NAGUIAT v NLRC
al disaffiliated themselves from the
G.R. No: 116123
Petitioner/s: Sergio Naguiat, doing business
under Naguiat Enterprises; Clark Field Taxi
Respondent/s: National Labor Relations
Commission (NLRC), National Organization of
Workigmen and its members; Leonardo Galang
et.al
Ponente: J. Panganiban
Action: Petition for certiorari
Date: March 13, 1997
FACTS
1. Clark Field Taxi Inc., a family-owned
corporation (by the family of Sergio Naguiat; they
also own another company, Naguiat Enterprises),
held a concessionaire’s contract with the Army
Air Force Exchange Services (AAFES) for the
operation of taxi services within Clark Air Base.
-Leonardo Galang et.al. were among those hired
as taxicab drivers.
-They worked at least 3-4 times a week, and are
required to pay boundary fee of US$26.50 (if
woking from 1AM to 12NN) or US$27 (if working
from 12NN to 12MN).
-They earned US$15.00 daily. The excess of that
amouont is deposited to the company, which
they can withdraw every 15 days.
2. Due to the phase out of the US military bases
in the Philippines, AAFES was dissolved and the
services of the taxicab drivers were terminated.
3. AAFES Taxi Drivers Association (union) held a
negotiation with CFTI for their separation
benefits. It was agreed that they will receive P500
for every year of service as severance pay. Galang
et.al., however, refused to accept the said
amount.
SHANABANANA
4. Galang et.
union and instead joined the National
Organization of Workingmen. They filed a
complaint against Naguiat Enterprises, AAFES,
and the union, for payment of separation pay due
to termination/phase out.
-They alleged that they were regular employees
of the Naguiat Enterprises, although it was CFTI
who approved and supervised their employment
(Naguiat as their indirect employer, therefore
liable with CFTI)
-They also alleged that CFTI closed business due
to great financial losses and lost business
opportunity (roads impassable due to Mt.
Pinatubo eruption; lost business due to phase out
of US bases), hence they should be entitled to
half month salary for every year of service
rendered as separation pay (or $120 every
month, based on the $240 which is the minimum
monthly earnings as taxi driver of CFTI)
5. Labor Arbiter: ordered payment of P1,200
($120 x5) for every year of service “for
humanitarian consideration.” Galang et.al
appealed to the NLRC.
6. NLRC: ruled that the drivers were entitled to
the separation pay in the amount of $120 for
every year of service, and that Sergio Naguiat and
Antolin Naguiat, father and son and President
and VP of Naguiat Enterprises, should be held
jointly and severally liable with CFTI for the
payment of separation pay.
7. Their MR being denied, hence this petition by
Naguiat.
ISSUE 1
WON private respondent-employees (Galang
et.al.), who were separated from service due to
the closure of Clark Air Base, entitled to
separation pay -- YES
HELD
TORTS ATTY. VIAGEDOR
1. Naguiat failed to show that NLRC acted without
or in excess of its jurisdiction or with grave abuse
of discretion. It is well-settled in Philippine
jurisprudence that the finding of facts of
administrative agencies are binding upon this
Court unless there is a showing of grave abuse of
discretion.
2. Naguiat also failed to prove with clear and
satisfactory evidence CFTI’s business losses or
financial reverses so as to sustain retrenchment
or closure of business and warrant exemption of
separation pay. Further, Naguiat is also estopped
from questioning the amount of $240 as basis for
the computation of separation pay as he did not
appeal nor manifest error in the findings and
conclusions of the labor arbiter.
3. NLRC is correct in holding that the respondent-
employees were entitled to separation pay in the
amount of $120.00 (one half of $240.00 monthly
pay) or its peso equivalent for every year of
service.
ISSUE 2
WON officers of corporations are ipso facto liable
jointly and severally with the companies they
represent for the payment of separation pay --
YES
HELD
1. NAGUIAT ENTERPRISES NOT SOLIDARILY
LIABLE. The findings of the labor arbiter, which is
binding in this court, is that the respondents were
regular employees of CFTI who received wages
on a boundary or commission basis. There is no
evidence to show that Naguiat Enterprises is an
indirect employer nor a labor-only contractor of
the drivers.
-They submitted documents such as drivers’
applications for employment with CFTI
-SSS remittances and payroll of Naguiat
SHANABANANA
Enterprises show that none of them were its
employees
2. The drivers’ claims only signify their confusion
on the personalities of Sergio Naguiat as an
individual who was president of CFTI, and Sergio
Naguiat Enterprises, as a separate corporate
entity with a separate business. The truth of the
matter is, Sergio Naguiat, in supervising the taxi
drivers and determining their employment
terms, was rather carrying out his responsibilities
as president of CFTI. Naguiat Enterprises as a
separate corporation does not appear to be
involved at all (although Sergio Naguiat is also a
stockholder and the director of said firm).
3. BUT, CFTI PRESIDENT SOLIDARILY LIABLE.
Sergio Naguiat, in his capacity as president of
CFTI, cannot be exonerated from joint and
several liability in the payment of separation pay
to individual respondents. He falls within the
meaning of an “employer” as contemplated by
the Labor Code, who may be held jointly and
severally liable for the obligations of the
corporation to its dismissed employees.
4.Moreover, there is a corporate tort in this case.
Tort is a breach of a legal duty: the violation of a
right given or the omission of a duty imposed by
law. In this case, because CFTI failed to comply
with the law-immposed duty to grant separation
pay to employees in case of closure of
establishment, the stockholder who was actively
engaged in the management or operation of the
business should be held personally liable.
-Purusant to Corporation Code, Title XII (Close
Corporations), Section 100, par. 5. To the extent
that the stockholders are actively engage(d) in
the management or operation of the business
and affairs of a close corporation, the
stockholders shall be held to strict fiduciary
duties to each other and among themselves. Said
stockholders shall be personally liable for
corporate torts unless the corporation has
obtained reasonably adequate liability
insurance."
TORTS ATTY. VIAGEDOR
5. However, Antolin Naguiat, as the VP of CFTI,
cannot be held liable. Although he was the
general manager, it was not shown that he acted
in such capacity. There was no evidence on the
extent of his participation in the management or
operation of the business.
DISPO
Petition partly granted. CFTI and Sergio Naguiat,
as president and co-owner thereof, are jointly
and severally liable to pay the respondents the
separation pay computed at US$120 for every
year of service. Sergio Naguiat Enterprises and
Antolin Naguiat are absolved from liability on the
other hand.
NOTES
Torts And Damages Case Digest: Grand Union
Supermarket Et Al., V. Jose J. Espino, Jr., Et Al.,
(1979)
G.R. No. L-48250 December 28, 1979
Lessons Applicable: Public humiliation (Torts and
Damages)
Laws Applicable: Articles 19 and 21 in relation to
Article 2219 of the Civil Code, Art. 26,Art. 2214,
New Civil Code
FACTS:
Jose J. Espino. Jr., a civil engineer and an
executive of Procter and Gamble Philippines, Inc,
together with his wife and two daughters went to
shop at South Supermarket in Makati
Finding a cylindrical "rat tail" file which he needed
for his hobby, he picked it up and held it fearing
it might get lost because of its tiny size
SHANABANANA
While shopping, they saw the maid of Jose's aunt
so as he talked, he placed the rat tail in his breast
pocket partly exposed
At the check-out counter, he paid for their
purchases worth P77 but forgot to pay the file
As he was exiting the supermarket, he was
approached by Guard Ebreo regarding the file in
his pocket. He quickly apologized saying "I'm
Sorry" and he turned towards the cashier to
pay. But, he was stopped and instead was
brought to the rear of the supermarket when he
was asked to fill out an Incident
Report labeling him as "Shoplifter"
His wife joined him since he was taking so long
and they were brought to the first checkout
counter where Ms. Nelia Santos-Fandino's desk
was. She made a remark:"Ano, nakaw na naman
ito". Jose told Ms. Fandino that he was going to
pay for the file because he needed it but she
replied "That is all they say, the people whom we
cause not paying for the goods say... They all
intended to pay for the things that are found to
them."
Jose objected stating he is a regular customer of
the supermarket
He gave P5 to pay for the P3.85 cost of the file
but Ms. Fandino said the P5 was his fine which
will be rewarded to the guard. People were
staring at them. He took the file and paid the file
at the nearest checkout counter with P50 and got
out as fast as they could. His first impulse was to
go back to the supermarket that night to throw
rocks at its glass windows. But reason prevailed
over passion and he thought that justice should
take its due course.
He filed against Grand Union Supermarket et
al. founded on Article 21 in relation to Article
2219 of the New Civil Code and prays for moral
damages, exemplary damages, attorney s fees
and 'expenses of litigation, costs of the suit and
the return of the P5 fine
TORTS ATTY. VIAGEDOR
CFI: dismissed
CA: reversed and granted damages of P75,000 by
way of moral damages, P25,000 as exemplary
damages, and P5,000 as attorney's fee
ISSUE: W/N Grand Union Supermarket should be
liable for public humiliation founded on Article 21
in relation to Article 2219 of the New Civil Code
HELD: YES. Grand Union Supermarket ordered to
pay, jointly and severally moral damages P5,000
and P2,000 as and for attorney's fees; and to
return the P5 fine
Jose did not intend to steal the file and that is act
of picking up the file from the open shelf was not
criminal nor done with malice or criminal intent
for on the contrary, he took the item with the
intention of buying and paying for it
personal circumstances:
graduate Mechanical Engineer from U.P. Class
1950, employed as an executive of Proctor &
Gamble Phils., Inc., a corporate manager incharge
of motoring and warehousing therein; honorably
discharged from the Philippine Army in 1946; a
Philippine government pensionado of the United
States for six months; member of the Philippine
veterans Legion; author of articles published in
the Manila Sunday Times and Philippines Free
Press; member of the Knights of Columbus,
Council No. 3713; son of the late Jose Maria
Espino, retired Minister, Department of Foreign
Affairs at the Philippine Embassy Washington
Jose was falsely accused of shoplifting is evident
Fine branding him as a thief which was not right
nor justified
the mode and manner in which he was subjected,
shouting at him, imposing upon him a fine,
threatening to call the police and in the presence
and hearing of many people at the Supermarket
SHANABANANA
which brought and caused him humiliation and
embarrassment, sufficiently rendered the
petitioners liable for damages under Articles 19
and 21 in relation to Article 2219 of the Civil Code
It is against morals, good customs and public
policy to humiliate, embarrass and degrade the
dignity of a person
Everyone must respect the dignity, personality,
privacy and peace of mind of his neighbors and
other persons (Article 26, Civil Code)
His forgetfullness led to his embarassment and
humiliation thereby causing him mental anguish,
wounded feelings and serious anxiety. His act of
omission contributed to the occurrence of his
injury or loss and such contributory negligence is
a factor which may reduce the damages that
private respondent may recover (Art. 2214, New
Civil Code). Moreover, that many people were
present and they saw and heard the ensuing
interrogation and altercation appears to be
simply a matter of coincidence in a supermarket
which is a public place and the crowd of
onlookers, hearers or bystanders was not
deliberately sought or called by management to
witness private respondent's predicament.
Grand Union Supermarket acted in good faith in
trying to protect and recover their property, a
right which the law accords to them. - eliminate
the grant of exemplary damages .
PEOPLE V. AGLIDAY
FACTS: That on the evening of February
25, 1999, at Brgy. Nalsian Sur, Bayambang,
Pangasinan, Ricardo Agliday, with intent to kill,
did then and there, wilfully, unlawfully, and
feloniously shoot his son Richard Agliday using an
unlicensed shotgun, which caused his death. The
court then found Ricardo Agliday y Tolentino,
guilty of PARRICIDE and was sentenced to suffer
TORTS ATTY. VIAGEDOR
reclusion perpetua and to indemnify the heirs of
the victim amounting to P50, 000.00.
CRIME COMMITED: PARRICIDE
CONTENTION OF THE ACCUSED: On his
appeal on the Regional Trial Court, San Carlos
City, Pangasinan, Agliday pleaded not guilty as
the incident, on his belief was merely an accident.
And citing Article 12, paragraph 4 under the
Revised Penal Code which says, “Any person who,
while performing a lawful act with due care,
causes an injury by mere accident without fault
or intention of causing it”, is an exempting
circumstance. Agliday also averred that he was
only cleaning his shotgun and accidentally fired
on the direction of his son.
CONTENTION OF THE STATE: The mother and
brother of the deceased testified against the
accused-appellant, enunciating that the act was
done with intent. That before the incident,
Ricardo and his wife Conchita was quarrelling,
and the deceased intervened and tried to pacify
his father who was then under the influence of
liquor. Apparently angered and not listening to
the decease, proceeded to his bedroom, got his
shotgun, and fired it to Richard.
DECISION: The court negated the story of
the accused. That intent was present in the act.
The court believed that a shotgun cannot be fired
instantly without cocking it. Undoubtedly,
appellant cocked the shotgun before discharging
it, showing a clear intent to fire it at someone.
The court then gave credence to the
corroborated testimonies of the witness.
Therefore, the APPEAL was DENIED, and the
ASSAILED DECISION WAS AFFIRMED.
NATIONAL POWER
CORPORATION, Petitioner, v. LUCMAN M.
IBRAHIM, ATTY. OMAR G. MARUHOM, ELIAS G.
MARUHOM, BUCAY G. MARUHOM, MAMOD G.
SHANABANANA
MARUHOM, FAROUK G. MARUHOM, HIDJARA G.
MARUHOM, ROCANIA G. MARUHOM, POTRISAM
G. MARUHOM, LUMBA G. MARUHOM, SINAB G.
MARUHOM, ACMAD G. MARUHOM, SOLAYMAN
G. MARUHOM, MOHAMAD M. IBRAHIM,
CAIRONESA M. IBRAHIM AND MACAPANTON K.
MANGONDATO, Respondents.
DECISION
PEREZ, J.:
At bench is a petition for review
on certiorari1 assailing the Decision2 dated 24
June 2005 and Resolution3 dated 5 December
2006 of the Court of Appeals in CA-G.R. CV No.
68061.
The facts:
The Subject Land
In 1978, petitioner took possession of a 21,995
square meter parcel of land in Marawi City
(subject land) for the purpose of building thereon
a hydroelectric power plant pursuant to its Agus
1 project. The subject land, while in truth a
portion of a private estate registered under
Transfer Certificate of Title (TCT) No. 378-A4 in
the name of herein respondent Macapanton K.
Mangondato (Mangondato),5 was occupied by
petitioner under the mistaken belief that such
land is part of the vast tract of public land
reserved for its use by the government
under Proclamation No. 1354, s. 1974.6cralawred
Mangondato first discovered petitioner’s
occupation of the subject land in 1979—the year
that petitioner started its construction of
the Agus 1 plant. Shortly after such discovery,
Mangondato began demanding compensation
for the subject land from petitioner.
In support of his demand for compensation,
Mangondato sent to petitioner a letter7 dated 28
September 1981 wherein the former detailed the
TORTS ATTY. VIAGEDOR
origins of his ownership over the lands covered
by TCT No. 378-A, including the subject land. The Thus, during the early 1990s, petitioner and
relevant portions of the letter Mangondato partook in a series of
read:chanRoblesvirtualLawlibrary communications aimed at settling the amount of
compensation that the former ought to pay the
Now let me trace the basis of the title to the land
latter in exchange for the subject land.
adverted to for particularity. The land titled in my
Ultimately, however, the communications failed
name was originally consisting of seven (7)
to yield a genuine consensus between petitioner
hectares. This piece of land was particularly set
and Mangondato as to the fair market value of
aside by the Patriarch Maruhom, a fact
the subject land.chanroblesvirtuallawlibrary
recognized by all royal datus of Guimba, to
belong to his eldest son, Datu Magayo-ong Civil Case No. 605-92 and Civil Case No. 610-92
Maruhom. This is the very foundation of the right
and ownership over the land in question which
With an agreement basically out of reach,
was titled in my name because as the son-in-law
Mangondato filed a complaint for reconveyance
of Hadji Ali Maruhom the eldest son of, and only
against petitioner before the Regional Trial Court
lawyer among the descendants of Datu Magayo-
(RTC) of Marawi City in July 1992. In his
ong Maruhom, the authority and right to apply
complaint, Mangondato asked for, among others,
for the title to the land was given to me by said
the recovery of the subject land and the payment
heirs after mutual agreement among themselves
by petitioner of a monthly rental from 1978 until
besides the fact that I have already bought a
the return of such land. Mangondato’s complaint
substantial portion of the original seven (7)
was docketed as Civil Case No. 605-92.
hectares.

