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Lasam vs Smith

Facts 1. The defendant was the owner of a public garage in the town of San Fernando, La Union, and engaged in the business of carrying passengers for hire from one point to another in the Province of La Union and the surrounding provinces. 2. Defendant undertook to convey the plaintiffs from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. 3. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant, Bueno, to drive the car. 4. Bueno held no drivers license, but had some experience in driving. 5. The car functioned well until after the crossing of the Abra River in Tagudin, when, according to the testimony of the witnesses for the plaintiffs, defects developed in the steering gear so as to make accurate steering impossible, and after zigzagging for a distance of about half kilometer, the car left the road and went down a steep embankment. 6. The automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions and a dislocated rib, but his wife, Joaquina, received serious injuries, among which was a compound fracture of one of the bones in her left wrist. She also suffered nervous breakdown from which she has not fully recovered at the time of trial. 7. The complaint was filed about a year and a half after and alleges that the accident was due to defects in the automobile as well as to the incompetence and negligence of the chauffeur. 8. The trial court held, however, that the cause of action rests on the defendants breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code, and not article 1903, are applicable. The court further found that the breach of contract was not due to fortuitous events and that, therefore the defendant was liable in damages. 9. Hence this petition

Issue 1. Is the trial court correct in its findings that the breach of contract was not due to a fortuitous event?

Ruling 1. Yes. It is sufficient to reiterate that the source of the defendants legal liability is the contract of carriage; that by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads: No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law

expressly provides otherwise and those in which the obligation itself imposes such liability.

As will be seen, some extraordinary circumstances independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito. In the present case, this element is lacking. It is not suggested that the accident in question was due to an act of God or to adverse road conditions which could have been foreseen. As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. That is not a caso fortuito.

IMPORTANT 1. The expression "events which cannot be foreseen and which having been foreseen, are inevitable" is synonymous with the term "fortuitous event" of which some extraordinary circumstance independent of the will of the obligor, or of his employees, is one of the essential elements. 2. Essential elements of a caso fortuito: a. The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. b. It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. c. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And d. the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor." 3. Some extraordinary circumstances independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito.

Republic of the Philippines vs Luzon Stevedoring Corporation

Facts 1. In the early afternoon of August 17, 1960, barge L- 1892, owned by the Luzon Stevedoring Corporation was being towed down the Pasig River by two tugboats when the barge rammed against one of the wooden piles of the Nagtahan bailey bridge, smashing the posts and causing the bridge to list. The river, at the time, was swollen and the current swift, on account of the heavy downpour in Manila and the surrounding provinces on August 15 and 16, 1960. 2. The Republic of the Philippines sued Luzon Stevedoring for actual and consequential damage caused by its employees, amounting to P200,000. 3. Defendant Corporation disclaimed liability on the grounds that it had exercised due diligence in the selection and supervision of its employees that the damages to the bridge were caused by force majeure, that plaintiff has no capacity to sue, and that the Nagtahan bailey bridge is an obstruction to navigation. 4. After due trial, the court rendered judgment on June 11, 1963, holding the defendant liable for the damage caused by its employees and ordering it to pay plaintiff the actual cost of the repair of the Nagtahan bailey bridge which amounted to P192,561.72, with legal interest from the date of the filing of the complaint.

Issue 1. Was the collision of appellant's barge with the supports or piers of the Nagtahan bridge caused by fortuitous event or force majeure?

Ruling 1. No. Considering that the Nagtahan bridge was an immovable and stationary object and uncontrovertedly provided with adequate openings for the passage of water craft, including barges like of appellant's, it was undeniable that the unusual event that the barge, exclusively controlled by appellant, rammed the bridge supports raises a presumption of negligence on the part of appellant or its employees manning the barge or the tugs that towed it.

2. For in the ordinary course of events, such a thing will not happen if proper care is used. In Anglo American Jurisprudence, the inference arises by what is known as the "res ipsa loquitur" rule The appellant strongly stressed the precautions taken by it on the day in question: that it assigned two of its most powerful tugboats to tow down river its barge L- 1892; that it assigned to the task the more competent and experienced among its patrons, had the towlines, engines and equipment double-checked and inspected' that it instructed its patrons to take extra precautions; and concludes that it had done all it was called to do, and that the accident, therefore, should be held due to force majeure or fortuitous event.

3. These very precautions, however, completely destroyed the appellant's defense. For caso fortuito or force majeure (which in law are identical in so far as they exempt an obligor from

liability) by definition, are extraordinary events not foreseeable or avoidable, "events that could not be foreseen, or which, though foreseen, were inevitable" (Art. 1174, Civ. Code of the Philippines). It was, therefore, not enough that the event should not have been foreseen or anticipated, as was commonly believed but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening was not impossibility to foresee the same. The very measures adopted by appellant prove that the possibility of danger was not only foreseeable, but actually foreseen, and was not caso fortuito.

IMPORTANT I. CIVIL LAW; CULPA AQUILIANA; PRESUMPTIONS; RES IPSA LOQUITUR. Where an immovable and stationary object like the Nagtahan bridge, uncontrovertedly provided with adequate openings for passage of watercraft, is rammed by a barge exclusively controlled by appellant, causing damage to its supports, there arises a presumption of negligence on appellant's part or its employees, manning the barge or the tugs that towed it. In the ordinary course of events, such a thing does not happen if proper care is used. In Anglo-American Jurisprudence, the inference arises by what is known as the "res ipsa loquitur" rule.

II.

ID; CASO FORTUITO. Caso fortuito or force majeure (which in law are identical insofar as they exempt an obligor from liability) by definition, means extraordinary events not forseeable or avoidable, "events that could not be forseen, or which though foreseen, were inevitable." It is therefore not enough that the event should not have been forseen or anticipated, but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same: "un hecho no constituye caso fortuito por la sola circunstancia de que su existencia haga ms dificil o ms onerosa la accin diligente del presnto ofensor."

