Equitable Remedy

Court-ordered action that directs parties to do or not to do something; such remedies include injunctive relief and Spe
cific Performance.Alternatively, a nonmonetary remedy, such as an Injunction or specific performance, obtained when a legal remedy such as moneydam
ages cannot adequately redress the injury.
Equitable remedies are distinguished from "legal" remedies (which are available to a successful claimant as of right)
by the discretion of the court to grant them. In common law jurisdictions, there are a variety of equitable remedies, but
the principal remedies are:
1. injunction[4]
2. specific performance
3. account of profits
4. rescission
5. declaratory relief
6. rectification
7. equitable estoppel
8. certain proprietary remedies, such as constructive trusts[5]
9. subrogation
10. in very specific circumstances, an equitable lien
11. equitable compensation
12. Appointment or removal of fiduciary
13. Interpleader

[G.R. No. 124922. June 22, 1998] JIMMY CO, doing business under the name & style DRAGON METAL
MANUFACTURING, Petitioner, vs. COURT OF APPEALS and BROADWAY MOTOR SALES CORPORATION,
Respondents.

DECISION
MARTINEZ, J.:
On July 18, 1990, petitioner entrusted his Nissan pick-up car 1988 model [1] to private respondent - which is
engaged in the sale, distribution and repair of motor vehicles - for the following job repair services and supply of
parts:
- Bleed injection pump and all nozzles;
- Adjust valve tappet;
- Change oil and filter;
- Open up and service four wheel brakes, clean and adjust;
- Lubricate accelerator linkages;
- Replace aircon belt; and
- Replace battery[2]
Private respondent undertook to return the vehicle on July 21, 1990 fully serviced and supplied in accordance with
the job contract. After petitioner paid in full the repair bill in the amount of P1,397.00,[3] private respondent issued
to him a gate pass for the release of the vehicle on said date. But came July 21, 1990, the latter could not release
the vehicle as its battery was weak and was not yet replaced. Left with no option, petitioner himself bought a new
battery nearby and delivered it to private respondent for installation on the same day. However, the battery was
not installed and the delivery of the car was rescheduled to July 24, 1990 or three (3) days later. When petitioner
sought to reclaim his car in the afternoon of July 24, 1990, he was told that it was carnapped earlier that morning
while being road-tested by private respondents employee along Pedro Gil and Perez Streets in Paco, Manila.
Private respondent said that the incident was reported to the police.
Having failed to recover his car and its accessories or the value thereof, petitioner filed a suit for damages against
private respondent anchoring his claim on the latters alleged negligence. For its part, private respondent
contended that it has no liability because the car was lost as a result of a fortuitous event - the carnapping. During
pre-trial, the parties agreed that:
(T)he cost of the Nissan Pick-up four (4) door when the plaintiff purchased it from the defendant is P332,500.00
excluding accessories which were installed in the vehicle by the plaintiff consisting of four (4) brand new tires,
magwheels, stereo speaker, amplifier which amount all in all to P20,000.00. It is agreed that the vehicle was lost
on July 24, 1990 `approximately two (2) years and five (5) months from the date of the purchase. It was agreed
that the plaintiff paid the defendant the cost of service and repairs as early as July 21, 1990 in the amount
of P1,397.00 which amount was received and duly receipted by the defendant company. It was also agreed that
the present value of a brand new vehicle of the same type at this time is P425,000.00 without accessories.[4]
They likewise agreed that the sole issue for trial was who between the parties shall bear the loss of the vehicle
which necessitates the resolution of whether private respondent was indeed negligent. [5] After trial, the court a
quo found private respondent guilty of delay in the performance of its obligation and held it liable to petitioner for
the value of the lost vehicle and its accessories plus interest and attorneys fees. [6] On appeal, the Court of Appeals
(CA) reversed the ruling of the lower court and ordered the dismissal of petitioners damage suit. [7] The CA ruled
that: (1) the trial court was limited to resolving the issue of negligence as agreed during pre-trial; hence it cannot
pass on the issue of delay; and (2) the vehicle was lost due to a fortuitous event.
In a petition for review to this Court, the principal query raised is whether a repair shop can be held liable for the
loss of a customers vehicle while the same is in its custody for repair or other job services?

