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SUPREME COURT natural obligation that they discussed in their brief, this Court feels it urgent to

EN BANC reproduce at this point, the definition and meaning of natural obligation.

G.R. No. L-13667. April 29, 1960. Article 1423 of the New Civil Code classifies obligations into civil or natural.
"Civil obligations are a right of action to compel their performance. Natural
PRIMITIVO ANSAY, ETC., ET AL., Plaintiffs-Appellants, v. THE BOARD obligations, not being based on positive law but on equity and natural law, do
OF DIRECTORS OF THE NATIONAL DEVELOPMENT COMPANY, ET AL., not grant a right of action to enforce their performance, but after voluntary
Defendants-Appellees. fulfillment by the obligor, they authorize the retention of what has been
delivered or rendered by reason thereof."
It is thus readily seen that an element of natural obligation before it can be
Nature of the Action: This is an appeal regarding a decision of the Court of cognizable by the court is voluntary fulfillment by the obligor. Certainly
First Instance of Manila dismissing the plaintiffs-appellants’ motion for retention can be ordered but only after there has been voluntary
reconsideration which was denied in favor of the defendant-appellee. performance. But here there has been no voluntary performance. In fact, the
court cannot order the performance.
Facts: On July 25, 1956, appellants filed against appellees in the Court of
First Instance of Manila a complaint praying for a 20% Christmas bonus for At this point, we would like to reiterate what we said in the case of Philippine
the years 1954 and 1955. However, the court ruled that: Education Co. v. CIR and the Union of Philippine Education Co., Employees
(NUL) (92 Phil., 381; 48 Off. Gaz., 5278) —
"(a) A bonus is an act of liberality and the court takes it that it is not within its
judicial powers to command respondents to be liberal; "From the legal point of view a bonus is not a demandable and enforceable
obligation. It is so when it is made a part of the wage or salary
"(b) Petitioners admit that respondents are not under legal duty to give such compensation."
bonus but that they had only ask that such bonus be given to them because
it is a moral obligation of respondents to give that but as this Court And while it is true that the subsequent case of H. E. Heacock v. National
understands, it has no power to compel a party to comply with a moral Labor Union, Et Al., 95 Phil., 553; 50 Off. Gaz., 4253, we stated that:
obligation (Art. 142, New Civil Code).
"Even if a bonus is not demandable for not forming part of the wage, salary
"IN VIEW WHEREOF, dismissed. No pronouncement as to costs.” or compensation of an employee, the same may nevertheless, be granted on
equitable consideration as when it was given in the past, though withheld in
A motion for reconsideration of the afore-quoted order was denied. Hence succeeding two years from low salaried employees due to salary increases."
this appeal.
still the facts in said Heacock case are not the same as in the instant one,
Issue: Whether or not the defendant-appellee is required to provide its and hence the ruling applied in said case cannot be considered in the
employees a Christmas bonus? present action.

Held: No. A Christmas bonus is a natural obligation that cannot be enforced Premises considered, the order appealed from is hereby affirmed, without
by the courts. pronouncement as to costs.”

“Appellants contend that there exists a cause of action in their complaint Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion,
because their claim rests on moral grounds or what in brief is defined by law Endencia, Barrera and Gutierrez David, JJ., concur.
as a natural obligation.
Since appellants admit that appellees are not under legal obligation to give FIRST DIVISION
such claimed bonus; that the grant arises only from a moral obligation or the G.R. No. L-48889 May 11, 1989
vs. that acknowledges the first promissory note will constitute a new cause of
THE HONORABLE MIDPAINTAO L. ADIL, Judge of the Second Branch action.
of the Court of First Instance of Iloilo and SPOUSES PATRICIO (2) As for the 2nd issue, the respondent cites Article 166 whereby by signing the
CONFESOR and JOVITA VILLAFUERTE, respondents. 2nd promissory note alone, he cannot bind his wife, respondent Villafuerte, to
GANCAYCO, J.: the obligation. But the court disagrees. Under Article 165 of the Civil Code,
the husband is the administrator of the Conjugal Partnership. As such, all
Nature of the Action: This is a petition for review on certiorari on the validity debts and obligations contracted by the husband for the benefit of the
of a promissory note which was executed in consideration of a previous Conjugal Partnership are chargeable to the Conjugal Partnership. Therefore
promissory note the enforcement of which had been barred by prescription. the Conjugal Partnership is liable for this obligation.
Facts: Wherefore, the decision of the CFI was reinstated.
That on February 10, 1940 sps. Patricio Confesor and Jovita Villafuerta
obtained an agricultural loan from the Agricultural and Industrial Bank (AIB), SUPREME COURT EN BANC
now the Development of the Philippines (DBP), in the amount of
P2,000.00. They bound themselves jointly to pay the account in ten (10) Heirs of Gilberto Roldan, et al v. Heirs of Silvela Roldan, et al
equal yearly amortizations. However, as the obligation to pay remained
unpaid after the lapse of the 10 year period, Confesor, executed another G.R. No. 202578, September 27, 2017
promissory note on April 11, 1961, expressly acknowledging said load and
promising to pay the same on or before June 15, 1961. However, the said SERENO, C.J.
spouses were not able to pay the obligation on the specified date, the DBP
then filed a complaint on September 11 1970 against them for the payment Nature
of the loan. The Court of First Instance(CFI) of Iloilo City ruled in favor of the
DBP and ordered the spouses to pay jointly the sum of P5,760.96 plus Before this Court is a Petition for Review on Certiorari assailing the Court of
additional daily interest of P1.04 from the date the complaint was filed. The Appeals (CA) Decision and Resolution,3 which affirmed the Decision of the
Spouses appealed therefrom to the CFI wherein the decision was reversed Regional Trial Court (RTC). The RTC ruled that petitioner heirs of Gilberto
and dismissed the complaint made by DBP. A motion for reconsideration Roldan, respondent heirs of Silvela Roldan,5 and respondent heirs of
was made by the DBP, but it was denied, hence this current petition. Leopoldo Magtulis are co-owners of Lot No. 4696.
(1) Whether or not the right to prescription may be waived Facts
(2) Whether or not in signing the second promissory note, respondent Patricio
Confesor can bind the conjugal partnership or shall pay the obligation in his Natalia Magtulis owned Lot No. 4696, an agricultural land in Kalibo, Aklan.
personal capacity? Her heirs included Gilberto Roldan and Silvela Roldan, her two children by
Ruling: her first marriage; and, allegedly, Leopolda Magtulis her child with another
(1) The court held that there is no doubt that prescription has set in as to the man named Juan Aguirre. After her death in 1961, Natalia left the lot to her
first promissory note. However, when respondent Confesor executed the children. However, Gilberta and his heirs took possession of the property to
second promissory note, whereby he promised to pay the amount covered by the exclusion of respondents.
the previous promissory note on or before June 15, 1961, and that failure to
do so he agreed to the foreclosure of the mortgage. As such, the respondent On 19 May 2003, respondents (Heirs of Silvela and Heirs of Magtulis) filed
effectively and expressly renounced and waived his right to the prescription before the RTC a Complaint for Partition and Damages against petitioners
of the action covering the first promissory note. It was held by the court that (Heirs of Gilberto). The latter refused to yield the property on these grounds:
where a party acknowledges the correctness of a debt and promises to pay it (1) respondent heirs of Silvela had already sold her share to Gilberto; and (2)
after the same has prescribed and with full knowledge of the prescription he respondent heirs of Leopolda had no cause of action, given that he was not a
thereby waives the benefit of prescription. A new express promiste to pay a child of Natalia. (Second cause of action not relevant)
debt barred will take the case from the operation of the Statute of Limitations
as this proceeds upon the ground that as a statutory limitation merely bars During trial, petitioners failed to show any document evidencing the sale of
the remedy but does not discharge the debt. But the new promissory note Silvela's share to Gilberto. Thus, in its Decision dated 14 December 2007,
the RTC ruled that the heirs of Silvela remained co-owners of the property
they had inherited from Natalia. Consequently, it ordered petitioners to valuable consideration" without particularizing the details or referring
account and deliver to respondents their equal share to the produce of the to any proof of the transaction.16 Therefore, we sustain the
land. conclusion that she remains coowner of Lot No. 4696.

