1. MAKATI STOCK EXCHANGE v. MIGUEL V.

CAMPOS +

DECISION

603 Phil. 121

CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 seeking the
reversal of the Decision[2] dated 11 February 1997 and Resolution dated 18
May 1999 of the Court of Appeals in CA-G.R. SP No. 38455.

The facts of the case are as follows:

SEC Case No. 02-94-4678 was instituted on 10 February 1994 by

respondent Miguel V. Campos, who filed with the Securities,
Investigation and Clearing Department (SICD) of the Securities
and Exchange Commission (SEC), a Petition against herein
petitioners Makati Stock Exchange, Inc. (MKSE) and MKSE
directors, Ma. Vivian Yuchengco, Adolfo M. Duarte, Myron C. Papa,
Norberto C. Nazareno, George Uy-Tioco, Antonio A, Lopa, Ramon B.
Arnaiz, Luis J.L. Virata, and Antonio Garcia, Jr. Respondent, in said
Petition, sought: (1) the nullification of the Resolution dated 3 June 1993 of
the MKSE Board of Directors, which allegedly deprived him of his
right to participate equally in the allocation of Initial Public
Offerings (IPO) of corporations registered with MKSE; (2) the
delivery of the IPO shares he was allegedly deprived of, for which he would
pay IPO prices; and (3) the payment of P2 million as moral damages, P1
million as exemplary damages, and P500,000.00 as attorney's fees and
litigation expenses.

On 14 February 1994, the SICD issued an Order granting respondent's

prayer for the issuance of a Temporary Restraining Order to enjoin
petitioners from implementing or enforcing the 3 June 1993 Resolution of
the MKSE Board of Directors.

The SICD subsequently issued another Order on 10 March 1994 granting

respondent's application for a Writ of Preliminary Injunction, to
continuously enjoin, during the pendency of SEC Case No. 02-94-4678, the

1
implementation or enforcement of the MKSE Board Resolution in question.
Petitioners assailed this SICD Order dated 10 March 1994 in a Petition
for Certiorari filed with the SEC en banc, docketed as SEC-EB No. 393.

On 11 March 1994, petitioners filed a Motion to Dismiss respondent's

Petition in SEC Case No. 02-94-4678, based on the following grounds: (1)
the Petition became moot due to the cancellation of the license of MKSE;
(2) the SICD had no jurisdiction over the Petition; and (3) the Petition
failed to state a cause of action.

The SICD denied petitioner's Motion to Dismiss in an Order dated 4 May

1994. Petitioners again challenged the 4 May 1994 Order of SICD before the
SEC en banc through another Petition for Certiorari, docketed as SEC-EB
No. 403.

In an Order dated 31 May 1995 in SEC-EB No. 393, the SEC en

banc nullified the 10 March 1994 Order of SICD in SEC Case No. 02-94-
4678 granting a Writ of Preliminary Injunction in favor of respondent.
Likewise, in an Order dated 14 August 1995 in SEC-EB No. 403, the SEC en
banc annulled the 4 May 1994 Order of SICD in SEC Case No. 02-94-4678
denying petitioners' Motion to Dismiss, and accordingly ordered the
dismissal of respondent's Petition before the SICD.

Respondent filed a Petition for Certiorari with the Court of Appeals

assailing the Orders of the SEC en banc dated 31 May 1995 and 14 August
1995 in SEC-EB No. 393 and SEC-EB No. 403, respectively. Respondent's
Petition before the appellate court was docketed as CA-G.R. SP No. 38455.

On 11 February 1997, the Court of Appeals promulgated its Decision in CA-

G.R. SP No. 38455, granting respondent's Petition for Certiorari, thus:

WHEREFORE, the petition in so far as it prays for annulment of the Orders

dated May 31, 1995 and August 14, 1995 in SEC-EB Case Nos. 393 and 403
is GRANTED. The said orders are hereby rendered null and void and set
aside.
Petitioners filed a Motion for Reconsideration of the foregoing Decision but
it was denied by the Court of Appeals in a Resolution dated 18 May 1999.

Hence, the present Petition for Review raising the following arguments:

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I.

THE SEC EN BANC DID NOT COMMIT GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
DISMISSED THE PETITION FILED BY RESPONDENT BECAUSE ON ITS
FACE, IT FAILED TO STATE A CAUSE OF ACTION.

II.

THE GRANT OF THE IPO ALLOCATIONS IN FAVOR OF RESPONDENT

WAS A MERE ACCOMMODATION GIVEN TO HIM BY THE BOARD OF
[DIRECTORS] OF THE MAKATI STOCK EXCHANGE, INC.

III.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE SEC EN

BANC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION WHEN IT MADE AN EXTENDED
INQUIRY AND PROCEEDED TO MAKE A DETERMINATION AS TO THE
TRUTH OF RESPONDENT'S ALLEGATIONS IN HIS PETITION AND
USED AS BASIS THE EVIDENCE ADDUCED DURING THE HEARING
ON THE APPLICATION FOR THE WRIT OF PRELIMINARY
INJUNCTION TO DETERMINE THE EXISTENCE OR VALIDITY OF A
STATED CAUSE OF ACTION.

IV.

IPO ALLOCATIONS GRANTED TO BROKERS ARE NOT TO BE BOUGHT

BY THE BROKERS FOR THEMSELVES BUT ARE TO BE DISTRIBUTED
TO THE INVESTING PUBLIC. HENCE, RESPONDENT'S CLAIM FOR
DAMAGES IS ILLUSORY AND HIS PETITION A NUISANCE SUIT.[3]
On 18 September 2001, counsel for respondent manifested to this Court
that his client died on 7 May 2001. In a Resolution dated 24 October 2001,
the Court directed the substitution of respondent by his surviving spouse,
Julia Ortigas vda. de Campos.

Petitioners want this Court to affirm the dismissal by the SEC en banc of

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respondent's Petition in SEC Case No. 02-94-4678 for failure to state a
cause of action. On the other hand, respondent insists on the sufficiency of
his Petition and seeks the continuation of the proceedings before the SICD.

A cause of action is the act or omission by which a party violates a right of

another.[4] A complaint states a cause of action where it contains three
essential elements of a cause of action, namely: (1) the legal right of the
plaintiff, (2) the correlative obligation of the defendant, and (3) the act or
omission of the defendant in violation of said legal right. If these elements
are absent, the complaint becomes vulnerable to dismissal on the ground of
failure to state a cause of action.

If a defendant moves to dismiss the complaint on the ground of lack of

cause of action, he is regarded as having hypothetically admitted all the
averments thereof. The test of sufficiency of the facts found in a complaint
as constituting a cause of action is whether or not admitting the facts
alleged, the court can render a valid judgment upon the same in accordance
with the prayer thereof. The hypothetical admission extends to the relevant
and material facts well pleaded in the complaint and inferences fairly
deducible therefrom. Hence, if the allegations in the complaint furnish
sufficient basis by which the complaint can be maintained, the same should
not be dismissed regardless of the defense that may be assessed by the
defendant.[5]

Given the foregoing, the issue of whether respondent's Petition in SEC Case
No. 02-94-4678 sufficiently states a cause of action may be alternatively
stated as whether, hypothetically admitting to be true the allegations in
respondent's Petition in SEC Case No. 02-94-4678, the SICD may render a
valid judgment in accordance with the prayer of said Petition.

A reading of the exact text of respondent's Petition in SEC Case No. 02-94-
4678 is, therefore, unavoidable. Pertinent portions of the said Petition
reads:

7. In recognition of petitioner's invaluable services, the general membership

of respondent corporation [MKSE] passed a resolution sometime in 1989
amending its Articles of Incorporation, to include the following provision
therein:

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"ELEVENTH - WHEREAS, Mr. Miguel Campos is the only surviving
incorporator of the Makati Stock Exchange, Inc. who has maintained his
membership;

"WHEREAS, he has unselfishly served the Exchange in various capacities,

as governor from 1977 to the present and as President from 1972 to 1976
and again as President from 1988 to the present;

"WHEREAS, such dedicated service and leadership which has contributed

to the advancement and well being not only of the Exchange and its
members but also to the Securities industry, needs to be recognized and
appreciated;

"WHEREAS, as such, the Board of Governors in its meeting held on

February 09, 1989 has correspondingly adopted a resolution recognizing
his valuable service to the Exchange, reward the same, and preserve for
posterity such recognition by proposing a resolution to the membership
body which would make him as Chairman Emeritus for life and install in
the Exchange premises a commemorative bronze plaque in his honor;

"NOW, THEREFORE, for and in consideration of the above premises, the

position of the "Chairman Emeritus" to be occupied by Mr. Miguel Campos
during his lifetime and irregardless of his continued membership in the
Exchange with the Privilege to attend all membership meetings as well as
the meetings of the Board of Governors of the Exchange, is hereby created."
8. Hence, to this day, petitioner is not only an active member of the
respondent corporation, but its Chairman Emeritus as well.

9. Correspondingly, at all times material to this petition, as an active

member and Chairman Emeritus of respondent corporation, petitioner has
always enjoyed the right given to all the other members to participate
equally in the Initial Public Offerings (IPOs for brevity) of corporations.

10. IPOs are shares of corporations offered for sale to the public, prior to
the listing in the trading floor of the country's two stock exchanges.
Normally, Twenty Five Percent (25%) of these shares are divided equally
between the two stock exchanges which in turn divide these equally among
their members, who pay therefor at the offering price.

11. However, on June 3, 1993, during a meeting of the Board of Directors of

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respondent-corporation, individual respondents passed a resolution to stop
giving petitioner the IPOs he is entitled to, based on the ground that these
shares were allegedly benefiting Gerardo O. Lanuza, Jr., who these
individual respondents wanted to get even with, for having filed cases
before the Securities and Exchange (SEC) for their disqualification as
member of the Board of Directors of respondent corporation.

12. Hence, from June 3, 1993 up to the present time, petitioner has been
deprived of his right to subscribe to the IPOs of corporations listing in the
stock market at their offering prices.

13. The collective act of the individual respondents in depriving petitioner

of his right to a share in the IPOs for the aforementioned reason, is unjust,
dishonest and done in bad faith, causing petitioner substantial financial
damage.[6]
There is no question that the Petition in SEC Case No. 02-94-4678 asserts
a right in favor of respondent, particularly, respondent's alleged right to
subscribe to the IPOs of corporations listed in the stock market at their
offering prices; and stipulates the correlativeobligation of petitioners to
respect respondent's right, specifically, by continuing to allow respondent
to subscribe to the IPOs of corporations listed in the stock market at their
offering prices.

However, the terms right and obligation in respondent's Petition are not
magic words that would automatically lead to the conclusion that such
Petition sufficiently states a cause of action. Right and obligation are legal
terms with specific legal meaning. A right is a claim or title to an interest in
anything whatsoever that is enforceable by law.[7] An obligation is defined
in the Civil Code as a juridical necessity to give, to do or not to do. [8] For
every right enjoyed by any person, there is a corresponding obligation on
the part of another person to respect such right. Thus, Justice J.B.L. Reyes
offers[9] the definition given by Arias Ramos as a more complete definition:

An obligation is a juridical relation whereby a person (called the creditor)

may demand from another (called the debtor) the observance of a
determinative conduct (the giving, doing or not doing), and in case of
breach, may demand satisfaction from the assets of the latter.
The Civil Code enumerates the sources of obligations:

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Art. 1157. Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
Therefore, an obligation imposed on a person, and the corresponding right
granted to another, must be rooted in at least one of these five sources. The
mere assertion of a right and claim of an obligation in an initiatory
pleading, whether a Complaint or Petition, without identifying the basis or
source thereof, is merely a conclusion of fact and law. A pleading should
state the ultimate facts essential to the rights of action or defense asserted,
as distinguished from mere conclusions of fact or conclusions of
law.[10] Thus, a Complaint or Petition filed by a person claiming a right to
the Office of the President of this Republic, but without stating the source
of his purported right, cannot be said to have sufficiently stated a cause of
action. Also, a person claiming to be the owner of a parcel of land cannot
merely state that he has a right to the ownership thereof, but must likewise
assert in the Complaint either a mode of acquisition of ownership or at least
a certificate of title in his name.

In the case at bar, although the Petition in SEC Case No. 02-94-
4678 does continue respecting and observing such right, the
Petition utterly failed to lay down the source or basis of
respondent's right and/or petitioners' obligation.allege
respondent's right to subscribe to the IPOs of corporations listed
in the stock market at their offering prices, and petitioners'
obligation to

Respondent merely quoted in his Petition the MKSE Board Resolution,

passed sometime in 1989, granting him the position of Chairman Emeritus
of MKSE for life. However, there is nothing in the said Petition from which
the Court can deduce that respondent, by virtue of his position as Chairman
Emeritus of MKSE, was granted by law, contract, or any other legal source,
the right to subscribe to the IPOs of corporations listed in the stock market
at their offering prices.

A meticulous review of the Petition reveals that the allocation of IPO shares
was merely alleged to have been done in accord with a practicenormally

7
observed by the members of the stock exchange, to wit:

IPOs are shares of corporations offered for sale to the public, prior to their
listing in the trading floor of the country's two stock exchanges. Normally,
Twenty-Five Percent (25%) of these shares are divided equally
between the two stock exchanges which in turn divide these
equally among their members, who pay therefor at the offering
price.[11](Emphasis supplied)
A practice or custom is, as a general rule, not a source of a
legally demandable or enforceable right.[12] Indeed, in labor cases,
benefits which were voluntarily given by the employer, and which have
ripened into company practice, are considered as rights that cannot be
diminished by the employer.[13] Nevertheless, even in such cases, the source
of the employees' right is not custom, but ultimately, the law, since Article
100 of the Labor Code explicitly prohibits elimination or diminution of
benefits.