For its part, petitioner filed an expropriation

The original title of this seven (7) hectares has
been subdivided into several TCTs for the other
children of Datu Magayo-ong Maruhom with
whom I have executed a quit claim. Presently,
only three (3) hectares is left to me out of the
original seven (7) hectares representing those
portion [sic] belonging to my wife and those I
have bought previously from other heirs. This is
now the subject of this case.8cralawlawlibrary
Petitioner, at first, rejected Mangondato’s claim
of ownership over the subject land; the former
then adamant in its belief that the said land is
public land covered by Proclamation No. 1354, s.
1974. But, after more than a decade, petitioner
finally acquiesced to the fact that the subject land
is private land covered by TCT No. 378-A and
consequently acknowledged Mangondato’s right,
as registered owner, to receive compensation
therefor.
complaint9 before the RTC on 27 July 1992.
Petitioner’s complaint was docketed as Civil Case
No. 610-92.
Later, Civil Case No. 605-92 and Civil Case No.
610-92 were consolidated before Branch 8 of the
Marawi City RTC.
On 21 August 1992, Branch 8 of the Marawi City
RTC rendered a Decision10 in Civil Case No. 605-
92 and Civil Case No. 610-92. The decision upheld
petitioner’s right to expropriate the subject land:
it denied Mangondato’s claim for reconveyance
and decreed the subject land condemned in favor
of the petitioner, effective July of 1992, subject
to payment by the latter of just compensation in
the amount of P21,995,000.00. Anent
petitioner’s occupation of the subject land from
1978 to July of 1992, on the other hand, the
decision required the former to pay rentals

SHANABANANA TORTS ATTY. VIAGEDOR

therefor at the rate of P15,000.00 per month
with 12% interest per annum. The
decision’s fallo reads:chanRoblesvirtualLawlibrar
y
WHEREFORE, the prayer in the recovery case for
[petitioner’s] surrender of the property is denied
but [petitioner] is ordered to pay monthly rentals
in the amount of P15,000.00 from 1978 up to July
1992 with 12% interest per annum xxx and the
property is condemned in favor of [petitioner]
effective July 1992 upon payment of the fair
market value of the property at One Thousand
(P1,000.00) Pesos per square meter or a total of
Twenty-One Million Nine Hundred Ninety-Five
Thousand (P21,995,000.00) [P]esos.11cralawred
cralawlawlibrary
Disagreeing with the amount of just
compensation that it was adjudged to pay under
the said decision, petitioner filed an appeal with
the Court of Appeals. This appeal was docketed in
the Court of Appeals as CA-G.R. CV No. 39353.
Respondents Ibrahims and Maruhoms and Civil
Case No. 967-93
During the pendency of CA-G.R. CV No. 39353, or
on 29 March 1993, herein respondents the
Ibrahims and Maruhoms12 filed before the RTC of
Marawi City a complaint13 against Mangondato
and petitioner. This complaint was docketed
as Civil Case No. 967-93 and was raffled to Branch
10 of the Marawi City RTC.
In their complaint, the Ibrahims and Maruhoms
disputed Mangondato’s ownership of the lands
covered by TCT No. 378-A, including the subject
land. The Ibrahims and Maruhoms asseverate
that they are the real owners of the lands covered
by TCT No. 378-A; they being the lawful heirs of
the late Datu Magayo-ong Maruhom, who was
the original proprietor of the said lands.14 They
also claimed that Mangondato actually holds no
SHANABANANA
claim or right over the lands covered by TCT No.
378-A except that of a trustee who merely holds
the said lands in trust for them.15cralawred
The Ibrahims and Maruhoms submit that since
they are the real owners of the lands covered by
TCT No. 378-A, they should be the ones entitled
to any rental fees or expropriation indemnity that
may be found due for the subject land.
Hence, the Ibrahims and Maruhoms prayed for
the following reliefs in their
16
complaint: cralawred
1. That Mangondato be ordered to execute
a Deed of Conveyance transferring to
them the ownership of the lands covered
by TCT No. 378-
A;ChanRoblesVirtualawlibrary
2. That petitioner be ordered to pay to
them whatever indemnity for the subject
land it is later on adjudged to pay in Civil
Case No. 605-92 and Civil Case No. 610-
92;ChanRoblesVirtualawlibrary
3. That Mangondato be ordered to pay to
them any amount that the former may
have received from the petitioner by way
of indemnity for the subject
land;ChanRoblesVirtualawlibrary
4. That petitioner and Mangondato be
ordered jointly and severally liable to pay
attorney’s fees in the sum of
P200,000.00.
In the same complaint, the Ibrahims and
Maruhoms also prayed for the issuance of a
temporary restraining order (TRO) and a writ of
preliminary injunction to enjoin petitioner,
during the pendency of the suit, from making any
payments to Mangondato concerning
expropriation indemnity for the subject
land.17cralawred
TORTS ATTY. VIAGEDOR
On 30 March 1993, Branch 10 of the Marawi City
RTC granted the prayer of the Ibrahims and
Maruhoms for the issuance of a TRO.18 On 29
May 1993, after conducting an appropriate
hearing for the purpose, the same court likewise
granted the prayer for the issuance of a writ of
preliminary injunction.19cralawred
In due course, trial then ensued in Civil Case No.
967-93.chanroblesvirtuallawlibrary
The Decision of the Court of Appeals in CA-G.R. CV
No. 39353
and the Decision of this Court in G.R. No. 113194
On 21 December 1993, the Court of Appeals
rendered a Decision in CA-G.R. CV No. 39353
denying the appeal of petitioner and affirming in
toto the 21 August 1992 Decision in Civil Case No.
605-92 and Civil Case No. 610-92. Undeterred,
petitioner next filed a petition for review
on certiorari with this Court that was docketed
herein as G.R. No. 113194.20cralawred
On 11 March 1996, we rendered our Decision in
G.R. No. 113194 wherein we upheld the Court of
Appeals’ denial of petitioner’s appeal.21 In the
same decision, we likewise sustained the
appellate court’s affirmance of the decision in
Civil Case No. 605-92 and Civil Case No. 610-92
subject only to a reduction of the rate of interest
on the monthly rental fees from 12% to 6% per
annum.22cralawred
Our decision in G.R. No. 113194 eventually
became final and executory on 13 May
1996.23cralawred
Execution of the 21 August 1992 Decision in Civil
Case No. 605-92 and
Civil Case No. 610-92, as Modified
In view of the finality of this Court’s decision in
G.R. No. 113194, Mangondato filed a motion for
SHANABANANA
execution of the decision in Civil Case No. 605-92
and Civil Case No. 610-92.24 Against this motion,
however, petitioner filed an
25
opposition. cralawred
In its opposition, petitioner adverted to the
existence of the writ of preliminary injunction
earlier issued in Civil Case No. 967-93 that enjoins
it from making any payment of expropriation
indemnity over the subject land in favor of
Mangondato.26 Petitioner, in sum, posits that
such writ of preliminary injunction constitutes a
legal impediment that effectively bars any
meaningful execution of the decision in Civil Case
No. 605-92 and Civil Case No. 610-92.
Finding no merit in petitioner’s opposition,
however, Branch 8 of the Marawi City RTC
rendered a Resolution27 dated 4 June 1996
ordering the issuance of a writ of execution in
favor of Mangondato in Civil Case No. 605-92 and
Civil Case No. 610-92. Likewise, in the same
resolution, the trial court ordered the issuance of
a notice of garnishment against several of
petitioner’s bank accounts28 for the amount
of P21,801,951.00—the figure representing the
total amount of judgment debt due from
petitioner in Civil Case No. 605-92 and Civil Case
No. 610-92 less the amount then already settled
by the latter. The dispositive portion of the
resolution reads:chanRoblesvirtualLawlibrary
WHEREFORE, let a Writ of Execution and the
corresponding order or notice of garnishment be
immediately issued against [petitioner] and in
favor of [Mangondato] for the amount of Twenty
One Million Eight Hundred One Thousand and
Nine Hundred Fifty One (P21,801,951.00)
Pesos.chanrobleslaw
x x x.29cralawlawlibrary
Pursuant to the above resolution, a notice of
garnishment30 dated 5 June 1996 for the amount
TORTS ATTY. VIAGEDOR
of P21,801,951.00 was promptly served upon the Maruhoms for the rental fees and expropriation
Philippine National Bank (PNB)—the authorized indemnity adjudged in Civil Case No. 605-92 and
depositary of petitioner. Consequently, the Civil Case No. 610-92.33cralawred
amount thereby garnished was paid to
Mangondato in full satisfaction of petitioner’s In addition, Mangondato and petitioner were
judgment debt in Civil Case No. 605-92 and Civil also decreed solidarily liable to the Ibrahims and
Case No. 610-92.chanroblesvirtuallawlibrary Maruhoms for attorney’s fees in the amount of
P200,000.00.34cralawred
Decision in Civil Case No. 967-93
The pertinent dispositions in the decision
Upon the other hand, on 16 April 1998, Branch 10 read:chanRoblesvirtualLawlibrary
of the Marawi City RTC decided Civil Case No.
WHEREFORE, premises considered, judgment is
967-93.31 In its decision, Branch 10 of the Marawi
hereby rendered in favor of [the Ibrahims and
City RTC made the following relevant
Maruhoms] and against [Mangondato and
findings:32cralawred
petitioner] as follows:
1. The Ibrahims and Maruhoms—not
1. x x x
Mangondato—are the true owners of
the lands covered by TCT No. 378-A, 2. Ordering [Mangondato and petitioner]
which includes the subject land. to pay jointly and severally [the Ibrahims
and Maruhoms] all forms of
2. The subject land, however, could no
expropriation indemnity as adjudged for
longer be reconveyed to the Ibrahims
[the subject land] consisting of 21,995
and Maruhoms since the same was
square meters in the amount of
already expropriated and paid for by the
P21,801,051.00 plus other forms of
petitioner under Civil Case No. 605-92
indemnity such as rentals and
and Civil Case No. 610-92.
interests;ChanRoblesVirtualawlibrary
3. Be that as it may, the Ibrahims and
3. Ordering [Mangondato and petitioner]
Maruhoms, as true owners of the subject
to pay [the Ibrahims and Maruhoms]
land, are the rightful recipients of
jointly and severally the sum of
whatever rental fees and indemnity that
P200,000.00 as attorney’s
may be due for the subject land as a
fees;ChanRoblesVirtualawlibrary
result of its expropriation.
4. x x x

