Lazatin, Raphaela Kercee Vendel P.

G02
Arlegui v CA
FACTS:

Spouses Gil and Beatriz Genguyon have been renting a property at Mandaluyong City owned by Serafia Real
Estate for more than 20 years. In a letter dated March 26, 1984the Genguyon spouses with the other tenants
in the building were informed that all the assests of Serafia have been assigned and transferred to AB Barretto
Enterprises.

For fear of being ejected from their units, the tenants formed the Barreto Apartment Tenants Association. They
elected officers among themselves to represent in the negotiations with AB Barretto for the purchase of the
apartment units. Among those elected Josue Arlegui as vice-president and Mateo Tan Lu as auditor of the
association.

The spouses continued to occupy the apartment but were surprised to learn that their apartment has already
been sold to Mateo Tan Lu who subsequently sold the same to Josue Arlegui after a year. Not long after that,
they received from Arleguis lawyer a letter demanding they vacate the apartment. When they failed to do so,
Arlegui filed an ejectment case against them.

The spouses Genguyon also filed a civil case against the Barettos, Mateo Lu and Arlegui for annulment of sale,
specific performance, redemption and damages with preliminary injunction.

RTC ordered the Preliminary Mandatory Injunction directing the MTC to desist from taking further action in the
ejectment case.

RTC subsequently held in favor of Arlegui and dismissed the complaint against the Barrettos and Tan Lu. It also
lifted the PMI. Spouses Genguyon appealed to the CA.

While the appeal is pending, the ejectment case against the Genguyon proceeded and the MTC ordered them
to vacate the premises, pay the accrued monthly rentals until they surrendered possession of the premises as
well as attorneys fees and cost of suit. RTC affirmed the decision of MTC on appeal.

CA annulled the judgment of the RTC and found the following:

There existed between the Genguyons and the officers of the tenants association, particularly Mateo
Tan Lu and Josue Arlegui, a fiduciary relationship;

Mateo Tan Lu and Josue Arlegui committed a breach of trust when they purchased the apartment unit
leased by the Genguyons;

Josue Arlegui is not an innocent-purchaser for value nor a buyer in good faith;

RTC erred in finding that the Genguyons action was premised on their right of first preference under
the Urban Land Reform Law; and

The Genguyons are not estopped from denying Arleguis ownership of the subject property for no
lessor-lessee relationship was established between them

Arlegui filed for MR but was denied. Hence this petition.

ISSUE: WON the Genguyons are entitled to award of damages.- YES

RULING:

The acts of Tan Lu and Arlegui directly violate the principles enunciated in Art. 19 which declares that every
person must practice justice, honesty and good faith in his dealings with his fellowmen. That there was a valid
pact or agreement among the Association members and their entrusted officers charged with the negotiations,
is an accepted fact. As two of the three entrusted officers charged with the negotiations, Tan Lu and Arlegui fall
within the purview of Art. 19 which is also implemented by Art. 21, New Civil Code, a sequent of Art. 19, which
declares that "[A]ny person who wilfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage.

In addition, Articles 2221 and 2222 of the New Civil Code provide that the Court may award nominal damages:
(1) in order that a right of the plaintiff, which has been violated or invaded, may be vindicated or recognized;
or (2) in every case where any property right has been invaded. Under the circumstances, whether as
compensatory or nominal damages, the amount of P35,000.00, inclusive of attorneys fees, is just and
reasonable
Globe v CA
FACTS:

Tobias was employed by Globe Mackay in a dual capacity as a purchasing agent and administrative assistant
to the engineering operations manager. In 1972, GLOBE MACKAY discovered fictitious purchases and other
fraudulent transactions for which it lost several thousands of pesos.