There is no such law in this case that converts the practice of allocating IPO
shares to MKSE members, for subscription at their offering prices, into an
enforceable or demandable right. Thus, even if it is hypothetically admitted
that normally, twenty five percent (25%) of the IPOs are divided equally
between the two stock exchanges -- which, in turn, divide their respective
allocation equally among their members, including the Chairman Emeritus,
who pay for IPO shares at the offering price -- the Court cannot grant
respondent's prayer for damages which allegedly resulted from the MKSE
Board Resolution dated 3 June 1993 deviating from said practice by no
longer allocating any shares to respondent.

Accordingly, the instant Petition should be granted. The Petition in SEC

Case No. 02-94-4678 should be dismissed for failure to state a
cause of action. It does not matter that the SEC en banc, in its Order
dated 14 August 1995 in SEC-EB No. 403, overstepped its bounds by not
limiting itself to the issue of whether respondent's Petition before the SICD
sufficiently stated a cause of action. The SEC en banc may have been
mistaken in considering extraneous evidence in granting petitioners'
Motion to Dismiss, but its discussion thereof are merely superfluous
and obiter dictum. In the main, the SEC en banc did correctly dismiss the
Petition in SEC Case No. 02-94-4678 for its failure to state the basis for
respondent's alleged right, to wit:

8
Private respondent Campos has failed to establish the basis or
authority for his alleged right to participate equally in the IPO
allocations of the Exchange. He cited paragraph 11 of the amended
articles of incorporation of the Exchange in support of his position but a
careful reading of the said provision shows nothing therein that would bear
out his claim. The provision merely created the position of chairman
emeritus of the Exchange but it mentioned nothing about conferring upon
the occupant thereof the right to receive IPO allocations.[14]
With the dismissal of respondent's Petition in SEC Case No. 02-94-4678,
there is no more need for this Court to resolve the propriety of the issuance
by SCID of a writ of preliminary injunction in said case.

WHEREFORE, the Petition is GRANTED. The Decision of the Court of

Appeals dated 11 February 1997 and its Resolution dated 18 May 1999 in
CA-G.R. SP No. 38455 are REVERSED and SET ASIDE. The Orders
dated 31 May 1995 and 14 August 1995 of the Securities and Exchange
Commission en banc in SEC-EB Case No. 393 and No. 403, respectively,
are hereby reinstated. No pronouncement as to costs.

SO ORDERED.

Ynares-Santiago, (Chairperson), Austria-Martinez, Nachura, and Peralta,

JJ., concur.

PAULINO S. ASILO, JR., Petitioner, (appeals on certiorari regarding the demolition of houses
of bombasi by the petitioners without obtaining first court orders and subject for damages)
vs.
THE PEOPLE OF THE PHILIPPINES and Spouses VISITACION AND CESAR C.
BOMBASI, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 159059

VICTORIA BUETA VDA. DE COMENDADOR, IN REPRESENTATION OF

DEMETRIO T. COMENDADOR,Petitioner,
vs.
VISITACION C. BOMBASI AND CESAR C. BOMBASI, Respondents.

DECISION

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PEREZ, J.:

At bench are appeals by certiorari1 from the Decision2 of the Fourth Division of the
Sandiganbayan; (1) finding Demetrio T. Comendador3 (Mayor Comendador) and Paulino S.
Asilo, Jr.4 guilty beyond reasonable doubt of violation of Sec. 3(e) of Republic Act No. 3019; (2)
dismissing the cases against accused Alberto S. Angeles;5 (3) ordering the defendants
Municipality of Nagcarlan, Laguna, Demetrio T. Comendador and Paulino S. Asilo, Jr. to pay
the plaintiffs now respondents Visitacion C. Bombasi (Visitacion) and Cesar C. Bombasi
damages; and (4) dismissing the cases against the spouses Alida and Teddy Coroza6 and Benita
and Isagani Coronado.7

The factual antecedents of the case are:

On 15 March 1978, Private Respondent Visitacion’s late mother Marciana Vda. De Coronado
(Vda. De Coronado) and the Municipality of Nagcarlan, Laguna (represented by the then
Municipal Mayor Crisostomo P. Manalang) entered into a lease contract whereby the
Municipality allowed the use and enjoyment of property comprising of a lot and a store
located at the corner of Coronado and E. Fernandez Sts. at Poblacion, Nagcarlan, Laguna,
in favor of the respondent’s mother for a period of twenty (20) years beginning on 15
March 1978 until 15 March 1998, extendible for another 20 years.8

The lease contract provided that the late Vda. De Coronado could build a firewall on her
rented property which must be at least as high as the store; and in case of modification of
the public market, she or her heir/s would be given preferential rights.

Visitacion took over the store when her mother died sometime in 1984.9 From then on up to
January 1993, Visitacion secured the yearly Mayor’s permits.10

Sometime in 1986, a fire razed the public market of Nagcarlan. Upon Visitacion’s request for
inspection on 15 May 1986, District Engineer Marcelino B. Gorospe (Engineer Gorospe) of the
then Ministry of Public Works and Highways,11 Regional Office No. IV-A, found that the store
of Visitacion remained intact and stood strong. This finding of Engineer Gorospe was contested
by the Municipality of Nagcarlan.

The store of Visitacion continued to operate after the fire until 15 October 1993.

On 1 September 1993, Visitacion received a letter12 from Mayor Comendador directing her to
demolish her store within five (5) days from notice. Attached to the letter were copies of
Sangguniang Bayan Resolution No. 15613dated 30 August 1993 and a Memorandum issued by
Asst. Provincial Prosecutor Marianito Sasondoncillo of Laguna.

The relevant provisos of the Resolution No. 156 states that:

NOW THEREFORE, be it RESOLVED, as it hereby resolved to authorize Hon. Demetrio

T. Comendador to enforce and order the Coronado’s to demolish the building constructed

10
on the space previously rented to them in order to give way for the construction of a new
municipal market building.

RESOLVED FURTHER, to authorize Demetrio T. Comendador, Honorable Mayor of Nagcarlan

to file an Unlawful Detainer Case with damages for the expenses incurred due to the delay
in the completion of the project if the Coronado’s continuously resists the order.

On 3 September 1993, Visitacion wrote a reply letter to Mayor Comendador saying that:
(1) the lease contract was still existing and legally binding; (2) she was willing to vacate the
store as long as same place and area would be given to her in the new public market; and
(3) in case her proposals are not acceptable to Mayor Comendador, for the latter to just file
an unlawful detainer case against her pursuant to Sangguniang Bayan Resolution No. 156.
Pertinent portions of the letter read:

x x x With all due respect to the resolution of the Municipal Council and the opinion rendered by
the Laguna Asst. Provincial Prosecutor, it is my considered view, however, arrived at after
consultation with my legal counsel, that our existing lease contract is still legally binding and
in full force and effect. Lest I appear to be defiant, let me reiterate to you and the council that
we are willing to vacate the said building provided that a new contract is executed granting
to us the same space or lot and the same area. I believe that our proposal is most reasonable
and fair under the circumstance. If you are not amenable to the said proposal, I concur with the
position taken by the Council for you to file the appropriate action in court for unlawful detainer
to enable our court to finally thresh out our differences.141avvphi1

On 15 September 1993, Asst. Provincial Prosecutor Florencio Buyser sent a letter to Visitacion
ordering her to vacate the portion of the public market she was occupying within 15 days from
her receipt of the letter; else, a court action will be filed against her.

On 11 October 1993, the Sangguniang Bayan of Nagcarlan, Laguna issued Resolution No. 183
authorizing Mayor Comendador to demolish the store being occupied by Visitacion using legal
means. The significant portion of the Resolution reads:

Kung kaya ang Sangguniang Bayan ay buong pagkakaisang IPINASIYA: Ang pagbibigay
kapangyarihan kay Kgg. Demetrio T. Comendador na ipagiba ang anumang istrakturang
nagiging sagabal sa mabilis at maayos na pagbabangon ng pamilihang bayan.15

On 14 October 1993, Municipal Administrator Paulino S. Asilo, Jr. (Asilo) also sent a letter16 to
Visitacion informing her of the impending demolition of her store the next day. Within the same
day, Visitacion wrote a reply letter17 to Asilo, alleging that there is no legal right to demolish the
store in the absence of a court order and that the Resolutions did not sanction the demolition of
her store but only the filing of an appropriate unlawful detainer case against her. She further
replied that if the demolition will take place, appropriate administrative, criminal and civil
actions will be filed against Mayor Comendador, Asilo and all persons who will take part in the
demolition.

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On 15 October 1993, Mayor Comendador relying on the strength of Sangguniang Bayan
Resolution Nos. 183 and 156 authorized the demolition of the store with Asilo and Angeles
supervising the work.

Engineer Winston Cabrega (Engineer Cabrega), a licensed civil engineer, estimated the cost of
the demolished property as amounting to ₱437,900.0018

On 19 August 1994, Visitacion, together with her husband Cesar Bombasi (Spouses Bombasi)
filed with the Regional Trial Court of San Pablo City, Laguna a Civil Case19 for damages with
preliminary injunction against the Municipality of Nagcarlan, Laguna, Mayor Demetrio T.
Comendador, Paulino S. Asilo, Jr., and Alberto S. Angeles. The complaint was soon after
amended to include the Spouses Benita and Isagani Coronado and Spouses Alida and Teddy
Coroza as formal defendants because they were then the occupants of the contested area.

The spouses prayed for the following disposition:

1. RESTRAINING or ENJOINING defendant Municipality and defendant Municipal

Mayor from leasing the premises subject of lease Annex "A" hereof, part of which is now
occupied by PNP Outpost and by the Municipal Collectors’ Office, and the equivalent
adjacent area thereof, and to cause the removal of said stalls;

2. UPHOLDING the right of plaintiffs to occupy the equivalent corner area of the leased
areas being now assigned to other persons by defendants Municipality and/or by
defendant Municipal Mayor, and to allow plaintiffs to construct their stalls thereon;

3. MAKING the injunction permanent, after trial;

4. ORDERING defendants to pay plaintiffs, jointly and severally, the following –

(a) ₱437,900.00 for loss of building/store and other items therein;

(b) ₱200,000.00 for exemplary damages;

(c) ₱200,000.00 for moral damages;

(d) ₱30,.00 for attorney’s fees and ₱700.00 for every attendance of counsel in
court.

5. GRANTING further reliefs upon plaintiffs as justice and equity may warrant in the
premises.20

Spouses Bombasi, thereafter, filed a criminal complaint21 against Mayor Comendador, Asilo and
Angeles for violation of Sec. 3(e) of Republic Act No. 3019 otherwise known as the "Anti-Graft
and Corrupt Practices Act" before the Office of the Ombudsman. On 22 February 1996, an
Information22 against Mayor Comendador, Asilo and Angeles was filed, which reads:

12
That on or about October 15, 1993, at Nagcarlan, Laguna, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, all public officers, accused Demetrio T.
Comendador, being then the Municipal Mayor, accused Paulino S. Asilo, Jr. being then the
Municipal Administrator and accused Alberto S. Angeles being then the Municipal Planning and
Development Coordinator, all of the Municipality of Nagcarlan, Laguna, committing the crime
herein charged in relation to, while in the performance and taking advantage of their official
functions, conspiring and confederating with each other, and with evident bad faith, manifest
partiality or through gross inexcusable negligence, did then and there willfully, unlawfully,
criminally cause the demolition of a public market stall leased by the municipal government in
favor of one Visitacion Coronado-Bombasi without legal or justifiable ground therefor, thus,
causing undue injury to the latter in the amount of PESOS: FOUR HUNDRED THIRTY SEVEN
THOUSAND AND NINE HUNDRED ONLY (₱437,900.00).

Upon their arraignments, all the accused entered their separate pleas of "Not Guilty."

On 4 March 1997, the Sandiganbayan promulgated a Resolution ordering the consolidation of

Civil Case No. SP-4064 (94)23 with Criminal Case No. 23267 pending before the Third Division
pursuant to Section 4, Presidential Decree No. 1606, which pertinently reads:

Any provision of law or Rules of Court to the contrary notwithstanding, the criminal action and
the corresponding civil action for the recovery of civil liability arising from the offense charged
shall at all times be simultaneously instituted with, and jointly determined in the same
proceeding by the Sandiganbayan or the appropriate courts, the filing of the criminal action
being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the
filing of such civil action separately from the criminal action shall be recognized; Provided,
however, that where the civil action had heretofore been filed separately but judgment therein
has not yet been rendered, and the criminal case is hereafter filed with the Sandiganbayan or the
appropriate court, said civil action shall be transferred to the Sandiganbayan or the appropriate
court as the case may be, for consolidation and joint determination with the criminal action,
otherwise the separate civil action shall be deemed abandoned.24

During the pendency of the case, Alberto S. Angeles died on 16 November 1997. Accordingly,
the counsel of Angeles filed a motion to drop accused Angeles. On 22 September 1999, the Third
Division of Sandiganbayan issued an Order25 DISMISSING the case against Angeles. The
germane portion of the Order reads:

In view of the submission of the death certificate of accused/defendant Alberto S. Angeles, and
there being no objection on the part of the Public Prosecutor, cases against deceased
accused/defendant Angeles only, are hereby DISMISSED.

The death of Mayor Comendador followed on 17 September 2002. As a result, the counsel of the
late Mayor filed on 3 March 2003 a Manifestation before the Sandiganbayan informing the court
of the fact of Mayor Comendador’s death.

