CHAPTER 8: OTHER ACTIONABLE WRONGS

Basic Principle: An act or omission may give rise to an action based on law, contract, quasi-contract or quasi-delict. Legal Basis: Article 1157 What are the Causes of Action? 1. Contractual Negligence (Culpa Contactua)

2. 3.

Far East Bank and Trust Company vs. Court of Appeals, SC G.R. No. 123569, April 1, 1996) Air France vs. Rafael Carrascoso, S.C G.R. No. L21438) TEST FOR APPLICATION OF QUASI-DELICT PROVISIONS: Where, without a pre-existing contract between the parties, an act or omisison can nonetheless amount to an actionable tort by itself, the fact that the parties are contractually bound is no bar to the application of the quasi-delict provisions to the case. Breach of Contract with Malice or Bad Faith Moral damages may be recovered in cases of culpa contractual if defendant acted FRAUDULENTLY or IN BAD FAITH. Malice or Bad Faith

a. Those which, in the performance of their obligations

are guilty of fraud, negligence or delay for damages (Arts. 1170-1174, NCC) b. There is a PRE-EXISTING OBLIGATION

c. NEGLIGENCE IS NOT THE SOURCE OF OBLIGATION, but merely an INCIDENT resulting in its breach or non-fulfillment

2.

Civil Negligence (Culpa Aquiliana)

a. Article 2176. Whoever by act or omission causes

damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. b. There is NO PRE-EXISTING OBLIGATION and the negligence itself is the DIRECT AND INDEPENDENT SOURCE OF OBLIGATION of the party guilty thereof.

o Includes only GROSS negligence (not applicable to simple negligence) o Where the evidence shows that breach of contract was attended with malice or bad faith or with inexcusable neglect or malfeasance, there is a case of quasi-delict which may be made basis for an award of damages under Articles 20 and 21. Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. Art. 431. The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person. Art. 432. The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. The owner may demand from the person benefited indemnity for the damage to him. NOTES: Basic Principle: One has a right to use, enjoy, dispose and even exclude others from the enjoyment of his property. But such use, enjoyment and disposal should not be prejudicial or cause harm or damage to another. Principles espoused in the three aforecited Civil Code provisions: 1. a. Principle of Self-help It is embodied in Article 429, NCC

c. Other terms: Tort, Quasi-Delict

3. a. NOTES: One can be held liable for damages caused by his own fault or negligence whether or not there is a pre-existing contractual relation or no contractual relationship A pre-existing contractual relation between the parties does not preclude the existence of culpa aquiliana, or even culpa criminal based on the same act or omission. Tort arising from Breach of Contract While it is true that in order that a person may be liable for quasi-delicts, there must be no pre-existing contractual relationship between the parties, yet, if the is an act that violates the contract independently of the contract, the act give rise to liability under quasi-delicts.1 This rule can govern only where the act or omission complained of would constitute an actionable tort independently of the contract. 2 Simply stated, when the act that breaks the contract may be also a tort Legal Basis: Jurisprudence: Criminal Negligence If the negligence results into crime

b. Rationale: The right to repel or prevent an actual or threatened physical invasion or usurpation of property is essential to maintenance of property right s c. Article 11, par. 1, Revised Penal Code (Justifying Circumstances) i. Defense of Property: Defense of property can be invoked as a justifying circumstance only when it is

1.

YHT Realty Corporation vs. Court of Appeals, SC G.R. No. 126780, February 17, 2005)

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

coupled with an attack on the person of one entrusted with said property (People v. Apolinar) ii. Elements: 1. 2. Unlawful aggression Reasonable necessity of the means employed to prevent or repel it Lack of sufficient provocation on the part of the person defending himself

Becomes owner of the materials but must pay for their value.

1. Entitled to reimbursement provided he does not remove them; Or 2. Entitled to provided there substantial injury removal is no

3.

EXCEPTION: When they can be removed without destruction to the work made or to the plants, in such case the owner of material may removed them.

d.

Limitations of the Doctrine: i. It can only be exercised at the time of an actual or threatened dispossession Lawful possessor must use only such force as necessary to repel or prevent an invasion or property usurpation; otherwise: liable for damages Should be immediately exercised; Once delay has taken place, even if excusable, the owner or lawful possessor must resort to judicial process for the recovery of the property. 2. LO in Bad Faith; OM in Good Faith LO Becomes owner of the materials but must pay for their value plus damages. OM 1. Entitled to ABSOLUTE RIGHT OF REMOVAL plus damages OR

ii.

iii.

