4 Phil 560 VAZQUEZ Vs.

DE BORJA;

Torts and Damages Distinction of Liability of Employers Under Article 2180 and Their Liability for Breach of Contract In January 1932, De Borja entered into a contract of sale with the NVSD Co., Inc. The subject of the sale was 4,000 cavans of rice valued at Php2.10 per cavan. On behalf of the company, the contract was executed by Vasquez as the companys acting president. NVSD Co. only delivered 2,488 cavans and failed and refused despite demand to deliver the rest hence De Borja incurred damages (apparently, NVSD Co was insolvent). He then sue Vasquez for payment of damages. ISSUE: Whether or not Vasquez is liable for damages. HELD: No. Vasquez is not party to the contract as it was NVSD Co which De Borja contracted with. It is well known that a corporation is an artificial being invested by law with a personality of its own, separate and distinct from that of its stockholders and from that of its officers who manage and run its affairs. The mere fact that its personality is owing to a legal fiction and that it necessarily has to act thru its agents, does not make the latter personally liable on a contract duly entered into, or for an act lawfully performed, by them for an in its behalf. The fact that the corporation, acting thru Vazquez as its manager, was guilty of negligence in the fulfillment of the contract did not make Vazquez principally or even subsidiarily liable for such negligence. Since it was the corporations contract, its non fulfillment, whether due to negligence or fault or to any other cause, made the corporation and not its agent liable. JUSTICE PARAS Dissenting : Vasquez as president of NVSD Co is liable for damages. Vasquez, as acting president and manager of Natividad-Vazquez Sabani Development Co., Inc., and with full knowledge of the then insolvent status of his company, agreed to sell to De Borja 4,000 cavans of palay. Further, NVSD Co was soon thereafter dissolved.

Cangco vs. Manila Railroad (GR 12191, 14 October 1918) Facts: Petitioner Cangco is employed by defendant Manila Railroad Co. in Manila, and by virtue of his employment, he is entitled free ride from his house in San Mateo to Manila and vice-versa. On a fateful night around 8:00 PM at the station of San Mateo where it was dimly lighted , petitioner while alighting the train (though it was still moving very slowly to the point of stop), not knowing that there are sacks of melon piled at the edge of the platform stepped on the objects, causing him to slip off balance. Plaintiff was drawn under the car in an unconscious condition and as a result seriously injured him. His arm was amputated and he was prevented from working. He spent approx P800 pesos for his medical expenses.Thereupon, he sued Manila Railroad to recover damages on the ground of negligence of the servants and employees of the defendant. The CFI ruled that although there is an apparent negligence on the part of the defendant through its employees but nevertheless, the plaintiff cannot recover because he had failed to use due caution in alighting from the coach. Hence this appeal.

Issue:Whether or not Manila Railroad Company is liable to the plaintiff for the negligent acts of its employees, notwithstanding that plaintiff was also negligent?

Held: Yes! While the plaintiff may have been negligent, the defendant is also negligent. The case falls under the category that of (1) culpa contractual, that is, contract of carriage by providing the passengers safe travel beginning from the time he It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extracontractual obligations or to use the technical form of expression, that article relates only to culpa aquiliana and not to culpa contractual. respondeat superior - One who places a powerful automobile in the hands of a servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence which makes him liable for all the consequences of his imprudence. Culpa Aquiliana or extra-contractual culpa The liability arising from extra-contractual culpa is always based upon a voluntary act or omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of law that there was negligence on the part of the master or employer either in selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability. Distinction between non-contractual and contractual Obligation The fundamental distinction between obligations of this character and those which arise from contract, rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which creates the vinculum juris, whereas in contractual relations the vinculum juris exists independently of the breach of the voluntary duty assumed by the parties when entering into the contractual relation. The mere fact that a person is bound to another by contract does not relieve him from extra-contractual liability to such person. Comparative negligence - if the accident was caused by plaintiffs own negligence, no liability is imposed upon defendants negligence and plaintiffs negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence.Test on Contributory negligence. 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?

JACINTO TANGUILIG doing business under the name and style J.M.T. ENGINEERING AND GENERAL MERCHANDISING vs COURT OF APPEALS and VICENTE HERCE JR. G.R.No. 125994 29June2001

FACTS

OF

THE

CASE:

Herce contracted Tanguilig to construct a windmill system for him, for consideration of 60,000.00. Pursuant to the agreement Herce paid the downpayment of 30,000.00 and installment of 15,000.00 leaving a 15,000.00 balance. Herce refused to pay the balance because he had already paid this amount to SPGMI which constructed a deep well to which the windmill system was to be connected since the deepwell, and assuming that he owed the 15,000.00 this should be offset by the defects in the windmill system which caused the structure to collapse after strong winds hit their place. According to Tanguilig, the 60,000.00 consideration is only for the construction of the windmill and the construction of the deepwell was not part of it. The collapse of the windmill cannot be attributed to him as well, since he delivered it in good and working condition and Herce accepted it without protest. Herce contested that the collapse is attributable to a typhoon, a force majeure that relieved him of liability. The RTC ruled in favor of Tanguilig, but this decision was overturned by the Court of Appeals which ruled in favor of Herce