On 28 April 2003, the Sandiganbayan rendered a decision, the dispositive portion of which reads
as follows:

13
WHEREFORE, premises considered, judgment is hereby rendered as follows:

In Criminal Case No. 23267, the court finds accused Demetrio T. Comendador and Paulino S.
Asilo, Jr. guilty beyond reasonable doubt of violation of Sec. 3(e) of Republic Act. No. 3019 as
amended, and in the absence of aggravating and mitigating circumstances, applying the
Indeterminate Sentence Law, said accused are sentenced to suffer the indeterminate penalty of 6
years and 2 months imprisonment as minimum to 10 years and 1 day as maximum.

The order of the court dated September 22, 1999 dismissing the cases against the accused
Alberto S. Angeles, who died on November 16, 1997 is hereby reiterated.

In Civil Case No. 4064, defendants Municipality of Nagcarlan, Laguna, Demetrio T.

Comendador and Paulino S. Asilo, Jr. are hereby ordered jointly and severally to pay plaintiff
P437,900.00 as actual damages for the destruction of the store; P100,000.00 as moral damages;
P30,000.00 as attorney’s fees, and to pay the cost of the suit. The prayer for exemplary damages
is denied as the court found no aggravating circumstances in the commission of the crime.

In view of this court’s finding that the defendant spouses Alida and Teddy Coroza are lawful
occupants of the subject market stalls from which they cannot be validly ejected without just
cause, the complaint against them is dismissed. The complaint against defendant spouses Benita
and Isagani Coronado is likewise dismissed, it appearing that they are similarly situated as the
spouses Coroza. Meanwhile, plaintiff Visitacion Bombasi is given the option to accept market
space being given to her by the municipality, subject to her payment of the appropriate rental and
permit fees.

The prayer for injunctive relief is denied, the same having become moot and academic.

The compulsory counterclaim of defendant Comendador is likewise denied for lack of merit.26

Within the same day, Asilo, through his counsel, filed a Motion for Reconsideration27 of the
Decision alleging that there was only an error of judgment when he complied with and
implemented the order of his superior, Mayor Comendador. He likewise alleged that there is no
liability when a public officer commits in good faith an error of judgment. The Sandiganbayan,
on its Resolution28 dated 21 July 2003 denied the Motion for Reconsideration on the ground that
good faith cannot be argued to support his cause in the face of the court’s finding that bad faith
attended the commission of the offense charged. The Court further explained that the invocation
of compliance with an order of a superior is of no moment for the "demolition [order] cannot be
described as having the semblance of legality inasmuch as it was issued without the authority
and therefore the same was patently illegal."29

The counsel for the late Mayor also filed its Motion for Reconsideration30 on 12 May 2003
alleging that the death of the late Mayor had totally extinguished both his criminal and civil
liability. The Sandiganbayan on its Resolution31granted the Motion insofar as the extinction of
the criminal liability is concerned and denied the extinction of the civil liability holding that the
civil action is an independent civil action.

14
Hence, these Petitions for Review on Certiorari.32

Petitioner Asilo argues that in order to sustain conviction under Sec. 3(e) of Republic Act No.
3019 or "The Anti-Graft and Corrupt Practices Act," the public officer must have acted with
manifest partiality, evident bad faith or gross negligence. He also contended that he and his co-
accused acted in good faith in the demolition of the market and, thereby, no liability was
incurred.

On the other hand, Petitioner Victoria argues that the death of Mayor Comendador prior to the
promulgation of the decision extinguished NOT ONLY Mayor Comendador’s criminal liability
but also his civil liability. She also asserted good faith on the part of the accused public officials
when they performed the demolition of the market stall. Lastly, she contended that assuming
arguendo that there was indeed liability on the part of the accused public officials, the actual
amount of damages being claimed by the Spouses Bombasi has no basis and was not duly
substantiated.

Liability of the accused public officials

under Republic Act No. 3019

Section 3(e) of Republic Act No. 3019 provides:

In addition to acts or omissions of public officers already penalized by existing law, the
following shall constitute corrupt practices of any public officer and are hereby declared to be
unlawful:

xxxx

(e) Causing any undue injury to any party, including the Government, or giving any private party
any unwarranted benefits, advantage or preference in the discharge of his official, administrative
or judicial functions through manifest partiality, evident bad faith or gross inexcusable
negligence. This provision shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other concessions.

The elements of the offense are as follows: (1) that the accused are public officers or private
persons charged in conspiracy with them; (2) that said public officers commit the prohibited acts
during the performance of their official duties or in relation to their public positions; (3) that they
caused undue injury to any party, whether the Government or a private party; (4) OR that such
injury is caused by giving unwarranted benefits, advantage or preference to the other party; and
(5) that the public officers have acted with manifest partiality, evident bad faith or gross
inexcusable negligence.33

We sustain the Sandiganbayan in its finding of criminal and civil liabilities against petitioner
Asilo and petitioner Mayor Comendador as here represented by his widow Victoria Bueta.

We agree with the Sandiganbayan that it is undisputable that the first two requisites of the
criminal offense were present at the time of the commission of the complained acts and that, as

15
to the remaining elements, there is sufficient amount of evidence to establish that there was an
undue injury suffered on the part of the Spouses Bombasi and that the public officials concerned
acted with evident bad faith when they performed the demolition of the market stall.

Causing undue injury to any party, including the government, could only mean actual injury or
damage which must be established by evidence.34

In jurisprudence, "undue injury" is consistently interpreted as "actual." Undue has been

defined as "more than necessary, not proper, [or] illegal;" and injury as "any wrong or
damage done to another, either in his person, rights, reputation or property [that is, the]
invasion of any legally protected interest of another." Actual damage, in the context of
these definitions, is akin to that in civil law.35

It is evident from the records, as correctly observed by the Sandiganbayan, that Asilo and
Mayor Comendador as accused below did not deny that there was indeed damage caused
the Spouses Bombasi on account of the demolition. We affirm the finding that:

xxx. Clearly, the demolition of plaintiff’s store was carried out without a court order, and
notwithstanding a restraining order which the plaintiff was able to obtain. The demolition was
done in the exercise of official duties which apparently was attended by evident bad faith,
manifest partiality or gross inexcusable negligence as there is nothing in the two (2) resolutions
which gave the herein accused the authority to demolish plaintiff’s store.

"Evident bad faith" connotes not only bad judgment but also palpably and patently fraudulent
and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive
or ill will.36 [It] contemplates a state of mind affirmatively operating with furtive design or with
some motive or self-interest or ill will or for ulterior purposes.37

It is quite evident in the case at bar that the accused public officials committed bad faith in
performing the demolition.

First, there can be no merit in the contention that respondents’ structure is a public nuisance. The
abatement of a nuisance without judicial proceedings is possible if it is nuisance per
se.38 Nuisance per se is that which is nuisance at all times and under any circumstance, regardless
of location and surroundings.39 In this case, the market stall cannot be considered as a nuisance
per se because as found out by the Court, the buildings had not been affected by the 1986 fire.
This finding was certified to by Supervising Civil Engineer Wilfredo A. Sambrano of the Laguna
District Engineer Office.40 To quote:

An inspection has been made on the building (a commercial establishment) cited above and
found out the following:

1. It is a two-storey building, sketch of which is attached.

2. It is located within the market site.

16
 3. The building has not been affected by the recent fire.

4. The concrete wall[s] does not even show signs of being exposed to fire.41

Second, the Sangguniang Bayan resolutions are not enough to justify demolition. Unlike its
predecessor law,42 the present Local Government Code43 does not expressly provide for the
abatement of nuisance.44 And even assuming that the power to abate nuisance is provided for by
the present code, the accused public officials were under the facts of this case, still devoid of any
power to demolish the store. A closer look at the contested resolutions reveals that Mayor
Comendador was only authorized to file an unlawful detainer case in case of resistance to obey
the order or to demolish the building using legal means. Clearly, the act of demolition without
legal order in this case was not among those provided by the resolutions, as indeed, it is a legally
impossible provision.

Furthermore, the Municipality of Nagcarlan, Laguna, as represented by the then Mayor

Comendador, was placed in estoppel after it granted yearly business permits45 in favor of the
Spouses Bombasi. Art. 1431 of the New Civil Code provides that, through estoppel, an
admission or representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon. The representation made by the
municipality that the Spouses Bombasi had the right to continuously operate its store binds the
municipality. It is utterly unjust for the Municipality to receive the benefits of the store operation
and later on claim the illegality of the business.

The bad faith of the petitioners completes the elements of the criminal offense of violation
of Sec. 3(e) of Republic Act No. 3019. The same bad faith serves as the source of the civil
liability of Asilo, Angeles, and Mayor Comendador.

It must be noted that when Angeles died on 16 November 1997, a motion to drop him as an
accused was filed by his counsel with no objection on the part of the prosecution. The
Sandiganbayan acted favorably on the motion and issued an Order dismissing all the cases
filed against Angeles. On the other hand, when Mayor Comendador died and an adverse
decision was rendered against him which resulted in the filing of a motion for
reconsideration by Mayor Comendador’s counsel, the prosecution opposed the Motion
specifying the ground that the civil liability did not arise from delict, hence, survived the
death of the accused. The Sandiganbayan upheld the opposition of the prosecution which
disposition was not appealed.

We note, first off, that the death of Angeles and of Mayor Comendador during the pendency of
the case extinguished their criminal liabilities.

We now hold, as did the Sandiganbayan that the civil liability of Mayor Comendador survived
his death; and that of Angeles could have likewise survived had it not been for the fact that the
resolution of the Sandiganbayan that his death extinguished the civil liability was not questioned
and lapsed into finality.

We laid down the following guidelines in People v. Bayotas:46

17
Death of the accused pending appeal of his conviction extinguishes his criminal liability as well
as the civil liability based solely thereon. As opined by Justice Regalado, in this regard, "the
death of the accused prior to final judgment terminates his criminal liability and only the civil
liability directly arising from and based solely on the offense committed, i.e., civil liability ex
delicto in senso strictiore."

Corollarily, the claim for civil liability survives notwithstanding the death of (the) accused, if the
same may also be predicated on a source of obligation other than delict. Article 1157 of the Civil
Code enumerates these other sources of obligation from which the civil liability may arise as a
result of the same act or omission:

a) Law

b) Contracts

c) Quasi-contracts

d) Acts or omissions punished by law; and

e) Quasi-delicts. (Emphasis ours)

Where the civil liability survives, as explained [above], an action for recovery therefore
may be pursued but only by way of filing a separate civil action47 and subject to Section 1,
Rule 111 of the 1985 Rules on Criminal Procedure as amended. This separate civil action
may be enforced either against the executor/administrator or the estate of the accused,
depending on the source of obligation upon which the same is based as explained above.

Finally, the private offended party need not fear a forfeiture of his right to file this separate civil
action by prescription, in cases where during the prosecution of the criminal action and prior to
its extinction, the private-offended party instituted together therewith the civil action. In such
case, the statute of limitations on the civil liability is deemed interrupted during the pendency of
the criminal case, conformably with provisions of Article 1155 of the New Civil Code, which
should thereby avoid any apprehension on a possible privation of right by prescription.

Upon death of the accused pending appeal of his conviction, the criminal action is extinguished
inasmuch as there is no longer a defendant to stand as the accused; the civil action instituted
therein for recovery of civil liability ex delicto is ipso facto extinguished, grounded as it is on the
criminal.48

The New Civil Code provisions under the Chapter, Human Relations, were cited by the
prosecution to substantiate its argument that the civil action based therein is an independent one,
thus, will stand despite the death of the accused during the pendency of the case.

On the other hand, the defense invoked Section 4 of Presidential Decree No. 1606, as amended
by Republic Act No. 8249, in support of its argument that the civil action was dependent upon
the criminal action, thus, was extinguished upon the death of the accused. The law provides that:

18
Any provision of law or the Rules of Court to the contrary notwithstanding, the criminal action
and the corresponding civil action for the recovery of civil liability arising from the offense
charged shall at all times be simultaneously instituted with, and jointly determined in the same
proceeding by, the Sandiganbayan, the filing of the criminal action being deemed to necessarily
carry with it the filing of the civil action, and no right to reserve the filing of such action shall be
recognized. (Emphasis ours)

We agree with the prosecution.

Death of Mayor Comendador during the pendency of the case could have extinguished the civil
liability if the same arose directly from the crime committed. However, in this case, the civil
liability is based on another source of obligation, the law on human relations.49 The pertinent
articles follow:

Art. 31 of the Civil Code states:

When the civil action is based on an obligation not arising from the act or omission
complained of as a felony, such civil action may proceed independently of the criminal
proceedings and regardless of the result of the latter.

And, Art. 32(6) states:

Any public officer or employee, or any private individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or impairs any of the following rights and liberties of
another person shall be liable to the latter for damages:

(6) The right against deprivation of property without due process of law;

xxxx

In any of the cases referred to in this article, whether or not the defendant's act or omission
constitutes a criminal offense, the aggrieved party has a right to commence an entirely separate
and distinct civil action for damages, and for other relief. Such civil action shall proceed
independently of any criminal prosecution (if the latter be instituted), and may be proved by a
preponderance of evidence.

