection, hit the rear end portion of the Fiera, the cargo truck smashed respondent Noeagainst the Fiera crushing his legs and feet which made him fall to the ground. Noe was broughtto the Silliman University Medical Center where his lower left leg was

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amputated. Noe, throughhis guardian ad litem Arlie Bernardo, filed with the RTC of Dumaguete City a complaint fordamages arising from quasi delict against the registered owner of the cargo truck and his driverGerosano. And he prayed for actual damages, loss of income, moral and expenses and costs of suit.Owner of the truck and driver Gerosano filed an answer denying the allegations in thecomplaint. They filed a third party complaint against respondents Bandoquillo and Quinquillera,as owner and driver of the Fiera. The reckless imprudence of the respondent driver was theproximate cause of the accident. Respondents Bandoquillo and Quinquillera filed their answerto the third party complaint asking for the dismissal of the fees.Driver Gerosano was charged criminally for reckless imprudence resulting to multiplephysical injuries with damage to property before the MCTC of Negros Oriental. MCTC findinghim guilty of the crime charged and was sentenced him and to pay the costs. RTC rendered its judgment in the civil case ordering defendants Gerosano and Estacion, to pay plaintiff, jointly orsolidarily to the actual damages, fee and the litigation expenses.Petitioner appealed to the CA. CA rendered the assailed decision which affirmed in for reconsideration was denied. Hence, theherein petition for review. Issues: (1) Whether the Court of Appeals erred in not finding that Larry Estacion exercised a duediligence as of a good father of the family to prevent damage despite the abundance of evidence to that effect; (2) Whether the court of appeals erred in not holding that Larry Estacion exercised duediligence in the selection and supervision of his employee and in maintaining his cargo truckroadworthy and in good condition (3) Whether the court of appeals erred in exonerating respondents Cecilia Bandoquillio andGeminiano Quinquillera Held: (1) The court held that petitioner failed to overcome the presumption of negligence thus he isliable for the negligence of his driver Gerosano; the respondents failed to prove it otherwise.The obligation imposed by Article 2176 is demandab

own acts or omissions,but also for those of persons for whom one is responsible. (2) There was also no proof that he exercised diligence in maintaining his cargo truckroadworthy mechanic driver testified thathe made a routine check up on October 15, 1982, one day before the mishap happened, andfound the truck operational, there was no record of such inspection. (3) Modification for the ruling of the Court of Appeals that respondents Bandoquillo andQuinquillera are liable for the negligent act of their driver. The judgment was orderingdefendants Gerosano and Estacion, as well as third party defendants Bandoquillo andQuinquillera, to pay plaintiff, jointly and solidarily, the award of damages, since there wascontributory negligence on the part of bemitigated in accordance with Article 2179

BANZON vs. COURT OF APPEALS Sometime in the year 1952, defendant Maximo R. Sta. Maria, obtained several crop loans from PNB. For these loans, Associated acted as surety for defendant Maximo R. Sta. Maria by filing surety bonds in favor of PNB to guarantee and answer for the prompt and faithful repayment of said loans. In turn, plaintiff Antonio R. Banzon and one Emilio R. Naval acted as indemnitors of Associated in the indemnity agreements, obligating themselves to indemnify and hold it harmless from any liabilities. It further appears, however, that defendant Maximo R. Sta. Maria failed to pay his crop loan obligations in favor of PNB when the same fell due, and accordingly, the bank demanded payment thereof from Associated as surety. Instead of paying the bank, Associated filed a complaint dated November 19, 1956 in the Court of First Instance of Manila against Maximo R. Sta. Maria and indemnitors Banzon and Naval, claiming that the outstanding obligation of defendant Maximo R. Sta. Maria with PNB, as guaranteed by it, amounted to P6,100.00, P9,346.44 and P14,807.52, or an aggregate total of P30,257.86 exclusive of interests. The case was docketed as Civil Case No. 31237 of the said court. On December 11, 1957, a judgment was rendered by said Court sentencing the aforesaid defendants

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therein to pay jointly and severally unto plaintiff for the benefit of the Philippine National Bank the amounts mentioned above, with interests thereon at 12% per annum, P593.76 for premiums and documentary stamps due and 15% attorney's fees the 15% and the interest to be paid for the benefit only of the plaintiff. (Exhibit "C" and Exhibit "2") Issue: What appears to us as error is the trial court's conclusion that private respondents are responsible for the prejudice caused petitioners. Ruling: This conclusion is in opposition to our clear and unequivocal pronouncement in said Banzon vs. Cruz case that the wrongful taking of petitioners' two lots was the direct result of three premature acts, to wit: 1) the action of Associated Insurance and Surety, Inc. against petitioner Banzon; 2) the execution of the 1957 judgment in Civil Case No. 31237; 3) the act of the Sheriff of Caloocan City in demolishing the improvements on one of the lots. These acts do not fall under any of the situations provided for in Article 2071 of the Civil Code wherein the guarantor even before paying may proceed against the principal debtors. Otherwise stated, as a general rule, the guarantor must first pay the outstanding amounts due before it can exact payment from the principal debtor. Hence, since Associated had not paid nor compelled private respondent to pay the bank, it had no right in law or equity to so execute the judgment against Banzon as indemnitor. Coming back to the issue, the appellate court exhibited a higher degree of perception when it held: In the first place, it was well established that it was not the defendants who started the series of litigations but the Associated. Instead of fulfilling its obligations to discharge, as a surety, the Sta. Marias' indebtedness, Associated instituted the premature court action against its indemnitors, including Sta. Maria. This premature action of the Associated consequently resulted in the levy and sale of the two lots thereby depriving plaintiffs of their property. 15 On the other hand, it is a settled principle that moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. 16 While Ideally this debacle could have been avoided by private respondents' payment of their obligations