III.

ID.; CASO FORTUITO, INVOCATION OF. Where appellant adopted precautionary measures by assigning two of its most powerful tugboats to tow its barge down river and by assigning its more competent and experienced patrons to take care of the towlines, who were instructed to take precautions; and where the engines and equipment had been double-checked and unspected so that it had done all it could do to prevent an accident, said appellant cannot invoke caso fortuito or force majeure, as the possibility of danger was not only foreseeable, but actually foreseen. Otherwise stated, appellant, knowing or appreciating the perils posed by the swollen stream and its swift current, voluntarily entered into a situation involving obvious danger; it therefore assumed the risk, and cannot shed responsibility merely because the precautions it adopted turned out to be insufficient.

Austria vs CA

Facts 1. Maria G. Abad received from Guillermo Austria a pendant with diamonds to be sold on a commission basis or to be returned on demand. 2. While walking home, the purse containing the jewelry and cash was snatched by two men. 3. A complaint of the incident was filed in the Court of First Instance against certain persons. 4. Abad failed to return the jewelry or pay for its value despite demands made by Austria. 5. Austria brought an action against the Abad spouses for the recovery of the pendant or of its value and damages. 6. Abad spouses set up the defense that the alleged robbery had extinguished their obligation.

Issue 1. Should the Abad spouse be held liable for the loss of the pendant?

Ruling 1. No. The Court ruled that the exempting provision of Article 1174 of the Civil Code is applicable in the case. It is a recognized jurisdiction that to constitute a caso fortuito that would exempt a person from responsibility, it is necessary that a. the event must be independent of the human will or of the obligors will; b. the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner; c. the obligor must be free of participation in, or aggravation of, the injury to the creditor.

2. To avail of the exemption granted, it is not necessary that the persons responsible for the event should be found or punished. It is sufficient that to unforeseeable event which is the robbery took place without concurrent fault or negligence on the part of the obligor which can be proven by preponderant evidence. It was held that the act of Maria Abad in walking home alone carrying the jewelry was not negligent for at that time the incidence of crimes was not high.

IMPORTANT I. CIVIL LAW; OBLIGATIONS; REQUISITES OF FORTUITOUS EVENT. It is recognized in this jurisdiction that to constitute a caso fortuito that would exempt a person from responsibility, it is necessary that 1. the event must be independent of the human will (or rather, of the debtor's or obligor's);

2. the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner; and that 3. the obligor must be free of participation in, or aggravation of, the injury to the creditor. A fortuitous event, therefore, can be produced by nature, e.g., earthquakes, storms, floods, etc., or by the act of man, such as war, attack by bandits, robbery, etc., provided that the event has all the characteristics enumerated above. II. ID.; ID.; ID.; FOR ROBBERY TO CONSTITUTE A FORTUITOUS EVENT, IT IS NOT REQUIRED THAT THE ACCUSED IN THE ROBBERY CASE BE FIRST CONVICTED; REASON. The point at issue in this proceeding is how the fact of robbery is to be established in order that a person may avail of the exempting provision of Article 1174 of the new Civil Code, which reads as follows: . . It may be noted therefrom that the emphasis of the provision is on the events, not on the agents or factors responsible for them. To avail of the exemption granted in the law, it is not necessary that the persons responsible for the occurrence should be found or punished; it would only be sufficient to establish that the unforeseeable event, the robbery in this case, did take place without any concurrent fault on the debtor's part, and this can be done by preponderant evidence. To require in the present action for recovery the prior conviction of the culprits in the criminal case, in order to establish the robbery as a fact, would be to demand proof beyond reasonable doubt to prove a fact in a civil case. ID.; ID.; ID.; ID.; THE COMMISSION AGENT WHO TRAVELED ALONE AT NIGHT 1961 IS NOT NEGLIGENT AND NOT RESPONSIBLE FOR THE LOSS DUE TO ROBBERY OF JEWELRY RECEIVED ON CONSIGNMENT; IT IS OTHER WISE IN 1971; CASE AT BAR. It is undeniable that in order to completely exonerate the debtor for reason of a fortuitous event, such debtor must, in addition to the casus itself, be free of any concurrent or contributory fault or negligence. This is apparent from Article 1170 of the Civil Code of the Philippines, providing that: . . It is clear that under the circumstances prevailing at present in the City of Manila and its suburbs, with their high incidence of crimes against persons and property, that renders travel after nightfall a matter to be sedulously avoided without suitable precaution and protection, the conduct of respondent Maria G. Abad, in returning alone to her house in the evening, carrying jewelry of considerable value, would be negligent per se, and would not exempt her from responsibility in the case of a robbery. We are not persuaded, however, that the same rule should obtain ten years previously, in 1961, when the robbery in question did take place, for at that time criminality had not by far reached the levels attained in the present day.

III.