2. a. b.

Obligation to respect the rights of others Basis: Police power of the State Example: Nuisance

EXCEPTION: When Owner of the Materials decides to remove them whether or not destruction would be caused. (Absolute Removal). Owner of Materials would still be entitled to damages

2. Entitled to reimbursement plus damages in case he chooses not to remove

3. LO in Good Faith; OM in Bad Faith LO Exempted Reimbursement entitled to damage from and OM No Right!

3.

Obligation to permit interference under certain conditions a. General Rule: One cannot interfere with the right of ownership of another

b. Exception: Article 432: State of Necessity

c. State of Necessity i. Justifying circumstance in RPC (no criminal liability but with civil liabilility) evils, one is justified in choosing the lesser evil

B. RULES WHEN A 3RD PERSON BUILDS, SOWS OR PLANTS (BPS) ON LANDOWNERS (LO) LAND. (448) EXAMPLE: A HOUSE WAS BUILT ON THE LAND. 1. LO and BPS in Good Faith; or LO and BPS in Bad Faith

ii. The least evil rule: between two

LO Has a choice either to: 1. Appropriate house after payment of indemnity OR

BPS 1. Right to payment of indemnity: a. Necessary Expenses, Right of retention until reimbursed. b. Useful Expenses, Right of retention

ARTICLES 447-452 A. RULES WHEN LAND OWNER (LO) CONSTRUCTS OR PLANTS ON HIS LAND WITH MATERIALS OF ANOTHER (OM). (447) 1. LO and OM in Good Faith; or LO and OM in Bad Faith LO OM

2. Compel the builder to buy the land upon which the building was built, unless the value of the land be considerably more than the value of the housein such case builder pays rent. If builder

2. May remove the ornaments with which he

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

pays, he has no right of retention and LO is entitled to remove improvement.

has embellished the principal thing if it suffers no injury thereby, and if his successor in possession does not prefer to refund the amount expended.

3. Consider price of land as an ordinary money debt of the builder. Therefore he may enforce payment thru an ordinary action for recovery of a money debt (levy and execution).

ARTICLES 470-474 1. OWNER OF PRINCIPAL (OP) AND OWNER ACCESSORY (OA) IN GOOD FAITH/BAD FAITH OP Acquires the accessory, indemnifying the OA for its value OA May separate them if no injury will be caused; If value of accessory is greater than principal, OA may demand separation even if damages may be caused to the principal (expenses to be borne by the one who caused the conjunction) OF

2. LO in Good Faith; BPS in Bad Faith LO 1. Gets the accessory without paying any indemnity, but must pay necessary expenses for preservation of the land. LO is entitled to damages. 2. Demand demolition of the work, or that the planting or sowing be removed at the BPSs expense PLUS damages 3. Compel the BPS to pay the price of the land, and the sower the proper rent whether or not the value of the land is considerably more than the value of the house PLUS damages. BPS 1. Loses what is built, planted or sown without right to indemnity.

2. Liability for damages

3.Entitled to reimbursement for necessary expenses of preservation of land

2. OP in Good Faith; OA in Bad faith OP Owns the damages accessory plus OA Loses the thing incorporated and indemnify OP for damages

3. LO in Bad Faith; BPS in Good Faith 3. OP in Bad faith; OA in Good Faith LO Only becomes the owner after proper indemnity plus payment of damages. BPS OP 1. Entitled to ABSOLUTE RIGHT OF REMOVAL plus damages OR 1. Pay OA value of accessory PLUS DAMAGES OR 2. Principal and accessory be separated PLUS DAMAGES OA Right to choose between 1. OP paying him the value or 2. That the thing be separated even if principal will be destroyed Both with right to damages

EXCEPTION: When Owner of the Materials decides to remove them whether or not destruction would be caused. (Absolute Removal). Owner of Materials would still be entitled to damages

2. Entitled to reimbursement plus damages (in case he chooses not to remove)

Art.471 Form of Indemnity. (Thing equal in kind/value or price) Art. 472/473. Mixture- takes place when two or more things belonging to different owners are mixed or combined with the respective identities of the component parts destroyed or lost. Two Kinds: 1. Commixtion- or the mixture of solid things belonging to different owners.