Lazatin, Raphaela Kercee Vendel P. G02

According to Tobias it was he who actually discovered the anomalies and reported them his immediate superior
and to Petitioner Hendry who was then the Executive Vice-President and General Manager of Globe Mackay.
One day after Tobias made the report, petitioner Hendry confronted Tobias by stating that he was the number
one suspect, and ordered Tobias to take a one week forced leave, not to communicate with the office, to leave
his table drawers open, and to leave the office keys.
When Tobias returned to work after the forced leave, petitioner Hendry went up to him and called him a
crook and a swindler. Tobias was then ordered to take a lie detector test. He was also instructed to submit
specimen of his handwriting, signature, and initials for examination by the police investigators to determine his
complicity in the anomalies.
The Manila police investigators submitted a laboratory crime report clearing Tobias of participation in the
anomalies. Not satisfied with the police report, petitioners hired a private investigator submitted a report
finding Tobias guilty. This report however expressly stated that further investigation was still to be conducted.
Nevertheless, Petitioner Hendry issued a memorandum suspending Tobias from work preparatory to the filing
of criminal charges against him.
Tagle, Metro Manila Police Chief Document Examiner, after investigating other documents pertaining to the
alleged anomalous transactions, submitted a second laboratory crime report reiterating his previous finding
that the handwritings, signatures, and initials appearing in the checks and other documents involved in the
fraudulent transactions were not those of Tobias. The lie detector tests conducted on Tobias also yielded
negative results.
Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the report of
the private investigator, was, by its own terms, not yet complete, Petitioners filed with the City Fiscal of Manila
a complaint for estafa through falsification of commercial documents, later amended to just estafa.
Subsequently five other criminal complaints were filed against Tobias, four of which were for estafa through
Falsification of commercial document while the fifth was for of violation of Art. 290 of the RPC (Discovering
Secrets Through Seizure of Correspondence). All of the six criminal complaints were dismissed by the fiscal.
In the meantime, Tobias received a termination letter from the Petitioners. Thus, Tobias filed a complaint for
illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the NLRC reversed the labor arbiters
decision. However, the Secretary of Labor, acting on petitioners appeal from the NLRC ruling, reinstated the
labor arbiters decision. Tobias appealed the Secretary of Labors order with the Office of the President. During
the pendency of the appeal with said office, petitioners and private respondent Tobias entered into a
compromise agreement regarding the latters complaint for illegal dismissal.
Unemployed, Tobias sought employment with another company RETELCO. However, Petitioner Hendry, without
being asked by RETELCO, wrote a letter to the latter stating that Tobias was dismissed by Globe Mackay due to
dishonesty.
Private respondent Tobias filed a civil case for damages anchored on alleged unlawful, malicious, oppressive,
and abusive acts of petitioners. The RTC of Manila rendered judgment in favor of private respondent by
ordering petitioners to pay actual damages, moral damages, exemplary damages, attorneys fees, and costs.
Petitioners appealed the RTC decision to the CA. On the other hand, Tobias appealed as to the amount of
damages.
The CA affirmed the RTC decision in toto. Petitioners MR having been denied, the instant petition for review on
certiorari was filed to the SC.
Petitioners contend that they could not be made liable for damages in the lawful exercise of their right to
dismiss Tobias.
On the other hand, Tobias contends that because of petitioners abusive manner in dismissing him as well as
for the inhuman treatment he got from them, the Petitioners must indemnify him for the damage that he had
suffered.

ISSUE: WON the petitioners violated his rights.- YES

RULING:

Art. 19 of the Civil Code states that: Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.

This article is referred to as the principle of abuse of rights. It sets certain standards which must be observed
not only in the exercise of ones rights but also in the performance of ones duties. It recognizes a primordial
limitation on all rights; that in their exercise, the norms of human conduct set forth in Article 19 must be
observed. A right, though by itself legal because recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised in a manner which does not conform with the
norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which
the wrongdoer must be held responsible. However, Art. 19 does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.

Article 20, which pertains to damage arising from a violation of law, provides that: Every person who contrary
to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.

Also Art. 21 provides that: Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the damage.