Petitioners appealed to the CA. They reiterated that Silvela had sold her 2. No. According to petitioners, prescription and laches have clearly set
share of the property to her brother Gilberta. CA affirmed the decision of the in given their continued occupation of the property in the last 42 years.
RTC, and refused to conclude that Silvela had sold her shares to Gilberto Prescription cannot be appreciated against the co-owners of a property,
without any document evidencing a sales transaction. absent any conclusive act of repudiation made clearly known to the other co-
Petitioner heirs of Gilberto moved for reconsideration, additionally contend
that respondents lost their rights over the property, since the action for Here, petitioners merely allege that the purported co-ownership "was
partition was lodged before the RTC only in 2003, or 42 years since Gilberto already repudiated by one of the parties" without supporting
occupied the property in 1961. For the heirs of Gilberto, prescription and evidence. Aside from the mere passage of time, there was failure on
laches already preclude the heirs of Silvela and the heirs of Leopoldo from the part of petitioners to substantiate their allegation of laches by
claiming co-ownership over the lot. proving that respondents slept on their rights. Nevertheless, had they
done so, two grounds deter them from successfully claiming the
Respondents assert that the arguments raised by petitioners involve existence of prescription and laches.
questions of fact not cognizable by this Court. As regards the issue of
prescription and laches, they insist that petitioners cannot invoke a new First, as demanded by the repudiation requisite for prescription to be
theory for the first time on appeal. appreciated, there is a need to determine the veracity of factual
matters such as the date when the period to bring the action
Issues: commenced to run. In Macababbad, Jr. v. Masirag, we considered
that determination as factual in nature. The same is true in relation to
1. Whether the CA erred in affirming the RTC's finding that Silvela did finding the existence of laches. We held in Crisostomo v. Garcia, Jr.
not sell her share of the property to Gilberto that matters like estoppel, laches, and fraud require the presentation
2. Whether prescription and laches bar respondents from claiming co-- of evidence and the determination of facts. Since petitions for review
ownership over the lot on certiorari under Rule 45 of the Rules of Court, as in this case,
entertain questions of law, petitioners claim of prescription and
Held/Ratio: laches fail.

1. No. Petitioners argue before us that Silvela had a perfected contract Second, petitioners have alleged prescription and laches only before
of sale with Gilberto over her shares of Lot No. 4696. That argument this Court. Raising a new ground for the first time on appeal
is obviously a question of fact,14 as it delves into the truth of whether contravenes due process, as that act deprives the adverse party of
she conveyed her rights in favor of her brother. the opportunity to contest the assertion of the claimant. Since
respondents were not able to refute the issue of prescription and
The assessment of the existence of the sale requires the calibration laches, this Court denies the newly raised contention of petitioners.
of the evidence on record and the probative weight thereof. The
RTC, as affirmed by the CA, already performed its function and Case Digest # 4
found that the heirs of Gilberto had not presented any document or SAGRADA ORDEN DE PREDICADORES DEL SANTISMO ROSARIO DE
witness to prove the fact of sale. FILIPINAS
The factual determination of courts, when adopted and confirmed by NATIONAL COCONUT CORPORATION
the CA, is final and conclusive on this Court except if unsupported by
the evidence on record.15 In this case, the exception does not apply, [G.R. No. L-3756, June 30, 1952]
as petitioners merely alleged that Silvela "sold, transferred and EN BANC
conveyed her share in the land in question to Gilberto Roldan for a
FACTS: This is an action instituted by the pre-war owner, Sagrada Orden, to for rentals, these would not accrue to the benefit of Orden, the old owner, but
recover the possession of a piece of real property in Pandacan Manila, and to the United States Government.
the rentals for its occupation and use.
On January 4, 1943, during the Japanese military occupation, the land was There was also no express agreement between the Alien Property
acquired by a Japanese corporation by the name of Taiwan Tekkosho and Management and NACOCO to pay rentals on the property nor an implied
after liberation on April 4, 1946, the Alien Property Custodian of the United agreement between them as CEMC who occupied the property before them
States of America took possession, control, and custody of the property did not pay for rentals as well when they entered the “custodianship
pursuant to the Trading with the Enemy Act. The property was then occupied agreement” where there was no provision for such payment.
by the Copra Export Management Company (CEMC) under a custodian
agreement with US Alien Property Custodian. When CEMC vacated the FALLO: Wherefore, the part of the judgment appealed from, which sentences
property, it was occupied by defendant National Coconut Corporation defendant-appellant to pay rentals from August, 1946, to February 28, 1949,
(NACOCO) is hereby reversed. In all other respects the judgment is affirmed. Costs of this
The plaintiff’s claim to the said property before the Alien Property Custodian appeal shall be against the plaintiff-appellee.
was denied.
It bought an action in court which resulted to the cancellation of the title issued
in the name of Taiwan Tekkosho which was executed under threats, duress, 5. Metrobank v. Rosales and Yo Yuk To, G.R. No. 183204, Jan 13, 2014
and intimidation; reissuance of the title in favor of the plaintiff stating that he
had always been the owner; cancellation of the claims, rights, title, interest of Division: 2nd
the Alien property Custodian; and occupant NACOCO’s ejection from the
property. A right was also vested to the plaintiff to recover from the defendants
rentals for its occupation of the land from the date it vacated. Ponente: J. Del Castillo
NACOCO contests the trial court’s decision on holding them liable for rentals
or compensation for the use and occupation of the property from the date they FACTS:
began to occupy the property to the date they vacated it (August 1946 to
December 1948). They interpose the defense of occupying the property in In 2000, Rosales and Yo Yuk To (Respondents) opened a Joint Peso
good faith, under no obligation whatsoever to pay rentals for the use and Account with Metrobank (Petitioner). In May 2002, Rosales accompanied her
occupation of the warehouse. client Liu Chiu Fang who was applying for a retiree’s visa from the Philippine
Leisure and Retirement Authority (PLRA), to Metrobank’s branch in Escolta
ISSUE: Whether there was an agreement of payment of rental for the use and to open a savings account, as required by the PLRA wherein respondent
occupation of the property and if it could be recovered by Sagrada Orden as Rosales acted as an interpreter for Fang. On March 3, 2003, respondents
the pre-war owner of the property. opened a Joint Dollar Account with Metrobank with an initial deposit of $14K.