Tugade vs CA

Facts 1. At about 9:15 o'clock in the morning of January 4, 1972, Rodolfo [Rayandayan] was driving a Holden Kingswood car (the [Holden] car), bearing plate No. 52-19V (L-Rizal '71), owned by the Sta. Ines Mining Corp. and assigned for use of its manager, on Ayala Avenue in Makati, Rizal, going northwards. 2. At the intersection of Ayala Avenue and Makati Avenue, Rayandayan was going to turn left on Makati Avenue but he stopped to wait for the left turn signal and because a jeep in front of him was also at a stop. 3. While in that stop position, the Holden car was bumped from behind by Blue Car Taxi, bearing Plate No. 55-71R (TX-QC '71) and driven by Inocencio Tugade causing damage to the Holden car, the repairs of which cost P778.10 . . . 4. Tugade was then charged with Reckless Imprudence Resulting in Damage to Property. He pleaded not guilty and while admitting that the collision was caused by faulty brakes of his taxicab, sought to exculpate himself with the explanation that this fault could not and should not be traced to him. 5. After trial, the lower court held Tugade guilty beyond reasonable doubt of Reckless Imprudence resulting in damage to property and sentenced him to a fine of 1k and subsidiary imprisonment in case of insolvency and actual damages of P778.10 6. Tugade appealed the decision reiterating that `the malfunctioning of the brakes at the time of accident was due to a mechanical defect which even the exercise of due negligence of a good father of a family cannot have prevented. 7. CA affirmed TCs decision in toto. 8. Hence this petition. Issue 1. Whether or not the faulty brakes of the taxicab constitutes caso fortuito? Ruling 1. No, it does not Rationalization I. TORTS AND DAMAGES; FORTUITOUS EVENT; MISHAP CAUSED BY DEFECTIVE BRAKES NOT FORTUITOUS IN CHARACTER. An essential element of a caso fortuito is the occurrence of some extraordinary circumstance independent of the will of the obligor, or of his employees. This element is lacking in the present case. It is not suggested that the accident in question was due to an act of God or to adverse road conditions which could not have been foreseen. As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. This is not a caso fortuito which would call for an acquittal of the driver.

Southeastern College, Inc vs CA

Facts 1. Private respondents are owners of a house at 326 College Road, Pasay City, while petitioner owns a four-storey school building along the same College Road. 2. On October 11, 1989, at about 6:30 in the morning, a powerful typhoon Saling hit Metro Manila. Buffeted by very strong winds, the roof of petitioners building was partly ripped off and blown away, landing on and destroying portions of the roofing of private respondents house. 3. After the typhoon had passed, an ocular inspection of the destroyed buildings was conducted by a team of engineers headed by the city building official, Engr. Jesus L. Reyna. Pertinent aspects of the latters Report dated October 18, 1989 stated, as follows: a. One of the factors that may have led to this calamitous event is the formation of the buildings in the area and the general direction of the wind. Situated in the peripheral lot is an almost U -shaped formation of 4-storey building. Thus, with the strong winds having a westerly direction, the general formation of the buildings becomes a big funnel-like structure, the one situated along College Road, receiving the heaviest impact of the strong winds. Hence, there are portions of the roofing, those located on both ends of the building, which remained intact after the storm. b. Another factor and perhaps the most likely reason for the dislodging of the roofings structural trusses is the improper anchorage of the said trusses to the roof beams. The diameter steel bars embedded on the concrete roof beams which serve as truss anchorage are not bolted nor nailed to the trusses. Still, there are other steel bars which were not even bent to the trusses, thus, those trusses are not anchored at all to the roof beams. c. It then recommended that to avoid any further loss and damage to lives, limbs and property of persons living in the vicinity, the fourth floor of subject school building be declared as a structural hazard. 4. In their Complaint before the Regional Trial Court of Pasay City, Branch 117, for damages based on culpa aquiliana, private respondents alleged that the damage to their house rendered the same uninhabitable, forcing them to stay temporarily in others houses. And so they sought to recover from petitioner P117,116.00, as actual damages, P1,000,000.00, as moral damages, P300,000.00, as exemplary damages and P100,000.00,for and as attorneys fees; plus costs. 5. In its Answer, petitioner averred that subject school building had withstood several devastating typhoons and other calamities in the past, without its roofing or any portion thereof giving way; that it has not been remiss in its responsibility to see to it that said school building, which houses school children, faculty members, and employees, is in tip-top condition; and furthermore, typhoon Saling was an act of God and therefore beyond human control such that petitioner cannot be answerable for the damages wrought thereby, absent any negligence on its part. 6. The Trial Court and the Court of Appeals gave credence to the ocular inspection made by the city engineer. 7. Hence this petition

Issue 1. WON the damage on the roof of the building of private respondents resulting from the impact of the falling portions of the school buildings roof ripped off by the strong winds of typhoon Saling, was, within legal contemplation, due to fortuitous event

Ruling 1. YES. Petitioner cannot be held liable for the damages suffered by the private respondents. This conclusion finds support in Article 1174of the Civil Code, which provides: Art 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. 2. The antecedent of fortuitous event or caso fortuito is found in the Partidas which defines it as an event which takes place by accident and could not have been foreseen. Escriche elaborates it as an unexpected event or act of God which could neither before seen nor resisted. Civilist Arturo M. Tolentino adds that fortuitous events may be produced by two general causes: (1) by nature, such as earthquakes, storms, floods, epidemics, fires, etc. and (2) by the act of man, such as an armed invasion, attack by bandits, governmental prohibitions, robbery, etc. 3. In order that a fortuitous event may exempt a person from liability, it is necessary that he be free from any previous negligence or misconduct by reason of which the loss may have been occasioned. An act of God cannot be invoked for the protection of a person who has been guilty of gross negligence in not trying to forestall its possible adverse consequences. When a persons negligence concurs with an act of God in producing damage or injury to another, such person is not exempt from liability by showing that the immediate or proximate cause of the damage or injury was a fortuitous event. When the effect is found to be partly the result of the participation of man whether it be from active intervention, or neglect, or failure to act the whole occurrence is hereby humanized, and removed from the rules applicable to acts of God. 4. After a thorough study and evaluation of the evidence on record, this Court believes otherwise, notwithstanding the general rule that factual findings by the trial court, especially when affirmed by the appellate court, are binding and conclusive upon this Court. After a careful scrutiny of the records and the pleadings submitted by the parties, we find exception to this rule and hold that the lower courts misappreciated the evidence proffered.