Lazatin, Raphaela Kercee Vendel P. G02

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid test which can
be applied. While the Court has not hesitated to apply Article 19 whether the legal and factual circumstances
called for its application, the question of whether or not the principle of abuse of rights has been violated
resulting in damages under Article 20 or Article 21 or other applicable provision of law, depends on the
circumstances of each case. In this case, after examining the record and considering certain significant
circumstances, finds that Petitioners have indeed abused the right that they invoke, causing damage to private
respondent and for which the latter must now be indemnified.
Notwithstanding the fact that it was Tobias who reported the possible existence of anomalous transactions,
petitioner Hendry showed belligerence. Petitioners reaction towards Tobias upon uncovering the anomalies was
less than civil. Upon reporting for work after his suspension, Tobias was confronted by Hendry who said.
Tobby, you are the crook and swindler in this company.
Considering that the first report made by the police investigators was submitted some time later, the
statement made by petitioner Hendry was baseless. The imputation of guilt without basis and the pattern of
harassment during the investigations of Tobias transgress the standards of human conduct set forth in Article
19 of the Civil Code. If the dismissal is done abusively, then the employer is liable for damages to the
employee. Under the circumstances of the instant case, the petitioners clearly failed to exercise in a legitimate
manner their right to dismiss Tobias, giving the latter the right to recover damages under Article 19 in relation
to Article 21 of the Civil Code.
But Petitioners were not content with just dismissing Tobias. Several other tortious acts were committed by
petitioners against Tobias after the latters termination from work. After the filing of the first of six criminal
complaints against Tobias, the latter talked to Hendry to protest the actions taken against him. In response,
Hendry cut short Tobias protestations by telling him to just confess or else the company would file a hundred
more cases against him until he landed in jail. Hendry added that, You Filipinos cannot be trusted. The threat
unmasked petitioners bad faith in the various actions taken against Tobias.
The next tortious act committed by petitioners was the writing of a letter to RETELCO. Because of the letter,
Tobias failed to gain employment with RETELCO and as a result of which, Tobias remained unemployed for a
longer period of time. For this further damage suffered by Tobias, petitioners must likewise be held liable for
damages consistent with Article 2176 of the Civil Code. This act reveals a seeming obsession to prevent Tobias
from getting a job, even after almost two years from the time Tobias was dismissed.
In fine, considering the haste in which the criminal complaints were filed, the fact that they were filed during
the pendency of the illegal dismissal case against petitioners, the threat made by Hendry, the fact that the
cases were filed notwithstanding the two police reports exculpating Tobias from involvement in the anomalies
committed against GLOBE MACKAY, coupled by the eventual dismissal of all the cases, the Court is led into no
other conclusion than that petitioners were motivated by malicious intent in filing the six criminal complaints
against Tobias.
Hence, based on the numerous actionable tortious acts, the amount of damages awarded to Tobias was
reasonable under the circumstances. 80k as actual damages; 200k as moral damages; 20k as exemplary
damages; 30k as attorney's fees; and, costs.

Nikko Hotel v Reyes

FACTS:

Mr. Reyes more popularly known as Amay Bisaya was an actor of long standing; a co-host of a radio program
over DZRH; a Board Member of the Music Singer Composer chaired by popular singer Imelda Papin; a showbiz
Coordinator of Citizen Crime Watch; and 1992 official candidate of the KBL Party for Governor of Bohol; and an
awardee of a number of humanitarian organizations of the Philippines.

Reyes alleged that while he was having coffee at the lobby of Hotel Nikko, he was spotted by his friend of
several years, Dr. Violeta Filart who nvited him to join her in a party at the hotels penthouse in celebration of
the natal day of the hotels manager, Mr. Masakazu Tsuruoka. Mr. Reyes asked if she could vouch for him for
which she replied: of course. Mr. Reyes then went up with the party of Dr. Filart carrying the basket of fruits
which was the latters present for the celebrant. After a couple of hours, when the buffet dinner was ready, Mr.
Reyes lined-up at the buffet table but, to his great shock, shame and embarrassment, he was stopped by
petitioner herein, Ruby Lim, who claimed to speak for Hotel Nikko as Executive Secretary thereof. In a loud
voice and within the presence and hearing of the other guests who were making a queue at the buffet table,
Ruby Lim told him to leave the party (huwag ka nang kumain, hindi ka imbitado, bumaba ka na lang). Mr.
Reyes tried to explain that he was invited by Dr. Filart. Dr. Filart, who was within hearing distance, however,
completely ignored him thus adding to his shame and humiliation. The police then came to escort him out.