On July 31, 2003, Metrobank issued a "Hold Out" order against respondents’
HELD: No. A party allowed by the United States Alien Property Custodian to accounts. On September 3, 2003, Metrobank filed through the prosecutor a
occupy and use the enemy property is not liable to pay rentals therefor to the criminal case for Estafa through False Pretences, Misrepresentation, Deceit,
pre-war owner prior to the annulment of the enemy's title to the property even and Use of Falsified Documents against respondent Rosales, wherein it was
when the enemy acquired it by duress, because there was no privity (of alleged that Rosales and an unidentified woman as the ones responsible for
contractor obligation) between the Alien Property Custodian and the enemy the unauthorized and fraudulent withdrawal of $75K from Fang’s dollar
owner, the former's title being based, by legal provision, on the right to seize account with Metrobank Escolta Branch. And on March 3, 2003, respondents
enemy property. The occupant's obligation to pay rentals, like any other opened a dollar account with Metrobank; and that the bank later discovered
obligation, must arise from law, contract, quasi-contract, crime, or negligence that the serial numbers of the dollar notes deposited by respondents in the
(article 1089, Spanish Civil Code). If occupant took possession of the property amount of $11.8K were the same as those withdrawn by the impostor.
with the permission of the Alien Property Custodian, without any express or Rosales denied taking part in the fraudulent and unauthorized withdrawal
implied agreement between them that rentals would be paid for the use and from the dollar account of Fang. Rosales claimed that she did not go to the
occupation of the enemy property, none may be recovered by the pre-war bank on February 5, 2003. Neither did she inform Gutierrez that Fang was
owner and even if NACOCO were liable to the Alien Property Administration going to close her account. On December 15, 2003, the City Prosecutor of
Manila issued a Resolution dismissing the criminal case for lack of probable
cause. On September 10, 2004, Rosales filed before the RTC of Manila a withhold Rosales’ deposits on the Application and Agreement for Deposit
Complaint for Breach of Obligation and Contract with Damages against Account.
Metrobank. Rosales alleged that they attempted several times to withdraw
their deposits but were unable to because Metrobank had placed their Metrobank’s reliance on the "Hold Out" clause in the Application and
accounts under "Hold Out" status without any explanation of the cause. Agreement for Deposit Account is misplaced. The "Hold Out" clause applies
only if there is a valid and existing obligation arising from any of the sources
RTC Decision: finding Metrobank liable for damages for breach of contract. of obligation enumerated in NCC 1157. In this case, Metrobank failed to
Ruled that it is the duty of petitioner to release the deposit to respondents as show that Rosales have an obligation to it under any law, contract, quasi-
the act of withdrawal of a bank deposit is an act of demand by the creditor. contract, delict, or quasi-delict. And although a criminal case was filed by
Also said that the recourse of petitioner is against its negligent employees Metrobank against Rosales, this is not enough reason for petitioner to issue
and not against respondents. An actual damages of P50K, moral damages of a "Hold Out" order as the case is still pending and no final judgment of
P50K, exemplary damages of P30K and 10% of the amount due as and for conviction has been rendered against respondent Rosales. At the time
attorney’s fees plus the cost of suit. Metrobank issued the "Hold Out" order, the criminal complaint had not yet
been filed. Thus, considering that Rosales is not liable under any of the five
CA affirmed the RTC Decision but deleted the award of actual damages sources of obligation, there was no legal basis for petitioner to issue the
because the basis for Rosales’ claim for such damages is the professional "Hold Out" order. Accordingly, we agree with the findings of the RTC and the
fee that they paid to their legal counsel for defense against the criminal CA that the "Hold Out" clause does not apply in the instant case.
complaint of Metrobank for estafa before the Office of the City Prosecutor of
Manila and not this case. In view of the foregoing, we find that Metrobank is guilty of breach of contract
when it unjustifiably refused to release Rosales’ deposit despite demand.
GENERAL ISSUES: Having breached its contract with Rosales, Metrobank is liable for damages.
In cases of breach of contract, moral damages may be recovered only if the
defendant acted fraudulently or in bad faith, or is "guilty of gross negligence
• W/N The CA erred in ruling that the Hold-out provision in the
application and agreement for deposit account does not apply in this case. amounting to bad faith, or in wanton disregard of his contractual obligations.”
In this case, a review of the circumstances surrounding the issuance of the
"Hold Out" order reveals that Metrobank issued the "Hold Out" order in bad
faith. First of all, the order was issued without any legal basis. Second,
• W/N The CA erred in affirming the award of moral damages, Metrobank did not inform Rosales of the reason for the "Hold Out." Third, the
exemplary damages, and attorney’s fees. (NO) order was issued prior to the filing of the criminal complaint. Records show
that the "Hold Out" order was issued on July 31, 2003, while the criminal
CONTROLLING ISSUE: complaint was filed only on September 3, 2003. All these taken together lead
us to conclude that Metrobank acted in bad faith when it breached its
• W/N Metrobank breached its contract with Rosales, and if so, contract with Rosales. As we see it then, Rosales are entitled to moral
whether Metrobank is liable for damages. (YES) damages.

RULING: As to the award of exemplary damages, NCC 2229 provides that exemplary
damages may be imposed "by way of example or correction for the public
WHEREFORE, the Petition is hereby DENIED. The assailed April 2, 2008 good, in addition to the moral, temperate, liquidated or compensatory
Decision and the May 30, 2008 Resolution of the Court of Appeals in CA- damages." They are awarded only if the guilty party acted in a wanton,
G.R. CV No. 89086 are hereby AFFIRMED. SO ORDERED. fraudulent, reckless, oppressive or malevolent manner. In this case, we find
that Metrobank indeed acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner when it refused to release the deposits of Rosales
The "Hold Out" clause does not apply to the instant case. Metrobank claims
without any legal basis. We need not belabor the fact that the banking
that it did not breach its contract with respondents because it has a valid
industry is impressed with public interest. As such, "the highest degree of
reason for issuing the "Hold Out" order. Metrobank anchors its right to
diligence is expected, and high standards of integrity and performance are
even required of it." It must therefore "treat the accounts of its depositors with
meticulous care and always to have in mind the fiduciary nature of its CA: Dismissed, ruling that: a) the incident was a fortuitous event; b) that
relationship with them." For failing to do this, an award of exemplary respondents are not liable for damages for the injury suffered by the petitioner
damages is justified to set an example. The award of attorney's fees is from the hands of their own security guard in violation of their built-in
likewise proper pursuant to NCC 2208(1). contractual obligation to petitioner, being their law student at the time, to
provide him with a safe and secure educational environment; c) that Rosete,
SUPREME COURT THIRD DIVISION who shot petitioner, was not FEU’s employee by virtue of the contract for
security services between Galaxy and FEU, notwithstanding the fact that
JOSEPH SALUDAGA, petitioner, petitioner, not being a party to it, is not bound by the same under the principle
vs. of relativity of contracts; and, d) FEU exercised due diligence in selecting
FAR EASTERN UNIVERSITY and EDILBERTO C. DE JESUS in his Galaxy as the agency which would provide security services within the
capacity as President of FEU, respondents. respondent FEU.

G.R. No. 179337 April 30, 2008 In his appeal, petitioner sued respondents for damages based on the alleged
breach of student-school contract for a safe learning environment.
CORTES, J. Respondents aver that the shooting incident was a fortuitous event because
they could not have reasonably foreseen nor avoided the accident caused by
Nature: Rosete as he was not their employee; and that they complied with their
obligation to ensure a safe learning environment for their students by having
YNARES-SANTIAGO, J.: exercised due diligence in selecting the security services of Galaxy.