Remedies if option exercised by the Landowner was compulsory selling and Builder fails to pay: 1. Leave things as they are and assume relation of lessor and lessee; pay rents 2. Demolish what has been built, sown or planted. (

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

2. Confusion- or the mixture of liquid things belonging to different owners. Rules: 1. Mixture by will of the owners- Their rights shall be governed by their stipulations. Without stipulation, each acquires a right or interest in proportion to the value of his material. 2. Mixture caused by an owner in GF or by chance- each share shall still be in proportion to the value of their thing. 3. Mixture caused by the owner in BF- the actor forfeits his things and is liable for damages.

b.

To demand indemnity for the material plus damages

3. a. b.

Owner of the material in BF: He losses the material He is liable for damages

Ruinous buildings and trees in danger of falling (Art. 482483) the owner has the duty to demolish a building in danger of falling or to repair the same to prevent it from falling. If owner fails to do so, administrative authorities in the exercise of police power may order demolition or take measures to insure public safety. If by fall of the tree, occasioned by the inaction or negligence of the owner, someone has been hurt, the owner of the tree is liable for damages under Art. 2191 Art. 549 and 552 Liability of possessor in BF Fruits- he is not entitled a. b. Must reimburse the value of the fruits received Has no right with respect to pending fruits

Art. 474. Specification. - means the giving of a new form to a material belonging to another person through the application of labor or industry. RULES: 1. When the maker (considered principal) is in GF a. Appropriate but must indemnify the owner of the material b. May not appropriate material transformed is worth more than the new thing. The OM may i. appropriate the new thing subject to payment of the value of the work or ii. Demand indemnity for material with damages.

c. Must reimburse the value of the fruits which the legitimate possessor could have receive Necessary Expenses- entitled without right of retention Useful expenses- not entitled to improvement; has no right of removal. refund; forfeits the

2. When the maker is in BF a. OM can appropriate the work without paying for the labor or industry b. OM can demand indemnity plus damages c. OM cannot appropriate if the value of the work is considerably more than the value of the material due to artistic or scientific importance. PROPERTY Specification (Art. 474) The transformation of anothers material by the application of labor. The material becomes a thing of different kind. Labor is the principal Rules: 1. a. b. Owner of the principal in GF Maker acquires the new thing He must indemnify the owner of the material

Luxurious expenses- he is not entitled to refund; He loses the improvement, but he is given a limited right of removal. Charges- he shall share them with the owner of lawful possessor, in propotion to their time of possession. Deterioration or loss- he is liable for damages, whether du to his fault or negligence, or even if due to fortuitious event. Liability to owner or lawful possessor- liable for an amount equal to a reasonable rent for the use and occupation of the property. USUFRUCT Gives the right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting the same otherwise provides. Art.589, 590, 601- Obligations of the Usufructuary which may give rise to liability for damages. Art. 589- to take care of the property held in usufruct as a good father of the family. Art.590- to answer any damages which the thing held in usufruct may suffer through the fault of his substitute. Art. 601- to notify the owner the owner of any prejudicial act committed by third persons. When notification by the usufructuary is required:

Exception: if the material is more valuable than the resulting thing, the owner of the material has the option: a. b. To acquire the work, indemnifying for the labor, or To demand indemnity for the material

2. Owner of the principal in BF, the owner of the material has the option: a. To acquire the result without indemnity

o If a third party commits acts prejudicial to the rights of ownership

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

Effect of non-notification: Usufructuary is liable for damages as if they have been caused through his fault. N.B. this pertains only to acts prejudicial to RIGHT OF OWNERSHIP and not to NAKED OWNERSHIP. Exception: when the act affects possession, although it is in the usufructuary, he should notify the owner because the latter has an interest in defending it. EASEMENT RELATING TO WATER N.B. Art. 637 of the Civil Code, has already been superseded by Art. 50 of P.D. 1067. (Water Code of the Philippines.) Article 50. Lower estates are obliged to receive the waters which naturally and without the intervention of man flow from the higher estate, as well as the stone or earth which they carry with them. The owner of the lower estate cannot construct works which will impede this natural flow, unless he provides an alternative method of drainage; neither can the owner of the higher estate make works which will increase this natural flow.

proprietor intending to make any excavations must notify all owners or adjacent land injunction and damages may be awarded in proper circumstances