Reyes then filed an action Claiming damages, Mr. Reyes asked for One Million Pesos actual damages, One
Million Pesos moral and/or exemplary damages and Two Hundred Thousand Pesos attorneys fees.

Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under the ignominious
circumstance painted by the latter. Ms. Lim narrated that she was the Hotels Executive Secretary for the past
twenty (20) years. For Mr. Tsuruokas party, Ms. Lim generated an exclusive guest list and extended invitations
accordingly. She alleged that At the party, mindful of Mr. Tsuruokas wishes to keep the party intimate, Ms. Lim
approached Mr. Boy Miller, the captain waiter, to inquire as to the presence of Mr. Reyes who was not invited.
Mr. Miller replied that he saw Mr. Reyes with the group of Dr. Filart. As Dr. Filart was engaged in conversation
with another guest and as Ms. Lim did not want to interrupt, she inquired instead from the sister of Dr. Filart,

Lazatin, Raphaela Kercee Vendel P. G02

Ms. Zenaida Fruto, who told her that Dr. Filart did not invite Mr. Reyes. Ms. Lim then requested Ms. Fruto to tell
Mr. Reyes to leave the party as he was not invited. Mr. Reyes, however, still lingered. When Ms. Lim spotted Mr.
Reyes by the buffet table, she decided to speak to him herself as there were no other guests in the immediate
vicinity.
However, as Mr. Reyes was already helping himself to the food, she decided to wait. When Mr. Reyes went to a
corner and started to eat, Ms. Lim approached him and said: alam ninyo, hindo ho kayo dapat nandito. Pero
total nakakuha na ho kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede lang po umalis na
kayo. She then turned around trusting that Mr. Reyes would show enough decency to leave, but to her
surprise, he began screaming and making a big scene, and even threatened to dump food on her (HAHHA).
Dr. Violeta Filart, the third defendant in the complaint before the lower court, also gave her version of the story
to the effect that she never invited Mr. Reyes to the party. According to her, it was Mr. Reyes who volunteered
to carry the basket of fruits intended for the celebrant as he was likewise going to take the elevator, but not to
the penthouse. When they reached the penthouse, she reminded Mr. Reyes to go down as he was not properly
dressed and was not invited.
RTC ruled in favor of Nikko Hotel/Reyes
CA reversed, thus this petition.

ISSUE: WON Ruby Lim acted abusively in asking Roberto Reyes, a.k.a. Amay Bisaya, to leave the party where he was
not invited by the celebrant thereof thereby becoming liable under Articles 19 and 21 of the Civil Code.- NO
RULING:

Ms. Lim, mindful of the celebrants instruction to keep the party intimate, would naturally want to get rid of the
gate-crasher in the most hush-hush manner in order not to call attention to a glitch in an otherwise seamless
affair and, in the process, risk the displeasure of the celebrant, her former boss. To unnecessarily call attention
to the presence of Mr. Reyes would certainly reflect badly on Ms. Lims ability to follow the instructions of the
celebrant to invite only his close friends and some of the hotels personnel. Mr. Reyes, upon whom the burden
rests to prove that indeed Ms. Lim loudly and rudely ordered him to leave, could not offer any satisfactory
explanation why Ms. Lim would do that and risk ruining a formal and intimate affair. On the contrary, Mr.
Reyes, on cross-examination, had unwittingly sealed his fate by admitting that when Ms. Lim talked to him, she
was very close. Close enough for him to kiss.

In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule
and shame, it is highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in
the hotel business for twenty years wherein being polite and discreet are virtues to be emulated, the
testimony of Mr. Reyes that she acted to the contrary does not inspire belief and is indeed incredible. Had
plaintiff simply left the party as requested, there was no need for the police to take him out.

Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be
made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her
employer, Hotel Nikko, be held liable as its liability springs from that of its employee

Article 19, known to contain what is commonly referred to as the principle of abuse of rights, is not a panacea
for all human hurts and social grievances. When a right is exercised in a manner which does not conform with
the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for
which the wrongdoer must be responsible. The object of this article, therefore, is to set certain standards
which must be observed not only in the exercise of ones rights but also in the performance of ones duties.
These standards are the following: act with justice, give everyone his due and observe honesty and good faith.
Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1)
There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code.