As held in Aberca v. Ver:

It is obvious that the purpose of the above codal provision [Art. 32 of the New Civil Code] is to
provide a sanction to the deeply cherished rights and freedoms enshrined in the Constitution. Its
message is clear; no man may seek to violate those sacred rights with impunity. x x x.50

Indeed, the basic facts of this case point squarely to the applicability of the law on human
relations. First, the complaint for civil liability was filed way AHEAD of the information on the
Anti-Graft Law. And, the complaint for damages specifically invoked defendant Mayor
Comendador’s violation of plaintiff’s right to due process. Thus:

19
xxxx

In causing or doing the forcible demolition of the store in question, the individual natural
defendants did not only act with grave abuse of authority but usurped a power which belongs to
our courts of justice; such actuations were done with malice or in bad faith and constitute an
invasion of the property rights of plaintiff(s) without due process of law.

xxxx

The Court is in one with the prosecution that there was a violation of the right to private property
of the Spouses Bombasi. The accused public officials should have accorded the spouses the due
process of law guaranteed by the Constitution and New Civil Code. The Sangguniang Bayan
Resolutions as asserted by the defense will not, as already shown, justify demolition of the store
without court order. This Court in a number of decisions51 held that even if there is already a writ
of execution, there must still be a need for a special order for the purpose of demolition issued by
the court before the officer in charge can destroy, demolish or remove improvements over the
contested property.52 The pertinent provisions are the following:

Before the removal of an improvement must take place, there must be a special order, hearing
and reasonable notice to remove. Section 10(d), Rule 39 of the Rules of Court provides:

(d) Removal of improvements on property subject of execution. – When the property subject of
execution contains improvements constructed or planted by the judgment obligor or his
agent, the officer shall not destroy, demolish or remove said improvements except upon special
order of the court, issued upon motion of the judgment obligee after due hearing and after the
former has failed to remove the same within a reasonable time fixed by the court.

The above-stated rule is clear and needs no interpretation. If demolition is necessary, there must
be a hearing on the motion filed and with due notices to the parties for the issuance of a special
order of demolition.53

This special need for a court order even if an ejectment case has successfully been litigated,
underscores the independent basis for civil liability, in this case, where no case was even filed by
the municipality.

The requirement of a special order of demolition is based on the rudiments of justice and fair
play. It frowns upon arbitrariness and oppressive conduct in the execution of an otherwise
legitimate act. It is an amplification of the provision of the Civil Code 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.54

Notably, the fact that a separate civil action precisely based on due process violations was filed
even ahead of the criminal case, is complemented by the fact that the deceased plaintiff
Comendador was substituted by his widow, herein petitioner Victoria who specified in her
petition that she has "substituted him as petitioner in the above captioned case." Section 1, Rule
III of the 1985 Rules in Criminal Procedure mentioned in Bayotas is, therefore, not applicable.

20
Truly, the Sandiganbayan was correct when it maintained the separate docketing of the civil and
criminal cases before it although their consolidation was erroneously based on Section 4 of
Presidential Decree No. 1606 which deals with civil liability "arising from the offense charged."

We must, however, correct the amount of damages awarded to the Spouses Bombasi.

To seek recovery of actual damages, it is necessary to prove the actual amount of loss with a
reasonable degree of certainty, premised upon competent proof and on the best evidence
obtainable.55 In this case, the Court finds that the only evidence presented to prove the actual
damages incurred was the itemized list of damaged and lost items56 prepared by Engineer
Cabrega, an engineer commissioned by the Spouses Bombasi to estimate the costs.

As held by this Court in Marikina Auto Line Transport Corporation v. People of the
Philippines,57

x x x [W]e agree with the contention of petitioners that respondents failed to prove that the
damages to the terrace caused by the incident amounted to ₱100,000.00. The only evidence
adduced by respondents to prove actual damages claimed by private respondent were the
summary computation of damage made by Engr. Jesus R. Regal, Jr. amounting to ₱171,088.46
and the receipt issued by the BB Construction and Steel Fabricator to private respondent for
₱35,000.00 representing cost for carpentry works, masonry, welding, and electrical works.
Respondents failed to present Regal to testify on his estimation. In its five-page decision, the trial
court awarded ₱150,000.00 as actual damages to private respondent but failed to state the factual
basis for such award. Indeed, the trial court merely declared in the decretal portion of its decision
that the "sum of ₱150,000.00 as reasonable compensation sustained by plaintiff for her damaged
apartment." The appellate court, for its part, failed to explain how it arrived at the amount of
₱100,000.00 in its three-page decision. Thus, the appellate court merely declared:

With respect to the civil liability of the appellants, they contend that there was no urgent
necessity to completely demolish the apartment in question considering the nature of the
damages sustained as a result of the accident. Consequently, appellants continue, the award of
₱150,000.00 as compensation sustained by the plaintiff-appellee for her damaged apartment is an
unconscionable amount.

Further, in one case,58 this Court held that the amount claimed by the respondent-claimant’s
witness as to the actual amount of damages "should be admitted with extreme caution
considering that, because it was a bare assertion, it should be supported by independent
evidence." The Court further said that whatever claim the respondent witness would allege must
be appreciated in consideration of his particular self-interest.59 There must still be a need for the
examination of the documentary evidence presented by the claimants to support its claim with
regard to the actual amount of damages.

The price quotation made by Engineer Cabrega presented as an exhibit60 partakes of the nature of
hearsay evidence considering that the person who issued them was not presented as a
witness.61 Any evidence, whether oral or documentary, is hearsay if its probative value is not
based on the personal knowledge of the witness but on the knowledge of another person who is

21
not on the witness stand. Hearsay evidence, whether objected to or not, has no probative value
unless the proponent can show that the evidence falls within the exceptions to the hearsay
evidence rule.62 Further, exhibits do not fall under any of the exceptions provided under Sections
37 to 47 of Rule 130 of the Rules of Court.

Though there is no sufficient evidence to award the actual damages claimed, this Court grants
temperate damages for ₱200,000.00 in view of the loss suffered by the Spouses Bombasi.
Temperate damages are awarded in accordance with Art. 2224 of the New Civil Code when the
court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of
the case, be proven with certainty. The amount of temperate or moderated damages is usually left
to the discretion of the courts but the same should be reasonable, bearing in mind that the
temperate damages should be more than nominal but less than compensatory.63 Without a doubt,
the Spouses Bombasi suffered some form of pecuniary loss in the impairment of their store.
Based on the record of the case,64the demolished store was housed on a two-story building
located at the market’s commercial area and its concrete walls remained strong and not affected
by the fire. However, due to the failure of the Spouses Bombasi to prove the exact amount of
damage in accordance with the Rules of Evidence,65 this court finds that ₱200,000.00 is the
amount just and reasonable under the circumstances.

WHEREFORE, the instant appeal is DENIED. Accordingly, the Decision of the

Sandiganbayan dated 28 April 2003 is hereby AFFIRMED WITH MODIFICATION. The Court
affirms the decision finding the accused Paulino S. Asilo, Jr. and Demetrio T. Comendador
guilty of violating Section 3(e) of Republic Act No. 3019. We declare the finality of the
dismissal of both the criminal and civil cases against Alberto S. Angeles as the same was not
appealed. In view of the death of Demetrio T. Comendador pending trial, his criminal liability is
extinguished; but his civil liability survives. The Municipality of Nagcarlan, Paulino Asilo and
Demetrio T. Comendador, as substituted by Victoria Bueta Vda. De Comendador, are hereby
declared solidarily liable to the Spouses Bombasi for temperate damages in the amount of
₱200,000.00 and moral damages in the amount of ₱100,000.00.

Costs against the petitioners-appellants.

SO ORDERED.

PELAYO VS. LAURON Case Digest

ARTURO PELAYO VS. MARCELO LAURON
12 Phil 453
January 12, 1909
 The plaintiff physician was called at the house of the defendant to assist their daughter
in law to give birth but died as a consequence. The defendant refuses to pay the plaintiff
because they argued that it is the obligation of the husband of their daughter-in-law.
FACTS: On November 23, 1906, Arturo Pelayo, a physician, filed a complaint against Marcelo
and Juana Abella. He alleged that on October 13, 1906 at night, Pelayo was called to the house
of the defendants to assist their daughter-in-law who was about to give birth to a child.
Unfortunately, the daughter-in-law died as a consequence of said childbirth. Thus, the

22
defendant refuses to pay. The defendants argue that their daughter-in-law lived with her
husband independently and in a separate house without any relation, that her stay there was
accidental and due to fortuitous event.

ISSUE: Whether or not the defendants should be held liable for the fees demanded by the
plaintiff upon rendering medical assistance to the defendants’ daughter-in-law.

RULING: No. The Court held that the rendering of medical assistance is one of the obligations
to which spouses are bound by mutual support, expressly determined by law and readily
demanded. Therefore, there was no obligation on the part of the in-laws but rather on the
part of the husband who is not a party.

Thus, decision affirmed

LUIS PICHEL vs. PRUDENCIO ALONZO

G.R. No. L-36902
January 30, 1982

Facts:

Prudencio Alonzo was awarded by the Government that parcel of land designated a s
Lot 21 of Subdivision Plan Psd -32465 of Balactasan, Lamitan,
B a s i l a n C i t y i n accordance with RA 477. The award was cancelled by the
Board of Liquidators on 27January 1965 on the ground that, previous thereto,
Alonzo was proved to have alienated the land to another, in violation of law. In
1972, Alonzo’s rights to the land were reinstated. On 14 August 1968,
Alonzo and his wife sold to Pichel through a “deed of sale” all the fruits
of the coconut trees which may be harvested in the land for the period,
from 15 September 1968 to 1 January 1976, in consideration of
P4,200.00. Itwas further stipulated that the vendor’s right, title, interest and
participation herein conveyed is of his own exclusive and absolute property,
free from any liens and encumbrances and he warrants to the Vendee good title
thereto and to defend the same against any and all claims of all persons
whomsoever. Even as of the date of sale, however, the land was still under
lease to one Ramon Sua, and it was the agreement that part of the
consideration of the sale, in the sum of P3,650.00, was to be paid by Pichel
directly to Ramon Sua so as to release the land from the clutches of the latter. Pending
said payment Alonzo refused to allow the Pichel to make any harvest. In
July1972, Pichel for the first time since the execution of the deed of sale in his
favor, caused the harvest of the fruit of the coconut trees in the land. Alonzo filed
an action for the annulment of a “Deed of Sale” before the CFI Basilan City. On 5
January 1973, the lower court rendered its decision holding that although the
agreement in question is denominated by the parties as a deed of sale of fruits of the
coconut trees found in the vendor’s land, it actually is, for all legal intents and purposes,
a contract of lease of the land itself; an encumbrance prohibited under RA 477. The

23
court thus held that the deed of sale is null and void, and ordered Alonzo to pay
back Pichel the consideration of the sale in the sum of P4,200 with interests
from the date of the filing of the complaint until paid, and Pichel to pay the
sum of P500.00 as attorney’s fees; with costs against Pichel. Hence, the
petition to review on certiorari was raised before the Supreme Court. The
Supreme Court set aside the judgment of the lower court and entered
another dismissing the complaint; without costs.

Issue: Is the contract of sale valid?

Held: Contract of sale valid, essential elements valid

The document in question expresses a valid contract of sale as it has the

essential elements of a contract of sale as defined under Article 1458 of the New Civil
Code. Article1458 provides that “by the contract of sale one of the
contracting parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay therefore a price certain in
money or its equivalent,” and that “a contract of sale maybe absolute or conditional.”
The subject matter of the contract of sale are the fruits of the coconut trees on
the land during the years from 15 September 1968 up to 1 January1976, which
subject matter is a determinate thing.
Things having potential existence may be the object of the contract of sale
Under Article 1461 of the New Civil Code, things having a potential existence may be
the object of the contract of sale. A valid sale may be made of a thing, which though
not yet actually in existence, is reasonably certain to come into
existence as the natural increment or usual incident of something already in
existence, and then belonging to the vendor, and the title will vest in the buyer
the moment the thing comes into existence. A man may sell property of which he is
potentially and not actually possessed.
Woodhouse vs. Halili [93 PHIL 527 # L-4811. July 31, 1953]
 Plaintiff entered into contract with defendant for distribution of Mission softdrink s
and they had a contract that the plaintiff should obtain exclusive franchise but the
truth is that he only get a temporary one.

Facts: The Plaintiff entered into an agreement with the defendant for the
establishment of a partnership for bottling and distribution of Mission soft drinks.
Before the partnership was actually established the defendant required the plaintiff
to secure an exclusive franchise for the said venture. In behalf of the said
partnership and upon obtaining the said exclusive franchise the defendant stipulated
to pay the plaintiff 30% of the profits. The plaintiff sought to obtain the said
exclusive franchise but was only given a temporary one, subject only to 30 days.
The parties then proceeded with the signing of the agreement. The partnership was

24
still not initiated, only the agreement to work with each other, with the plaintiff as
manager and the defendant as financer, was established.

Together the two parties went to the US to formally sign the contractof franchise
with Mission Dry Corporation. The defendant then found out about the temporary
franchise right given to the plaintiff, different from the exclusive franchise rights they
stipulated in their contract.

When the operations of the business began he was paid P 2,000 and was allowed
the use of a car. But in the next month, the pay was decreased to P 1,000 and the
car was withdrawn from him.

The plaintiff demanded the execution of the partnership, but the defendant excused
himself, saying that there was no hurry to do so. The Court of First Instance ordered
the defendant to render an accounting of the profits and to pay the plaintiff 15% of
such amount. It also held that execution of the contract of partnership cannot be
enforced upon the defendant and that fraud as alleged by the defendant was also
not proved. Hence the present action.

Issues:

(1) Whether the representation of the plaintiff in saying that he had exclusive
franchise rights rather than the actual temporary right he possessed invalidated
the contract

(2) Whether the court may compel the defendant to execute thecontract of
partnership between the parties

(3) What will be the amount of damages to be paid to the plaintiff?

25
Held: The Decision of the Court of First Instance is affirmed with modification. YES

Fraud was undoubtedly employed by the plaintiff to secure the consent of the
defendant to enter into the contract with him by representing himself as
holder of exclusive franchise rights when in fact he only holds a temporary
franchise right good for 30 days. The fraud employed was not such as to
render the contract null and void but only such as to hold the plaintiff liable
for damages. Such fraud is merely incidental (dolo incidental) and not
the causal fraud (dolocausante) that is detrimental to a contract. It does not
invalidate thecontract since fraud was only employed to secure the 30%
stipulated share from the partnership.