ISSUES

OF

THE

CASE:

Can the collapse of the windmill be attributed to force majeure? Thus, extinguishing the liability of Tanguilig? - Yes, in order for a party to claim exemption from liability by reason of fortuitous event under Art 1174 of the Civil Code the event should be the sole and proximate cause of the loss or destruction of the object of the contract. - In Nakpil vs. Court of Appeals, the S.C. held that 4 requisites must concur that there must be a (a) the cause of the breach of the obligation must be independent of the will of debtor (b) the event must be either unforeseeable or unavoidable; (c) the event be such to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. - Tanguilig merely stated that there was a strong wind, and a strong wind in this case is not fortuitous, it was not unforeseeable nor unavoidable, places with strong winds are the perfect locations to put up a windmill, since it needs strong winds for it to work. HELD: WHEREFORE, the appealed decision is MODIFIED. Respondent VICENTE HERCE JR. is directed to pay petitioner JACINTO M. TANGUILIG the balance of P15,000.00 with interest at the legal rate from the date of the filing of the complaint. In return, petitioner is ordered to "reconstruct subject defective windmill system, in accordance with the one-year guaranty" and to complete the same within three (3) months from the finality of this decision. Obligations and Contracts Terms:

Fortuitous Events- Refers to an occurrence or happening which could not be foreseen, or even if foreseen, is inevitable. It is necessary that the obligor is free from negligence. Fortuitous events may be produced by two (2) general causes: (1) by Nature, such as but not limited to, earthquakes, storms, floods, epidemics, fires, and (2) by the act of man, such as but not limited to, armed invasion, attack by bandits, governmental prohibitions, robbery, provided that they have the force of an imposition which the contractor or supplier could not have resisted.

CRISMINA GARMENTS, INC. VS. COURT OF APPEAL AND NORMA SIAPNO G.R. No. 128721, March 09, 1999 FACTS: Petitioner contracted the services of the respondent, to sew for the petitioner of 20,762 pieces of assorted girls denims to the amount of P76,410.00. At first, the respondent was told that the sewing of some of the pants was defective. She offered to take delivery of the defective pants. However, she was later told by [petitioner]'s representative that the goods were already good. She was told to just return for her check of P76,410.00. However, the petitioner failed to pay her the aforesaid amount. This prompted her to hire the services of counsel who, on November 12, 1979, wrote a letter to the petitioner demanding payment of the aforesaid amount within ten days from receipt thereof. On February 7, 1990, the petitioner's vice-president-comptroller, wrote a letter to respondent's counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering 6,164 pairs, were defective and that she was liable to the petitioner for the amount of P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund of the aforesaid amount. ISSUE: Whether or not it is proper to impose interest at the rate of twelve percent (12%) per annum for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties.

HELD: Because the amount due in this case arose from a contract for a piece of work, not from a loan or forbearance of money, the legal interest of six percent (6%) per annum should be applied. Furthermore, since the amount of the demand could be established with certainty when the Complaint was filed, the six percent (6%) interest should be computed from the filing of the said Complaint. But after the judgment becomes final and executory until the obligation is satisfied, the interest should be reckoned at twelve percent (12%) per year.

ESTELA L. CRISOSTOMO v. COURT OF APPEALS and CARAVAN TRAVEL AND TOURS INTERNATIONAL, INC. G.R. No. 138334, 25 August 2003, First Division (Ynares-Santiago, J.) A travel agency is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. Petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing, and accommodation in a tour dubbed Jewels of Europe. A 5% discount on the total cost of P74,322.70 which included the airfare was given to the petitioner. The booking fee was also waived because petitioners niece, Meriam Menor, was respondents ticketing manager. On June 12, 1991, Menor went to her aunts residence to deliver petitioners travel documents and plane tickets. In return, petitioner gave the full payment for the package tour. Menor then told her to be at the NAIA on Saturday, June 15, 1991, two hours before her flight on board British Airways. Without checking her travel documents, petitioner went to NAIA and to her dismay, she discovered that the flight she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight scheduled on June 14, 1991. She called up Menor to complain and Menor suggested upon petitioner to take another tour British Pageant. Petitioner was asked anew to pay US$785.00. Petitioner gave respondent US$300 as partial payment and commenced the trip. ISSUE: Whether or not respondent Caravan did not observe the standard of care required of a common carrier when it informed the petitioner wrongly of the flight schedule. HELD: The petition was denied for lack of merit. The decision of the Court of Appeals was affirmed. A common carrier is defined under Article 1732 of the Civil Code as persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, affecting their services to the public. It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. The standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code. This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. It is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner for the tour. Had petitioner exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the flight. Needless to say, after the travel papers were delivered to petitioners, it became incumbent upon her to take ordinary care of her concerns. This undoubtedly would require that she at least read the documents in order to assure herself of the important details regarding the trip.