Consistent with the foregoing findings, Branch 10 5. x x x

of the Marawi City RTC thus required payment of
6. x x x
all the rental fees and expropriation indemnity
due for the subject land, as previously adjudged SO ORDERED.35cralawred
in Civil Case No. 605-92 and Civil Case No. 610- cralawlawlibrary
92, to the Ibrahims and Maruhoms.

Notable in the trial court’s decision, however, was Petitioner’s Appeal to the Court of Appeals and
that it held both Mangondato and the the Execution
petitioner solidarily liable to the Ibrahims and

SHANABANANA TORTS ATTY. VIAGEDOR

Pending Appeal of the Decision in Civil Case No.
967-93
Petitioner appealed the decision in Civil Case No.
967-93 with the Court of Appeals: contesting
mainly the holding in the said decision that it
ought to be solidarily liable with Mangondato to
pay to the Ibrahims and Maruhoms the rental
fees and expropriation indemnity adjudged due
for the subject land. This appeal was docketed
as CA-G.R. CV No. 68061.
While the foregoing appeal was still pending
decision by the Court of Appeals, however, the
Ibrahims and Maruhoms were able to secure with
the court a quo a writ of execution pending
appeal36 of the decision in Civil Case No. 967-93.
The enforcement of such writ led to the
garnishment of Mangondato’s moneys in the
possession of the Social Security System (SSS) in
the amount of P2,700,000.00 on 18 September
1998.37 Eventually, the amount thereby
garnished was paid to the Ibrahims and
Mangondato in partial satisfaction of the decision
in Civil Case No. 967-93.
On 24 June 2005, the Court of Appeals rendered
its Decision38 in CA-G.R. CV No. 68061 denying
petitioner’s appeal. The appellate court denied
petitioner’s appeal and affirmed the decision in
Civil Case No. 967-93, subject to the right of
petitioner to deduct the amount of
P2,700,000.00 from its liability as a consequence
of the partial execution of the decision in Civil
Case No. 967-93.39cralawred
Hence, the present appeal by
petitioner.chanroblesvirtuallawlibrary
The Present Appeal
The present appeal poses the question of
whether it is correct, in view of the facts and
circumstances in this case, to hold petitioner
SHANABANANA
liable in favor of the Ibrahims and Maruhoms for
the rental fees and expropriation indemnity
adjudged due for the subject land.
In their respective decisions, both Branch 10 of
the Marawi City RTC and the Court of Appeals had
answered the foregoing question in the
affirmative. The two tribunals postulated that,
notwithstanding petitioner’s previous payment
to Mangondato of the rental fees and
expropriation indemnity as a consequence of the
execution of the decision in Civil Case No. 605-92
and 610-92, petitioner may still be held liable to
the Ibrahims and Maruhoms for such fees and
indemnity because its previous payment to
Mangondato was tainted with “bad faith.”40 As
proof of such bad faith, both courts cite the
following considerations:41cralawred
1. Petitioner “allowed” payment to
Mangondato despite its prior knowledge,
which dates back as early as 28
September 1981, by virtue of
Mangondato’s letter of even date, that
the subject land was owned by a certain
Datu Magayo-ong Maruhom and not by
Mangondato; and
2. Petitioner “allowed” such payment
despite the issuance of a TRO and a writ
of preliminary injunction in Civil Case No.
967-93 that precisely enjoins it from
doing so.
For the two tribunals, the bad faith on the part of
petitioner rendered its previous payment to
Mangondato invalid insofar as the Ibrahims and
Maruhoms are concerned. Hence, both courts
concluded that petitioner may still be held liable
to the Ibrahims and Maruhoms for the rental fees
and expropriation indemnity previously paid to
Mangondato.42cralawred
Petitioner, however, argues otherwise. It submits
that a finding of bad faith against it would have
TORTS ATTY. VIAGEDOR
no basis in fact and law, given that it merely on Lopez’s definition by describing bad faith
complied with the final and executory decision in as:chanRoblesvirtualLawlibrary
Civil Case No. 605-92 and Civil Case No. 610-92
“xxx a state of mind affirmatively operating with
when it paid the rental fees and expropriation
furtive design or with some motive of self-
indemnity due the subject to
interest or will or for ulterior
Mangondato.43 Petitioner thus insists that it
purpose.”47cralawlawlibrary
should be absolved from any liability to pay the
rental fees and expropriation indemnity to the
Ibrahims and Maruhoms and prays for the Air France’s articulation of the meaning of bad
dismissal of Civil Case No. 967-93 against faith was, in turn, echoed in a number
it.chanroblesvirtuallawlibrary subsequent cases,48 one of which, is the 2009
case of Balbuena, et al. v. Sabay, et al.49cralawred
OUR RULING

In the 1967 case of Board of Liquidators v. Heirs

We grant the appeal. of M. Kalaw,50 on the other hand, we enunciated
one of the more oft-repeated formulations of bad
No Bad Faith On The Part faith in our case law:chanRoblesvirtualLawlibrary
of Petitioner
“xxx bad faith does not simply connote bad
judgment or negligence; it imports a dishonest
Petitioner is correct. No “bad faith” may be taken
purpose or some moral obliquity and conscious
against it in paying Mangondato the rental fees
doing of wrong. It means breach of a known duty
and expropriation indemnity due the subject
thru some motive or interest of ill will; it partakes
land.
of the nature of fraud.”51cralawlawlibrary
Our case law is not new to the concept of bad
faith. Decisions of this Court, both old and new, As a testament to its enduring quality, the
had been teeming with various pronouncements foregoing pronouncement in Board of
that illuminate the concept amidst differing legal Liquidators had been reiterated in a slew of later
contexts. In any attempt to understand the basics cases,52 more recently, in the 2009 case
of bad faith, it is mandatory to take a look at some of Nazareno, et al. v. City of Dumaguete53 and the
of these pronouncements: 2012 case of Aliling v. Feliciano.54cralawred

In Lopez, et al. v. Pan American World
Airways,44 a 1966 landmark tort case, we defined
the concept of bad faith
as:chanRoblesvirtualLawlibrary
“…a breach of a known duty through some
motive of interest or ill will.”45cralawlawlibrary
Just months after the promulgation of Lopez,
however, came the case of Air France v.
Carrascoso, et al.,46 In Air France, we expounded
Still, in 1995, the case of Far East Bank and Trust
Company v. Court of Appeals55 contributed the
following description of bad faith in our
jurisprudence:chanRoblesvirtualLawlibrary
“Malice or bad faith implies a conscious and
intentional design to do a wrongful act for a
dishonest purpose or moral
obliquity;xxx.”56cralawlawlibrary
The description of bad faith in Far East Bank and
Trust Company then went on to be repeated in