5. There is no question that a typhoon or storm is a fortuitous event, a natural occurrence which may be foreseen but is unavoidable despite any amount of foresight, diligence or care. In order to be exempt from liability arising from any adverse consequence engendered thereby, there should have been no human participation amounting to a negligent act. In other words, the person seeking exoneration from liability must not be guilty of negligence. Negligence, as commonly understood, is conduct which naturally or reasonably creates undue risk or harm to others. It may be the failure to observe that degree of care, precaution, and vigilance which the circumstances justly demand, or the omission to do something which a prudent and reasonable man, guided by considerations which ordinarily regulate the conduct of human

affairs, would do. From these premises, we proceed to determine whether petitioner was negligent, such that if it were not, the damage caused to private respondents house could have been avoided. 6. At the outset, it bears emphasizing that a person claiming damages for the negligence of another has the burden of proving the existence of fault or negligence causative of his injury or loss. The facts constitutive of negligence must be affirmatively established by competent evidence, not merely by presumptions and conclusions without basis in fact. Private respondents, in establishing the culpability of petitioner, merely relied on the aforementioned report submitted by a team which made an ocular inspection of petitioners school building after the typhoon. As the term imparts, an ocular inspection is one by means of actual sight or viewing. What is visual to the eye though, is not always reflective of the real cause behind. For instance, one who hears a gunshot and then sees a wounded person, cannot always definitely conclude that a third person shot the victim. It could have been self-inflicted or caused accidentally by a stray bullet. The relationship of cause and effect must be clearly shown. 7. In the present case, other than the said ocular inspection, no investigation was conducted to determine the real cause of the partial unroofing of petitioners school building. Private respondents did not even show that the plans, specifications and design of said school building were deficient and defective. Neither did they prove any substantial deviation from the approved plans and specifications. Nor did they conclusively establish that the construction of such building was basically flawed. 8. Moreover, the city building official, who has been in the city government service since 1974, admitted in open court that no complaint regarding any defect on the same structure has ever been lodged before his office prior to the institution of the case at bench. It is a matter of judicial notice that typhoons are common occurrences in this country. If subject school buildings roofing was not firmly anchored to its trusses, obviously, it could not have withstood long years and several typhoons even stronger than Saling. 9. In light of the foregoing, we find no clear and convincing evidence to sustain the judgment of the appellate court. We thus hold that petitioner has not been shown negligent or at fault regarding the construction and maintenance of its school building in question and that typhoon Saling was the proximate cause of the damage suffered by private respondents house.

Mindex Resources Development vs Ephraim Morillo

Facts 1. Private respondent Ephraim Morillo and petitioner Mindex Resources Corporation entered into a verbal agreement for the lease of the former's 6 x 6 ten-wheeler cargo truck for use in Mindex's mining operations in Binaybay, Bigaan, San Teodoro, Oriental Mindoro. 2. Unfortunately, the truck was burned by unidentified persons while it was parked unattended at Sitio Aras, Bigaan, San Teodoro, Oriental Mindoro, due to mechanical trouble. 3. The incident resulted in a lawsuit where the trial court found petitioner responsible for the destruction or loss of the leased 6 x 6 truck and ordered it to pay respondent a. the balance of the unpaid rental for the 6 x 6 truck with interest at 12 percent from June 22, 1994 (the rendition of the judgment) up to the payment of the amount b. costs of repair and overhaul of the said truck, with interest rate of 12 percent until fully paid; and c. P20,000 as attorney's fees for compelling respondent to secure the services of counsel in filing his complaint. 4. On appeal, the Court of Appeals sustained the trial court's ruling that petitioner was not without fault for the loss and destruction of the truck and, thus, liable therefor. 5. Hence, the present petition. Petitioner contended that the burning of the truck was a fortuitous event, for which it should not be held liable pursuant to Article 1174 of the Civil Code.

Issue 1. WON the burning of the truck was a fortuitous event?

Ruling 1. No, it does not.

Rationalization 1. The Supreme Court denied the petition. According to the Court, in order for a fortuitous event to exempt one from liability, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. When the effect, is found to be partly the result of a person's participation whether by active intervention, neglect or failure to act, the whole occurrence is humanized and removed from the rules applicable to acts of God. 2. The records clearly showed that petitioner failed to exercise reasonable care and caution that an ordinarily prudent person would have used in the same situation. Petitioner fell short of ordinary diligence in safeguarding the leased truck against the accident, which could have been avoided in the first place.

IMPORTANT 1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; RIGHTS AND OBLIGATIONS OF THE LESSOR AND THE LESSEE; LESSEE RESPONSIBLE FOR THE DETERIORATION OR LOSS OF THE THING LEASED, UNLESS THEY PROVE THAT IT TOOK PLACE WITHOUT THEIR FAULT. Both the RTC and the CA found petitioner negligent and thus liable for the loss or destruction of the leased truck. True, both parties may have suffered from the burning of the truck; however, as found by both lower courts, the negligence of petitioner makes it responsible for the loss. Well-settled is the rule that factual findings of the trial court, particularly when affirmed by the Court of Appeals, are binding on the Supreme Court. Contrary to its allegations, petitioner has not adequately shown that the RTC and the CA overlooked or disregarded significant facts and circumstances that, when considered, would alter the outcome of the disposition. Article 1667 of the Civil Code holds lessees responsible for the deterioration or loss of the thing leased, unless they prove that it took place without their fault. 2. ID.; OBLIGATIONS; FORTUITOUS EVENT; CANNOT BE INVOKED TO EXEMPT ONE FROM LIABILITY IF THE PROXIMATE CAUSE OF THE DAMAGE OR INJURY IS HUMAN NEGLIGENCE. In order for a fortuitous event to exempt one from liability, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One's negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person's participation whether by active intervention, neglect or failure to act the whole occurrence is humanized and removed from the rules applicable to acts of God. This often-invoked doctrine of "fortuitous event" or "caso fortuito" has become a convenient and easy defense to exculpate an obligor from liability. To constitute a fortuitous event, the following elements must concur: a. The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. b. It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. c. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And d. the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor." 3. ID.; ID.; ID.; PETITIONER FAILED TO EMPLOY REASONABLE FORESIGHT, DILIGENCE AND CARE THAT WOULD HAVE EXEMPTED IT FROM LIABILITY RESULTING FROM THE BURNING OF THE TRUCK. Article 1174 of the Civil Code states that no person shall be responsible for a fortuitous event that could not be foreseen or, though foreseen, was inevitable. In other words, there must be an exclusion of human intervention from the cause of injury or loss. A review of the records clearly shows that petitioner failed to exercise reasonable care and caution that an ordinarily prudent person would have used in the same situation. Witness Alexander Roxas testified how petitioner fell short of ordinary diligence in safeguarding the leased truck against the accident, which could have been avoided in the first place. Petitioner failed to employ reasonable foresight, diligence and care that would have exempted it from liability resulting from the burning of the truck. Negligence, as commonly understood, is that conduct that