The parties cannot be compelled to enter into a contract of partnership. The law
recognizes the liberty of an individual to do or not to do an act. The action falls
within Acto Personalisimo (a very personal act) which courts may not compel
compliance.

The 15% that the Trial court ordered the defendant to pay the plaintiff is deemed to
be the appropriate and reasonable. Such amount was the spontaneous reaction of
the defendant upon knowledge of the misrepresentation of the plaintiff and amounts
to the virtual modification of their contract.

26
NARCISO GUTIERREZ, plaintiff-appellee,
vs.
BONIFACIO GUTIERREZ, MARIA V. DE GUTIERREZ, MANUEL GUTIERREZ,
ABELARDO VELASCO, and SATURNINO CORTEZ, defendants-appellants.

MALCOLM, J.:

This is an action brought by the plaintiff in the Court of First Instance of Manila against
the five defendants, to recover damages in the amount of P10,000, for physical injuries
suffered as a result of an automobile accident. On judgment being rendered as prayed
for by the plaintiff, both sets of defendants appealed.

On February 2, 1930, a passenger truck and an automobile of private ownership

collided while attempting to pass each other on the Talon bridge on the Manila South
Road in the municipality of Las Piñas, Province of Rizal. The truck was driven by the
chauffeur Abelardo Velasco, and was owned by Saturnino Cortez. The automobile was
being operated by Bonifacio Gutierrez, a lad 18 years of age, and was owned by
Bonifacio's father and mother, Mr. and Mrs. Manuel Gutierrez. At the time of the
collision, the father was not in the car, but the mother, together will several other
members of the Gutierrez family, seven in all, were accommodated therein. A
passenger in the autobus, by the name of Narciso Gutierrez, was en route from San
Pablo, Laguna, to Manila. The collision between the bus and the automobile resulted in
Narciso Gutierrez suffering a fracture right leg which required medical attendance for a
considerable period of time, and which even at the date of the trial appears not to have
healed properly.

It is conceded that the collision was caused by negligence pure and simple. The
difference between the parties is that, while the plaintiff blames both sets of defendants,
the owner of the passenger truck blames the automobile, and the owner of the
automobile, in turn, blames the truck. We have given close attention to these highly
debatable points, and having done so, a majority of the court are of the opinion that the
findings of the trial judge on all controversial questions of fact find sufficient support in
the record, and so should be maintained. With this general statement set down, we turn
to consider the respective legal obligations of the defendants.

In amplification of so much of the above pronouncement as concerns the Gutierrez

family, it may be explained that the youth Bonifacio was in incompetent chauffeur, that
he was driving at an excessive rate of speed, and that, on approaching the bridge and
the truck, he lost his head and so contributed by his negligence to the accident. The
guaranty given by the father at the time the son was granted a license to operate
motor vehicles made the father responsible for the acts of his son. Based on
these facts, pursuant to the provisions of article 1903 of the Civil Code, the father
alone and not the minor or the mother, would be liable for the damages caused by
the minor.

27
We are dealing with the civil law liability of parties for obligations which arise from fault
or negligence. At the same time, we believe that, as has been done in other cases, we
can take cognizance of the common law rule on the same subject. In the United States,
it is uniformly held that the head of a house, the owner of an automobile, who maintains
it for the general use of his family is liable for its negligent operation by one of his
children, whom he designates or permits to run it, where the car is occupied and being
used at the time of the injury for the pleasure of other members of the owner's family
than the child driving it. The theory of the law is that the running of the machine by a
child to carry other members of the family is within the scope of the owner's business,
so that he is liable for the negligence of the child because of the relationship of master
and servant. (Huddy On Automobiles, 6th ed., sec. 660; Missell vs. Hayes [1914], 91
Atl., 322.) The liability of Saturnino Cortez, the owner of the truck, and of his chauffeur
Abelardo Velasco rests on a different basis, namely, that of contract which, we think,
has been sufficiently demonstrated by the allegations of the complaint, not controverted,
and the evidence. The reason for this conclusion reaches to the findings of the trial
court concerning the position of the truck on the bridge, the speed in operating the
machine, and the lack of care employed by the chauffeur. While these facts are not as
clearly evidenced as are those which convict the other defendant, we nevertheless
hesitate to disregard the points emphasized by the trial judge. In its broader aspects,
the case is one of two drivers approaching a narrow bridge from opposite directions,
with neither being willing to slow up and give the right of way to the other, with the
inevitable result of a collision and an accident.

The defendants Velasco and Cortez further contend that there existed contributory
negligence on the part of the plaintiff, consisting principally of his keeping his foot
outside the truck, which occasioned his injury. In this connection, it is sufficient to state
that, aside from the fact that the defense of contributory negligence was not pleaded,
the evidence bearing out this theory of the case is contradictory in the extreme and
leads us far afield into speculative matters.

The last subject for consideration relates to the amount of the award. The appellee
suggests that the amount could justly be raised to P16,517, but naturally is not serious
in asking for this sum, since no appeal was taken by him from the judgment. The other
parties unite in challenging the award of P10,000, as excessive. All facts considered,
including actual expenditures and damages for the injury to the leg of the plaintiff, which
may cause him permanent lameness, in connection with other adjudications of this
court, lead us to conclude that a total sum for the plaintiff of P5,000 would be fair and
reasonable. The difficulty in approximating the damages by monetary compensation is
well elucidated by the divergence of opinion among the members of the court, three of
whom have inclined to the view that P3,000 would be amply sufficient, while a fourth
member has argued that P7,500 would be none too much.

In consonance with the foregoing rulings, the judgment appealed from will be modified,
and the plaintiff will have judgment in his favor against the defendants Manuel
Gutierrez, Abelardo Velasco, and Saturnino Cortez, jointly and severally, for the sum of
P5,000, and the costs of both instances.

28
Avanceña, C.J., Johnson, Street, Villamor, Ostrand, Romualdez, and Imperial,
JJ., concur.

VILLA-REAL, J.:

Elcano vs Hill
 The defendant caused the death of Elcano’s son and he was acquitted for “lack of
intent coupled with mistake.” Elcano filed a case to recover damages on Hill’s dad
but it argued that the civil action is barred by his son’s acquittal in the criminal case;
and that if ever, his civil liability as a parent has been extinguished by the fact that
his son is already an emancipated minor by reason of his marriage.
FACTS: Reginald Hill, a minor, caused the death of Agapito (son of Elcano). Elcano filed a
criminal case against Reginald but Reginald was acquitted for “lack of intent coupled with
mistake.” Elcano then filed a civil action against Reginald and his dad (Marvin Hill) for
damages based on Article 2180 of the Civil Code. Hill argued that the civil action is barred
by his son’s acquittal in the criminal case; and that if ever, his civil liability as a parent has
been extinguished by the fact that his son is already an emancipated minor by reason of his
marriage.
ISSUE: Whether or not Marvin Hill may be held civilly liable under Article 2180.
HELD: Yes. The acquittal of Reginald in the criminal case does not bar the filing of a
separate civil action. A separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that the
offended party is not allowed, if accused is actually charged also criminally, to recover
damages on both scores, and would be entitled in such eventuality only to the bigger award
of the two, assuming the awards made in the two cases vary. In other words, the extinction
of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil
liability founded on Article 100 of the Revised Penal Code, whereas the civil liability
for the same act considered as a quasi-delict only and not as a crime is not
extinguished even by a declaration in the criminal case that the criminal act charged
has not happened or has not been committed by the accused. Briefly stated, culpa
aquiliana includes voluntary and negligent acts which may be punishable by law.
While it is true that parental authority is terminated upon emancipation of the child (Article
327, Civil Code), and under Article 397, emancipation takes place “by the marriage of the
minor child”, it is, however, also clear that pursuant to Article 399, emancipation by marriage
of the minor is not really full or absolute. Thus “Emancipation by marriage or by
voluntary concession shall terminate parental authority over the child’s person. It
shall enable the minor to administer his property as though he were of age, but he
cannot borrow money or alienate or encumber real property without the consent of
his father or mother, or guardian. He can sue and be sued in court only with the
assistance of his father, mother or guardian.” Therefore, Article 2180 is applicable to
Marvin Hill – the SC however ruled since at the time of the decision, Reginald is
already of age, Marvin’s liability should be subsidiary only – as a matter of equity.

29
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION v. CA

338 Phil. 1074

BELLOSILLO, J.:
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (formerly
Construction Development Corporation of the Philippines) filed on 18
March 1985 an action for a sum of money with damages against Ronaldo L.
Calupitan and Stronghold Insurance Co., Inc., before the Regional Trial
Court of Pasig.

On 4 January 1991 judgment was rendered ordering Calupitan and his surety,
respondent Stronghold, to pay petitioner jointly and severally (a) P317,500.00
representing the downpayment pursuant to the Subcontract Agreement of 23 December
1982; (b) P500,000.00 as liquidated damages; and, (c) P50,000.00 as attorney's fees
and expenses of litigation, all the foregoing amounts to earn interest at twelve percent
(12%) per annum from the filing of the case until fully paid. As to the cross claim,
Calupitan was ordered to pay Stronghold any and all amounts paid by the latter to
petitioner by reason of the judgment as well as P50,000.00 for attorney's fees and
litigation expenses, said amounts likewise to earn twelve percent (12%) interest per
annum from the date of payment by Stronghold to petitioner until fully paid.[1]

On 4 February 1991 Stronghold filed a notice of appeal, approved by the

trial court the following day, 5 February 1991, with an order to elevate the
records to the Court of Appeals.

On 17 June 1994 petitioner moved for the dismissal of the appeal on the
ground that despite the lapse of more than three (3) years respondent
Stronghold had not taken steps to prosecute its appeal. Petitioner relied
heavily on our rulings in Estella v. Court of Appeals[2]that gross inaction for
more than one (1) year amounts to failure to prosecute, and in Fagtanac v.
Court of Appeals[3] that it is the duty of the appellant to prosecute his appeal
with reasonable diligence.

Stronghold opposed the motion contending that it had not yet received
notices from respondent court to pay the docket fee and other charges and
thereafter to file its brief. It claimed good faith in waiting for said notices.

On 15 August 1994 respondent court denied the motion on the rationalization that -

x x x x the so-called failure to prosecute is not due to the fault of appellant considering
that the omission to transmit the records of the case to this Court is not the
responsibility of appellant. Rather, it is the duty of the Branch Clerk of Court (Sec. 1,
Rule 4 of the Internal Rules of this Court) to elevate the entire record from approval of
the notice of appeal.

30
Thus, respondent court directed the Branch Clerk of Court to transmit the entire records
of the case within five (5) days from receipt of its resolution.[4] On 4 November 1994 it
denied reconsideration.[5]

Petitioner now challenges the Resolutions of 15 August 1994 and 4 November 1994
contending that they were issued without or in excess of jurisdiction and/or with grave
abuse of discretion. It stresses that the appeal should have been dismissed by
respondent court based on the same cases it previously invoked.

The arguments of petitioner are well taken. It strains credulity that respondent court
should still look the other way. In relying solely on Sec. 1, Rule 4, of its Internal Rules,
respondent court ignored settled jurisprudence timely brought to its attention. Our
rulings take precedence over the Internal Rules of respondent appellate court.

In Arcega v. Court of Appeals[6] the petitioners disputed the dismissal of their appeal
based practically on the same grounds invoked in the present case. Therein they
asserted that they had not yet been notified that the records of the case were already
with the appellate court and that they had to pay the required docket and other fees.
Furthermore, they claimed that the elevation of the records of the case was beyond their
means and control.

But we were not impressed -

x x x x while it is the duty of the clerk of the lower court to transmit the
records of an appealed case to the appellate court, it is also the duty of the
appellant to make the clerk of court act, and the failure of the clerk to
perform his legal duty is no justification for the appellant's failure to
perform his, and he cannot justify his failure by saying that the fault was
that of the clerk of the lower court (underscoring supplied).[7]
We also quoted therein the disquisition in the earlier case of Fagtanac -

x x x x A rule long familiar to practitioners in this jurisdiction is that it is the duty of the
appellant to prosecute his appeal with reasonable diligence. He cannot simply fold his
arms and say that it is the duty of the Clerk of Court of First Instance under the
provisions of Section 11, Rule 41 of the Rules of Court, to transmit the record on appeal
to the appellate court. It is appellant's duty to make the Clerk act and, if necessary,
procure a court order to compel him to act. He cannot idly sit by and wait till this is
done. He cannot afterwards wash his hands and say that delay in the transmittal of the
record on appeal was not his fault. For, indeed, this duty imposed upon him was
precisely to spur on the slothful (underscoring supplied).[8]
The Court was impelled in Fagtanac to make a policy statement that failure to prosecute
will not be countenanced on the consideration that delays in litigation have always been
a bane in our judicial system and there is a growing tendency of defeated suitors and
their lawyers to disregard their duties under the Rules of Court in the hope that they can
stall the final day of reckoning.

31
Since it appeared that the petitioners in Arcega did nothing to effect or facilitate the
transmittal of the records to the appellate court for almost two (2) years from the order
to elevate the records, we sustained the dismissal of their appeal.

Estella v. Court of Appeals[9] dwells on the same indolence of an appellant -

We cannot subscribe to petitioners' gratuitous statement that "as the rule now exists, the
appellant is justified if he merely 'folds his hands' after the trial judge has ordered that
the records of the case be transmitted to the appellate court."

Conceding to the point that it is the clerk of court who is primarily responsible for seeing
to it that the records of appealed cases are properly sent to the appellate court without
delay (and having failed to do so subjects him to administrative liability), it behooves the
litigants to be more vigilant of their rights. They should take it upon themselves to call
the attention of the trial court as to any delay in action over their cases.