to PNB, such fact of non-payment alone, without Associated's premature action and subsequent fraudulent acts, could not possibly have resulted in the prejudice and damage complained of. Thus, while private respondents' non-payment was admittedly the remote cause or the factor which set in motion the ensuing events, Associated's premature action and execution were the immediate and direct causes of the damage and prejudice suffered by petitioners. In other words, active supervening events, consisting of said premature and fraudulent acts of the Associated Insurance and Surety, Inc. had broken the causal connection between the fact of non-payment and the damage suffered by petitioners, so that their claim should be directed not against private respondents but against Associated. Parenthetically, this right of action against Associated had been reserved in petitioners' favor in the Banzon vs. Cruz case. We are convinced that the failure of private respondents to pay their obligations with the PNB was not attended by bad faith or wilfull intent to cause injury to petitioners. For as found in Banzon vs. Cruz, supra: ... It should be noted therefore, that the debtor Sta. Maria had been making payments all along to the bank on account of his crop loans so much so that by 1963, the total principal due and amount outstanding thereon amounted only to P15,446.44. This amounts to practically one-half of the advance judgment for the total amount of P30,257.86, excluding interests, obtained by Associated six (6) years earlier in 1957 against Banzon 'for the benefit of the Philippine National Bank allegedly as the amount due from Sta. Maria and which Associated as surety would have to pay the bank, and which as it turns out, Associated never paid to the bank. 17 Consequently, Associated, in not discharging its liability notwithstanding that it had already executed its 1957 judgment against Banzon as indemnitor and taken in execution Banzon's two properties committed rank fraud. Moreover, under the Civil Code, the damages for which a defendant may be held liable are those which are the natural and probable consequences of the act or omission complained of. 18 As above explained, the prejudice caused petitioners cannot be said to be the natural and probable consequence of private respondents' mere failure to

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pay their crop loans as such prejudice arose due to active supervening forces or events. There is no denying that the damage and prejudice suffered by petitioners is too high a price to pay for an act of benevolence. By now, however, they should have obtained adequate relief in accordance with our ruling in Banzon v. Cruz, supra, the pertinent portion of which bears reiterating: In the case at bar, with the insurance commissioner as liquidator of Associated, recognizing through the Solicitor General that the Banzons' two lots wrongfully taken from them by Associated's premature actions should be reconveyed to them, there is established a clear and indubitable showing on the record that the petitioners are entitled to a writ of restoring the status quo ante. A mandatory writ shall therefore issue commanding respondent court to forthwith restore petitioners to their possession of Lot 6, Block 176, covered by TCT 8567 from which they have been removed by enforcement of said respondent court's enjoined order of demolition and writ of possession dated March 13, 1970, Annex "F" of the petition. As to petitioners' building thereon claimed to be worth Pl0,000.00 (but countered by Cardenas to be a mere 'barong-barong'), respondent court shall at Banzon's petition cause respondents Cardenases to restore the demolished building or pay Banzon the determined value thereof. As to the fruits of possession of the land, with Cardenas acknowledging that he has been leasing the same to a third person at P200.00 a month, respondents Cardenases shall forthwith pay to petitioners Banzons the whole amount of rentals so received by them to the time that possession of the lot is effectively restored to petitioners. By the very nature of this mandatory writ, the same shall be immediately executory upon promulgation of this decision. 19 WHEREFORE, the instant petition for review is hereby DENIED. No pronouncement as to costs.