Article 20 pertains to damages arising from a violation of law which does not obtain herein as Ms. Lim was
perfectly within her right to ask Mr. Reyes to leave.

Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal;
(2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to
injure.

A common theme runs through Articles 19 and 21, and that is, the act complained of must be intentional.

Without proof of any ill-motive on her part, Ms. Lims act of by-passing Mrs. Filart cannot amount to abusive
conduct especially because she did inquire from Mrs. Filarts companion who told her that Mrs. Filart did not
invite Mr. Reyes. If at all, Ms. Lim is guilty only of bad judgment, which, if done with good intentions, cannot
amount to bad faith.
Eastern Shipping v CA
FACTS:

On December 4, 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan for delivery vessel "SS
EASTERN COMET" owned by defendant Eastern Shipping Lines under Bill of Lading No. YMA-8. The shipment
was insured under plaintiff's Marine Insurance Policy No. 81/01177 for P36,382,466.38.

Lazatin, Raphaela Kercee Vendel P. G02

Upon arrival of the shipment in Manila on December 12, 1981, it was discharged unto the custody of
defendant Metro Port Service, Inc. The latter excepted to one drum, said to be in bad order, which
damage was unknown to plaintiff.
o On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant
Metro Port Service, Inc., one drum opened and without seal
o On January 8 and 14, 1982, defendant Allied Brokerage Corporation made deliveries of the shipment to
the consignee's warehouse. The latter excepted to one drum which contained spillages, while the rest
of the contents was adulterated/fake.
o Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered
losses totaling P19,032.95, due to the fault and negligence of defendants. Claims were presented
against defendants who failed and refused to pay the same.
o As a consequence of the losses sustained, plaintiff was compelled to pay the consignee P19,032.95
under the aforestated marine insurance policy, so that it became subrogated to all the rights of action
of said consignee against defendants.
RTC ordered payment of damages, jointly and severally. (The amount of P19,032.95, with the present legal
interest of 12% per annum from October 1, 1982, the date of filing of this complaints, until fully paid)
CA affirmed trial court.
o

ISSUES:
1. WON a claim for damage sustained on a shipment of goods can be a solidary, or joint and several, liability of
the common carrier, the arrastre operator and the customs broker.- Solidary
2. WON the payment of legal interest on an award for loss or damage is to be computed from the time the
complaint is filed or from the date the decision appealed from is rendered.
3. WON the applicable rate of interest, referred to above, is twelve percent (12%) or six percent (6%).
RULING:
1. Since it is the duty of the ARRASTRE to take good care of the goods that are in its custody and to deliver them
in good condition to the consignee, such responsibility also devolves upon the carrier. Both the arrastre and
the carrier are therefore charged with the obligation to deliver the goods in good condition to the consignee.
2. The common carrier's duty to observe the requisite diligence in the shipment of goods lasts from the time the
articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for
transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person
entitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court of Appeals, etc). When the goods
shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to
observe that diligence, and there need not be an express finding of negligence to hold it liable.
3. Guidelines / rules of thumb for future guidance.
a. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasidelicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on
"Damages" of the Civil Code govern in determining the measure of recoverable damages.
b. With regard particularly to an award of interest in the concept of actual and compensatory damages,
the rate of interest, as well as the accrual thereof, is imposed, as follows:
i. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan
or forbearance of money, the interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.
ii. When an obligation, not constituting a loan or forbearance of money, is breached, an interest
on the amount of damages awarded may be imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages
except when or until the demand can be established with reasonable certainty. Accordingly,
where the demand is established with reasonable certainty, the interest shall begin to run from
the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is made, the interest
shall begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual
base for the computation of legal interest shall, in any case, be on the amount finally
adjudged.
iii. When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be
12% per annum from such finality until its satisfaction, this interim period being deemed to be
by then an equivalent to a forbearance of credit.
4. 6% on the amount due computed from the decision, dated 03 February 1988, of the CA and 12% interest, in
lieu of 6%, shall be imposed on such amount upon finality of the Supreme Court decision until the payment
thereof.