Lateral Support supported and supporting land are divided by vertical planes Subjacent Support supported land is above the supporting land ART. 1388 Liability of Purchaser in bad faith of things alienated in fraud of creditors if the sale is rescinded the purchaser in bad faith must return the object acquired on such sale if it is impossible to return the object due to any cause, he must indemnify the creditor for damages suffered if there are two or more alienations, the first acquirer shall be liable first and so on successively

ART. 1390 Liability of Guilty party in voidable contracts ART. 682 683 Liability of proprietor or possessor of land or building for NUISANCE Proprietors or Possessor of Land or Building prohibited from committing nuisance through: a. b. c. d. e. f. Noise Jarring offensive odor smoke heat dust g. water h. glare i. glare j. other causes Voidable contracts a. b. one of the parties is incapable of giving consent consent is vitiated by mistake, intimidation, undue influence or fraud violence,

the one who caused the mistake, violence, intimidation, undue influence and fraud shall be liable for damages he can also be held criminally liable he or his successor in interest cannot ask for annulment of the contract he who comes to court must come with clean hands

Factories and shops must maintain least possible annoyance to the neighborhood - subject to zoning, health police, and other laws and regulations the servient is the proprietor, possessor, factory and shops the dominant is the general public or anybody injured by the nuisance these are limitations on ownership in accordance with the principle that every person should use his property as not to cause damage or injury to others

ART. 1555 Liability of vendor in bad faith for eviction (warranty against eviction) Every contact has implied warranty against eviction may it be stipulated or not If the vendor acted in bad faith, he shall also be liable for damages, interests and ornamental expenses If lack of evidence of bad faith, vendee is not entitled to damages

Right of vendee to demand after eviction: a. b. c. d. e. return of the value of the thing at the time of eviction, may it be greater or lesser than sale price income or fruits, if he was required to deliver the same to the winner of the suit against him cost of the suit causing such eviction and the suit against vendor for warranty expense of the contract if vendee paid for such damages, interests and ornamental expenses in case of sale in bad faith

ART. 684 Liability of proprietor making excavations upon his land restriction on right of ownership such excavation must not deprive any adjacent land or building sufficient lateral or subjacent support each landowner has right to be laterally supported by the soil of his neighbor if without which the land will fall away or slide causing injury

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

ART. 1569 Liability of vendor in bad faith in case loss of defective thing sold ( warranty against hidden defects)

b.

He warrants the legality of the credit at the perfection of the contract

If thing has no hidden defects during sale - loss is borne by vendee If the thing has hidden defects in case id loss, the vendor is obliged to return price paid less the value of the thing at the time it was lost (DAMAGE) If sale was made in bad faith he shall also be liable for damages in all cases, loss may be through a fortuitous event or fault of vendee

Violation of the above warranties, vendor/assignor (GOOD FAITH) shall be liable only to the price received, expenses of the contract and other legitimate payments by reason of the assignment. When vendor/assignor is in (BAD FAITH), he shall be liable for price received, expenses of the contract, other legitmate expenses and DAMAGES. Who is an assignor in BAD FAITH? One who has knowledge of any of the circumstances of non existence or illegality of the credit, insolvency of the debtor. Art. 1667 Art. 1668 ONE OF THE OBLIGATIONS OF THE LESSEE Lessee is obliged to return the property leased upon termination of the lease in the same condition as he received it save what has been lost or impaired by lapse of time, ordinary wear and tear or fortuitous event. IF DETERIORATION TAKES PLACE: Lessee has the burden to prove that it took place without its fault, unless it was due to fortuitous event. IT IS IMMATERIAL WHETHER OR NOT LESSEE IS AT FAULT: When others cause deterioration. (guests, visitors, members of the household) Art. 1694 LIABLITY OF HEAD OF FAMILY TO HOUSE HELPER In relation to Art. 19, 20, 21, 33 Article 1711 and 1712 Who are required to pay compensation: -Owners of enterprises and other employers. - The law does not distinguish the kinds of enterprises; hence, it applies to all industrial or non-industrial enterprises, as well as to religious, charitable and educational institution. Coverage of liability: 1. Death of, or personal injuries to, their employees ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT. (whether accidental or entirely due to fortuitous event) 2. Any illness or disease CAUSED BY SUCH EMPLOYMENT. Defenses against Liability: 1. 2. 3. Employees own notorious negligence Voluntary Act Drunkenness

ART. 1576 Liability of Veterinarian in sale of animals with Redhibitory defect Redhibitory defect hidden defect of animals and in such a nature that expert knowledge is not sufficient to discover Instances wherein veterinarian shall be laible for hidden defects: a. b. failed to discover through ignorance failed to disclose such defect to vendee though bad faith the liability is not the vendors but the veterinarians

Art. 1596 Action for damages (One of the REMEDIES OF AN UNPAID SELLER) When may be exercised: a. b. In case of wrongful neglect or refusal by the buyer to accept or pay for the thing sold In an executory contract, where the ownership in the goods has not passed, and the seller cannot maintain an action to recover the price. If the goods are not yet identified at the time of the contract or subsequently

c.