SHANABANANA TORTS ATTY. VIAGEDOR

subsequent cases such as 1995’s Ortega v. Court
of Appeals,57 1997’s Laureano Investment and
Development Corporation v. Court of
Appeals,58 2010’s Lambert Pawnbrokers v.
59
Binamira and 2013’s California Clothing, Inc., v.
Quiñones,60 to name a few.
Verily, the clear denominator in all of the
foregoing judicial pronouncements is that the
essence of bad faith consists in
the deliberate commission of a wrong. Indeed,
the concept has often been equated with
malicious or fraudulent motives, yet
distinguished from the mere unintentional
wrongs resulting from mere simple negligence or
oversight.61cralawred
A finding of bad faith, thus, usually assumes the
presence of two (2) elements: first, that the actor
knew or should have known that a particular
course of action is wrong or illegal,
and second, that despite such actual or
imputable knowledge, the actor, voluntarily,
consciously and out of his own free will, proceeds
with such course of action. Only with the
concurrence of these two elements can we begin
to consider that the wrong committed had been
done deliberately and, thus, in bad faith.
In this case, both Branch 10 of the Marawi City
RTC and the Court of Appeals held that petitioner
was in bad faith when it paid to Mangondato the
rental fees and expropriation indemnity due the
subject land. The two tribunals, in substance,
fault petitioner when it “allowed” such payment
to take place despite the latter’s alleged
knowledge of the existing claim of the Ibrahims
and Maruhoms upon the subject land and the
issuance of a TRO in Civil Case No. 967-93. Hence,
the two tribunals claim that petitioner’s payment
to Mangondato is ineffective as to the Ibrahims
and Maruhoms, whom they found to be the real
owners of the subject land.
SHANABANANA
We do not agree.
Branch 10 of the Marawi City RTC and the Court
of Appeals erred in their finding of bad faith
because they have overlooked the utter
significance of one important fact: that
petitioner’s payment to Mangondato of the rental
fees and expropriation indemnity adjudged due
for the subject land in Civil Case No. 605-92 and
Civil Case No. 610-92, was required by the final
and executory decision in the said two cases and
was compelled thru a writ of garnishment issued
by the court that rendered such decision. In other
words, the payment to Mangondato was not a
product of a deliberate choice on the part of the
petitioner but was made only in compliance to
the lawful orders of a court with jurisdiction.
Contrary then to the view of Branch 10 of the
Marawi City RTC and of the Court of Appeals, it
was not the petitioner that “allowed” the
payment of the rental fees and expropriation
indemnity to Mangondato. Indeed, given the
circumstances, the more accurate rumination
would be that it was the trial court in Civil Case
No. 605-92 and Civil Case No. 610-92 that
ordered or allowed the payment to Mangondato
and that petitioner merely complied with the
order or allowance by the trial court. Since
petitioner was only acting under the lawful
orders of a court in paying Mangondato, we find
that no bad faith can be taken against it,
even assuming that petitioner may have had
prior knowledge about the claims of the Ibrahims
and Maruhoms upon the subject land and the
TRO issued in Civil Case No. 967-93.
Sans Bad Faith, Petitioner
Cannot Be Held Liable to the
Ibrahims and Maruhoms
Without the existence of bad faith, the ruling of
the RTC and of the Court of Appeals apropos
petitioner’s remaining liability to the Ibrahims
TORTS ATTY. VIAGEDOR
and Maruhoms becomes devoid of legal basis. In
fact, petitioner’s previous payment to
Mangondato of the rental fees and expropriation
indemnity due the subject land pursuant to the
final judgment in Civil Case No. 605-92 and Civil
Case No. 610-92 may be considered to have
extinguished the former’s obligation regardless
of who between Mangondato, on one hand, and
the Ibrahims and Maruhoms, on the other, turns
out to be the real owner of the subject
land.62 Either way, petitioner cannot be made
liable to the Ibrahims and Maruhoms:
First. If Mangondato is the real owner of the
subject land, then the obligation by petitioner to
pay for the rental fees and expropriation
indemnity due the subject land is already deemed
extinguished by the latter’s previous payment
under the final judgment in Civil Case No. 605-92
and Civil Case No. 610-92. This would be a simple
case of an obligation being extinguished through
payment by the debtor to its creditor.63 Under
this scenario, the Ibrahims and Maruhoms would
not even be entitled to receive anything from
anyone for the subject land. Hence, petitioner
cannot be held liable to the Ibrahims and
Maruhoms.
Second. We, however, can reach the same
conclusion even if the Ibrahims and Maruhoms
turn out to be the real owners of the subject land.
Should the Ibrahims and Maruhoms turn out to
be the real owners of the subject land,
petitioner’s previous payment to Mangondato
pursuant to Civil Case No. 605-92 and Civil Case
No. 610-92—given the absence of bad faith on
petitioner’s part as previously discussed—may
nonetheless be considered as akin to a payment
made in “good faith” to a person in “possession of
credit” per Article 1242 of the Civil Code that, just
the same, extinguishes its obligation to pay for
the rental fees and expropriation indemnity due
SHANABANANA
for the subject land. Article 1242 of the Civil Code
reads:chanRoblesvirtualLawlibrary
“Payment made in good faith to any person in
possession of the credit shall release the
debtor.” cralawlawlibrary
Article 1242 of the Civil Code is an exception to
the rule that a valid payment of an obligation can
only be made to the person to whom such
obligation is rightfully owed.64 It contemplates a
situation where a debtor pays a “possessor of
credit” i.e., someone who is not the real creditor
but appears, under the circumstances, to be the
real creditor.65 In such scenario, the law
considers the payment to the “possessor of
credit” as valid even as against the real creditor
taking into account the good faith of the debtor.
Borrowing the principles behind Article 1242 of
the Civil Code, we find that Mangondato—being
the judgment creditor in Civil Case No. 605-92
and Civil Case No. 610-92 as well as the registered
owner of the subject land at the time66—may be
considered as a “possessor of credit” with respect
to the rental fees and expropriation indemnity
adjudged due for the subject land in the two
cases, if the Ibrahims and Maruhoms turn out to
be the real owners of the subject land. Hence,
petitioner’s payment to Mangondato of the fees
and indemnity due for the subject land as a
consequence of the execution of Civil Case No.
605-92 and Civil Case No. 610-92 could still validly
extinguish its obligation to pay for the same even
as against the Ibrahims and Maruhoms.
Effect of Extinguishment of
Petitioner’s Obligation
The extinguishment of petitioner’s obligation to
pay for the rental fees and expropriation
indemnity due the subject land carries with it
certain legal effects:
TORTS ATTY. VIAGEDOR
First. If Mangondato turns out to be the real
owner of the subject land, the Ibrahims and
Maruhoms would not be entitled to recover
anything from anyone for the subject land.
Consequently, the partial execution of the
decision in Civil Case No. 967-93 that had led to
the garnishment of Mangondato’s moneys in the
possession of the Social Security System (SSS) in
the amount of P2,700,000.00 in favor of the
Ibrahims and Maruhoms, becomes improper and
unjustified. In this event, therefore, the Ibrahims
and Maruhoms may be ordered to return the
amount so garnished to Mangondato.
Otherwise, i.e. if the Ibrahims and Maruhoms
really are the true owners of the subject land,
they may only recover the rental fees and
expropriation indemnity due the subject land
against Mangondato but only up to whatever
payments the latter had previously received from
petitioner pursuant to Civil Case No. 605-92 and
Civil Case No. 610-92.
Second. At any rate, the extinguishment of
petitioner’s obligation to pay for the rental fees
and expropriation indemnity due the subject land
negates whatever cause of action the Ibrahims
and Maruhoms might have had against the
former in Civil Case No. 967-93. Hence, regardless
of who between Mangondato, on one hand, and
the Ibrahims and Maruhoms, on the other, turns
out to be the real owner of the subject land, the
dismissal of Civil Case No. 967-93 insofar as
petitioner is concerned is called for.
Re: Attorney’s Fees
The dismissal of Civil Case No. 967-93 as against
petitioner necessarily absolves the latter from
paying attorney’s fees to the Ibrahims and
Maruhoms arising from that case.
WHEREFORE, premises considered, the instant
petition is GRANTED. The Decision dated 24 June
SHANABANANA
2005 and Resolution dated 5 December 2006 of
the Court of Appeals in CA-G.R. CV No. 68061 is
hereby SET ASIDE. The Decision dated 16 April
1998 of the Regional Trial Court in Civil Case No.
967-93 is MODIFIED in that petitioner is absolved
from any liability in that case in favor of the
respondents Lucman M. Ibrahim, Atty. Omar G.
Maruhom, Elias G. Maruhom, Bucay G.
Maruhom, Mamod G. Maruhom, Farouk G.
Maruhom, Hidjara G. Maruhom, Rocania G.
Maruhom, Potrisam G. Maruhom, Lumba G.
Maruhom, Sinab G. Maruhom, Acmad G.
Maruhom, Solayman G. Maruhom, Mohamad M.
Ibrahim and Caironesa M. Ibrahim. Civil Case No.
967-93 is DISMISSED as against petitioner.
No costs.
SO ORDERED.
DAYWALT v LA CORPORACION DE LOS
PADRES AGUSTINOS RECOLETOS(from Torts
Reviewer)
Facts: in 1902, Teodorica Endencia executed a
contract whereby she obligated herself to
conveyto Geo W. Daywalt a 452-hectare parcel of
land for P 4000. They agreed that a deed should
beexecuted as soon as Endencia’s title to the land
was perfected in the Court of Land
Registrationand a Torrens title issued in her
name. When the Torrens title was issued,
Endencia found outthat the property measured
1248 hectares instead of 452 hectares, as she
initially believed.Because of this, she became
reluctant to transfer the whole tract to Daywalt,
claiming that shenever intended to sell so large
an amount and that she had been misinformed as
to its area.Daywalt filed an action for specific
performance. The SC ordered Endencia to convey
the entiretract to Daywalt. Meanwhile, La
Corporacion de los Padres Agustinos Recoletos
TORTS ATTY. VIAGEDOR
(Recoletos), was a religiouscorp., w/c owned
an estate immediately adjacent to the property
sold by Endencia to Daywalt. Italso happened
that Fr. Sanz, the representative of the Recoletos,
exerted some influence andascendancy over
Endencia, who was a woman of little force and
easily subject to the influence of other people. Fr.
Sanz knew of the existence of the contracts with
Daywalt and discouraged her from conveying the
entire tract. Daywalt filed an action for damages
against the Recoletos on the ground that it
unlawfullyinduced Endencia to refrain from the
performance of her contract for the sale of the
land inquestion and to withhold delivery of the
Torrens title. Daywalt’s claim for damages against
theRecoletos was for the huge sum of P 500000
[in the year 1919], since he claims that because
of the interference of the Recoletos, he failed to
consummate a contract with another person for
thesale of the property and its conversion into a
sugar mill.
Issue: whether Recoletos is liable to Daywalt?
Held: No, it is not liable. The stranger
who interferes in a contract between other
parties cannot become more extensivelyliable
in damages for the non-performance of the
contract than the party in whose behalf
heintermediates. Hence, in order to determine
the liability of the Recoletos, there is first a need
toconsider the liability of Endencia to Daywalt.
The damages claimed by Daywalt from
Endenciacannot be recovered from her, first,
because these are special damages w/c were not
w/in thecontemplation of the parties when the
contract was made, and secondly, these
damages are tooremote to be the subject of
recovery. Since Endencia is not liable for damages
to Daywalt,neither can the Recoletos be held
liable. As already suggested, by advising Endencia
not toperform the contract, the Recoletos could
in no event render itself more extensively liable
thanthe principal in the contract.
SHANABANANA
PEDRO ELCANO and PATRICIA ELCANO, in their
capacity as Ascendants of AgapitoElcano,
deceased,plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as
father and Natural Guardian of said
minor, defendants-appellees.
G.R. No. L-24803 [May 26, 1977]
Facts of the Case:
Respondent Reginald Hill killed the son of the
plaintiffs named Agapito Elcano. A criminal
complaint was instituted against him but he was
acquitted on the ground that his act was not
criminal, because of lack of intent to kill, couple
with mistake. Subsequently, plaintiffs filed a
complaint for recovery
of damages against defendant Reginald Hill, a
minor, married at the time of the occurrence, and
his father, the defendant Marvin Hill, with who
he was living and getting subsistence, for the
same killing. A motion to dismiss was filed by
the defendants. The Court of First Instance of
Quezon City denied the motion. Nevertheless,
the civil case was finally dismissed upon motion
for reconsideration.
Issues:
1. WON the present civil action for damages is
barred by the acquittal of Reginald in the criminal
case.
2. WON Article 2180 (2nd and last paragraphs) of
the Civil Code may be applied against Atty. Hill,
notwithstanding the undisputed fact that at the
time of the occurrence complained of. Reginald,
though a minor, living with and getting
subsistence from his father, was already legally
married.
Ruling of the Court:
1. No, the present civil action for damages is not
barred by the acquittal of Reginald in the criminal
TORTS ATTY. VIAGEDOR
case. Firstly, there is a distinction as regards the
proof required in a criminal case and a civil case.
To find the accused guilty in a criminal case, proof
of guilt beyond reasonable doubt is required,
while in a civil case, preponderance of evidence
is sufficient to make the defendant pay
in damages. Furthermore, a civil case
for damages on the basis of quasi-delict does is
independently instituted from a criminal act. As
such the acquittal of Reginald Hill in the criminal
case has not extinguished his liability for quasi-
delict, hence that acquittal is not a bar to the
instant action against him.
2. Yes, the above mentioned provision may still
be applied against Atty Marvin Hill. Although
parental authority is terminated
upon emancipation of the child, emancipation by
marriage is not absolute, i.e. he can sue and be
sued in court only with the assistance of his
father, mother or guardian. As in the present
case, killing someone else contemplated judicial
litigation, thus, making Article 2180 apply to Atty.
Hill.However, inasmuch as it is evident that
Reginald is now of age, as a matter of equity, the
liability of Atty. Hill has become milling, subsidiary
to that of his son.
Manila Railroad vs La Compania Transatlantica
Facts:
Two locomotive boilers owned by The Manila
Railroad Company arrived at Manila via the
Steamship Alicante owned by Compañia
Trasatlantica de Barcelona. The equipment of the
ship for discharging heavy cargo was not
sufficiently strong to handle these boilers, so the
Steamship Company had to procure assistance
from The Atlantic, Gulf and Pacific Company
SHANABANANA
(hereafter called the Atlantic Company). The
service to be performed by the Atlantic Company
consisted in bringing its floating crane alongside
the Alicante, lifting the boilers out of the ship's
hold, and transferring them to a barge which
would be placed ready to receive them.
While the boiler was being hoisted, it was not
properly done as the rivet near the head of the
boiler was caught under the edge of the hatch.
The weight on the crane was thus increased by a
strain estimated at fifteen tons with the result
that the cable of the sling parted and the boiler
fell to the bottom of the ship's hold. (natagak ang
boiler unya nakaduha pa jud xa natagak)
The boiler was badly damaged that it had to be
reshipped to England where it was rebuilt, and
afterwards was returned to Manila. The Railroad
Company's damage by reason of the cost of
repairs, expenses, and loss of the use of the boiler
proved to be P22,343.29; and as to the amount
of the damage so resulting there is practically no
dispute. To recover these damages the present
action was instituted by the Railroad Company
against the Steamship Company who in turn
caused the Atlantic Company to be brought in as
a codefendant, and insisted that whatever
liability existed should be fixed upon the Atlantic
Company as an independent contractor who had
undertaken to discharge the boilers and had
become responsible for such damage as had
been done.
The judge of the Court of First Instance gave
judgment in favor of the plaintiff against the
Atlantic Company, but absolved the Steamship
Company from the complaint.
Issue:
TORTS ATTY. VIAGEDOR