Lazatin, Raphaela Kercee Vendel P. G02

a.

The Central Bank Circular imposing the 12% interest per annum applies only to loans or forbearance of
money, goods or credits, as well as to judgments involving such loan or forbearance of money, goods
or credits, and that the 6% interest under the Civil Code governs when the transaction involves the
payment of indemnities in the concept of damage arising from the breach or a delay in the
performance of obligations in general. Observe, too, that in these cases, a common time frame in the
computation of the 6% interest per annum has been applied, i.e., from the time the complaint is filed
until the adjudged amount is fully paid.

Sulpicio Lines v Curso

FACTS:

Dr. Curso boarded at the port of Manila the MV Doa Marilyn, an inter-island vessel owned and operated by
petitioner Sulpicio Lines, Inc., bound for Tacloban City. Unfortunately, the ship sank in the afternoon of October
24, 1988 while at sea due to the inclement sea and weather conditions brought about by Typhoon Unsang. The
body of Dr. Curso was not recovered, along with hundreds of other passengers of the ill-fated vessel. At the
time of his death, Dr. Curso was 48 years old, and employed as a resident physician at the Naval District
Hospital in Naval, Biliran.

Respondents-surviving brothers and sisters of Dr. Curso, sued Sulpicio in the RTC in Naval, Biliran to claim
damages based on breach of contract of carriage by sea, averring that the petitioner had acted negligently in
transporting Dr. Curso and the other passengers. They stated, among others, that their parents had
predeceased Dr. Curso, who died single and without issue; and that, as such, they were Dr. Cursos surviving
heirs and successors in interest entitled to recover moral and other damages.

According to Sulpicio, it had no liability and insisted that the sinking of the vessel was due to force majeure
(i.e., Typhoon Unsang), which exempted a common carrier from liability. Moreover, the ship was seaworthy in
all respects, and was in fact cleared by the Philippine Coast Guard for the voyage.

RTC dismissed the Respondents complaint stating that the sinking was due to force majeure and that Sulpicio
acted with the diligence required. And that the findings of the Special Board of Marine Inquiry (SBMI)
constituted to investigate the disaster absolved the Sulpicio, its officers, and crew of any negligence and
administrative liability; and that the respondents failed to prove their claim for damages.

However, the CA reversed the decision of the RTC and held that Sulpicio failed to show adequate proof that it
exercised the required degree of diligence. Because there was no account of the acts and decision of the crew
of the ill-fated ship from 8:00 PM on October 23, 1988 when the Chief Mate left his post until 4:00 AM the next
day when he resumed duty. What happened during such time is important in determining what information
about the typhoon was gathered and how the ship officers reached their decision to just change course, and
not take shelter while a strong typhoon was approaching. Lastly, Sulpicio is liable for moral damages.
ISSUE: WON the surviving brothers and sisters of a passenger of a vessel that sunk during a voyage are entitled to
recover moral damages from the vessel owner as common carrier.- NO
RULING:

Article 2206 forth the persons entitled to moral damages. The omission from Article 2206 (3) of the brothers
and sisters of the deceased passenger reveals the legislative intent to exclude them from the recovery of
moral damages for mental anguish by reason of the death of the deceased. Inclusio unius est exclusio alterius.
The solemn power and duty of the courts to interpret and apply the law do not include the power to correct the
law by reading into it what is not written therein. Thus, the CA erred in awarding moral damages to the
respondents.

To be entitled to moral damages, the respondents must have a right based upon law. It is true that under
Article 1003 of the Civil Code they succeeded to the entire estate of the late Dr. Curso in the absence of the
latters descendants, ascendants, illegitimate children, and surviving spouse. However, they were not included
among the persons entitled to recover moral damages.

Lastly, moral damages may be recovered in an action upon breach of contract of carriage only when:
o Where death of a passenger results, or
o It is proved that the carrier was guilty of fraud and bad faith, even if death does not result.

Article 2206 of the Civil Code entitles the descendants, ascendants, illegitimate children, and surviving spouse
of the deceased passenger to demand moral damages for mental anguish by reason of the death of the
deceased.