ground to only about 8-10 ft. This posed as a threat to passersby who were exposed to the danger of electrocution. As early as 1991, the leaders of Ampucao, Itogon made verbal and written requests for NPC to institute safety measures to protect trail users from their high-tension wires. In 1995, Engr. Banayot, NPC Area Manager, informed the Itogon mayor that NPC installed 9 additional poles, and they identified a possible rerouting scheme to improve the distance from its deteriorating lines to the ground. 19-year-old Noble Casionan worked as a pocket miner. In 1995, Noble and his co-pocket miner Melchor Jimenez were at Dalicno. They cut 2 bamboo poles, and they carried one pole horizontally on their shoulder, with Noble carrying the shorter pole. Noble walked ahead as they passed through the trail underneath the NPC high-tension lines on their way to their work place. As Noble was going uphill and turning left on a curve, the tip of the bamboo pole that he was carrying touched one of the dangling high-tension wires. Melchor narrated that he heard a buzzing sound for only about a second or two, then he saw Noble fall to the ground. Melchor rushed to him and shook him, but Noble was already dead. A post-mortem examination by the municipal health officer determined the cause of death to be cardiac arrest, secondary to ventricular fibulation, secondary to electrocution. There was a small burned area in the middle right finger of Noble. Police investigators who visited the site confirmed that portions of the wires above the trail hung very low. They noted that people usually used the trail and had to pass directly underneath the wires, and that the trail was the only viable way since the other side was a precipice. They did not see any danger warning signs installed. After the GM of NPC was informed of the incident, NPC repaired the dangling lines and put up warning signs around the area. Noble's parents filed a claim for damages against NPC. NPC denied being negligent in maintaining the safety of the lines, averring that signs were installed but they were stolen by children, and that excavations were made to increase the clearance from the ground but some poles sank due to pocket mining in the area. NPC witnesses testified that the cause of death could not have been electrocution since Noble did not suffer extensive burns. NPC

National Power Corporation [NPC] v. Heirs of Noble Casionan FACTS In the 1970s, NPC installed high-tension electrical transmission lines of 69 kilovolts traversing the trail leading to Sangilo, Itogon. Eventually, some lines sagged, thereby reducing their distance from the

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argued that if Noble did die by electrocution, it was due to his own negligence. RTC decided in favor of Noble's parents. RTC observed that NPC witnesses were biased because all but one were employees of NPC, and they were not actually present at the time of the accident. RTC found NPC negligent since the company has not acted upon the requests and demands made by the community leaders since 1991. CA affirmed RTC with modification--award of moral damages was reduced from 100k to 50k, and award of attorney fees was disallowed since the reason for the award was not expressly stated in the decision. ISSUE AND HOLDING WON there was contributory negligence on the part of Noble. NO; hence, NPC is not entitled to a mitigation of its liability. RATIO Negligence is the failure to observe, for the protection of the interest of another, that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard which he is required to conform for his own protection. There is contributory negligence when the party's act showed lack of ordinary care and foresight that such act could cause him harm or put his life in danger. It is an act or omission amounting to want of ordinary care on the part of the person injured which, concurring with the defendant's negligence, is the proximate causeof the injury. The underlying precept is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. NCC 2179 provides that liability will be mitigated in consideration of the injured party's contributory negligence. Precedents + [non-]application to the case at hand In Ma-ao Sugar Central, it was held that to hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warnings or signs on an impending danger to health and body. In this case,

there were no warning signs, and the trail was regularly used by people since it was the only viable way from Dalicon to Itogon. Hence, Noble should not be faulted for simply doing what was ordinary routine to other workers in the area. NPC faults Noble in engaging in pocket mining, which is prohibited by DENR in the area. In Aonuevo v. CA, the Court held that the violation of a statute is not sufficient to hold that the violation was the proximate cause of the injury, unless the very injury that happened was precisely what was intended to be prevented by the statute. The fact that pocket miners were unlicensed was not a justification for NPC to leave their transmission lines dangling. Damages awarded Noble's unearned income of 720k [loss of earning capacity formula: Net Earning Capacity = 2/3 x (80 age at time of death) x (gross annual income reasonable and necessary living expenses)] Exemplary damages of 50k [since there is gross negligence] Moral damages of 50k

AMADO PICART v. FRANK SMITH Facts: Plaintiff Amado Picart was riding on his pony on the Carlatan Bridge in San Fernando, La Union when the defendant, riding on his car, approached. Defendant blew his horn to give warning. Plaintiff moved the horse to the right instead of moving to the left, reasoning that he had no sufficient time to move to the right direction. Defendant continued to approach, and when he had gotten quite near, he quickly turned to the left. The horse was frightened that it turned his body across the bridge. His limb was broken and the rider was thrown off and got injured. The horse died. An action for damages was filed against the defendant. Issue: Whether or not the defendant in maneuvering his car in the manner above described was guilty of negligence such as gives rise to a civil obligation to repair the damage done Held: As the defendant started across the bridge, he had the right to assume that the horse and rider would

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pass over to the proper side; but as he moved toward the center of the bridge it was demonstrated to his eyes that this would not be done; and he must in a moment have perceived that it was too late for the horse to cross with safety in front of the moving vehicle. In the nature of things this change of situation occurred while the automobile was yet some distance away; and from this moment it was not longer within the power of the plaintiff to escape being run down by going to a place of greater safety. The control of the situation had then passed entirely to the defendant. The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. Conduct is said to be negligent when a prudent man in the position of the tortfeasor would have foreseen that an effect harmful to another was sufficiently probable to warrant his foregoing the conduct or guarding against its consequences. It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent negligence in planting himself on the wrong side of the road. But as we have already stated, the defendant was also negligent; and in such case the problem always is to discover which agent is immediately and directly responsible. It will be noted that the negligent acts of the two parties were not contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these circumstances the law is that the person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party.

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