naturally or reasonably creates undue risk or harm to others. It may be failure to observe that degree of care, precaution or vigilance that the circumstances justly demand; or to do any other act that would be done by a prudent and reasonable person, who is guided by considerations that ordinarily regulate the conduct of human affairs. 4. ID.; DAMAGES; COMPENSATORY DAMAGES; HAVING FOUND NEGLIGENT IN SAFEGUARDING THE LEASED TRUCK, PETITIONER MUST SHOULDER ITS REPAIR AND OVERHAUL COSTS TO MAKE IT SERVICEABLE AGAIN. Article 1667 of the Civil Code holds the lessee responsible for the deterioration or loss of the thing leased. In addition, Article 1665 of the same Code provides that "the lessee shall return the thing leased, upon the termination of the lease, just as he received it, save what has been lost or impaired by the lapse of time, or by ordinary wear and tear, or from an inevitable cause." Courts begin with the assumption that compensatory damages are for pecuniary losses that result from an act or omission of the defendant. Having been found to be negligent in safeguarding the leased truck, petitioner must shoulder its repair and overhaul costs to make it serviceable again. Such expenses are duly supported by receipts; thus, the award of P132,750 is definitely in order.

Herbosa vs CA

Facts 1. Petitioner spouses contracted PVE (Professional Video Equipment), a division of Solid Distributors, Inc. to record on video the petitioners wedding celebration scheduled on the morning of October 11, 1980. 2. Petitioners paid PVE the amount of One Thousand Four Hundred Twenty-Three Pesos (P1,423.00) as downpayment while the balance of One Thousand Five Hundred Thirty-Two Pesos (P1,532.00) was to be paid upon receipt of the finished video tape. 3. Accordingly, on October 11, 1980 at around 6:30 o'clock in the morning the PVE crew composed of the cameraman, Vedastro Sulit, VTR (video tape recorder) operator, Michael Rodriguez, and the driver and lightman, Felix Baguio, arrived at the residence of the bride at 1694 M. H. Del Pilar Street, Ermita, Manila. They recorded the pre-departure activities of the bride before leaving for the Malate Church along Mabini Street, Malate, Manila where the wedding ceremonies were held at 9:00 o'clock in the morning. Thereafter, the crew proceeded to the Manila Hotel in Intramuros, Manila, where the wedding reception followed at 10:30 o'clock in the morning. 4. On October 13, 1980, however, Ben Zarate, studio manager of PVE, informed the petitioners that the videotape coverage of their wedding celebration was damaged due to mechanical defect in their equipment. 5. On October 19, 1980 PVE general manager, Eric Sycip, confirmed the damage and proposed to do a video tape production of their wedding celebration through photographs or a video coverage of any event of similar significance. In addition, Eric Sycip sent a check representing the amount of the downpayment which the petitioners did not accept. 6. Deeply aggrieved, the petitioners rejected both of the proposed alternatives since, according to them, a video tape production through photographs was not going to compensate for the betamax or film coverage of their actual wedding celebration and that there could be no event of similar significance insofar as petitioners are concerned. 7. PVE, a division of respondent Solid Distributors, Inc., disclaimed any liability for the damaged videotape by invoking force majeure or fortuitous event and asserted that a defective transistor caused the breakdown in its video tape recorder. 8. PVE or respondent Solid Distributors, Inc. claimed that its crew, whom it never presented to testify during the trial of the case, allegedly conducted a playback test at the residence of the bride and that the next playback test was conducted after the wedding reception at the Manila Hotel where the defect in the video tape recorder was allegedly discovered for the first time. 9. Petitioner spouses sued Professional Video Equipment (PVE), a division of Solid Distributors, Inc. for breach of contract with damages. Petitioners also alleged that said failure on the part of PVE to perform its obligation caused deep disappointment, anxiety and an irreparable break in the continuity of an established family tradition of recording by film or slide historical and momentous family events especially wedding celebrations and for which they were entitled to be paid actual, moral and exemplary damages including attorney's fees.