This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court
assails the June 29, 2007 Decision2 of the Court of Appeals in CA-G.R. CV Issue #1: Whether or not there is a contractual obligation between Saludaga
No. 87050, nullifying and setting aside the November 10, 2004 Decision 3 of and FEU.
the Regional Trial Court of Manila, Branch 2, in Civil Case No. 98-89483 and
dismissing the complaint filed by petitioner; as well as its August 23, 2007
Resolution4 denying the Motion for Reconsideration.5 Held #1: YES.

It is undisputed that petitioner was enrolled as a sophomore law student in

Facts: respondent FEU. As such, there was created a contractual obligation between
the two parties. On petitioner’s part, he was obliged to comply with the rules
Petitioner Joseph Saludaga was a sophomore law student of respondent Far and regulations of the school. On the other hand, respondent FEU, as a
Eastern University (FEU) when he was shot by Alejandro Rosete (Rosete), learning institution is mandated to impart knowledge and equip its students
one of the security guards on duty at the school premises. with the necessary skills to pursue higher education or a profession. At the
same time, it is obliged to ensure and take adequate steps to maintain peace
Petitioner thereafter filed a complaint for damages against respondents on the and order within the campus.
ground that they breached their obligation to provide students with a safe and
secure environment and an atmosphere conducive to learning. Respondents, Issue #2: Whether or not FEU is guilty of culpa contractual.
in turn, filed a Third-Party Complaint against Galaxy Development and
Management Corporation (Galaxy), the agency contracted by respondent FEU Held #2: YES.
to provide security services within its premises to indemnify them for whatever
would be adjudged in favor of petitioner.
It is settled that in culpa contractual, the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a corresponding
RTC: FEU and its President was ordered to pay jointly and severally Saludaga right of relief.
damages. Galaxy and its President was ordered to indemnify jointly and
severally FEU for such amount.
Here, petitioner was shot inside the campus by no less the security guard who
was hired to maintain peace and secure the premises, there is a prima facie
showing that respondents failed to comply with its obligation to provide a safe
and secure environment to its students. Also, respondents failed to prove that RULING. YES
they ensured that the guards assigned in the campus met the requirements
stipulated in the Security Service Agreement. No evidence as to the RATIO: The defendant, through its assigned security guards, instead of
qualifications of Rosete as security guard was presented. Respondents also complying with its contractual undertaking "to safeguard and protect the
failed to show that they undertook steps to ascertain and confirm that the business premises of (plaintiff) from theft, robbery, vandalism and all other
security guards assigned to them actually possess the qualifications required unlawful acts of any person or persons", unlawfully and wrongfully drove out
in the Security Service Agreement. of plaintiff's premises a customer's car, lost control of it on the highway causing
it to fall into a ditch, thereby directly causing plaintiff to incur actual damages
PEOPLE'S CAR, INC. vs. COMMANDO SECURITY SERVICE AGENCY in the total amount of P8,489.10.
[G.R. No. L-36840. May 22, 1973.] Defendant is therefore undoubtedly liable to indemnify plaintiff for the entire
SECOND DIVISION damages thus incurred, since under paragraph 5 of their contract it "assumed
NATURE: Appeal from the adverse judgment of the Davao court of :rst the responsibility for the proper performance by the guards employed of their
instance limiting plaintiff-appellant's recovery under its complaint to the sum duties and (contracted to) be solely responsible for the acts done during their
of P1,000.00 instead of the actual damages of P8,489.10 claimed and watch hours" and "specifically released (plaintiff) from any and all liabilities . .
suffered by it as a direct result of the wrongful acts of defendant security . to the third parties arising from the acts or omissions done by the guards
agency's guard assigned at plaintiff's premises in pursuance of their "Guard during their tour of duty."
Service Contract", the Court :nds merit in the appeal and accordingly
reverses the trial court's judgment. Plaintiff was in law liable to its customer for the damages caused the
customer's car, which had been entrusted into its custody. Plaintiff therefore
FACTS: On April 5, 1970 at around 1:00 A.M., defendant's security guard on was in law justified in making good such damages and relying in turn on
duty at plaintiff's premises, "without any authority, consent, approval, defendant to honor its contract and indemnify it for such undisputed damages,
knowledge or orders of the plaintiff and/or defendant brought out of the which had been caused directly by the unlawful and wrongful acts of
compound of the plaintiff a car belonging to its customer, and drove said car defendant's security guard in breach of their contract. As ordained in Article
for a place or places unknown, abandoning his post as such security guard on 1159, Civil Code, "obligations arising from contracts have the force of law
duty inside the plaintiff's compound, and while so driving said car in one of the between the contracting parties and should be complied with in good faith."
City streets lost control of said car, causing the same to fall into a ditch. As a
result of these wrongful acts of defendant's security guard, the car of plaintiff's FALLO: ACCORDINGLY, the judgment appealed from is hereby reversed and
customer, Joseph Luy, which had been left with plaintiff for servicing and judgment is hereby rendered sentencing defendant-appellee to pay plaintiff-
maintenance, "suffered extensive damage in the total amount of P7,07910" appellant the sum of P8,489.10 as and by way of reimbursement of the
besides the car rental value "chargeable to defendant" in the sum of P1,410.00 stipulated actual damages and expenses, as well as the costs of suit in both
for a car that plaintiff had to rent and make available to its said customer to instances. It is so ordered.
enable him to pursue his business and occupation for the period of forty-seven G.R. No. L-23749. April 29, 1977.
(47) days (from April 25 to June 10, 1970) that it took plaintiff to repair the
damaged car, 7 or total actual damages incurred by plaintiff in the sum of FAUSTINO CRUZ, Plaintiff-Appellant, v. J. M. TUASON & COMPANY,
P8,489.10. INC., and GREGORIO ARANETA, INC., defendants-appellees.
Plaintiff claimed that defendant was liable for the entire amount under
paragraph 5 of their contract, defendant assumed "sole responsibility for the BARREDO, J.:
acts done during their watch hours" by its guards, whereas defendant
contended, without questioning the amount of the actual damages incurred by Nature of the Action: Appeal from the order of the Court of First Instance of
plaintiff, that its liability under Paragraph 4 of the contract, limits-defendant's Quezon City dismissing the complaint of appellant Cruz for the recovery of
that states “through the negligence of its guards . . . during the watch improvements he has made on appellees' land and to compel appellees to
hours...shall not exceed one thousand (P1,000.00) pesos per guard post". convey to him 3,000 square meters of land on three grounds: (1) failure of the
complaint to state a cause of action; (2) the cause of action of plaintiff is
ISSUE: WoN the Commando Security Service Agency is liable for the unenforceable under the Statute of Frauds; and (3) the action of the plaintiff
damages incurred by People’s Car, Inc. of P8,489. has already prescribed.
bound by any reciprocal or bilateral agreement. The reason why the law
Facts: As requested by the Deudors, the family of Telesforo Deudor who laid creates a juridical relations and imposes certain obligation is to prevent a
claim in question on the strength of an informacion posesoria, Cruz made situation where a person is able to benefit or take advantage of such lawful,
permanent improvements on the said land having an area of more or less 20 voluntary and unilateral acts at the expense of said actor." (Ambrosio Padilla,
quinones. The improvements were valued at P30,400 and for which he Civil Law, Vol. VI, p. 748, 1969 ed.)