The rule that it is the duty of the appellant to prosecute his appeal with
reasonable diligence is still a sound rule. He cannot simply "fold his hands"
and say that it is the duty of the clerk of court to have his case promptly
submitted to the appellate court for the disposition of his appeal.

This absence of an awareness or regard on the part of the defeated litigant to personally
see to it that the needed records are forthwith sent to the appellate court is one major
cause of delays in litigations x x x x (underscoring supplied).[10]

Likewise, we sustained therein the dismissal of the appeal for failure to prosecute
covering a period of only one (1) year, one (1) month and twenty-two (22) days, as
compared to Stronghold's appeal which has remained dormant for three (3) years and
four (4) months. With more reason therefore that the appeal in the present case should
have been dismissed.

Rule 4 of the Revised Internal Rules of the Court of Appeals outlines the procedure in
appealed civil cases. As aforementioned, Sec. 1 imposes the duty on the Clerk of the
Regional Trial Court to transmit to the Court of Appeals the entire original records and
other documents. The Civil Cases Section of its Judicial Records Division, upon receipt
of the records, is then mandated under Sec. 2 to immediately, inter alia, issue the proper
notice to the appellant to pay the docketing and other legal fees. Therefore, rather than
having waited for the receipt of the notices to pay the docket fee and other charges and
thereafter to file its brief, Stronghold should have ascertained whether the records of the
case had already been transmitted to respondent court; otherwise, it should have caused
the elevation thereof. We take a dim view of its complacent attitude. Ex nihilo nihil fit. [11]

It is manifest that respondent court gravely abused its discretion in denying petitioner's

32
motion to dismiss the appeal of respondent Stronghold and, corollarily, in denying
reconsideration thereof.

WHEREFORE, the petition is GRANTED. The Resolutions of respondent Court of

Appeals of 15 August 1994 denying petitioner's motion to dismiss the appeal and of 4
November 1994 denying reconsideration thereof are SET ASIDE. Respondent court is
directed to DISMISS the appeal of respondent Stronghold Insurance Co., Inc., for failure
to prosecute for an unreasonable length of time.
SO ORDERED.

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROGELIO BAYOTAS

y CORDOVA, accused-appellant
G.R. No. 102207. September 2, 1994

FACTS:

Rogelio Bayotas, accused and charged with Rape, died on February 4, 1992
due to cardio respiratory arrest. The Solicitor General then submitted a comment
stating that the death of the accused does not excuse him from his civil liability
(supported by the Supreme Court’s decision in People vs Sendaydiego). On the other
hand, the counsel of the accused claimed that in the Supreme Court’s decision in
People vs Castillo, civil liability is extinguished if accused should die before
the final judgement is rendered.

ISSUE:

Whether or not the death of the accused pending appeal of his conviction extinguish his
civil liability.

RULING:

The Court decided on this case through stating the cases of Castillo and Sendaydiego. In
the Castillo case, the Court said that civil liability is extinguished only when death of the
accused occurred before the final judgement. Judge Kapunan further stated that civil
liability is extinguished because there will be “no party defendant” in the
case. There will be no civil liability if criminal liability does not exist.
Further, the Court stated “it is, thus, evident that… the rule established was that the
survival of the civil liability depends on whether the same can be predicated on the
sources of obligations other than delict.

In the Sendaydiego case, the Court issued Resolution of July 8, 1977 where it states that
civil liability will only survive if death came after the final judgement of the CFI of
Pangasinan. However, Article 30 of the Civil Code could not possibly lend support to the
ruling in Sendaydiego. Civil liability ex delicto is extinguished by the death of the
accused while his conviction is on appeal. The Court also gave a summary on which
cases should civil liability be extinguished, to wit:

33
Death of the accused pending appeal of his conviction extinguishes
his criminal liability as well as the civil liability based solely thereon.
Therefore, Bayotas’s death extinguished his criminal and civil liability
based solely on the act complained of.

MANLICLIC v. CALAUNAN Jan. 25, 2007 | CHICO-NAZARIO, J.| Culpa Aquiliana v. Crime
PETITIONERS : MAURICIO MANLICLIC, PHILIPPINE RABBIT BUS LINES, INC.
RESPONDENTS : MODESTO CALAUNAN
SUMMARY: Bus hit a jeep. Driver of bus was exonerated from criminal liability as he was not
found to have been negligent (under the RPC). Bus owner seeks to exonerate himself from
liability. SC ruled otherwise, and found the bus driver negligent (for purposes of q uasi-delict)
and the owner liable as employer for failure to exercise due diligence as good father of a fam.
DOCTRINE : See Held #s 4 and 5 (6 din pala)
FACTS:
1. At around 6-7am, July 12, 1988, Calaunan with Marcelo Mendoza were Manila-bound from
Pangasinan aboard the former’s owner -type jeep. The bus, owned by PRBLI and driven by
Manliclic was also Manila-bound from Tarlac. The vehicles collided along NLEX (Plaridel,
Bulacan), and the front right side of the bus hit the rear left side of the jeep, which caused the
latter to fall into a ditch with water.
2. Calaunan suffered minor injuries and was brought first to the Manila Central University
Hospital in Caloocan by Buan, the conductor of the bus. He was later transferred to the
Veterans Memorial Medical Center. Mendoza was unhurt.
3. Manliclic was charged Reckless Imprudence resulting in Damage to Property with Physical
Injuries in a crim case before the RTC of Malolos. A civil case for damages was subsequently
filed by Calaunan against the petitioners before the RTC of Dagupan.
4. Respondent’s counsel, in the civil case prayed that the stenographic notes of the crim case
be received in evidence in the civil case as the witnesses whose testimonies were used therein
would not be available to testify in the civil case. (Witnesses Respondent and Ramos left the
country, while Mendoza allegedly went missing while looking for a job in his hometown).
5. Parties differ only in the manner by which the collision took place. Petitioner: that while
overtaking the jeep, the bus hit the jeep. This was corroborated by Ramos (who saw what
happened while aboard another jeep) and Mendoza. Petitioners maintain, however, that while it
was in the process of overtaking the jeep, the said jeep swerved to the left in an attempt to
overtake another jeep in front of it. Petitioner company further maintains that it observed
the diligence of a good father of a family in the selection of their employees (Manliclic).
6. TC ruled in favour of Calaunan and ordered the petitioners to pay actual, moral, and
exemplary damages, as well as attorney’s fees.
ISSUE: Who is liable for the collision? PRBLI is soldarily liable for the damages caused by
Manliclic
HELD:
1. (As to propriety of admitting the evidence used in the crim case) The Court acknowledged
that the responded failed to comply with the requisites in Sec. 47, Rule 130, in order that the
testimonies be admitted as exceptions to the hearsay rule. However, the Court noted that the
petitioners also failed to object to the admissibility of the said testimonies, and are deemed to
have waived their right to object to such admissibility. Hence, such testimonies were admitted
in evidence.

34
2. (As to which facts should govern) The Court acknowledged that the case was based on
quasi-delict. Manliclic was sued for reckless imprudence, while PRBLI was sued for failing to
exercise due diligence of a good father of a family in selecting and supervising its employees.
The Court also noted that Manliclic was exonerated by the CA, which held that Manliclic was
not negligent, as the swerving of the jeep in front of him was beyond his control (CA used facts
in Fact#5).
3. The Court then held that Manliclic, being exonerated for non-negligence, could not be held
liable for reckless imprudence under the RPC.
4. A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code with a
substantivity all its own, and individuality that is entirely apart and independent from a delict or
crime – a distinction exists between the civil liability arising from a crime and the
responsibility for quasi-delicts or culpa extra-contractual . The same negligence causing
damages may produce civil liability arising from a crime under the Penal Code, or create an
action for quasi-delicts or culpa extra-contractual under the Civil Code . It is now settled that
acquittal of the accused, even if based on a finding that he is not guilty, does not carry
with it the extinction of the civil liability based on quasi delict .
5. In other words, if an accused is acquitted based on reasonable doubt on his guilt, his civil
liability arising from the crime may be proved by preponderance of evidence only. However, if
an accused is acquitted on the basis that he was not the author of the act or omission
complained of (or that there is declaration in a final judgment that the fact from which the civil
might arise did not exist), said acquittal closes the door to civil liability based on the crime or
ex delicto . In this second instance, there being no crime or delict to speak of, civil liability
based thereon or ex delicto is not possible . In this case, a civil action, if any, may be instituted
on grounds other than the delict complained of.
6. As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be
extinguished by an acquittal, whether it be on ground of reasonable doubt or that accused was
not the author of the act or omission complained of (or that there is declaration in a final
judgment that the fact from which the civil liability might arise did not exist). The responsibility
arising from fault or negligence in a quasi-delict is entirely separate and distinct from
the civil liability arising from negligence under the Penal Code. An acquittal or conviction in
the criminal case is entirely irrelevant in the civil case based on quasi -delict or culpa aquiliana.
7. The Court adhered to the trial’s court version of the facts and held that Manliclic was
negligent. Further, PRBLI, as the employer, was held to be solidarily liable as it failed to
submit concrete proof or compliance to show that it had exercised the due diligence of a
good father of a family.

SPS. GUANIO VS. MAKATI SHANGRI-LA HOTEL

G.R. No. 190601 February 7, 2011

* Petitioner spouses booked a wedding reception on the respondent

hotel. When the actual reception took place, they complained of delays
in the service of the dinner and certain items were not available at the
menu and the rude attitude of the waiters. Petitioners filed a complaint
for breach of contract and damages. The respondent contended that the
undue delay is due to the unexpected increase in numbers of guests.

35
Facts: Petitioner spouses, Luigi M. Guanio and Anna Hernandez-Guanio, booked respondent
Makati Shangre-La Hotel for their wedding reception. A week before their wedding reception,
the hotel scheduled a food tasting. Eventually, the parties agreed to a package where the final
price was P1,150.00 per person. According to the complainants, when the actual reception took
place, ” the respondent’s representatives did not show up despite their assurance that they would;
their guests complained of the delay in the service of the dinner; certain items listed in the
published menu were unavailable; the hotel’s waiters were rude and unapologetic when
confronted about the delay; and despite Alvarez’s promise that there would be no charge for the
extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for
the three-hour extension of the event up to 4:00 A.M. the next day. They further claim that they
brought wine and liquor in accordance with their open bar arrangement, but these were not
served to the guests who were forced to pay for their drinks. They sent a letter-complaint to hotel
and received an apologetic reply from the hotel’s Executive Assistant Manager in charge of Food
and Beverage. They nevertheless filed a complaint for breach of contract and damages before the
Regional Trial Court (RTC) of Makati City. Answering, the hotel said that complainants
requested a combination of king prawns and salmon, hence, the price was increased to P1,200.00
per person, but discounted at P1,150.00; that contrary to their claim, the hotel representatives
were present during the event, albeit they were not permanently stationed thereat as there were
three other hotel functions; that while there was a delay in the service of the meals, the same was
occasioned by the sudden increase of guests to 470 from the guaranteed expected minimum
number of guests of 350 to a maximum of 380, as stated in the Banquet Event Order (BEO);2
and the Banquet Service Director in fact relayed the delay in the service of the meals to
complainant’s father. The RTC, relying heavily on the letter of the hotel’s Executive Assistant
ruled in favour of the complainants and awarded damages in their favour. The Court of Appeals
reversed the decision, noting that the proximate cause of the complainant’s injury was the
unexpected increase in the number of their guests.

36
Issue: WON Makati Shangri-La Hotel may be held liable for damages.

Held: YES

The Supreme Court reversed the Court of Appeals decision, noting that in this case, the
obligation was based on a contract, hence, the concept of proximate cause has no
application. In absolving the hotel from damages, the Supreme Court noted that: “The appellate
court, and even the trial court, observed that petitioners were remiss in their obligation to
inform respondent of the change in the expected number of guests. The observation is
reflected in the records of the case. Petitioners’ failure to discharge such obligation thus excused,
as the above-quoted paragraph 4.5 of the parties’ contract provide, respondent from liability for
“any damage or inconvenience” occasioned thereby” Nevertheless, on grounds of equity, the
High Court awarded P50,000.00 in favour of the complainants and justified it by saying:

“The exculpatory clause notwithstanding, the Court notes that respondent could have
managed the “situation” better, it being held in high esteem in the hotel and service
industry. Given respondent’s vast experience, it is safe to presume that this is not its first
encounter with booked events exceeding the guaranteed cover. It is not audacious to expect
that certain measures have been placed in case this predicament crops up. That regardless of
these measures, respondent still received complaints as in the present case, does not amuse.

Respondent admitted that three hotel functions coincided with petitioners’ reception. To the
Court, the delay in service might have been avoided or minimized if respondent exercised
prescience in scheduling events. No less than quality service should be delivered especially in
events which possibility of repetition is close to nil. Petitioners are not expected to get married
twice in their lifetimes.”

37
What applies in the present case is Article 1170 of the Civil Code which reads:

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.

RCPI v. Verchez, et al. enlightens: In culpa contractual x x x the mere proof of the existence of
the contract and the failure of its compliance justify, prima facie, a corresponding right of
relief. The law, recognizing the obligatory force of contracts, will not permit a party to be
set free from liability for any kind of misperformance of the contractual undertaking or a
contravention of the tenor thereof. A breach upon the contract confers upon the injured
party a valid cause for recovering that which may have been lost or suffered.

The remedy serves to preserve the interests of the promissee that may include his “expectation
interest ,” which is his interest in having the benefit of his bargain by being put in as good a
position as he would have been in had the contract been performed, or his “reliance interest
,”which is his interest in being reimbursed for loss caused by reliance on the contract by being
put in as good a position as he would have been in had the contract not been made; or
his”restitution interest,” which is his interest in having restored to him any benefit that he has
conferred on the other party. Indeed, agreements can accomplish little, either for their makers or
for society, unless they are made the basis for action.