(1) Is the Steamship Company liable to the
plaintiff by reason of having delivered the boiler
in question in a damaged condition? (2) Is the
Atlantic Company liable to be made to respond to
the steamship company for the amount the latter
may be required to pay to the plaintiff for the
damage done ? (3) Is the Atlantic Company
directly liable to the plaintiff, as the trial court
held?
Ruling:
The accident is to be attributed to the failure of
Leyden (foreman) to exercise the degree of care
which an ordinarily competent and prudent
person would have exhibited under the
circumstances which then confronted him. This
conclusion of fact cannot be refuted; and,
indeed, no attempt is here made by the appellant
to reverse this finding of the trial court.
It will be observed that a contractual relation
existed between the Railroad Company and the
Steamship Company; and the duties of the latter
with respect to the carrying and delivery of the
boilers are to be discovered by considering the
terms and legal effect of that contract. A
contractual relation also existed between the
Steamship Company and the Atlantic Company;
and the duties owing by the latter to the former
with respect to the lifting and the transferring of
the boilers are likewise to be discovered by
considering the terms and legal effect of the
contract between these parties. On the other
hand, no contractual relation existed directly
between the Railroad Company and the Atlantic
Company.
SHANABANANA
Under the contract for transportation from
England to Manila, the Steamship Company is
liable to the plaintiff for the injury done to the
boiler while it was being discharged from the ship
under articles 1103 and 1104 of the Civil Code,
for the consequences of the omission of the care
necessary to the proper performance of its
obligation. The contract to transport and deliver
at the port of Manila a locomotive boiler, which
was received by it in proper condition, is not
complied with by delivery at the port of
destination of a mass of iron the utility of which
had been destroyed.
The Steamship Company cannot escape liability
by reason of the fact that it employed a
competent independent contractor to discharge
the boilers..
Defenses of Atlantic
Atlantic contends that by the terms of the
engagement in accordance with which the
Atlantic Company agreed to render the service,
all risk incident to the discharge of the boilers was
assumed by the Steamship Company; and
secondly, that the Atlantic Company should be
absolved under the last paragraph of article 1903
of the Civil Code, inasmuch as it had used due
care in the selection of the employee whose
negligent act caused the damage in question.
At the hearing, the president of the Atlantic
company said that the agreement was that their
company would not assume responsibility for any
damage.
The Atlantic Company offered in evidence a
number of letters which had been written by it at
different times, extending over a period of years,
TORTS ATTY. VIAGEDOR
in response to inquiries made by other firms and
persons in Manila concerning the terms upon
which the Atlantic Company would make heavy
lifts. The company recognized its duty to exercise
due supervisory care; and the exemption from
liability, whatever may have been its precise
words, had reference to disasters which might
result from some inherent hidden defect in the
lifting apparatus or other unforeseen occurrence
not directly attributable to negligence of the
company in the lifting operations. Neither party
could have supposed for a moment that it was
intended to absolve the Atlantic Company from
its duty to use due care in the work.
The court said that if the exemption should be
understood in the sense which counsel for the
Atlantic Company now insists it should bear, that
is, as an absolute exemption from all
responsibility for negligence, it is evident that the
agreement was a most inequitable and unfair
one, and hence it is one that the Steamship
Company can not be lightly assumed to have
made. Understood in that sense it is the
equivalent of licensing the Atlantic Company to
perform its tasks in any manner and fashion that
it might please, and to hold it harmless from the
consequences.
There may have been in the minds of the officials
of the Atlantic Company an idea that the promise
to use due care in the lifting operations was not
accompanied by a legal obligation, such promise
being intended merely for its moral effect as an
assurance to the steamship company that the
latter might rely upon the competence and
diligence of the employees of the Atlantic
Company to accomplish the work in a proper
way. The contract can not be permitted to
operate in this one-sided manner. The two
features of the engagement, namely, the promise
SHANABANANA
to use due care and the exemption from liability
for damage should be so construed as to give
some legal effect to both. The result is, as already
indicated, that the Atlantic Company was bound
by its undertaking to use due care and that the
exemption was intended to cover accidents due
to hidden defects in the apparatus or other
unforeseeable occurrences not having their
origin in the immediate personal negligence of
the party in charge of the operations.
W/N Atlantic should be absolved
We now proceed to consider the contention that
the Atlantic Company should be absolved from
liability to the Steamship Company under the last
paragraph of article 1903 of the Civil Code, which
declares that the liability there referred to shall
cease when the persons mentioned therein
prove that they employed all the diligence of a
good father of a family to avoid the damage. Even
when Atlantic used proper care in the selection
of Leyden, the obligation of the Atlantic Company
was created by contract, and article 1903 is not
applicable to negligence arising in the course of
the performance of a contractual obligation.
Article 1903 is exclusively concerned with cases
where the negligence arises in the absence of
agreement.
In discussing the liability of the Steamship
Company to the plaintiff Railroad Company we
have already shown that a party is bound to the
full performance of his contractual engagements
under articles 1101 et seq. of the Civil Code, and
other special provisions of the Code relative to
contractual obligations; and if he falls short of
complete performance by reason of his own
negligence or that of any person to whom he may
commit the work, he is liable for the damages
resulting therefrom.. It is desirable, however, in
TORTS ATTY. VIAGEDOR
this connection, to bring out somewhat more
fully the distinction between negligence in the
performance of a contractual obligation (culpa
contractual) and negligence considered as an
independent source of obligation between
parties not previously bound (culpa aquiliana).
Justice Tracey, the author of the opinion from
which we have quoted, proceeds to observe that
Manresa, in commenting on articles 1102 and
1104, has described these two species of
negligence as contractual and extra-contractual,
the latter being the culpa aquiliana of the Roman
law. "This terminology is unreservedly accepted
by Sanchez Roman (Derecho Civil, fourth section,
chapter XI, article II, No. 12), and the principle
stated is supported by decisions of the supreme
court of Spain, among them those of November
20, 1896 (80 Jurisprudencia Civil, No. 151), and
June 27, 1894 (75 Jurisprudencia Civil, No. 182.)"
The principle that negligence in the performance
of a contract is not governed by article 1903 of
the Civil Code but rather by article 1104 of the
same Code was directly applied by this court in
the case of Baer Senior & Co.'s Successors vs.
Compañia Maritima (6 Phil. Rep., 215); and the
same idea has been impliedly if not expressly
recognized in other cases (N. T. Hashim & Co. vs.
Rocha & Co., 18 Phil. Rep., 315; Tan Chiong
Sian vs. Inchausti & Co., 22 Phil. Rep., 152).
What has been said suffices in our opinion to
demonstrate that the Atlantic Company is liable
to the Steamship Company for the damages
brought upon the latter by the failure of the
Atlantic Company to use due care in discharging
the boiler, regardless of the fact that the damage
was caused by the negligence of an employee who
was qualified for the work and who had been
chosen by the Atlantic Company with due care.
SHANABANANA
Can the Atlantic Company be held directly liable to
the Railroad Company?
Having regard then to the bare fact that the
Atlantic Company undertook to remove the
boiler from the ship's hold and for this purpose
took the property into its power and control,
there arose a duty to the owner to use due care
in the performance of that service and to avoid
damaging the property in the course of such
operation. This duty was obviously in existence
before the negligent act was done which resulted
in damage, and said negligent act may, if we still
ignore the existence of the express contract, be
considered as an act done in violation of this duty.
The duty thus to use due care is an implied
obligation, of a quasi contractual nature, since it is
created by implication of law in the absence of
express agreement. The conception of liability
with which we are here confronted is somewhat
similar to that which is revealed in the case of the
depositary, or commodatary, whose legal duty
with respect to the property committed to their
care is defined by law even in the absence of
express contract; and it can not be doubted that
a person who takes possession of the property of
another for the purpose of moving or conveying
it from one place to another, or for the purpose
of performing any other service in connection
therewith (locatio operis faciendi), owes to the
owner a positive duty to refrain from damaging
it, to the same extent as if an agreement for the
performance of such service had been expressly
made with the owner. The obligation here is
really a species of contract le, and it has its source
and explanation in the vital fact that the active
party has taken upon himself to do something
with or to the property and has taken it into his
power and control for the purpose of performing
such service. (Compare art. 1889, Civil Code.)
TORTS ATTY. VIAGEDOR
In the passage which we have already quoted
from the decision in the Rakes case this Court
recognized the fact that the violation of a quasi
contractual duty is subject to articles 1101, 1103,
and 1104 of the Civil Code and not within the
purview of article 1903. Manresa also, in the
paragraph reproduced above, is of the opinion
that negligence, considered as a substantive and
independent source of liability, does not include
cases where the parties are previously bound by
any other obligation. Again, it is instructive in this
connection to refer to the contents of article
1103 of the Civil Code, where it is declared that
the liability proceeding from negligence is
demandable in the fulfillment of all kinds of
obligations. These words evidently comprehend
both forms of positive obligations, whether
arising from express contract or from implied
contract (quasi contract).
In this connection it is instructive to recall the
celebrated case of Coggs vs. Bernard (2 Ld. Raym,
909), decided in the court of the King's Bench of
England in the year 1703. The action was brought
by the owner of certain casks of brandy to
recover damages from a person who had
undertaken to transport them from one place to
another. It was alleged that in so doing the
defendant so negligently and improvidently put
them down that one of the casks was staved and
the brandy lost. The complaint did not allege that
the defendant was a common carrier or that he
was to be paid for his services. It was therefore
considered that the complaint did not state facts
sufficient to support an action for breach of any
express contract. This made it necessary for the
court to go back to fundamental principles and to
place liability on the ground of a violation of the
legal duty incident to the mere fact of carriage.
Said Powell, J.: "An action indeed will not lie for
not doing the thing, for want of a sufficient
consideration; but yet if the bailee will take the
goods into his custody, he shall be answerable for
SHANABANANA
them; for the taking of the goods into his custody
is his own act." So Gould, J.: " . . . any man that
undertakes to carry goods is liable to an action,
be he a common carrier or whatever he is, if
through his neglect they are lost or come to any
damage: . . .." Behind these expressions was an
unbroken line of ancient English precedents
holding persons liable for damage inflicted by
reason of a misfeasance in carrying out an
undertaking. The principle determined by the
court in the case cited is expressed in the syllabus
in these words: "If a man undertakes to carry
goods safely and securely, he is responsible for
any damage they may sustain in the carriage
through his neglect, though he was not a
common carrier and was to have nothing for the
carriage." Though not stated in so many words,
this decision recognizes that from the mere fact
that a person takes the property of another into
his possession and control there arises an
obligation in the nature of an assumpsit that he
will use due care with respect thereto. This must
be considered a principle of universal
jurisprudence, for it is consonant with justice and
common sense and as we have already seen
harmonizes with the doctrine above deduced
from the provisions of the Civil Code.
The conclusion must therefore be that if there
had been no contract of any sort between the
Atlantic Company and the Steamship Company,
an action could have been maintained by the
Railroad Company, as owner, against the Atlantic
Company to recover the damages sustained by
the former. Such damages would have been
demandable under article 1103 of the Civil Code
and the action would not have been subject to
the qualification expressed in the last paragraph
of article 1903.
The circumstance that a contract was made
between the Atlantic Company and the
TORTS ATTY. VIAGEDOR
Steamship Company introduces, however, an
important, and in our opinion, controlling factor
into this branch of the case. It cannot be denied
that the Steamship Company had possession of
this boiler in the capacity of carrier and that, as
such, it was authorized to make a contract with
the Atlantic Company to discharge the same from
the ship. Indeed, it appears in evidence that even
before the contract of affreightment was made
the Railroad Company was informed that it would
be necessary for the Steamship Company to
procure the services of some contractor in the
port of Manila to effect the discharge, as the
ship's tackle was inadequate to handle heavy
cargo. It is therefore to be assumed that the
Railroad Company had in fact assented to the
employment of a contractor to perform this
service.
Now, it cannot be admitted that a person who
contracts to do a service like that rendered by the
Atlantic Company in this case incurs a double
responsibility upon entering upon performance,
namely, a responsibility to the party with whom
he contracted, and another entirely different
responsibility to the owner, based on an implied
contract. The two liabilities can not in our opinion
coexist. It is a general rule that an implied
contract never arises where an express contract
has been made.
If double responsibility existed in such a case as
this, it would result that a person who had limited
his liability by express stipulation might find
himself liable to the owner without regard to the