incurred expenses amounting to P7,781.74. In 1952, Tuason & Co. availed of
Cruz’s services as an intermediary with the Deudors, to work for the amicable In the case at bar, since appellant has a clearer and more direct recourse
settlement in a civil case. The said case involved 50 quiones of land, of which against the Deudors with whom he had entered into an agreement regarding
the 20 quiones of land mentioned formed part. A compromise agreement the improvements and expenditures made by him on the land of appellees, it
between the Deudors and Tuason & Co. was entered into on 1963 which was cannot be said, in the sense contemplated in Article 2142, that appellees have
approved by court. Cruz alleged that Tuason & Co. promised to convey him been enriched at the expense of appellant.
the 3,000 sq. meters of land occupied by him which was part of the 20 quiones
of land within 10 years from the date of signing of the compromise agreement In the ultimate, therefore, Our holding above that appellant's first two
between the Deudors and the latter as consideration of his services. The said assignments of error are well taken cannot save the day for him. Aside from
land was not conveyed to him by Tuason & Co. Cruz further alleged that his having no cause of action against appellees, there is one plain error of
Tuason & Co. was unjustly enriched at his expense since they enjoyed the omission. We have found in the order of the trial court which is as good a
benefits of the improvements he made on the land acquired by the latter. The ground as any other for Us to terminate this case favorably to appellees. In
trial court dismissed the case on the ground that there was no cause of action. said order which We have quoted in full earlier in this opinion, the trial court
Hence, this appeal. ruled that "the grounds relied upon in said motion are mere repetitions of those
already resolved and discussed by this Court in the order of August 13, 1964",
Issue: Whether or not JM Tuason & Co. was unjustly enriched and therefore an observation which We fully share. Virtually, therefore. appellant's motion for
liable to Cruz based on Article 2142 of the Civil Code? reconsideration was ruled to be pro-forma. Indeed, a cursory reading of the
record on appeal reveals that appellant's motion for reconsideration above-
Held: No. quoted contained exactly the same arguments and manner of discussion as
his February 6, 1964 "Opposition to Motion to Dismiss" of defendant Gregorio
“Appellants' reliance on Article 2142 of Civil Code is misplaced. Said article Araneta, Inc. ((pp. 17-25, Rec. on Appeal) as well as his February 17, 1964
provides: "Opposition to Motion to Dismiss of Defendant J. M. Tuason & Co." (pp. 33-
45, Rec. on Appeal and his February 29, 1964 "Rejoinder to Reply Oil
“Certain lawful, voluntary and unilateral acts give rise to the juridical relation of Defendant J. M. Tuason & Co." (pp. 52-64, Rec. on Appeal) We cannot see
quasi-contract to the end that no one shall be unjustly enriched or benefited at anything in said motion for reconsideration that is substantially different from
the expense of another.” the above oppositions and rejoinder he had previously submitted and which
the trial court had already considered when it rendered its main order of
From the very language of this provision, it is obvious that a presumed quasi- dismissal. Consequently, appellant's motion for reconsideration did not
contract cannot emerge as against one party when the subject matter thereof suspend his period for appeal. (Estrada vs. Sto. Domingo, 28 SCRA 890, 905-
is already covered by an existing contract with another party. Predicated on 6.) And as this point was covered by appellees' "Opposition to Motion for
the principle that no one should be allowed to unjustly enrich himself at the Reconsideration" (pp. 8689), hence, within the frame of the issues below, it is
expense of another, Article 2124 creates the legal fiction of a quasi-contract within the ambit of Our authority as the Supreme Court to consider the same
precisely because of the absence of any actual agreement between the parties here even if it is not discussed in the briefs of the parties. (Insular Life
concerned. Corollarily, if the one who claims having enriched somebody has Assurance Co., Ltd. Employees Association-NATU vs. Insular Life Assurance
done so pursuant to a contract with a third party, his cause of action should be Co., Ltd. [Resolution en banc of March 10, 1977 in G. R. No. L-25291).
against the latter, who in turn may, if there is any ground therefor, seek relief
against the party benefited. It is essential that the act by which the defendant Now, the impugned main order was issued on August 13, 1964, while the
is benefited must have been voluntary and unilateral on the part of the plaintiff. appeal was made on September 24, 1964 or 42 days later. Clearly, this is
As one distinguished civilian puts it, "The act is voluntary because the actor in beyond the 30-day reglementary period for appeal. Hence, the subject order
quasi-contracts is not bound by any pre-existing obligation to act. It is of dismissal was already final and executory when appellant filed his appeal.
unilateral, because it arises from the sole will of the actor who is not previously
WHEREFORE, the appeal of Faustino Cruz in this case is dismissed. No period required by law. He relies on Article 1613 of the Civil Code, giving the
costs.” vendee a retro the right to demand redemption of the entire property. The
court found no merit in such contention. The court held that the right of
SUPREME COURT repurchase may be exercise by a co-owner with respect to his share
SECOND DIVISION alone. While indeed the petitioner repurchased the land in its entirety all by
himself, that did not make him the owner of it all. In other words, such
G.R. No. L-44546 January 29, 1988 repurchase did not put an end to the existing state of co-ownership. While a
RUSTICO ADILLE, petitioner, vendee a retro, contemplated under Article 1613 “may not be compelled to
vs. consent to a partial redemption”, the redemption by one co-heir or co-owner
THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO, of the property in its totality does not vest in him ownership over it. Mere
TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO and failure of the other co-owners to redeem it entitles the vendee a retro to
SANTIAGO ASEJO, respondents. retain the property and consolidate title thereto in his name but the provision
SARMIENTO, J.: does not give to the redeeming co-owner the right to the entire property. It
does not provide a mode of terminating a co-ownership. While indeed his
Nature of the Action: half-siblings are liable to him for reimbursement and for their shares in
Facts: redemption expenses, he cannot claim exclusive right to the property owned
There was a land in question, Lot 14694 of Cadastral Survey of Albay which in common. As per Article 1456, the petitioner is a trustee of the property on
was located in Legaspi City. It was originally owned by Felisa Alzul. Alzul behalf of the half-siblings. The court agrees with the Court of Appeals that
married twice in her lifetime the first (1) was with Bernabe Adille, with whom fraud attended the registration of the property. The petitioner’s pretension
she had a child name Rustico Adille which is the petitioner in this case. In that he was the sole heir to the land in the affidavit of extrajudicial settlement
her second marriage with one Procopio Asejo, she had children which are betrays a clear effort on his part to defraud his half-siblings. He therefor
the respondents of this case. Sometime in 1939, Alzul sold the property in constituted himself, by his acts, as merely a negotiorum gestor under Article
Pacto de Retro, period of repurchase being 3 years. However, 3 years later, 2144.
in 1942, she died without being able to redeem. But during the period of (2) No, prescription as a mode of terminating a relation of co-ownership, must
redemption, Petitioner Adille repurchased the lot by himself. He executed a have been preceded or necessitates repudiation of the co-ownership. The
deed of extra-judicial partition representing himself to be the only heir and elements of the act of repudiation are as follows: (1) a co-owner repudiates
child of his mother Alzul so that the land named to his mother is transferred the co-ownership; (2) such an act of repudiation is clearly made known to the
to his name, this was in 1955. With having efforts of compromise has failed, other co-owners; (3) the evidence thereon is clear and conclusive, and (4) he
his half-sibinlings, the respondents, filed a case for partition and contention has been in possession through open, continuous, exclusive, and notorious
that Adille was only a trustee on an implied trust when he redeemed the lot. possession of the property for the period required by law. The case herein
Take note that one of the half-siblings, Emeteria Asejo, was occupying a shows that the elements are lacking. The petitioner had not repudiated the
portion of the lot. In the Trial Court, the judge ruled in favor of Adille and co-ownership; on the contrary, he deliberately kept his half-siblings in the
sustained in his position that he was and became absolute owner, and not a dark by feigning sole heirship over the estate under dispute. Moreover,
mere trustee, and thus ordered Emeteria Asejo to vacate the lot. On appeal, Emeteria Asejo, is occupying a portion of the lot, and that petitioner had not
the Court of Appeals reversed the trial court, and ruled in favor of the half- taken efforts to eject her from it. Registration of the lot, even if it is used to
siblings hence this petition. Note that the property was registered in 1955 by shield the fraud is therefore no argument to say that the act of registration is
the Adille solely in his name, while the claim of the respondents was equivalent to repudiation for it is only a universal notice of title.