Measure of damages: FORMULA: The difference between the contract price, that is, the amount of the obligation which the buyer failed to fulfill, and the market or current price, that is, the value of the goods which the seller has left upon his hands. The above-mentioned formula shall be different with the formula in computing proximate damages. (1596, par. 3) Additional damages for repudiation or countermand. (1596, par. 4) Art. 1628 Assignment of Credits and Other incorporeal rights (WARRANTIES OF THE ASSIGNOR OF CREDIT) a. He warrants the existence of the credit

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

4. Partial defense: employees lack of due care or contributory negligence. Arising out of refers to the origin or cause of the accident and descriptive of its character In the course of refers to time, place, and circumstances under which the accident take place. Where death or injury caused by fellow worker If caused by the NEGLIGENCE of the fellow worker- Employer is SOLIDARILY liable with the fellow worker. If caused by intentional or malicious act of the fellow workerEmployer is not liable UNLESS, the employer did not exercise due diligence in the selection and supervision of workers. Article 1723 1. Liability of Engineer or Architect for Damages: a. The collapse took place within 15 years from completion of structure b. It took place by reason of a defect in the plans and specifications, or due to the defects in the ground; c. The action for damages s brought within 10 years following the collapse of the building 2. a. Liability of Contractor for damages The edifice falls within the same period;

c.

Duty to exercise extra ordinary diligence

*Duration of liability the duty starts from the time the goods are unconditionally placed in the possession and received by the carrier for transportation, until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive them. * Defenses available to the CC in the carriage of goods i. ii. iii. iv. v. Caso Fortuito/Force Majeure Acts of Public Enemy Negligence of the Shipper or Owner Character of the Goods or Defects in the Packing or in the container Order or Act of Public Enemy

CARRIAGE OF PASSENGERS a. Duty to observe utmost diligence to passengers A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances.

b. The collapse took place on account of defects in the construction or the use of materials of inferior quality supplied by him, or due to violation of the terms of the contract; 3. Solidary Liability is imposed f the engineer or architect supervised or directed the construction with the constructor. 4. Effect of Acceptance of Work: Mere acceptance after completion does not imply waiver of any of the causes of action arising from the defect in the construction. NOTE:

b.

Duty to take care of the passengers baggage

The carrier is liable for the acts of its employees provided that the latter must be on duty at the time of the act. (Maranan vs. Perez)

COMMON CARRIERS Obligations of a Common Carrier: CARRIAGE OF GOODS a. Duty to accept the goods A common carrier that is granted with a certificate of public conveyance is duty bound to accept passengers or cargo without any discrimination.

Due diligence in the selection and supervision of employees CANNOT be interposed as a defense by the common carrier because its liability arises from the breach of the contract of carriage. Passengers have the right to be treated with the carriers employees with kindness, respect, courtesy and due consideration. Such that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. (Zulueta vs. Pan-Am World Airways)

Common carriers are NOT insurers of the lives of their passengers. * Defenses available to the CC in the carriage of goods EXTRA ORDINARY DILIGENCE CONCURRENT CAUSES OF ACTION ARISING FROM THE NEGLIGENT ACT OF THE COMMON CARRIER 1. Culpa contractual

b.

Duty to deliver the goods The goods should be delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated.

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

Only the carrier is primarily liable and not the driver, because there is no privity between the driver and the passenger. (Art.1759,NCC) No defense of due diligence in the selection and supervision of employees.

1. Liability arising from partners torts (Art 1822)

a. b. The partner must be guilty of a wrongful act or omission He must be acting in the ordinary course of business, or with the authority of his co-partners even if the act is unconnected with business.

2.