nakpil sons vs ca Facts: The Philippine Bar Association wanted to erect a building in its lot in Intramuros. They were able to obtain a contract with the United Construction Company Inc for the construction of the building and the design was obtained from Juan M. Nakpil & Sons and Juan F. Nakpil. The Building was completed in June 1966. On August 2, 1968 a massive earthquake hit Manila with an intensity of about 7.3. This earthquake caused damage to the building and caused it to lean forward dangerously which led to the vacation of the building. United Construction Company in turn shored up the building and incurred 13,661.28 php as costs. The PBA then instituted a case against UCC for damages due to its negligence regarding the construction of the said building thru its failure to follow the designs coming from the architects. UCC then filed a complint against the archetechts (Nakpil & Sons) alleging that it was the designs that are flawed and that caused the buildings inability to withstand an earthquake. UCC also included the president of PBA for including them in their petition. Nakpil & Sons answer that the petitioners need not to change the defendants in their petition as UCC deviated from the plans which caused the damages to the building. In the course of the trial a commissioner was appointed by both parties to give a report regarding the technical aspects of the case. His report concluded that indeed there were faults arising from the negligence of both defendants. The report stated that the design was flawed and that UCC deviated from the designs which aggravated the problem. The defendants then put up the Act of God defense. Issue: Whether or not the defendants could escape liability from the building due to a fortuitous event which is unforeseeable and inevitable even if their negligence is established Held: The defendants cannot validly invoke the Act of God defense. This is because of the report submitted by the appointed Commissioner which established their negligence. Acceptance of the building, after completion, does not imply waiver of any of the causes of action by reason of any defect. To exempt the obligor from its liability these requisites should first concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to the creditor. The report of the Commissioner established that the defects that occurred to the building could be attributed to the act of man specifically that of the architects and the engineers as well as the builders. This was because of the fact that UCC deviated from the plans submitted by the architects and their failure to observe the required marksmanship in constructing the building as well as the required degree of supervision. Nakpil & Sons are also liable for the inadequacies and defect in their submitted plan and specifications. These circumstances are the proximate causes of the damages that the PBA building incurred. The costs are to be paid by the defendants amounting to 5M which includes all appreciable damages as well as indemnity plus 100,000php for the atty fee. One who negligently creates a dangerous condition cannot escape liability for the natural and probable consequences thereof, although the act of a third person, or an act of God for which he is not responsible, intervenes to precipitate the loss.

Civil Law 2- ObliCon- SECURITY BANK AND TRUST COMPANY vs. REGIONAL TRIAL COURT OF MAKATI, BRANCH 61, MAGTANGGOL EUSEBIO and LEILA VENTURA, This is with regard to ART 1170- Interest rate from damages as stipulated by parties Case of Security Bank and Trust Company vs. R.T.C MAKATI BR. 61 MAGTANGGOL EUSEBIO AND LEILA VENTURA G.R.No. 113926 23October1996 FACTS OF THE CASE: On April 27, 1983, private respondent Magtanggol Eusebio executed 3 Promissory Notes from different dates in favor of petitioner Security Bank and Trust Co. (SBTC) in the amounts of 100,000, 100,000, and 65,000. Respondent bound himself to pay the said amounts in six (6) monthly installments plus 23% interest per annum.On all the abovementioned promissory notes, private respondent Leila Ventura had signed as co-maker. Upon maturity there were still principal balance remaining on the notes. Eusebio refused to pay the balance payable, so SBTC filed a collection case against him. The RTC rendered a judgment in favor of SBTC, although the rate of interest imposed by the RTC was 12% p.a. instead of the agreed upon 23% p.a. The court denied the motion filed by SBTC to apply the 23% p.a. instead of the 12% p.a. ISSUES Did the RTC err in using OF 12% instead of the 23% THE as agreed upon by the CASE: parties?

- Yes, the rate of interest was agreed upon by the parties freely. Significantly, respondent did not question that rate. - P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to stipulate freely regarding any subsequent adjustment in the interest rate that shall accrue on a loan or forbearance of money, goods or credits. - It is not for respondent court a quo to change the stipulations in the contract where it is not illegal. Furthermore, Article 1306 of the New Civil Code provides that contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. - The 12% shall be applied for obligations arising from loans, or forbearance of money in the absence of express stipulations HELD: IN VIEW OF THE FOREGOING, the decision of the respondent court a quo, is hereby AFFIRMED with the MODIFICATION that the rate of interest that should be imposed be 23% per annum. Obligations and Contracts Terms: PROMISSORY NOTE - A written document in which a borrower agrees (promises) to pay back money to a lender according to specified terms. A written promise to pay a certain sum of money, at a future time, unconditionally. A promissory note differs from a mere acknowledgment of debt, without any promise to pay, as when the debtor gives his creditor an I 0 U. In its form it usually contains a promise to pay, at a time therein expressed, a sum of money to a certain person therein named, or to his order, for value received. It is dated and signed by the maker. It is never under seal. He who makes the promise is called the maker, and he to whom it is made is the payee.