limitation which he had seen fit to impose by
contract. There appears to be no possibility of
reconciling the conflict that would be developed
in attempting to give effect to those inconsistent
liabilities. The contract which was in fact made, in
our opinion, determines not only the character
and extent of the liability of the Atlantic Company
SHANABANANA
but also the person or entity by whom the
obligation is exigible. It is of course quite clear
that if the Atlantic Company had refused to carry
out its agreement to discharge the cargo, the
plaintiff could not have enforced specific
performance and could not have recovered
damages for non-performance. (Art. 1257, Civil
Code; Donaldson, Sim & Co. vs. Smith, Bell & Co.,
2 Phil. Rep., 766; Uy Tam and Uy Yet vs. Leonard,
30 Phil. Rep., 471.) In view of the preceding
discussion it is equally obvious that, for lack of
privity with the contract, the Railroad Company
can have no right of action to recover damages
from the Atlantic Company for the wrongful act
which constituted the violation of said contract.
The rights of the plaintiff can only be made
effective through the Compañia Trasatlantica de
Barcelona with whom the contract of
affreightment was made.
The judgment entered in the Court of First
Instance must, therefore, be reversed not only
with respect to the judgment entered in favor of
the plaintiff directly against the Atlantic Company
but also with respect to the absolution of the
Steamship Company and the further failure of the
court to enter judgment in favor of the latter
against the Atlantic Company. The Compañia
Trasatlantica de Barcelona should be and is
hereby adjudged to pay to the Manila Railroad
Company the sum of twenty two thousand three
hundred forty three pesos and twenty nine
centavos (P22,343.29), with interest from May
11, 1914, until paid; and when this judgment is
satisfied, the Compañia Trasatlantica de
Barcelona is declared to be entitled to recover
the same amount from the Atlantic Gulf & Pacific
Company, against whom judgment is to this end
hereby rendered in favor of the Compañia
Trasatlantica de Barcelona. No express
adjudication of costs of either instance will be
made. So ordered.
TORTS ATTY. VIAGEDOR
||| (Manila Railroad Co. v. La Compa, G.R. No.
11318, [October 26, 1918], 38 PHIL 875-901)
Cangco v. Manila Railroad Co.
G.R. No. L-12191, 14 October 1918
FACTS:
Jose Cangco was in the employment of Manila
Railroad Company. He lived in the pueblo of San
Mateo, in the province of Rizal, which is located
upon the line of the defendant railroad company;
and in coming daily by train to the company’s
office in the city of Manila where he worked, he
used a pass, supplied by the company, which
entitled him to ride upon the company’s trains
free of charge.
During his ride in the train he arose from his seat
and makes his way to the exit while the train is
still on travel. When the train has proceeded a
little farther Jose Cangco step down into the
cement platform but unfortunately step in to a
sack of watermelon, fell down and rolled under
the platform and was drawn under the moving
car which resulting to his arm to be crashed and
lacerated. He was rushed to the hospital and sued
the company and the employee who put the sack
of watermelon in the platform.
The accident occurred between 7 and 8 o’ clock
on the dark night. It is that time of the year that
may we considered as season to harvest
watermelon explaining why there are sacks of
watermelon in the platform. The plaintiff
contends that it is the negligence of the Manila
Railroad Co. on why they let their employees put
a hindrance in the platform that may cause
serious accident. The defendant answered that it
is the lack of diligence on behalf of the plaintiff
alone on why he did not wait for the train to stop
before alighting the train.
ISSUE:
SHANABANANA
Whether or not the company is liable or there is
a contributory negligence on behalf of the
plaintiff.
RULING:
There is no contributory negligence on behalf of
the plaintiff. The Supreme Court provides some
test that may find the contributory negligence of
a person. Was there anything in the
circumstances surrounding the plaintiff at the
time he alighted from the train which would have
admonished a person of average prudence that
to get off the train under the conditions then
existing was dangerous? If so, the plaintiff should
have desisted from alighting; and his failure so to
desist was contributory negligence.
Alighting from a moving train while it is slowing
down is a common practice and a lot of people
are doing so every day without suffering injury.
Cangco has the vigor and agility of young
manhood, and it was by no means so risky for him
to get off while the train was yet moving as the
same act would have been in an aged or feeble
person. He was also ignorant of the fact that
sacks of watermelons were there as there were
no appropriate warnings and the place was dimly
lit.
Article 1173, first paragraph: The fault or
negligence of the obligor consists in the omission
of that diligence which is required by the nature
of the obligation and corresponds with the
circumstances of that persons, of the time and of
the place. When negligence shows bad faith, the
provisions of Article 1171 and 2201, paragraph 2,
shall apply.
In the case the proximate cause of the accident is
the lack of diligence of the company to inform
their employees to not put any hindrance in the
platform like sacks of watermelon. The contract
of defendant to transport plaintiff carried with it,
by implication, the duty to carry him in safety and
to provide safe means of entering and leaving its
trains (civil code, article 1258). That duty, being
TORTS ATTY. VIAGEDOR
contractual, was direct and immediate, and its
non-performance could not be excused by proof
that the fault was morally imputable to
defendant’s servants. Therefore, the company is
liable for damages against Cangco.
[G.R. No. 411. April 23, 1902.
DONALDSON, SIM & Co., Plaintiffs-Appellants, v.
SMITH, BELL, & Co., Defendants-Appellees.
F . de la Cantera for Appellants.
Alfredo Chicote for Appellees.
SYLLABUS
1. REAL PROPERTY; ILLEGAL DETENTION; ACTION
BY LESSEE. — An action for damages against an
occupant of buildings who unlawfully detains the
same will not lie in favor of a lessee of said
buildings who has never entered into possession
under his lease, because there is no privity
between the parties.
DECISION
LADD, J. :
This is an action to recover damages alleged to
have been sustained by the plaintiff’s by reason
of the defendants’ wrongful occupancy of certain
warehouses in Manila from the 2d to the 14th of
May, 1900, inclusive. The buildings in question
were the property of Luis R. Yangco, and had
been leased by him in July, 1899, to the military
SHANABANANA
government of the United States, by which they
had been subject to the defendants under an
arrangement the details ’of which it is not
necessary to state. Yangco objected to the
occupancy of the buildings by the defendants,
and on the 11th of April, 1900, the Chief
Quartermaster of the Army, acting apparently
under a misapprehension as to the facts
] respecting the defendants’ arrangement with the
Government, addressed a letter to them, stating
that the records of the office failed to show that
they had any right to the occupancy of the
buildings, and requesting that they be vacated at
once. On the 30th of April the lease from Yangco
to the Government was terminated by mutual
consent. On the 1st of May, Yangco leased the
buildings to the plaintiffs for one year. On the
same day the plaintiffs notified the defendants of
the lease, and requested them to vacate the
buildings within twenty-four hours. This the
defendants declined to do, and continued’ in the
occupancy of the warehouses, or some of them,
to the exclusion of the plaintiffs, till subsequently
to the 14th of May. The judgment in the court
below was in favor of the defendants, and the
plaintiffs appealed.
The decision of this case does not involve the
determination of the character of the
defendants’ occupancy of the warehouses,
whether wrongful or otherwise, as between
them and the Government, or as between them
and Yangco. The only question is whether the
defendants have failed to perform any duty
which they owed to the plaintiffs. Whatever
rights the plaintiffs had in the premises during the
period in question, viz, from the 2d to the 14th of
May, originated in and depended upon their
contract with Yangco for the lease of the
buildings. Not having entered into possession
under their lease, they had acquired no rights in
the leased property in the nature of rights in rem,
and which third persons were therefore bound
not to infringe. Article 1560 of the Civil Code,
TORTS ATTY. VIAGEDOR
which gives the lessee a direct action against a
trespasser, is confined to the case of an actual
interference with the lessee’s use of the
property. Here such use by the plaintiffs had not
begun when the alleged wrongs were
committed.
Article 1902 of the Civil Code, relied upon by the
plaintiffs, established the general principle of
liability for damage caused by fault or negligence,
but there can be no fault or negligence where, as
in the present case, there was no obligation
resting upon the person causing the damage to
exercise diligence as respects the injured person.
The failure to establish any legal relation between
the parties, giving rise to rights in the plaintiffs
and corresponding duties on the part of the
defendants, as respects the occupancy of the
buildings in question, is fatal to the plaintiffs’
recovery in this action. Their remedy, if they have
any, is against the lessor, under articles 1554 and
1556 of the Civil Code.
The judgment must be affirmed, with costs. So
ordered.
[G.R. No. 47107. June 27, 1940.]
NATIONAL LABOR UNION, INC., ET AL., Petitioners,
v. PHILIPPINE MATCH FACTORY and THE COURT
OF INDUSTRIAL RELATIONS, Respondents.
Paguia & Lerum, for Petitioners.
DeWitt, Perkins & Ponce Enrile for respondent
Philippine Match Factory.
SYLLABUS
1. COURT OF INDUSTRIAL RELATIONS; RIGHT OF
LABORERS TO STRIKE. — The recognition, if at all,
by law of the laborers’ right to strike is, at most,
a negative one, and, in the last analysis, nugatory.
The provision of the Constitution on compulsory
SHANABANANA
arbitration of industrial disputes and all the
suppletory legislation enacted in pursuance
thereof, rest upon the obvious policy of supplying
lawful and pacific methods to laborers and
employees in the vindication of their legitimate
rights and the corresponding avoidance of a
resort to strike. Thus, according to the
explanatory note to Assembly Bill No. 700, which
later became the present Commonwealth Act No.
103, the creation of the Court of Industrial
Relations was aimed to supply an "adequate
instrumentality to forestall strikes." The same
purpose is no less clearly expressed in section 4
of Commonwealth Act No. 103. It is thus obvious
that, while the law recognizes, in a negative way,
the laborers’ right to strike, it also creates all the
means by which a resort thereto may be avoided.
This is so, because a strike is a remedy essentially
coercive in character and general in its disturbing
effects upon the social order and the public
interests.
2. ID.; ID.; CONSEQUENCES OF STRIKE. — As the
strike is an economic weapon at war with the
policy of the Constitution and the law, a resort
thereto by laborers shall be deemed to be a
choice of a remedy peculiarly their own, and
outside of the statute, and, as such, the strikers
must accept all the risks attendant upon their
choice. If they succeed and the employer
succumbs, the law will not stand in their way in
the enjoyment of the lawful fruits of their victory.
But if they fail, they cannot thereafter invoke the
protection of the law from the consequences of
their conduct, unless the right they wished
vindicated is one which the law will, by all means,
protect and enforce.
3. ID.; ID.; ID.; CASE AT BAR. — The petitioners’
strike in the instant case is clearly unjustified.
Their cessation from their employment as a result
of such an unjustified strike is one of such
consequences which they must take by the
choice of a remedy of their own, outside of the
TORTS ATTY. VIAGEDOR
statue. To compel the respondent company,
under the circumstances, to readmit the
petitioners to their employment would be to lend
countenance to what the Constitution and the
law seek to avoid, and give protection to those
who, by their conduct, have forfeited their rights
thereto.
DECISION
MORAN, J.:
Against the decision of the Court of Industrial
Relations, denying the petitioners’ petition (1) for
the dismissal of one Pablo Pabalan, general
foreman of the respondent Philippine Match
Company, and (2) for their readmission to their
employment in said company, this appeal
by certiorari is interposed.
On August 31, 1939, the chapter of the National
Labor Union, Inc., in the Philippine Match
Company, handed a letter to the company,
demanding the immediate dismissal of one Pablo
Pabalan, a factory foreman. The factory manager,
Mr. During, to whom the letter was addressed,
requested the president of the chapter to specify
the charges against Pabalan, upon which the
company may proceed, if necessary, for
appropriate investigation. In response thereto,
the second letter was handed, but, like the first,
it made no specific charges. Finally, upon the
insistence of Mr. During, the Union addressed the
company a third letter, in which four charges
against Pabalan were specified. The matter was
indorsed to the company’s attorneys for
investigation, and the case was adjudged without
merits As to the fourth charge, consisting in the
SHANABANANA
supposed assault by Pabalan against one named
Dineros, attorney Brady for the company, upon
knowing that a complaint has been filed in the
city fiscal’s office, where it was first dropped for
failure of the complainant to furnish the address
of the accused, caused the matter to be there
reopened, obviously to accord the company and
the union the benefit of an impartial
investigation. In the meantime, while the fiscal’s
office was conducting the investigation, the
officers of the union’s chapter in the respondent
company, tendered, en masse, their resignation.
This was evidently in anticipation of an adverse
decision on the matter of their petition and was
designed to leave the company none to deal with
on the Pabalan case, thus opening the way clear
for a preconceived general strike. Three days
later, or on September 16, 1939, the petitioners,
without awaiting the outcome of the
investigation of the city fiscal on the Dineros case,
which he had announced he would release on
September 18, declared a general strike, leaving
the operations of the company in complete
paralysis for fifteen days. The strike was
immediately reported by the company to the
Department of Labor, and a conference was
immediately called, but as nothing was agreed
upon thereafter the case was certified by the
Secretary of Labor to the Court of Industrial
Relations on September 21, 1939. Petitioners,
through counsel, first objected to the jurisdiction
of the court, but the objection was later
withdrawn. On October 11, 1939, while the case
was pending hearing in the Court of Industrial
Relations, fifteen strikers, representing
themselves to be duly authorized representatives
of all the strikers, addressed a letter to the factory
manager, seeking readmission to their
employment. The company manager declined to
take action upon the matter while the dispute