Culpa aquiliana

The carrier and the driver are solidarily liable as joint tortfeasors . (Art.2180, NCC) Defense of due diligence in the selection and supervision of employees is available. Although the relation between the carrier and passenger is contractual in origin and nature, nevertheless, the act that breaks the contract may also be a tort. (Air France vs. Carrascoso) In case the injury to a passenger due to the negligence of the driver of the bus on which the passenger was riding on and of the driver o another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. (Tiu vs. Arriesgado) Since employers liability is primary, direct and solidary, its only recourse is to recover what it has paid from its negligent employee. (Philtranco vs. CA)

2. Liability arising from partners breach of trust (Art.

1823) a. b. Misapplication committed by a partner who received the money or property. By another partner while it is in custody of the partnership.

TORTS IN PARTNERSHIP AND AGENCY Art.1822 WRONGFUL ACT OR OMISSION Requisites for liability arising from partners torts 1. 2. Partner must be guilty of a wrongful act or omission and; He must be acting in the ordinary course of business, or with the authority of his co-partners even if the act is unconnected with the business.

Note: Art 1822 does not extend to criminal liability such as embezzlement, where the wrong doing is regarded as individual in character. Art.1823 BREACH OF TRUST This provision means that the partnership is liable for any losses suffered by a third person: 1. whose money or property is misappropriated by a partner who received with in the scope of his authority or By any other partner after it was received by the partnership in the ordinary course of business while in its custody.

3.

Culpa delictual The driver is primarily liable. The carrier is subsidiarily liable only if the driver is convicted and declared insolvent. (Art.100, RPC)

LIABILITY OF PARTNERS/PARTNERSHIP FOR TORT & BREACH OF TRUST Nature of liability The partners and the partnership are solidarily liable to third person (Art.1824) for the wrongful act or omission, or for breach of trust of the partner acting within the scope of the firms business or with the authority of his co-partners. Reason behind the law: the law protects him who, in good faith, relied upon the authority of a partner, whether such authority is real or apparent.

2.

Art.1824 LIABILITY Partners are solidarily liable to third person for the act or omission (Art.1822) or breach of trust (Art 1823) of a partner acting within the scope of the firms business or with the authority of his co-partners. Even if partners were innocent, partners are liable without prejudice to their right to recover from the guilty partner. Reason: the law protects him who, in good faith, relied upon the authority of a partner, whether such authority is real or apparent. Art.1928 RIGHT OF AGENT TO WITHDRAW

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves

Basis of this rule: an agency whether gratuitous or for a compensation is based in the constitutional prohibition against involuntary servitude. a) Without just cause agent must give due notice to the principal and withdrawal is without just cause, to indemnify the principal should the latter suffer damage due to such withdrawal. With just cause the agent cannot be held liable if the withdrawal is based on the impossibility of continuing with agency or is due to fortuitous event.

Cases where hotel keepers are NOT liable: a) Loss or injury caused by force majeure unless he is guilty of fault or negligence in failing to provide against the loss or injury. Loss is due to the acts of the guests or his family or visitors Loss arises from the character of the things into the hotel.

b) c)

b)

Art.1929 OBLIGATION OF THE AGENT TO CONTINUE AFTER WITHDRAWAL Purpose: to prevent damage or prejudice to the principal CREDIT TRANSACTIONS Art.1951 LIABILITY OF BAILOR FOR KNOWN HIDDEN FLAWS Requisites: 1. 2. 3. 4. 5. There is flaw or defect in the thing loaned The flaw or defect is hidden The bailor is aware thereof He does not advise the bailee of the same The bailee suffers damages by reason of said flaw or defect.

Art.1998 to 2003 LIABILITY OF KEEPERS OF HOTELS OR INNS For the keepers of hotel to be responsible as depositaries, the following elements must concur: a) b) They have been previously informed about the effects brought by the guests; The latter have taken safeguarding. pre cautions regarding

Extent of Liability not limited to effects lost or damaged in the hotel rooms which come under the term baggage or articles used by travellers but also include those lost in hotel annexes such as vehicles in the hotels garage. Note: Responsibility imposed extends to all those who offer lodging for compensation whatever may be their character. Cases where hotel keepers are liable regardless of the amount of care exercised:

a) The loss or injury caused by his servants or

employees as well as strangers provided that notice has been given and proper precautions taken (Art. 2000) b) The loss is caused by the act of the thief or robber done without the use of arms and irresistible force. (Art.2001)

Reporters: Adao, Campilla, Gala, Gamboa, Joel, Mayuga, Razon and Teves