10. PVE claimed it had diligently supervised its VTR crew in the video recording of petitioners' wedding and reception and that its crew acted in good faith and with due care and proper diligence of a good father of a family. 11. The trial court rendered a decision in favor of the petitioner spouses. Complications arose when the petitioners moved for the execution of judgment for failure of PVE to file a motion for reconsideration. PVE opposed the motion on the allegation that it failed to receive notice of judgment as the mail matter was posted in a post office box which was not registered in their counsel's name. 12. But still, the trial court ordered the execution of judgment. Consequently, PVE filed a notice of appeal and at the same time a motion for reconsideration on the issuance of a writ of execution. 13. The trial court gave due course to the appeal; however, the auction sale of certain properties was scheduled by the trial court. 14. PVE, then filed an injunction with the Court of Appeals to restrain the scheduled auction sale. The restraining order issued by the appellate court came too late as the subject properties were already sold to the highest bidder. 15. Because of the auction sale, the trial court recalled the appeal. PVE filed a petition for mandamus before the Court of Appeals to compel the trial court to give due course to their appeal. 16. The petition PVE was granted, hence, petitioner spouses appealed the decision to the Supreme Court. 17. Meanwhile, Solid Corporation filed a complaint with the Regional Trial Court for damages against petitioners and the sheriff alleging that it was the true owner of the properties levied upon and sold at public auction. 18. A summary judgment was rendered in favor of Solid Corporation, thus, the court ordered the proceeds of the auction sale to be delivered to the corporation. 19. The Court of Appeals rendered a consolidated decision. 20. Dissatisfied by the decision rendered by the Court of Appeals, petitioner spouses filed the instant petition.

Issue 1. WON the breach of contract was due to a fortuitous event? 2. Was PVE negligent? 3. WON moral damages can be awarded?

Ruling 1. No, it was not.

Rationalization 1. At any rate, in order that fortuitous event may exempt PVE or respondent Solid Distributors, Inc. from liability, it is necessary that it be free from negligence. The record shows, however, that the alleged malfunctioning of the video tape recorder occurred at the beginning of the video coverage at the residence of the bride. The PVE crew miserably failed to detect the defect in the video tape recorder and that they discovered the same rather too late after the wedding reception at the Manila Hotel. 2. The misfortune that befell the then newly-wed couple, petitioners herein, could have been avoided by a timely exercise of minimum prudence by the crew of PVE who are all employees of respondent Solid Distributors, Inc. to check any possible mechanical defect in the video tape recorder. The defect could have been detected earlier and remedial measures could have been made to ensure full video tape coverage of the petitioners' wedding celebration. But PVE or respondent Solid Distributors, Inc. did not. 3. We take judicial notice of the short distance between the office of PVE or respondent Solid Distributors, Inc. at 1000 J. Bocobo corner Kalaw Streets, Ermita, Manila, on one hand, and the locations of the required video tape coverage at the residence of the bride at M. H. Del Pilar Street, Ermita, Manila, the Malate Church and the Manila Hotel. The failure to record on videotape the wedding celebration of the petitioners constitutes malicious breach of contract as well as gross negligence on the part of respondent Solid Distributors, Inc. 4. PVE or respondent Solid Distributors, Inc. cannot seek refuge under Article 2180 of the New Civil Code by claiming that it exercised due care in the selection and supervision of its employees and that its employees are experienced in their respective trade. That defense, as provided in the last paragraph of Article 2180 of the New Civil Code, may be availed of only where the liability arises from culpa aquilana and not from culpa contractual such as in the case at bar. 5. However, the award of damages to the petitioners cannot be lumped together as was done by the trial court. It is basic that the claim for actual, moral and exemplary damages as well as attorney's fees must each be independently identified and justified. In this connection, Article 1170 of the New Civil Code provides that "those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages." For failure of PVE, a division of respondent Solid Distributors, Inc., to comply with its obligation under the video tape coverage contract, petitioners are entitled to actual damages at least in the amount of One Thousand Four Hundred Twenty-Three Pesos (P1,423.00) representing their downpayment in that contract. 6. Ordinarily, moral damages cannot be recovered in an action for breach of contract because such an action is not among those expressly mentioned in Article 2219 of the New Civil Code. However, moral damages are recoverable for breach of contract where the breach was wanton, reckless, malicious or in bad faith, oppressive or abusive. The wanton and reckless failure and neglect to timely check and remedy the video tape recorder by the PVE crew who are all employees of respondent Solid Distributors, Inc. indicates a malicious breach of contract and gross negligence on the part of said respondent in the discharge of its contractual obligations. Consequently, the petitioners who suffered mental anguish and tortured feelings thereby, are entitled to an award of One Hundred Thousand Pesos (P100,000.00) as moral damages.

FGU Insurance Corporation vs CA and SMC and estate of Ang Gui

Facts 1. Anco Enterprises Company (ANCO), a partnership between Ang Gui and Co To, was engaged in the shipping business. It owned the M/T ANCO tugboat and the D/B Lucio barge which were operated as common carriers. Since the D/B Lucio had no engine of its own, it could not maneuver by itself and had to be towed by a tugboat for it to move from one place to another. 2. On 23 September 1979, San Miguel Corporation (SMC) shipped from Mandaue City, Cebu, on board the D/B Lucio, for towage by M/T ANCO, the following cargoes: Bill of Lading No. 125,000 cases Pale Pilsen 350 cases Cerveza Negra 215,000 cases Pale Pilsen 200 cases Cerveza Negra Shipment Destination Estancia, Iloilo Estancia, Iloilo San Jose, Antique San Jose, Antique