The Court resolves the query in favor of the customer. First, on the technical aspect involved. Contrary to the CAs
pronouncement, the rule that the determination of issues at a pre-trial conference bars the consideration of other
issues on appeal, except those that may involve privilege or impeaching matter,[8] is inapplicable to this case. The
question of delay, though not specifically mentioned as an issue at the pre-trial may be tackled by the court
considering that it is necessarily intertwined and intimately connected with the principal issue agreed upon by the
parties, i.e. who will bear the loss and whether there was negligence. Petitioners imputation of negligence to
private respondent is premised on delay which is the very basis of the formers complaint. Thus, it was
unavoidable for the court to resolve the case, particularly the question of negligence without considering whether
private respondent was guilty of delay in the performance of its obligation.
On the merits. It is a not a defense for a repair shop of motor vehicles to escape liability simply because the
damage or loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se cannot be
considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken from anothers rightful
possession, as in cases of carnapping, does not automatically give rise to a fortuitous event. To be considered as
such, carnapping entails more than the mere forceful taking of anothers property. It must be proved and
established that the event was an act of God or was done solely by third parties and that neither the claimant nor
the person alleged to be negligent has any participation. [9] In accordance with the Rules of evidence, the burden of
proving that the loss was due to a fortuitous event rests on him who invokes it [10]- which in this case is the private
respondent. However, other than the police report of the alleged carnapping incident, no other evidence was
presented by private respondent to the effect that the incident was not due to its fault. A police report of an alleged
crime, to which only private respondent is privy, does not suffice to established the carnapping. Neither does it
prove that there was no fault on the part of private respondent notwithstanding the parties agreement at the pretrial that the car was carnapped. Carnapping does not foreclose the possibility of fault or negligence on the part of
private respondent.
Even assuming arguendo that carnapping was duly established as a fortuitous event, still private respondent
cannot escape liability. Article 1165 [11] of the New Civil Code makes an obligor who is guilty of delay responsible
even for a fortuitous event until he has effected the delivery. In this case, private respondent was already in delay
as it was supposed to deliver petitioners car three (3) days before it was lost. Petitioners agreement to the
rescheduled delivery does not defeat his claim as private respondent had already breached its obligation.
Moreover, such accession cannot be construed as waiver of petitioners right to hold private respondent liable
because the car was unusable and thus, petitioner had no option but to leave it.
Assuming further that there was no delay, still working against private respondent is the legal presumption under
Article 1265 that its possession of the thing at the time it was lost was due to its fault. [12] This presumption is
reasonable since he who has the custody and care of the thing can easily explain the circumstances of the loss.
The vehicle owner has no duty to show that the repair shop was at fault. All that petitioner needs to prove, as
claimant, is the simple fact that private respondent was in possession of the vehicle at the time it was lost. In this
case, private respondents possession at the time of the loss is undisputed. Consequently, the burden shifts to the
possessor who needs to present controverting evidence sufficient enough to overcome that presumption.
Moreover, the exempting circumstances - earthquake, flood, storm or other natural calamity - when the
presumption of fault is not applicable [13] do not concur in this case. Accordingly, having failed to rebut the
presumption and since the case does not fall under the exceptions, private respondent is answerable for the loss.
It must likewise be emphasized that pursuant to Articles 1174 and 1262 of the New Civil Code, liability attaches
even if the loss was due to a fortuitous event if the nature of the obligation requires the assumption of risk.
[14]
Carnapping is a normal business risk for those engaged in the repair of motor vehicles. For just as the owner is
exposed to that risk so is the repair shop since the car was entrusted to it. That is why, repair shops are required
to first register with the Department of Trade and Industry (DTI) [15] and to secure an insurance policy for the shop
covering the property entrusted by its customer for repair, service or maintenance as a pre-requisite for such
registration/accreditation.[16] Violation of this statutory duty constitutes negligence per se.[17] Having taken custody
of the vehicle, private respondent is obliged not only to repair the vehicle but must also provide the customer with
some form of security for his property over which he loses immediate control. An owner who cannot exercise the
seven (7) juses or attributes of ownership the right to possess, to use and enjoy, to abuse or consume, to
accessories, to dispose or alienate, to recover or vindicate and to the fruits - [18] is a crippled owner. Failure of the
repair shop to provide security to a motor vehicle owner would leave the latter at the mercy of the former.
Moreover, on the assumption that private respondents repair business is duly registered, it presupposes that its
shop is covered by insurance from which it may recover the loss. If private respondent can recover from its
insurer, then it would be unjustly enriched if it will not compensate petitioner to whom no fault can be attributed.
Otherwise, if the shop is not registered, then the presumption of negligence applies.
One last thing. With respect to the value of the lost vehicle and its accessories for which the repair shop is liable, it
should be based on the fair market value that the property would command at the time it was entrusted to it or
such other value as agreed upon by the parties subsequent to the loss. Such recoverable value is fair and
reasonable considering that the value of the vehicle depreciates. This value may be recovered without prejudice to
such other damages that a claimant is entitled under applicable laws.
WHEREFORE, premises considered, the decision of the Court Appeals is REVERSED and SET ASIDE and the
decision of the court a quo is REINSTATED.

SO ORDERED.

G.R. No. L-45637 May 31, 1985

ROBERTO JUNTILLA, petitioner,
vs.
CLEMENTE FONTANAR, FERNANDO BANZON and BERFOL CAMORO, respondents.
Valentin A. Zozobrado for petitioner.
Ruperto N. Alfarara for respondents.