was pending adjudication in the Court of
Industrial Relations. Thereupon, Petitioners,
through counsel, filed a motion before the Court
of Industrial Relations for an order to compel the
TORTS ATTY. VIAGEDOR
respondent company to readmit the strikers. On
November 6, 1939, the Court of Industrial
Relations rendered judgment, denying the
petition to dismiss the company’s foreman as
well as the petition for the readmission of the
strikers to their employment.
Upon the issue as to whether the factory foreman
should or should not be dismissed, let it be
observed that the findings of the Court of
Industrial Relations are conclusive upon the facts.
Upon the second issue, petitioners’ claim for
readmission to their employment rests (1) upon
the implied condition in a contract of
employment provided for in section 19 of
Commonwealth Act No. 103, and (2) upon the
broad proposition that their right to strike is
recognized by law. There is nothing in the law
invoked that supports the petitioners’
contention.
The recognition, if at all, by law of the laborers’
right to strike is, at most, a negative one, and, in
the last analysis, nugatory. The provision of the
Constitution on compulsory arbitration of
industrial disputes and all the suppletory
legislation enacted in pursuance thereof, rest
upon the obvious policy of supplying lawful and
pacific methods to laborers and employees in the
vindication of their legitimate rights and the
corresponding avoidance of a resort to strike.
Thus, according to the explanatory note to
Assembly Bill No. 700, which later became the
present Commonwealth Act No. 103, the
creation of the Court of Industrial Relations was
aimed to supply an "adequate instrumentality to
forestall strikers." The same purpose is no less
clearly ex- pressed in section 4 of Commonwealth
Act No. 103. It is thus obvious that, while the law
recognizes, in a negative way, the laborers’ right
to strike, it also creates all the means by which a
resort thereto may be avoided. This is so, because
a strike is a remedy essentially coercive in
character and general in its disturbing effects
SHANABANANA
upon the social order and the public interests.
A situation is thus created where a remedy is not,
in plain terms, outlawed, but is, by all means,
discouraged. And, to the extent that our
government is one of laws and not of men, what
the law, at least in spirit, condemns, man must
abstain from, if our orderly system is to prevail
against the instrusion of mob rule. Accordingly, as
the strike is an economic weapon at war with the
policy of the Constitution and the law, a resort
thereto by laborers shall be deemed to be a
choice of a remedy peculiarly their own, and
outside of the statute, and, as such, the strikers
must accept all the risks attendant upon their
choice. If they succeed and the employer
succumbs, the law will not stand in their way in
the enjoyment of the lawful fruits of their victory.
But if they fail, they cannot thereafter invoke the
protection of the law from the consequences of
their conduct, unless the right they wished
vindicated is one which the law will, by all means,
protect and enforce.
In the instant case, the strike was clearly
unjustified. The petition to the respondent
company for the dismissal of its foreman has
been accorded the attention that it merited. In
fact, the company has even taken a measure
beyond what may be expected of it, when it
sought the reopening of the case in the fiscal’s
office to secure, for both parties, the benefit of
an impartial investigation. When the petitioners,
therefore, declared a strike even before the
outcome of the investigation had been
announced, and without previously having
resorted to any of the pacific means provided by
law, they have acted unreasonably, and, as such,
the law cannot interpose its hand to protect them
from the consequences of their behavior. Their
cessation from their employment as a result of
such an unjustified strike is one of such
consequences which they must take by the
choice of a remedy of their own, outside of the
TORTS ATTY. VIAGEDOR
statute. To compel the respondent company,
under the circumstances to readmit the
petitioners to their employment would be to lend
countenance to what the Constitution and the
law seek to avoid, and give protection to those
who, by their conduct, have forfeited their rights
thereto.
Judgment is affirmed. With costs against
petitioners.
BPI EXPRESS CARD CORPORATION, petitioner, vs.
COURT OF APPEALS and RICARDO J.
MARASIGAN,respondents.
G.R. No. 120639. September 25, 1998
FACTS: Marasigan, a lawyer, is a BPI credit card
holder. His contractual relations with BPI went on
smoothly until October 1989, when his statement
of account amounting to P8,987.84 was not paid
in due time. BPI demanded immediate payment,
and required him to issue a check in favor of BPI,
otherwise his card will be suspended. Marasigan
issued a post-dated check (PDC) in favor of BPI.
BPI, having been informed of the PDC only a week
after receipt, already sent a letter to Marasigan,
informing him of the temporary suspension of
the privileges of his card. He was also told to
refrain from using his card to avoid any
inconvenience/embarrassment and that unless
he settles his outstanding account within 5 days
from receipt of the letter, his membership will be
permanently cancelled.
On the other hand, confident that he had settled
his account with the issuance of the postdated
check, Marasigan invited some guests at Café
Adriatico (there is also no showing that he
received the letter from BPI before he went to
Café Adriatico). When he presented his credit
card to paythe bill, the it was dishonored and one
of his guests paid the bill by using her own credit
card.
SHANABANANA
Marasigan asked BPI to withhold the deposit of
his postdated check and to return the said check
to him because according to him, BPI violated
their agreement that once Marasigan issues the
check to the to cover his unpaid account, BPI will
not suspend the effectivity of the card.
Marasigan filed a complaint for damages against
BPI before the trial court, and the trial court ruled
in favor of him. The decision was affirmed by the
CA.
ISSUE/S:
1. W/N BPI had the right to suspend the
credit card of the Marasigan
2. W/N the trial court and CA erred in
holding BPI liable for damages
HELD:
1. YES
2. YES
RATIO:
Under the terms and conditions of the credit
card, signed by Marasigan, any card with
outstanding balances after 30 days from original
billing shall automatically be suspended.
Marasigan admitted that he did not pay within 30
days for his original billing. BPI could
automatically suspend his credit card.
Even though there was an arrangement between
the parties (that upon issuance of a check, the
card wouldn’t be suspended) the court found that
Marasigan was not able to comply with his
obligation.
The purpose of the arrangement between the
parties was for the immediate payment of
Marasigan’s outstanding account, in order that
his credit card would not be suspended. As
agreed upon by the parties, on the following day,
private respondent did issue a check. However,
the check was postdated 15 December
TORTS ATTY. VIAGEDOR
1989. Settled is the doctrine that a check is only a
substitute for money and not money, the delivery
of such an instrument does not, by itself operate
as payment. This is especially true in the case of a
postdated check.
Thus, the issuance by the private respondent of
the postdated check was not effective
payment. It did not comply with his obligation
under the arrangement with BPI. BPI corporation
was therefore justified in suspending his credit
card.
While Marasigan suffered damages as a result of
the cancellation of his credit card, there is a
material distinction between damages and
injury. Injury is the illegal invasion of a legal right;
damage is the loss, hurt, or harm which results
from the injury; and damages are the
recompense or compensation awarded for the
damage suffered. Thus, there can be damage
without injury in those instances in which the loss
or harm was not the result of a violation of a legal
duty. In order that a plaintiff may maintain an
action for the injuries of which he complains, he
must establish that such injuries resulted from a
breach of duty which the defendant owed to the
plaintiff. In the case at bar, it was Marasigan's
failure to settle his obligation which caused the
suspension of his credit card and subsequent
dishonor at Café Adriatico.
BEATRIZ P. WASSMER, plaintiff-appellee,
vs.
FRANCISCO X. VELEZ, defendant-appellant.
G.R. No. L-20089 December 26, 1964
BENGZON, J.P., J.:
Facts:
Francisco Velez and Beatriz Wassmer, following
their mutual promise of love decided to get
married on September 4, 1954. Wassmer made
the necessary preparations for the wedding
SHANABANANA
including making and sending wedding
invitations, buying of wedding dress and other
apparels, and other wedding necessities.
On Sept. 2, 1954, Velez left this note for his bride-
to-be advising her that he will not be able to
attend the wedding because his mom was
opposed to said wedding.
And one day before the wedding, he sent another
message to Wassmer advising her that nothing
has changed and that he will be returning soon.
Therefore, Velez did not appear and was not
heard from again.
Wassmer sued Velez for damages and he failed to
answer and was declared in default. On April 29,
1955, judgment was rendered ordering
defendant to pay plaintiff P2,000.00 as actual
damages; P25,000.00 as moral and exemplary
damages; P2,500.00 as attorney’s fees; and the
costs.
On appeal, Velez argued that his failure to attend
the scheduled wedding was because of fortuitous
events. He further argued that he cannot be held
civilly liable for breaching his promise to marry
Wassmer because there is no law upon which
such an action may be grounded. He also
contested the award of exemplary and moral
damages against him.
Issue:
Whether or not breach of promise to marry is an
actionable wrong in this case.
Held:
This is not a case of mere breach of promise to
marry. As stated, mere breach of promise to
marry is not an actionable wrong. But to formally
set a wedding and go through all the preparation
and publicity, only to walk out of it when the
matrimony is about to be solemnized, is quite
different. This is palpably and unjustifiably
contrary to good customs for which defendant
must be held answerable in damages in
TORTS ATTY. VIAGEDOR
accordance with Article 21 which provides in
part “any person who wilfully causes loss or injury
to another in a manner that is contrary to morals,
good customs or public policy shall compensate
the latter for the damage.”
And under the law, any violation of Article 21
entitles the injured party to receive an award for
moral damages as properly awarded by the lower
court in this case. Further, the award of
exemplary damages is also proper. Here, the
circumstances of this case show that Velez, in
breaching his promise to Wassmer, acted in
wanton, reckless, and oppressive manner – this
warrants the imposition of exemplary damages
against him.
WASSMER VS. VELEZ
G.R. No. L-20089
December 26, 1964
By: Karen P. Lustica
Facts: Francisco Velez and Beatriz Wassmer,
following their mutual promise of love decided to
get married on September 4, 1954. On the day of
the supposed marriage, Velez left a note for his
bride-to-be that day to postpone their wedding
because his mother opposes it. Therefore, Velez
did not appear and was not heard from again.
Beatriz sued Velez for damages and Velez failed
to answer and was declared in default.
Judgement was rendered ordering the defendant
to pay plaintiff P2.000 as actual damages P25,000
as moral and exemplary damages, P2,500 as
attorney’s fees.
Later, an attempt by the Court for amicable
settlement was given chance but failed, thereby
rendered judgment hence this appeal.
In support of his “motion for new trial and
reconsideration,” defendant asserts that the
judgment is contrary to law. The reason given is
SHANABANANA
that “there is no provision of the Civil Code
authorizing” an action for breach of promise to
marry. Indeed, our ruling in Hermosisima vs.
Court of Appeals (L-14628, Sept. 30, 1960), as
reiterated in Estopa vs. Biansay (L-14733, Sept.
30, 1960), is that “mere breach of a promise to
marry” is not an actionable wrong. We pointed
out that Congress deliberately eliminated from
the draft of the new Civil Code the provisions that
would have it so.
Issue: Whether or not breach of promise to marry
is an actionable wrong in this case.
Held: YES.
Ratio: The Court admitted that under
Hermosisima vs. Court of Appeals, ordinarily, a
mere breach of promise to marry is not an
actionable wrong. However, it said that “the
extent to which acts not contrary to law may be
perpetrated with impunity, was not limitless”
because of Article 21 of the NCC.
“any person who wilfully causes loss or injury to
another in a manner that is contrary to morals,
good customs or public policy shall compensate
the latter for the damage.”
The Court found that on August 23, 1954,
Wassmer and Velez applied for a license to
conrtract marriage, the wedding was set for
September 4, 1954 and invitations were printed
and distributed to relatives, friends and
acquaintances.
In addition, the bride-to-be’s trousseau, party
drsrses and other apparel for the important
occasion were purchased. Dresses for the maid of
honor and the flower girl were prepared. A
matrimonial bed, with accessories, was bought.
Bridal showers were given and gifts received. And
then, with but two days before the wedding,
defendant, who was then 28 years old,: simply
TORTS ATTY. VIAGEDOR
left a note for plaintiff stating: “Will have to through its agents, waterpaths, water
postpone wedding — My mother opposes it … ” conductors and contrivances including
He enplaned to his home city in Mindanao, and an artificial lake within its land
the next day, the day before the wedding, he
 inundated and eroded
wired plaintiff: “Nothing changed rest assured
the spouses Emmanuel and
returning soon.” But he never returned and was
Natividad Andamo's land,
never heard from again.
caused a young man to drown,
damaged petitioners' crops and
plants, washed away costly
The Court ruled that this was not a case of mere
fences, endangered the lives of
breach to marry.
petitioners and their laborers
As stated, mere breach of promise to marry is not during rainy and stormy seasons,
an actionable wrong. But to formally set a and exposed plants and other
wedding and go through all the above-described improvements to destruction
preparation and publicity, only to walk out of it
 July 1982:spouses instituted a criminal
when the matrimony is about to be solemnized,
action
is quite different. This is palpably and
unjustifiably contrary to good customs for which  February 22, 1983: spouses filed a civil
defendant must be held answerable in damages case for damages
in accordance with Article 21 aforesaid.
 CA affirmed trial court issued an
Hence, although Velez did not violate any law in order suspending further hearings in
abandoning his fiancée, he was ordered to pay Civil Case until after judgment in the
damages because he exhibited behavior that was related Criminal Case
contrary to morals, good customs or public
 spouses contend that the trial
policy. It may also argued that the Court awarded
court and the Appellate Court
damages because of the public humiliation
erred in dismissing Civil Case
suffered by Wassmer and her family.
since it is predicated on a quasi-
delict