(1) Whether or not a co-owner acquire exclusive ownership over the property DOMETILA M. ANDRES v. MANUFACTURERS HANOVER & TRUST
(2) Whether or not the lapse of prescription to demand a property held in
common would terminate the relation of co-ownership? G.R. No. 82670, September 15, 1989
(1) No, the petitioner contends that the property in dispute devolved upon him CORTES, J.
because of the failure of his co-heirs to join him in its redemption within the
Nature: the amount of $10,000.00. Mantrust complied with the request. Mantrust
asked Andres for the return of the second remittance of $10,000.00 but the
Assailed in this petition for review on certiorari is the judgment of the Court of latter refused to pay.
Appeals, which, applying the doctrine of solutio indebiti, reversed the
decision of the Regional Trial Court, Branch CV, Quezon City by deciding in A complaint was filed with the Regional Trial Court, Branch CV, Quezon City
favor of Mantrust. which was decided in favor of petitioner as defendant. The trial court ruled
that Art. 2154 of the New Civil Code is not applicable to the case because
Facts: the second remittance was made not by mistake but by negligence and
petitioner was not unjustly enriched by virtue thereof. CA reversed the
Andres, using the business name "Irene's Wearing Apparel," was engaged in decision, hence this petition.
the manufacture of ladies garments, children's wear, men's apparel and
linens for local and foreign buyers. Among its foreign buyers was Facets Issue:
Funwear, Inc. (FACETS) of the United States.
Whether or not the private respondent has the right to recover the second
FACETS from time to time remitted certain amounts of money to Andres in $10,000.00 remittance it had delivered to petitioner.
payment for the items it had purchased. FACETS instructed the First
National State Bank (FNSB) of New Jersey to transfer $10,000.00 to Andres Held/ Ratio
via Philippine National Bank (PNB).
Yes. The contract of petitioner, as regards the sale of garments and other
Then, FNSB instructed Mantrust Manufacturers Hanover and Trust textile products, was with FACETS. It was the latter and not private
Corporation (Mantrust) to effect the above-mentioned transfer through its respondent which was indebted to petitioner. On the other hand, the contract
facilities and to charge the amount to the account of FNSB. for the transmittal of dollars from the United States to petitioner was entered
into by private respondent with FNSB. Petitioner, although named as the
Although Mantrust was able to send a telex to PNB to pay FNSB $10,000.00 payee was not privy to the contract of remittance of dollars. Neither was
through the Pilipinas Bank, where Andres Andres had an account, the private respondent a party to the contract of sale between petitioner and
payment was not effected immediately because the payee designated in the FACETS. There being no contractual relation between them, petitioner has
telex was only "Wearing Apparel." Upon query by PNB, Mantrust sent PNB no right to apply the second $10,000.00 remittance delivered by mistake by
another telex dated August 27, 1980 stating that the payment was to be private respondent to the outstanding account of FACETS.
made to "Irene's Wearing Apparel." On August 28, 1980, Andres received the
remittance of $10,000.00. It is evident that the claim of petitioner is anchored on the appreciation of the
attendant facts which petitioner would have this Court review. The Court
Meanwhile, on August 25, 1980, after learning about the delay in the holds that the finding by the Court of Appeals that the second $10,000.00
remittance of the money to Andres, FACETS informed FNSB about the remittance was made by mistake, being based on substantial evidence, is
situation. On September 8, 1980, unaware that Andres had already received final and conclusive.
the remittance, FACETS informed Mantrust about the delay and at the same
time amended its instruction by asking it to effect the payment through the Petitioner invokes the equitable principle that when one of two innocent
Philippine Commercial and Industrial Bank (PCIB) instead of PNB. persons must suffer by the wrongful act of a third person, the loss must be
borne by the one whose negligence was the proximate cause of the loss.
Accordingly, Mantrust, which was also unaware that Andres had already
received the remittance of $10,000.00 from PNB instructed the PCIB to pay The rule is that principles of equity cannot be applied if there is a provision of
$10,000.00 to Andres. Hence, on September 11, 1980, Andres received a law specifically applicable to a case:
second $10,000.00 remittance.
The common law principle that where one of two innocent persons must
Mantrust debited the account of FNSB for the second $10,000.00 remittance suffer by a fraud perpetrated by another, the law imposes the loss upon the
effected through PCIB. However, when FNSB discovered that Mantrust had party who, by his misplaced confidence, has enabled the fraud to be
made a duplication of the remittance, it asked for a recredit of its account in committed, cannot be applied in a case which is covered by an express
provision of the new Civil Code, specifically Article 559. Between a common such payment was due to a mistake in the construction of a doubtful or difficult
law principle and a statutory provision, the latter must prevail in this question of law (Article 2155 new Civil Code).
jurisdiction. [at p. 135.]
As to the necessity of protests, Section 76 of the Charter of Manila is applicable
Having shown that Art. 2154 of the Civil Code, which embodies the doctrine to the case at bar, which provides that “No court shall entertain any suit
of solutio indebiti, applies in the case at bar, the Court must reject the assailing the validity of tax under this article until the taxpayer shall have paid,
common law principle invoked by petitioner. under protest the taxes assessed against him, x x x,” relates to the
assessment, collection and recovery of real estate taxes only, and not to the
Finally, in her attempt to defeat private respondent's claim, petitioner makes recovery of retail dealers taxes.
much of the fact that from the time the second $10,000.00 remittance was
made, five hundred and ten days had elapsed before private respondent
demanded the return thereof. Needless to say, private respondent instituted (2) The action has prescribed only with respect to the payments made before
the complaint for recovery of the second $10,000.00 remittance well within October 30, 1950, when a written demand was made, considering that the
the six years prescriptive period for actions based upon a quasi-contract [Art. prescription of action is interrupted when there is a written extra-judicial
1145 of the New Civil Code]. demand (Art. 1155, NCC).
vs. Even applying the provisions of Act No. 190 to payments by appellee of the
CITY OF MANILA AND MARCELO SARMIENTO, as City Treasurer of retail dealers taxes made before the effectivity of the new Civil Code, because
Manila, “prescription already running before the effectivity of this Code shall be
governed by laws previously in force x x x” (Art. 1116, NCC), still payments
[G.R. No. L-17447, April 30, 1963] made before August 30, 1950, are no longer recoverable in view if the second
EN BANC paragraph of the said article, which provides that “but if since the time this
Code took effect the entire period herein required for prescription should
FACTS: Acting pursuant to Ordinance No. 3364, the defendant City Treasurer elapse. The present code shall be applicable even though by the former laws
of Manila assessed from plaintiff Gonzalo Puyat & Sons, Inc., retail dealer’s a longer period might be required”.
tax on the sales of furniture manufactured and sold by it in its factory site.