3. The D/B Lucio was towed by the M/T ANCO all the way from Mandaue City to San Jose, Antique. The vessels arrived at San Jose, Antique, at about one o'clock in the afternoon of 30 September 1979. The tugboat M/T ANCO left the barge immediately after reaching San Jose, Antique. 4. When the barge and tugboat arrived at San Jose, Antique, in the afternoon of 30 September 1979, the clouds over the area were dark and the waves were already big. The arrastre workers unloading the cargoes of SMC on board the D/B Lucio began to complain about their difficulty in unloading the cargoes. SMC's District Sales Supervisor, Fernando Macabuag, requested ANCO's representative to transfer the barge to a safer place because the vessel might not be able to withstand the big waves. 5. ANCO's representative did not heed the request because he was confident that the barge could withstand the waves. This, notwithstanding the fact that at that time, only the M/T ANCO was left at the wharf of San Jose, Antique, as all other vessels already left the wharf to seek shelter. With the waves growing bigger and bigger, only Ten Thousand Seven Hundred Ninety (10,790) cases of beer were discharged into the custody of the arrastre operator. 6. At about ten to eleven o'clock in the evening of 01 October 1979, the crew of D/B Lucio abandoned the vessel because the barge's rope attached to the wharf was cut off by the big waves. At around midnight, the barge run aground and was broken and the cargoes of beer in the barge were swept away. 7. ANCO failed to deliver the cases of beer to SMC which led SMC to file a complaint for Breach of Contract of Carriage and actual damages of P1,346,197 plus interest, litigation expenses and Twenty-Five Percent (25%) of the total claim as attorney's fees. 8. Ang Gui died and an amended complaint was filed and admitted with the surviving partner and Guis estate as defendants. 9. ANCO averred that it had an agreement with SMC that ANCO would not be liable for any losses or damages resulting to the cargoes by reason of fortuitous event. Since the cases of beer Pale Pilsen and Cerveza Negra were lost by reason of a storm, a fortuitous event which battered and sunk the vessel in which they were loaded, they should not be held liable. ANCO

further asserted that there was an agreement between them and SMC to insure the cargoes in order to recover indemnity in case of loss and that 20k of the cases of beer were insured with FGU for the amount of P858,500. 10. ANCO filed a 3rd party complaint against FGU, the insurance company claiming that said cargo was covered by the insurance policy and that if TC would order ANCO to pay SMC, then FGU should reimburse that amount. 11. FGU averred that it is only liable under the policy to Third-party Plaintiff ANCO and/or Plaintiff SMC in case of any of the following: a. total loss of the entire shipment; b. loss of any case as a result of the sinking of the vessel; or c. loss as a result of the vessel being on fire. 12. Furthermore, FGU alleged that the Third-Party Plaintiff ANCO and Plaintiff SMC failed to exercise ordinary diligence or the diligence of a good father of the family in the care and supervision of the cargoes insured to prevent its loss and/or destruction. 13. TC ruled that the cargo was lost due to a fortuitous event but that ANCO failed to observe the degree of diligence required that would exonerate them from liability. TC also ruled that FGU is likewise liable for 53% of the value of the lost cargo. 14. CA affirmed TCs decision in toto and the motion for reconsideration. 15. Hence the petition.

Issue 1. WON ANCO is liable considering that the cargo was lost due to fortuitous event? 2. WON FGU is liable?

Ruling 1. Yes, ANCO is liable. 2. No, FGU is not liable.

Rationalization 1. The Civil Code provides: Art. 1733. Common carriers, from the nature of their business and for reasons of public policy are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in vigilance over the goods is further expressed in Articles 1734, 1735, and 1745 Nos. 5, 6, and 7.

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; Art. 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm, or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. Caso fortuito or force majeure (which in law are identical insofar as they exempt an obligor from liability) by definition, are extraordinary events not foreseeable or avoidable, events that could not be foreseen, or which though foreseen, were inevitable. It is therefore not enough that the event should not have been foreseen or anticipated, as is commonly believed but it must be one impossible to foresee or to avoid. In this case, the calamity which caused the loss of the cargoes was not unforeseen nor was it unavoidable. In fact, the other vessels in the port of San Jose, Antique, managed to transfer to another place, a circumstance which prompted SMC's District Sales Supervisor to request that the D/B Lucio be likewise transferred, but to no avail. The D/B Lucio had no engine and could not maneuver by itself. Even if ANCO's representatives wanted to transfer it, they no longer had any means to do so as the tugboat M/T ANCO has already departed, leaving the barge to its own devices. The captain of the tugboat should have had the foresight not to leave the barge alone considering the pending storm. While the loss of the cargoes was admittedly caused by the typhoon Sisang, a natural disaster, ANCO could not escape liability to respondent SMC. The records clearly show the failure of petitioners' representatives to exercise the extraordinary degree of diligence mandated by law. To be exempted from responsibility, the natural disaster should have been the proximate and only cause of the loss. There must have been no contributory negligence on the part of the common carrier.

2. The ordinary negligence of the insured and his agents has long been held as a part of the risk which the insurer takes upon himself, and the existence of which, where it is the proximate cause of the loss, does not absolve the insurer from liability. But willful exposure, gross negligence, negligence amounting to misconduct, etc., have often been held to release the insurer from such liability. while mistake and negligence of the master or crew are incident to navigation and constitute a part of the perils that the insurer is obliged to incur, such negligence or recklessness must not be of such gross character as to amount to misconduct or wrongful acts; otherwise, such negligence shall release the insurer from liability under the insurance contract. cSIACD In the case at bar, both the trial court and the appellate court had concluded from the evidence that the crewmembers of both the D/B Lucio and the M/T ANCO were blatantly negligent. To wit:

There was blatant negligence on the part of the employees of defendants-appellants when the patron (operator) of the tug boat immediately left the barge at the San Jose, Antique wharf despite the looming bad weather. Negligence was likewise exhibited by the defendants-appellants' representative who did not heed Macabuag's request that the barge be moved to a more secure place. The prudent thing to do, as was done by the other sea vessels at San Jose, Antique during the time in question, was to transfer the vessel to a safer wharf The negligence of the defendants-appellants is proved by the fact that on 01 October 1979, the only simple vessel left at the wharf in San Jose was the D/B Lucio.