The effect of every infraction is to create a new duty, that is, to make RECOMPENSE to
the one who has been injured by the failure of another to observe his contractual obligation
unless he can show extenuating circumstances, like proof of his exercise of due diligence or
of the attendance of fortuitous event to excuse him from his ensuing liability.

EQUATORIAL REALTY V. MAYFAIR (November 21, 1996)

FACTS:

38
Petitioner Carmelo and Bauermann Inc. leased its parcel of land with 2-storey building to
respondent Mayfair Theater Inc.
They entered a contract which provides that if the LESSOR should desire to sell the leased
premises, the LESSEE shall be given 30-days exclusive option to purchase the same.

Carmelo informed Mayfair that it will sell the property to Equatorial. Mayfair made known its
interest to buy the property but only to the extent of the leased premises.
Notwithstanding Mayfair’s intention, Carmelo sold the property to Equatorial.

ISSUE:
WON the sale of the property to Equatorial is valid. NO.

HELD:
The sale of the property should be rescinded because Mayfair has the right of first refusal.
Both Equatorial and Carmelo are in bad faith because they knew of the stipulation in the
contract regarding the right of first refusal.

The stipulation is a not an option contract but a right of first refusal and as such the requirement
of a separate consideration for the option, has no applicability in the instant case. The
consideration is built in the reciprocal obligation of the parties.

In reciprocal contract, the obligation or promise of each party is the consideration for that
of the other. (Promise to lease in return of the right to first refusal)

With regard to the impossibility of performance, only Carmelo can be blamed for not including
the entire property in the right of first refusal. Court held that Mayfair may not have the option to
buy the property. Not only the leased area but the entire property.

39
General Milling Corporation vs. Spouses Ramos [GR No.
193723, July 20, 2011]
Post under case digests, Civil Law at Monday, January 25, 2016 Posted by Schizophrenic Mind

FACTS: General Milling Corporation (GMC) entered into a Growers Contract with spouses Librado and Remedios
Ramos (Spouses Ramos). Under the contract, GMC was to supply broiler chickens for the spouses to raise on their
land. To guarantee full compliance, the Growers Contract was accompanied by a Deed of Real Estate Mortgage over
a piece of real property and a surety bond. Spouses Ramos eventually were unable to settle their account with GMC.
The property was extrajudicially foreclosed and GMC was the highest bidder. Spouses Ramos questioned the
validity of the foreclosure proceedings. The CA found that GMC made no demand to spouses Ramos for the full
payment of their obligation. A perusal of the letters presented and offered as evidence by defendant-appellant GMC
did not “demand” but only request spouses Ramos to go to the office of GMC to “discuss” the settlement of their
account.

ISSUE: Whether or not GMC made sufficient demand to the spouses Ramos to fulfill their obligation

RULING: No. There are three requisites necessary for a finding of default. First, the obligation is demandable and
liquidated; second, the debtor delays performance; and third, the creditorjudicially or extrajudicially requires the
debtor's performance. Article 1169 of the Civil Code states that: those obligated to deliver or to do something incur
in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist, when the obligation or the
law expressly so declares. The contract in the instant case carries no such provision on demand not being necessary
for delay to exist. GMC should have first made.a demand on the spouses before proceeding to foreclose the real
estate mortgage.

PHILIPPINE CHARTER INSURANCE CORPORATION v. CENTRAL COLLEGES

OF THE PHILIPPINES and DYNAMIC PLANNERS AND CONSTRUCTION
CORPORATION G.R. Nos. 180631-33, February 22, 2012

 CCP contracted the services of DPCC to construct its five storey building. Phase
1 of the project was completed without issue but phase 2 encountered delays in
which 51% of the project was only completed which was way behind the
construction schedule. This prompted CCP to terminate the contract and file a case to
recover damages.
Topic: Delay
FACTS On May 16, 2000, Central Colleges of the Philippines (CCP) contracted the
services of Dynamic Planners and Construction Corporation (DPCC) to be its general
40
contractor for the construction of its five (5)-storey school building. As embodied in a
Contract Agreement, the construction of the entire building would be done in two phases.
DPCC posted three (3) bonds all issued by the Philippine Charter Insurance Corporation
(PCIC). The Phase 1 of the project was completed without issue. Thereafter, CCP paid
DPCC P14,880,000.00 or 12% of the agreed price of P124,000,000.00 with a check dated
March 14, 2002 as downpayment for the Phase 2 of the project. The Phase 2 of the project,
however, encountered numerous delays. When CCP audited DPCC on July 25, 2003,
only 47% of the work to be done was actually finished. Thus, in a letter dated October
29, 2003 addressed to DPCC and PCIC, CCP informed them of the breach in the contract
and its plan to claim on the construction bonds. On November 6, 2003, CCP notified
DPCC and PCIC that only 51% of the project was completed, which was way behind
the construction schedule, prompting it to declare the occurrence of default against
DPCC. It formally requested PCIC to remit the proceeds of the bonds. On November 14,
2003, DPCC wrote PCIC confirming the finding that Phase 2 was only 51% finished and, at
the same time, requesting for the extension of its performance and surety bonds because the
supposed revision of the plans would require more days. In a letter dated November 21,
2003, CCP notified PCIC that because of DPCC’s inability to complete the project on time,
it decided to terminate its contract with the latter and to continue the construction on its
own. Meanwhile, on December 5, 2003, PCIC informed DPCC that it had approved its
request for extension of the bonds. Eventually, negotiations to continue on with the
construction between CCP and DPCC reached a dead end. CCP hired another contractor to
work on the school site. On August 13, 2004, CCP sent a letter to PCIC of its final
demand for the payment of P13,924,351.47 as indicated in the bonds. On August 20,
2004, PCIC denied CCP’s claims against the three bonds. On October 28, 2004, CCP
filed a complaint with request for arbitration before the Construction Industry
Arbitration Commission (CIAC) against DPCC and PCIC. In their Answer, DPCC and
PCIC denied any liability and proffered that CCP unlawfully withheld the materials,
equipment, formworks and scaffoldings left at the premises amounting to
P4,232,264.12. On June 3, 2005, the CIAC rendered a decision in favor of CCP. All the
parties appealed the CIAC decision to the CA. On June 29, 2007, the CA modified CIAC’s
earlier decision. The CA found that DPCC was already in delay for managing to compl ete
only 51% of the construction work necessary to finish the Phase 2 of the project. It held that
due to DPCC’s inexcusable delay, CCP was legally within its rights to terminate the
contract with it. The CA, on appeal, however, deleted the award of cost of the materials,
equipment, formworks and scaffoldings allegedly left by DPCC at the work site for its
failure to prove the actual costs of said materials.
ISSUE Whether DPCC is in default
RULING Yes. Article 1169 of the New Civil Code provides: Art. 1169. Those obliged to
deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation. The civil law
concept of delay or default commences from the time the obligor demands, judicially or
extrajudicially, the fulfillment of the obligation from the obligee. In legal parlance, demand
is the assertion of a legal or procedural right. Hence, DPCC incurred delay from the time
CCP called its attention that it had breached the contract and extrajudicially demanded the
fulfillment of its commitment against the bonds. It is the obligor’s culpable delay, not

41
merely the time element, which gives the obligee the right to seek the performance of
the obligation. As such, CCP’s cause of action accrued from the time that DPCC became in
culpable delay as contemplated in the surety and performance bonds. Thus, DPCC became
in default on October 29, 2003 when CCP informed it in writing of the breach of the
contract agreement and demanded the fulfillment of its obligation against the bonds.
Consequently, the November 6, 2003 letter that CCP sent to PCIC properly complied with
the notice of claim requirement set forth in the said bonds. Upon notice of default of obligor
DPCC, PCIC’s liability, as surety, was already attached. A surety under Article 2047 of
the New Civil Code solidarily binds itself with the principal debtor to assure the
fulfillment of the obligation. Having acted as a surety, PCIC is duty bound to perform what
it has guaranteed on its surety and performance bonds, all of which are callable on demand,
occasioned by its principal’s default.

Barzaga vs. CA
 Petitioner went to the store of Angelito to inquire about the availability of materials to be
used in building his wife’s niche. They had an agreement of the delivery of materials but it
wasn’t delivered at the specified time and date. These events prompted the petitioner to file
damages due to the delay.
Facts: Ignacio Barzaga’s wife succumbed to a debilitating ailment and died on December 19,
1990. Forewarned, she expressed her wish to be buried before Christmas. After her death on
December 21, 1990 3pm, Ignacio Barzaga (Petitioner) went to the hardware store of Angelito
Alviar (Respondent) to inquire about the availability of certain materials to be used in building
his wife’s niche. Also asking if materials could be delivered at once, the Respondent’s employee
replied that if the store had pending deliveries that afternoon then all subsequent purchases made
would be delivered the following day.
Petitioner left that day and returned the following day on December 22, 1990, 7am. Petitioner
came to follow up his purchase of construction materials, stressing to the employees of the
hardware store that he would need the materials to be delivered to the cemetery (only a kilometer
away from the hardware store) by 8 am as he would have hired workers who would start
working at the site. Respondent’s employee agreed to deliver at the specified time, date and
place and with such assurance Barzaga purchased the materials and paid in full P 2,100.00.

However, the materials were not delivered on time. The petitioner went to the store several times
to ask for the delivery. Eventually, the Petitioner was forced to dismiss his hired workers since
his materials did not arrive. Petitioner determined to fulfill his wife’s request, purchased
materials from other stores. After his wife was buried, Petitioner sued the Respondent for
damages of delay. Respondent claims that delay happened because of a fortuitous event since the
truck tires were flat.

Issue: Was there a delay in the performance of the Respondent’s obligation?

Held: Yes. The Respondent was negligent and incurred delay in performing his obligations. The
Petitioner suffered as a consequence of the delay or contractual breach. There was a specific
time, date and place agreed upon the delivery of the materials. The said condition was agreed
upon by both the Petitioner and the Respondent.

42
There is a non performance of a reciprocal obligation since according to Article 1169, the
moment one of the parties fulfill his obligation, delay by the other begins. In this contract of
purchase and sale, the Petitioner had already accomplished his part which is the payment
of the price. It falls onto the Respondent now to immediately fulfill his obligation to deliver
the goods otherwise delay would attach. An award of moral damages is incumbent in this
case as the Petitioner has suffered gravely.

BATAL VS SAN PEDRO

 Spouses San Pedro contracted the service of Frank Batal to conduct a survey on
their land. They again contracted the service of Batal to determine the
boundaries of their lot for the construction of the fence. Batal placed markings
that served as a guide for the respondents in erecting concrete fence but it was
later on found out that their wall overlapped an adjoining lot. also discovered
that it was not Frank but his wife Erlinda Batal (Erlinda), who is a licensed
geodetic engineer.
FACTS: The spouses Luz San Pedro (Luz) and Kenichiro Tominaga (Kenichiro) are the
owners of a parcel of land, on which their house was erected, described as Lot 1509-C-3
with an area of 700 square meters situated in Barangay Malis, Guiguinto, Bulacan. Said
property was acquired by them from one Guillermo Narciso as evidenced by a Bilihan ng
Bahagi ng Lupa dated March 18, 1992.

The spouses Luz and Kenichiro then contracted the services of Frank Batal (Frank) who
represented himself as a surveyor to conduct a survey of their lot for the sum
of P6,500.00. As Luz and Kenichiro wanted to enclose their property, they again procured
the services of Frank for an additional fee of P1,500.00 in order to determine the exact
boundaries of the same by which they will base the construction of their perimeter fence.

Consequently, Frank placed concrete monuments marked P.S. on all corners of the lot which
were used as guides by Luz and Kenichiro in erecting a concrete fence measuring about
eight (8) feet in height and cost them P250,000.00 to build.

Sometime in 1996, a complaint was lodged against Luz and Kenichiro before the barangay
on the ground that the northern portion of their fence allegedly encroached upon a
designated right-of-way known as Lot 1509-D. Upon verification with another surveyor,
Luz and Kenichiro found that their wall indeed overlapped the adjoining lot. They also
discovered that it was not Frank but his wife Erlinda Batal (Erlinda), who is a licensed
geodetic engineer.

During their confrontations before the barangay, Frank admitted that he made a mistake and
offered to share in the expenses for the demolition and reconstruction of the questioned

43
portion of Luz and Kenichiros fence. He however failed to deliver on his word, thus the
filing of the instant suit.

In their defense, the defendants-spouses Frank and Erlinda Batal submitted that Frank never
represented himself to be a licensed geodetic engineer. It was Erlinda who supervised her
husbands work [and t]hat the house and lot of plaintiffs, Luz and Kenichiro, were already
fenced even before they were contracted to do a resurvey of the same and the laying out of
the concrete monuments. The spouses Frank and Erlinda also refuted the spouses Luzs and
Kenichiros allegation of negligence and averred that the subject complaint was instituted to
harass them. [3]
ISSUE: WoN the petitioners exercise the requisite diligence in carrying out their
contractual obligations.

HELD: NO. In the present case, it is clear that the petitioners, in carrying out
their contractual obligations , failed to exercise the requisite diligence in the
placement of the markings for the concrete perimeter fence that was later
constructed. The placement of the markings had been done solely by petitioner
Frank Batal who is not a geodetic engineer. It was later discovered that it was
not he but his wife, petitioner Er linda Batal, who is the licensed geodetic
engineer and who is, therefore, the one qualified to do the work. Petitioner
Frank Batals installation of the concrete cyclone monuments had been done
without the adequate supervision of his wife, Erlinda. As a result, the
placement of the monuments did not accurately reflect the dimensions of the
lot. The respondents, upon assurance given by petitioner Frank Batal that they
could proceed with the construction of the perimeter fence by rel ying on the
purported accur acy of the placement of the monuments, erected their fence
which turned out to encroach on an adjacent easement. Because of the
encroachment, the respondents had to demolish and reconstruct the fence
and, thus, suffered damages.