All assessments were paid by Puyat & Sons without protest in the erroneous FALLO: MODIFIED in the sense that only payments made on or after
belief that it was liable thereof not knowing that pursuant to Sec 18 of the October 30, 1950 should be refunded, the decision appealed from is
Revised Charter of Manila, they are exempt from the payment of taxes being affirmed, in all other respects. No costs. .
a manufacturer of various kinds of furniture and that it was only applicable to
their sale of imported billiard balls, bowling balls and other accessories in their
display rooms.
12. CBK Power Co. Ltd. V. CIR, G.R. Nos. 1982729-30, January 15, 2014
After learning about the ordinance, plaintiff filed with defendant City Treasurer Division: 1st
of Manila a formal request for refund of the retail dealer’s taxes unduly paid.
Ponente: J. Perlas-Bernabe
ISSUE: (1) Whether payment of retail dealer’s taxes without protests were still
refundable (2) Whether or not the claim for refund filed in October 1956, in so FACTS:
far as said claim refers to taxes paid from 1950 to 1952 has already prescribed.
In August 2000 a syndicated loan from several foreign banks was made to
finance the CBK Project, the development and operation of the Caliraya,
HELD: (1) Yes. Where taxes which are not legally due are not paid voluntarily Botocan, and Kalayaan hydroelectric power generating plants in Laguna. In
but was paid thru error or mistake, which in this case was the erroneous belief February 2001, CBK Power borrowed money from Industrial Bank of Japan,
that they were due, they may, under the principle of solutio indebiti, be Fortis-Netherlands, Raiffesen Bank, Fortis-Belgium, and Mizuho Bank for
recovered, even if no protest was made upon their payment, particularly where which it remitted interest payments from May 2001 to May 2003. It allegedly
withheld final taxes from said payments based on the following rates, and CONTROLLING ISSUE:
paid the same to the RDO 55 of BIR: (a) 15% for Fortis-Belgium, Fortis-
Netherlands, and Raiffesen Bank; and (b) 20% for Industrial Bank of Japan • W/N CBK Power allegedly failed to exhaust administrative remedies
and Mizuho Bank. However, according to CBK Power, under the relevant tax before seeking judicial redress. (NO) [Dapat daw ba na nagfile muna sa
treaties between the Philippines and the respective countries in which each commissioner si CBK Power para macorrect yung mistake bago niya siya
of the banks is a resident, the interest income derived by the aforementioned kasuhan; bigyan daw muna ng chance lol]
banks are subject only to a preferential tax rate of 10%, CBK Power filed a RULING:
claim for refund of its excess final withholding taxes allegedly erroneously
withheld and collected for the years 2001-2003 (6.3M, 8.1M, and 1.1M WHEREFORE, the petition in G.R. Nos. 193383-84 is GRANTED. The
respectively) with the BIR Region 9. Decision dated March 29, 2010 and the Resolution dated August 16, 2010 of
the Court of Tax Appeals (CTA) En Banc in C.T.A. E.B. Nos. 469 and 494
are hereby REVERSED and SET ASIDE and a new one entered
CTA 1st Division Ruling: August 28, 2008, granted the petitions and ordered REINSTATING the Decision of the CTA First Division dated August 28, 2008
the refund of the amount of P15,672,958.42 upon a finding that the relevant ordering the refund in favor of CBK Power Company Limited the amount of
tax treaties were applicable to the case. The required International Tax P15,672,958.42 representing its excess final withholding taxes for the
Affairs Division (ITAD) ruling was not a condition sine qua non for the taxable years 2001 to 2003. On the other hand, the petition in G.R. Nos.
entitlement of the tax relief sought by CBK Power, however, upon motion for 193407-08 is DENIED for lack of merit. SO ORDERED.
reconsideration filed by the Commissioner, the CTA First Division amended (Deutsche Bank v. CIR) the obligation to comply with a tax treaty must take
its earlier decision by reducing the amount of the refund from precedence over the objective of RMO No. 1-2000 the period of application
P15,672,958.42 to P14,835,720.39 on the ground that CBK Power failed to for the availment of tax treaty relief as required by RMO No. 1-2000 should
obtain an ITAD ruling with respect to its transactions with Fortis-Netherlands. not operate to divest entitlement to the relief as it would constitute a violation
CTA En Banc Ruling: March 29, 2010, affirmed the ruling of the CTA First of the duty required by good faith in complying with a tax treaty. The denial of
Division that a prior application with the ITAD is indeed required by Revenue the availment of tax relief for the failure of a taxpayer to apply within the
Memorandum Order 1-2000,which administrative issuance has the force and prescribed period under the administrative issuance would impair the value
effect of law and is just as binding as a tax treaty. Further held that CBK of the tax treaty. At most, the application for a tax treaty relief from the BIR
Power’s petitions for review were filed within the two-year prescriptive period should merely operate to confirm the entitlement of the taxpayer to the relief.
provided under Section 229 of the National Internal Revenue Code of 1997, (Deutsche Bank v. CIR) The BIR should not impose additional requirements
and that it was proper for CBK Power to have filed said petitions without that would negate the availment of the reliefs provided for under international
awaiting the final resolution of its administrative claims for refund before the agreements, especially since said tax treaties do not provide for any
BIR; otherwise, it would have completely lost its right to seek judicial prerequisite at all for the availment of the benefits under said agreements.
recourse if the two-year prescriptive period lapsed with no judicial claim filed.
CBK Power’s motion for partial reconsideration and the Commissioner’s In view of the foregoing, the Court holds that the CTA En Banc committed
motion for reconsideration of the foregoing Decision were both denied in a reversible error in affirming the reduction of the amount of refund to CBK
Resolution for lack of merit Power from P15,672,958.42 to P14,835,720.39 to exclude its transactions
with Fortis-Netherlands for which no ITAD ruling was obtained.

• W/N the BIR may add a requirement – prior application for an ITAD
ruling – that is not found in the income tax treaties signed by the Philippines Sections 204 and 229 of the NIRC pertain to the refund of erroneously or
before a taxpayer can avail of preferential tax rates under said treaties. (NO) illegally collected taxes. Section 204 applies to administrative claims for
refund, while Section 229 to judicial claims for refund. In both instances, the
• W/N the failure to strictly comply with RMO No. 1-2000 will deprive taxpayer’s claim must be filed within two (2) years from the date of payment
persons or corporations of the benefit of a tax treaty (YES) of the tax or penalty. However, Section 229 of the NIRC further states the
condition that a judicial claim for refund may not be maintained until a claim
for refund or credit has been duly filed with the Commissioner. Indubitably, FISHER, J.:
CBK Power’s administrative and judicial claims for refund of its excess final
withholding taxes covering taxable year 2003 were filed within the two-year Nature:
prescriptive period.
Assailed in this petition for review on certiorari is the judgment of the Court of
With respect to the remittance filed on March 10, 2003, the Court agrees with Appeals, which, applying the doctrine of solutio indebiti, reversed the
the ratiocination of the CTA En Banc in debunking the alleged failure to decision of the Regional Trial Court, Branch CV, Quezon City by deciding in
exhaust administrative remedies. Had CBK Power awaited the action of the favor of Mantrust.