Schmitz Transport & Brokerage Corporation vs Transport Venture, Inc. and Industrial Insurance Co

Facts 1. A shipment of 545 hot rolled steel sheets in coil arrived at the Port of Manila from Russia. The cargo was carried on board a ship owned by Black Sea. It was for consignee Little Giant Steel Pipe Corporation (LGSPC) and the cargo was insured by Industrial Insurance Co. 2. LGSPC engaged the services of petitioner to secure requisite clearances, receive the cargoes from the shipside and deliver it to the consignee. 3. LGSPC hired the tugboat services of respondent Transport Venture, Inc. (TVI) to send a barge and tugboat at shipside. 4. On October 26, 1991, around 4:30 p.m., TVI's tugboat "Lailani" towed the barge "Erika V" to shipside. 5. By 7:00 p.m. also of October 26, 1991, the tugboat, after positioning the barge alongside the vessel, left and returned to the port terminal. At 9:00 p.m., arrastre operator Ocean Terminal Services Inc. commenced to unload 37 of the 545 coils from the vessel unto the barge. 6. By 12:30 a.m. of October 27, 1991 during which the weather condition had become inclement due to an approaching storm, the unloading unto the barge of the 37 coils was accomplished. No tugboat pulled the barge back to the pier, however. 7. At around 5:30 a.m. of October 27, 1991, due to strong waves, the crew of the barge abandoned it and transferred to the vessel. The barge pitched and rolled with the waves and eventually capsized, washing the 37 coils into the sea. At 7:00 a.m., a tugboat finally arrived to pull the already empty and damaged barge back to the pier. 8. Earnest efforts on the part of both the consignee Little Giant and Industrial Insurance to recover the lost cargoes proved futile. 9. LGSPC thus filed a formal claim against Industrial Insurance which paid it the amount of P5,246,113.11. LGSPC thereupon executed a subrogation receipt in favor of Industrial Insurance. 10. Industrial Insurance filed a complaint against petitioner, TVI and Black Sea for recovery of the amount it paid to LGSPC. LGSPC faulted the defendants for undertaking the unloading of the cargoes while typhoon signal No. 1 was raised in Metro Manila. 11. RTC ruled in favour of Industrial Insurance. Motion for reconsideration, based on the allegation that petitioner and TVI are not common carriers, was denied. On appeal, CA affirmed RTCs decision in toto. 12. Hence this petition.

Issue 1) Whether the loss of the cargoes was due to a fortuitous event, independent of any act of negligence on the part of petitioner Black Sea and TVI, and 2) If there was negligence, whether liability for the loss may attach to Black Sea, petitioner and TVI.

Ruling 1. NO. In order, to be considered a fortuitous event: a. the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligation, must be independent of human will; b. it must be impossible to foresee the event which constitute the caso fortuito, or if it can be foreseen it must be impossible to avoid; c. the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in any manner; and d. the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. That no tugboat towed back the barge to the pier after the cargoes were completely loaded by 12:30 in the morning is, however, a material fact which the appellate court failed to properly consider and appreciate the proximate cause of the loss of the cargoes. Had the barge been towed back promptly to the pier, the deteriorating sea conditions notwithstanding, the loss could have been avoided. But the barge was left floating in open sea until big waves set in at 5:30 a.m., causing it to sink along with the cargoes. The loss thus falls outside the "act of God doctrine." 2. Petitioner and respondent TVI were jointly and severally liable for the amount of paid by the consignee plus interest computed from the date of decision of the trial court. Despite petitioner and TVIs contention that they are not common carriers, the SC ruled that they are. Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. The contention, therefore, of petitioner that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration. True, petitioner was the broker-agent of Little Giant in securing the release of the cargoes. In effecting the transportation of the cargoes from the shipside and into Little Giant's warehouse, however, petitioner was discharging its own personal obligation under a contact of carriage. Petitioner, which did not have any barge or tugboat, engaged the services of TVI as handler to provide the barge and the tugboat. In their Service Contract, while Little Giant was named as the consignee, petitioner did not disclose that it was acting on commission and was chartering the vessel for Little Giant. Little Giant did not thus automatically become a party to the Service Contract and was not, therefore, bound by the terms and conditions therein. Not being a party to the service contract, Little Giant cannot directly sue TVI based thereon but it can maintain a cause of action for negligence.

In the case of TVI, while it acted as a private carrier for which it was under no duty to observe extraordinary diligence, it was still required to observe ordinary diligence to ensure the proper and careful handling, care and discharge of the carried goods. Thus, Articles 1170 and 1173 of the Civil Code provide: ART. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. ART. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2202, paragraph 2, shall apply. If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. As for petitioner, for it to be relieved of liability, it should, following Article 1739 of the Civil Code, prove that it exercised due diligence to prevent or minimize the loss, before, during and after the occurrence of the storm in order that it may be exempted from liability for the loss of the goods. EHIcaT While petitioner sent checkers and a supervisor on board the vessel to counter-check the operations of TVI, it failed to take all available and reasonable precautions to avoid the loss. After noting that TVI failed to arrange for the prompt towage of the barge despite the deteriorating sea conditions, it should have summoned the same or another tugboat to extend help, but it did not. As for Black Sea, its duty as a common carrier extended only from the time the goods were surrendered or unconditionally placed in its possession and received for transportation until they were delivered actually or constructively to consignee Little Giant. Parties to a contract of carriage may, however, agree upon a definition of delivery that extends the services rendered by the carrier. In the case at bar, Bill of Lading No. 2 covering the shipment provides that delivery be made "to the port of discharge or so near thereto as she may safely get, always afloat." The delivery of the goods to the consignee was not from "pier to pier" but from the shipside of "M/V Alexander Saveliev" and into barges, for which reason the consignee contracted the services of petitioner. Since Black Sea had constructively delivered the cargoes to Little Giant, through petitioner, it had discharged its duty. In fine, no liability may thus attach to Black Sea.