Being guilt y of a breach of their contract, petitioners are liable for

damages suffered by the respondents in accordance with Articles 1170 and
2201 of the Civil Code, [ 1 6 ] which state:

Art. 1170. Those who in the performance of their obligations

are guilt y of fraud, negligence, or delay and those who in an y
manner contravene the tenor thereof are liable for damages

Art. 2201. In contracts and quasi -contracts, the damages for

which the obligor who acted in good faith is liable shall be those
that are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have
reasonabl y foreseen at the time the obligat ion was constituted.

44
 In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be
reasonabl y attributed to the non -performance of the obligation.

Reyes Vs. Sisters Of Mercy

 Jorge Reyes is brought to Mercy Community Clinic after days of recurring chills. He was
found typhoid positive after Widal test. Dr. Blanes administered 500 mg of the antibiotic.
Subsequently, Reyes developed high fever and experienced vomiting and convuls ions, then,
death. The heirs of Reyes filed a complaint for damages due to medical malpractice and
negligence.

Facts:

 Jorge Reyes has been suffering from recurring fever with chills for around days.
 Home medication afforded him no relief so he went to Merc y Community Clinic. He was then
attended by Dr. Marlyn Rico.
 Since typhoid fever was common at that time, the Widal test was performed and he was found
positive for typhoid.
 Thereafter, Dr. Marlyn Rico indorse Jorge Reyes to Dr. Marvie Blanes.
 Suspecting that that Jorge had typhoid fever, Dr. Marvie Blanes ordered that Jorge be tested
for compatibility with chloromycetin, an antibiotic. Such test was conducted by Nurse
Pagente.
 As there was no adverse reaction, Dr. Blanes administered 500 mg of the antibio tic. Another
dose was given 3 hours later.
 Subsequently, Jorge Reyes developed high fever and experienced vomiting and convulsions.
He then turned blue due to deficiency in oxygen – cyanosis – and died. The cause of death was
stated to be “ventricular arrhythmia secondary to hyperpyrexia and typhoid fever.”
 The heirs of Reyes filed with the RTC a complaint for damages against Sisters of Mercy,
Sister Rose Palacio, Dr. Blanes, Dr. Rico and Mercy Community Clinic contending that
the death of Jorge was due to the wrongful administration of chloromycetin. (NOTE:
Petitioner’s action is for medical malpractice.)
 RTC ruled in favor of the respondents. The CA affirmed in toto the RTC decision. Hence, this
appeal.
 Petitioners contend that:
 Dr. Marlyn Rico hastily and erroneously relied upon the Widal test, diagnosed Jorge’s
illness as typhoid fever, and immediately prescribed the administration of the antibiotic
chloromycetin

45
  Dr. Marvie Blanes erred in ordering the administration of the second dose of 500
milligrams of chloromycetin barely 3 hours after the first was given.
 Testimony presented: That of Dr. Apolinar Vacalares, (Chief Pathologist of the Northern
Mindanao Training Hospital) who performed an autopsy on the body – Dr. Vacalares testified
that Reyes did not die of typhoid fever but of shock undetermined, which could be due to
allergic reaction or chloromycetin overdose.

Issue: WON there was medical malpractice. NO

Held:

Dr. Apolinar Vacalares is not a specialist of typhoid fever and he is thus not qualified to
prove that Dr. Marlyn Rico erred in her diagnosis.

While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be
so as he is not a specialist on infectious diseases like typhoid fever. Furthermore, although he may
have had extensive experience in performing autopsies, he admitted that he had yet to do one on
the body of a typhoid victim at the time he conducted the postmortem on Jorge Reyes. It is also
plain from his testimony that he has treated only about three cases of typhoid fever.

The two doctors presented by respondents clearly were experts on the subject

They vouched for the correctness of Dr. Marlyn Rico’s diagnosis. Dr. Peter Gotiong, a diplomate
whose specialization is infectious diseases and microbiology and an associate professor at the
Southwestern University College of Medicine and the Gullas College of Medic ine, testified that he
has already treated over a thousand cases of typhoid fever.

According to him, when a case of typhoid fever is suspected, the Widal test is normally used, and if
the 1:320 results of the Widal test on Jorge Reyes had been presented t o him along with the
patient’s history, his impression would also be that the patient was suffering from typhoid fever. As
to the treatment of the disease, he stated that chloromycetin was the drug of choice. He also
explained that despite the measures taken by respondent doctors and the intravenous
administration of two doses of chloromycetin, complications of the disease could not be discounted.

46
Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the
Philippine and American Board of Pathology, an examiner of the Philippine Board of Pathology, and
chief pathologist at the MetroCebu Community Hospital, Perpetual Succor Hospital, and the Andres
Soriano Jr. Memorial Medical Center.

He stated that, as a clinical pathologist, he recognized that the Widal test is used for typhoid
patients, although he did not encourage its use because a single test would only give a presumption
necessitating that the test be repeated, becoming more conclusive at the second and third weeks of
the disease.

He corroborated Dr. Gotiong’s testimony that the danger with typhoid fever is really the possible
complications which could develop like perforation, hemorrhage, as well as liver and cerebral
complications.

Dr. Rico was not negligent in administering the 2 doses of 500 g of chloromycetin

The chloromycetin was likewise a proper prescription is best established by medical

authority. Even if the deceased suffered from an anaphylactic shock, this, of itself, would not
yet establish the negligence of the appellee-physicians for all that the law requires of them is
that they perform the standard tests and perform standard procedures. The law cannot
require them to predict every possible reaction to all drugs administered.

The practice of medicine requires the highest degree of diligence

The practice of medicine is a profession engaged in only by qualified individuals. It is a right earned
through years of education, training, and by first obtaining a license from the state through
professional board examinations. Such license may, at any time and for cause, be revoked by the
government. In addition to state regulation, the conduct of doctors is also strictly governed by the
Hippocratic Oath, an ancient code of discipline and ethical rules which doctors have imposed upon
themselves in recognition and acceptance of their great responsibility to society. Given these
safeguards, there is no need to expressly require of doctors the observance of “extraordinary”
diligence.

47
As it is now, the practice of medicine is already conditioned upon the highest degree of diligence.
And, as we have already noted, the standard contemplated for doctors is simply the reasonable
average merit among ordinarily good physicians. That is reasonable diligence for doctors or, as the
Court of Appeals called it, the reasonable “skill and competence . . . that a physician in the same or
similar locality . . . should apply.”

There are thus four elements involved in medical negligence cases, namely: duty, breach,
injury, and proximate causation

Petitioner’s action is for medical malpractice. This is a particular form of negligence which consists
in the failure of a physician or surgeon to apply to his practice of medicine that degree of care and
skill which is ordinarily employed by the profession generally, under similar conditions, and in like
surrounding circumstances.

In order to successfully pursue such a claim, a patient must prove that the physician or surgeon
either failed to do something which a reasonably prudent physicia n or surgeon would have done, or
that he or she did something that a reasonably prudent physician or surgeon would not have done,
and that the failure or action caused injury to the patient.

The doctrine of Res Ipsa Loquitor is not applicable in this cas e. (t he principle that the
occurrence of an accident implies negligence)

Was there a physician-patient relationship between the respondent doctors and Jorge
Reyes? Yes.

Respondents were thus duty-bound to use at least the same level of care that any reasonably
competent doctor would use to treat a condition under the same circumstances. It is breach of this
duty which constitutes actionable malpractice.

As to this aspect of medical malpractice, the determination of the reasonable level of care and the
breach thereof, expert testimony is essential. Inasmuch as the causes of the injuries involved in
malpractice actions are determinable only in the light of scientific knowledge, it has been recognized
that expert testimony is usually necessary to support the conclusion as to causation.

48
The doctrine of res ipsa loquitor is not applicable in the case at bar

Though expert testimony is usually needed to prove malpractice, where common knowledge and
experience teach that the injury would not have occurred if due c are had been exercised, the
doctrine of res ipsa loquitur can be invoked to establish negligence.

Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician
negligent upon proper proof of injury to the patient, without the aid of expert testimony, where the
court from its fund of common knowledge can determine the proper standard of care. Where
common knowledge and experience teach that a resulting injury would not have occurred to the
patient if due care had been exercised, an inference of negligence may be drawn giving rise to an
application of the doctrine of res ipsa loquitur without medical evidence, which is ordinarily required
to show not only what occurred but how and why it occurred.

When the doctrine is appropriate, all that the patient must do is prove a nexus between the
particular act or omission complained of and the injury sustained while under the custody and
management of the defendant without need to produce expert medical testimony to establis h the
standard of care.

There is nothing unusual about the death of Jorge Reyes (absence of 1st requisite that the
accident was of a kind which does not ordinarily occur unless someone is negligent)

In this case, while it is true that the patient died jus t a few hours after professional medical
assistance was rendered, there is really nothing unusual or extraordinary about his death.

Prior to his admission, the patient already had recurring fevers and chills for five days unrelieved by
the analgesic, antipyretic, and antibiotics given him by his wife. This shows that he had been
suffering from a serious illness and professional medical help came too late for him.

It must be conceded that the doctrine of res ipsa loquitur can have no application in a sui t against a
physician or a surgeon which involves the merits of a diagnosis or of a scientific treatment. The

49
physician or surgeon is not required at his peril to explain why any particular diagnosis was not
correct, or why any particular scientific treatm ent did not produce the desired result.

FRANCISCO VS CHEMICAL

SUMMARY:

Since 1965, Francisco was the owner and manager of a Caltex station in Teresa, Rizal. Sometime
in March 1993, four persons, including Gregorio Bacsa (Bacsa), came to Franciscos Caltex
station and introduced themselves as employees of CBCI. Bacsa offered to sell to Francisco a
certain quantity of CBCIs diesel fuel.

50
After checking Bacsas identification card, Francisco agreed to purchase CBCIs diesel fuel.
Francisco imposed the following conditions for the purchase: (1) that Petron Corporation
(Petron) should deliver the diesel fuel to Francisco at his business address which should be
properly indicated in Petrons invoice; (2) that the delivery tank is sealed; and (3)
that Bacsashould issue a separate receipt to Francisco.

The deliveries started on 5 April 1993 and lasted for ten months, or up to 25 January
1994.5 There were 17 deliveries to Francisco and all his conditions were complied with.

In February 1996, CBCI sent a demand letter to Francisco regarding the diesel fuel delivered to
him but which had been paid for by CBCI.6 CBCI demanded that Francisco pay
CBCI P1,053,527 for the diesel fuel or CBCI would file a complaint against him in court.
Francisco rejected CBCIs demand.

On 16 April 1996, CBCI filed a complaint for sum of money and damages against Francisco and
other unnamed defendants.7 According to CBCI, Petron, on various dates, sold diesel fuel to
CBCI but these were delivered to and received by Francisco. Francisco then sold the diesel fuel
to third persons from whom he received payment. CBCI alleged that Francisco acquired
possession of the diesel fuel without authority from CBCI and deprived CBCI of the use of the
diesel fuel it had paid for. CBCI demanded payment from Francisco but he refused to pay. CBCI
argued that Francisco should have known that since only Petron, Shell and Caltex are authorized
to sell and distribute petroleum products in the Philippines, the diesel fuel came from
illegitimate, if not illegal or criminal, acts. CBCI asserted that Francisco violated Articles
19,8 20,9 21,10 and 2211 of the Civil Code and that he should be held liable. In the alternative,
CBCI claimed that Francisco, in receiving CBCIs diesel fuel, entered into an innominate contract
of do ut des (I give and you give) with CBCI for which Francisco is obligated to pay
CBCI P1,119,905, the value of the diesel fuel. CBCI also prayed for exemplary damages,
attorneys fees and other expenses of litigation.

HELD:

NO. Moreover, the owner of the goods who has been unlawfully deprived of it may
recover it even from a purchaser in good faith.35 Thus, the purchaser of property which has
been stolen from the owner has been held to acquire no title to it even though he purchased for
value and in good faith.

In this case, it is clear that Bacsa was not the owner of the diesel fuel. Francisco was aware
of this but he claimed that Bacsa was authorized by CBCI to sell the diesel fuel. However,
Franciscos claim that Bacsa was authorized is not supported by any evidence except his self-
serving testimony. First, Francisco did not even confirm with CBCI if it was indeed selling its
diesel fuel since it is not one of the oil companies known in the market to be selling petroleum

51
products. This fact alone should have put Francisco on guard. Second, it does not appear that
CBCI, by some direct and equivocal act, has clothed Bacsa with the indicia of ownership or
apparent authority to sell CBCIs diesel fuel. Francisco did not state if the identification card
presented by Bacsa indicated that he was CBCIs agent or a mere employee. Third, the receipt
issued by Bacsa was typewritten on a half sheet of plain bond paper. There was no letterhead or
any indication that it came from CBCI. We agree with the Court of Appeals that this was a
personal receipt issued by Bacsa and not an official receipt issued by CBCI. Consequently, CBCI
is not precluded by its conduct from denying Bacsas authority to sell. CBCI did not hold
out Bacsa or allow Bacsa to appear as the owner or one with apparent authority to dispose of the
diesel fuel.

Clearly, Bacsa cannot transfer title to Francisco as Bacsa was not the owner of the diesel
fuel nor was he authorized by CBCI to sell its diesel fuel. CBCI did not commit any act to
clothe Bacsa with apparent authority to sell the diesel fuel that would have misled Francisco.
Francisco, therefore, did not acquire any title over the diesel fuel. Since CBCI was unlawfully
deprived of its property, it may recover from Francisco, even if Francisco pleads good
faith.

52