Torts And Damages Case Digest: Natividad V. ISSUE: W/N there is quasi-delict even if done in
Andamo, Et Al., V. Intermediate Appellate Court private propety
Et Al. (1990)

G.R. No. 74761 November 6, 1990

Lessons Applicable: Elements of Quasi-Delict HELD: YES. REVERSED and SET ASIDE
(Torts and Damages)
 All the elements of a quasi-delict are
present, to wit:

 (a) damages suffered by the

FACTS: plaintiff

 Missionaries of Our Lady of La Salette,  (b) fault or negligence of the

Inc., a religious corporation, built defendant, or some other

SHANABANANA TORTS ATTY. VIAGEDOR

 person for whose acts he must
respond
 (c) the connection of cause and
effect between the fault or
negligence of the defendant and
the damages incurred by the
plaintiff
 While the property involved in the cited
case belonged to the public domain and
the property subject of the instant case is
privately owned, the fact remains that
petitioners' complaint sufficiently alleges
that petitioners have sustained and will
continue to sustain damage due to the
waterpaths and contrivances built by
respondent corporation
 It must be stressed that the use of one's
property is not without limitations.
Article 431 of the Civil Code provides that
"the owner of a thing cannot make use
thereof in such a manner as to injure the
rights of a third person." SIC UTERE TUO
UT ALIENUM NON LAEDAS. Moreover,
adjoining landowners have mutual and
reciprocal duties which require that each
must use his own land in a reasonable
manner so as not to infringe upon the
rights and interests of others. Although
we recognize the right of an owner to
build structures on his land, such
structures must be so constructed and
maintained using all reasonable care so
that they cannot be dangerous to
adjoining landowners and can withstand
the usual and expected forces of nature.
If the structures cause injury or damage
to an adjoining landowner or a third
person, the latter can claim
indemnification for the injury or damage
suffered.
 Article 2177. Responsibility for fault or
negligence under the preceding article is
SHANABANANA
entirely separate and distinct from the
civil liability arising from negligence
under the Penal Code. But the plaintiff
cannot recover damages twice for the
same act or omission of the defendant.
 whether it be conviction or acquittal
would render meaningless the
independent character of the civil action
and the clear injunction in Article 31, that
his action may proceed independently of
the criminal proceedings and regardless
of the result of the latter
AIR FRANCE v. RAFAEL CARRASCOSO G.R. No. L-
21438, September 28, 1966 Damages, Bad Faith
JANUARY 27, 2018
FACTS:
Plaintiff, a civil engineer, was a member of a
group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.
The defendant, Air France, through its authorized
agent, Philippine Air Lines, Inc., issued to plaintiff
a ‘first class’ round trip airplane ticket from
Manila to Rome. From Manila to Bangkok,
plaintiff travelled in ‘first class’, but at Bangkok,
the Manager of the defendant airline forced
plaintiff to vacate the ‘first class’ seat that he was
occupying because, in the words of the witness
Ernesto G. Cuento, there was a ‘white man’, who,
the Manager alleged, had a ‘better right’ to the
seat. When asked to vacate his ‘first class’ seat,
the plaintiff, as was to be expected, refused, and
told defendant’s Manager that his seat would be
taken over his dead body; a commotion ensued,
and, according to said Cuento, ‘many of the
Filipino passengers got nervous in the tourist
class; when they found out that Mr. Carrascoso
was having a hot discussion with the manager,
they came all across to Mr. Carrascoso and
pacified Mr. Carrascoso to give his seat to the
TORTS ATTY. VIAGEDOR
white man’ and plaintiff reluctantly gave his ‘first
class’ seat in the plane.
ISSUE:
Whether or not there was bad faith on the part
of the petitioner airline, thus making petitioner
liable for damages in favor of respondent.
RULING:
That there was a contract to furnish plaintiff a
first class passage covering, amongst others, the
Bangkok-Teheran leg; That said contract was
breached when petitioner failed to furnish first
class transportation at Bangkok; and that there
was bad faith when petitioner’s employee
compelled Carrascoso to leave his first class
accommodation berth “after he was already,
seated” and to take a seat in the tourist class, by
reason of which he suffered inconvenience,
embarrassments and humiliations, thereby
causing him mental anguish, serious anxiety,
wounded feelings and social humiliation,
resulting in moral damages.
It is true that there is no specific mention of the
term bad faith in the complaint. But, the
inference of bad faith is there, it may be drawn
from the facts and circumstances set forth
therein. The contract was averred to establish
the relation between the parties. But the stress
of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the
start of the trial, respondent’s counsel placed
petitioner on guard on what Carrascoso intended
to prove: That while sitting in the plane in
Bangkok, Carrascoso was ousted by petitioner’s
manager who gave his seat to a white man; and
(b) evidence of bad faith in the fulfillment of the
contract was presented without objection on the
part of the petitioner. It is, therefore,
unnecessary to inquire as to whether or not there
SHANABANANA
is sufficient averment in the complaint to justify
an award for moral damages. Deficiency in the
complaint, if any, was cured by the evidence.
A contract to transport passengers is quite
different in kind and degree from any other
contractual relation. And this, because of the
relation which an air-carrier sustains with the
public. Its business is mainly with the travelling
public. It invites people to avail of the comforts
and advantages it offers. The contract of air
carriage, therefore, generates a relation
attended with a public duty. Neglect or
malfeasance of the carrier’s employees,
naturally, could give ground for an action for
damages.
Passengers do not contract merely for
transportation. They have a right to be treated by
the carrier’s employees with kindness, respect,
courtesy and due consideration. They are entitled
to be protected against personal misconduct,
injurious language, indignities and abuses from
such employees. So it is, that any rule or
discourteous conduct on the part of employees
towards a passenger gives the latter an action for
damages against the carrier.
JULIAN SINGSON and RAMONA DEL CASTILLO vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO
FREIXAS (Pres. Of BPI)G.R. No. L-24837. 29 June
1968.
CONCEPCION, C.J.:
Facts: Appeal by plaintiffs from a decision of the
CFI Mla dismissing their complaint against
defendants.
On May 8, 1963, the Singsong commenced the
present action against the Bank and its president,
Freixas, for damages in consequence of said
illegal freezing of plaintiffs' account.
After appropriate proceedings, the CFI Mla
rendered judgment dismissing the complaint
TORTS ATTY. VIAGEDOR
upon the ground that plaintiffs cannot recover
from the defendants upon the basis of a quasi-
delict, because the relation between the parties
is contractual in nature.

Issue: WON the existence of a contractual

relation between the parties bar recovery of
damages.

Ruling: The judgment appealed from is reversed

holding defendant BPI to pay to the plaintiffs
nominal damages, and attorney's fees, apart
from the costs.

The SC have repeatedly held that the existence of

a contract between the parties does not bar the
commission of a tort by the one against the order
and the consequent recovery of damages
therefore.

In view, of the facts obtaining in the case at bar,

and considering, particularly, the circumstance,
that the wrong done to the plaintiff was
remedied as soon as the President of the bank
realized the mistake they had committed, the
Court finds that an award of nominal damages
the amount of which need not be proven in the
sum of P1,000, in addition to attorney's fees in
the sum of P500, would suffice to vindicate
plaintiff's rights.

SHANABANANA TORTS ATTY. VIAGEDOR