Commissioner on its claim for refund prior to taking court action knowing fully
well that the prescriptive period was about to end, it would have lost not only Facts:
its right to seek judicial recourse but its right to recover the final withholding
On January 20, 1915, Jose Cangco was riding the train of Manila Railroad
taxes it erroneously paid to the government thereby suffering irreparable
Company where he was an employee. As the train drew near to his destination,
damage. he arose from his seat. When he was about to alight from the train, Cangco
Also, while it may be argued that, for the remittance filed on June 10, 2003 accidentally stepped on a sack of watermelons which he failed to notice
because it was already 7:00pm and it was dim when it happened. As a result,
that was to prescribe on June 10, 2005, CBK Power could have waited for, at
he slipped and fell violently on the platform. His right arm was badly crushed
the most, three (3) months from the filing of the administrative claim on and lacerated which was eventually amputated.
March 4, 2005 until the last day of the two-year prescriptive period ending
June 10, 2005, that is, if only to give the BIR at the administrative level an Cangco sued Manila Railroad Company on the ground of negligence of its
opportunity to act on said claim, the Court cannot, on that basis alone, deny employees placing the sacks of melons upon the platform and in leaving them
a legitimate claim that was, for all intents and purposes, timely filed in so placed as to be a menace to the security of passenger alighting from the
accordance with Section 229 of the NIRC. There was no violation of Section company’s trains.
229 since the law, as worded, only requires that an administrative claim be
priorly filed. The company’s defense was that granting that its employees were negligent
in placing an obstruction upon the platform, the direct and proximate cause of
(Kiener Co. v. David) Nowhere and in no wise does the law imply that the the injury suffered by plaintiff was his own contributing negligence.
Collector of Internal Revenue must act upon the claim, or that the taxpayer
shall not go to court before he is notified of the Collector’s action. x x x. We ISSUE: Whether or not there was a contributing negligence on the part of the
understand the filing of the claim with the Collector of Internal Revenue to be plaintiff.
intended primarily as a notice of warning that unless the tax or penalty
alleged to have been collected erroneously or illegally is refunded, court HELD: The only fact from which a conclusion can be drawn to the effect that
action will follow. plaintiff was guilty of contributory negligence is that he stepped off the car
without being able to discern clearly the condition of the platform and while the
That being said, the foregoing refund claims of CBK Power should all be train was yet slowly moving. In considering the situation thus presented, it
granted, and, the petition of the Commissioner in G.R. Nos. 193407-08 be should not be overlooked that the plaintiff was, as we find, ignorant of the fact
denied for lack of merit. that the obstruction which was caused by the sacks of melons piled on the
platform existed; and as the defendant was bound by reason of its duty as a
SUPREME COURT EN BANC public carrier to afford to its passengers facilities for safe egress from its trains,
the plaintiff had a right to assume, in the absence of some circumstance to
JOSE CANGCO, plaintiff-appellant, warn him to the contrary, that the platform was clear. The place, as we have
vs. already stated, was dark, or dimly lighted, and this also is proof of a failure
MANILA RAILROAD CO., defendant-appellee. upon the part of the defendant in the performance of a duty owing by it to the
plaintiff; for if it were by any possibility concede that it had right to pile these
G.R. No. L-12191 October 14, 1918
sacks in the path of alighting passengers, the placing of them adequately so
that their presence would be revealed. [G.R. No. 34840. September 23, 1931.]

As pertinent to the question of contributory negligence on the part of the EN BANC

plaintiff in this case the following circumstances are to be noted: The
company's platform was constructed upon a level higher than that of the NATURE: Action brought by the plaintiff in the Court of First Instance of Manila
roadbed and the surrounding ground. The distance from the steps of the car against the five defendants, to recover damages in the amount of P10,000, for
to the spot where the alighting passenger would place his feet on the platform physical injuries suffered as a result of an automobile accident
was thus reduced, thereby decreasing the risk incident to stepping off. The
nature of the platform, constructed as it was of cement material, also assured FACTS: On February 2, 1930, a passenger truck and an automobile of private
to the passenger a stable and even surface on which to alight. Furthermore, ownership collided while attempting to pass each other on the Talon bridge in
the plaintiff was possessed of the vigor and agility of young manhood, and it the municipality of Las Pinas, Province of Rizal. The truck was driven by the
was by no means so risky for him to get off while the train was yet moving as chauffeur Abelardo Velasco, and was owned by Saturnino Cortez. The
the same act would have been in an aged or feeble person. In determining the automobile was being operated by Bonifacio Gutierrez, 18 years of age, and
question of contributory negligence in performing such act — that is to say, was owned by Bonifacio's father and mother, Mr. and Mrs. Manuel
whether the passenger acted prudently or recklessly — the age, sex, and Gutierrez. At the time of the collision, the father was not in the car, but the
physical condition of the passenger are circumstances necessarily affecting mother, together will several other members of the Gutierrez family, seven in
the safety of the passenger, and should be considered. Women, it has been all, were accommodated therein. As a result of the said incident, herein
observed, as a general rule are less capable than men of alighting with safety plaintiff, a passenger in the autobus, suffered a fracture which required medical
under such conditions, as the nature of their wearing apparel obstructs the free attendance, prompting him to sue herein defendants. It was found by the trial
movement of the limbs. Again, it may be noted that the place was perfectly court that both the boy and the driver of the autobus were negligent by which
familiar to the plaintiff as it was his daily custom to get on and of the train at neither of them were willing to slow up and give the right of way to the other.
this station. There could, therefore, be no uncertainty in his mind with regard
either to the length of the step which he was required to take or the character ISSUES: How should civil liability imposed upon the parties at present?
of the platform where he was alighting. Our conclusion is that the conduct of
the plaintiff in undertaking to alight while the train was yet slightly under way RULING: We are here dealing with the civil law liability of parties for obligations
was not characterized by imprudence and that therefore he was not guilty of which arise from fault or negligence. In the United States, it is uniformly held
contributory negligence. 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
The evidence shows that the plaintiff, at the time of the accident, was earning children, whom he designates or permits to run it, where the car is occupied
P25 a month as a copyist clerk, and that the injuries he has suffered have and being used at the time of the injury for the pleasure of other members of
permanently disabled him from continuing that employment. Defendant has the owner's family than the child driving it. The theory of the law is that the
not shown that any other gainful occupation is open to plaintiff. His expectancy running of the machine by a child to carry other members of the family is within
of life, according to the standard mortality tables, is approximately thirty-three the scope of the owner's business, so that he is liable for the negligence of the
years. We are of the opinion that a fair compensation for the damage suffered child because of the relationship of master and servant. The liability of
by him for his permanent disability is the sum of P2,500, and that he is also Saturnino Cortez, the owner of the truck, and of his chauffeur Abelardo
entitled to recover of defendant the additional sum of P790.25 for medical Velasco rests on a different basis, namely, that of contract which, we think,
attention, hospital services, and other incidental expenditures connected with has been sufficiently demonstrated by the allegations of the complaint, not
the treatment of his injuries. controverted, and the evidence. The reason for this conclusion reaches to the
The decision of lower court is reversed, and judgment is hereby rendered findings of the trial court concerning the position of the truck on the bridge, the
plaintiff for the sum of P3,290.25, and for the costs of both instances. So speed in operating the machine, and the lack of care employed by the
ordered. 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
NARCISO GUTIERREZ vs. BONIFACIO GUTIERREZ, MARIA V. DE drivers approaching a narrow bridge from opposite directions, with neither
GUTIERREZ, MANUEL GUTIERREZ, ABELARDO VELASCO, and 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.
FALLO: 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.