GUTIERREZ, JR., J.:

This is a petition for review, on questions of law, of the decision of the Court of First Instance of Cebu which reversed
the decision of the City Court of Cebu and exonerated the respondents from any liability arising from a vehicular
accident.
The background facts which led to the filing of a complaint for breach of contract and damages against the
respondents are summarized by the Court of First Instance of Cebu as follows:
The facts established after trial show that the plaintiff was a passenger of the public utility jeepney
bearing plate No. PUJ-71-7 on the course of the trip from Danao City to Cebu City. The jeepney was
driven by defendant Berfol Camoro. It was registered under the franchise of defendant Clemente
Fontanar but was actually owned by defendant Fernando Banzon. When the jeepney reached
Mandaue City, the right rear tire exploded causing the vehicle to turn turtle. In the process, the plaintiff
who was sitting at the front seat was thrown out of the vehicle. Upon landing on the ground, the
plaintiff momentarily lost consciousness. When he came to his senses, he found that he had a
lacerated wound on his right palm. Aside from this, he suffered injuries on his left arm, right thigh and
on his back. (Exh. "D"). Because of his shock and injuries, he went back to Danao City but on the
way, he discovered that his "Omega" wrist watch was lost. Upon his arrival in Danao City, he
immediately entered the Danao City Hospital to attend to his injuries, and also requested his father-inlaw to proceed immediately to the place of the accident and look for the watch. In spite of the efforts of
his father-in-law, the wrist watch, which he bought for P 852.70 (Exh. "B") could no longer be found.
xxx xxx xxx
Petitioner Roberto Juntilla filed Civil Case No. R-17378 for breach of contract with damages before the City Court of
Cebu City, Branch I against Clemente Fontanar, Fernando Banzon and Berfol Camoro.
The respondents filed their answer, alleging inter alia that the accident that caused losses to the petitioner was beyond
the control of the respondents taking into account that the tire that exploded was newly bought and was only slightly
used at the time it blew up.
After trial, Judge Romulo R. Senining of the Civil Court of Cebu rendered judgment in favor of the petitioner and
against the respondents. The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants and
the latter are hereby ordered, jointly and severally, to pay the plaintiff the sum of P750.00 as
reimbursement for the lost Omega wrist watch, the sum of P246.64 as unrealized salary of the plaintiff
from his employer, the further sum of P100.00 for the doctor's fees and medicine, an additional sum of
P300.00 for attorney's fees and the costs.
The respondents appealed to the Court of First Instance of Cebu, Branch XIV.
Judge Leonardo B. Canares reversed the judgment of the City Court of Cebu upon a finding that the accident in
question was due to a fortuitous event. The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered exonerating the defendants from any liability to the
plaintiff without pronouncement as to costs.
A motion for reconsideration was denied by the Court of First Instance.
The petitioner raises the following alleged errors committed by the Court of First Instance of Cebu on appeal
a. The Honorable Court below committed grave abuse of discretion in failing to take cognizance of the
fact that defendants and/or their employee failed to exercise "utmost and/or extraordinary diligence"
required of common carriers contemplated under Art. 1755 of the Civil Code of the Philippines.
b. The Honorable Court below committed grave abuse of discretion by deciding the case contrary to
the doctrine laid down by the Honorable Supreme Court in the case of Necesito et al. v. Paras, et al.
We find the petition impressed with merit.
The City Court and the Court of First Instance of Cebu found that the right rear tire of the passenger jeepney in which
the petitioner was riding blew up causing the vehicle to fall on its side. The petitioner questions the conclusion of the
respondent court drawn from this finding of fact.
The Court of First Instance of Cebu erred when it absolved the carrier from any liability upon a finding that the tire
blow out is a fortuitous event. The Court of First Instance of Cebu ruled that:
After reviewing the records of the case, this Court finds that the accident in question was due to a
fortuitous event. A tire blow-out, such as what happened in the case at bar, is an inevitable accident
that exempts the carrier from liability, there being absence of a showing that there was misconduct or
negligence on the part of the operator in the operation and maintenance of the vehicle involved. The
fact that the right rear tire exploded, despite being brand new, constitutes a clear case of caso fortuito
which can be a proper basis for exonerating the defendants from liability. ...
The Court of First Instance relied on the ruling of the Court of Appeals in Rodriguez v. Red Line Transportation
Co., CA G.R. No. 8136, December 29, 1954, where the Court of Appeals ruled that:
A tire blow-out does not constitute negligence unless the tire was already old and should not have
been used at all. Indeed, this would be a clear case of fortuitous event.
The foregoing conclusions of the Court of First Instance of Cebu are based on a misapprehension of overall facts from
which a conclusion should be drawn. The reliance of the Court of First Instance on the Rodriguez case is not in order.
In La Mallorca and Pampanga Bus Co. v. De Jesus, et al. (17 SCRA 23), we held that:
Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to no liability for
negligence, citing the rulings of the Court of Appeals in Rodriguez v. Red Line Transportation Co., CA
G.R. No. 8136, December 29, 1954, and People v. Palapad, CA-G.R. No. 18480, June 27, 1958.
These rulings, however, not only are not binding on this Court but were based on considerations quite
different from those that obtain in the case at bar. The appellate court there made no findings of any
specific acts of negligence on the part of the defendants and confined itself to the question of whether
or not a tire blow-out, by itself alone and without a showing as to the causative factors, would
generate liability. ...
In the case at bar, there are specific acts of negligence on the part of the respondents. The records show that the
passenger jeepney turned turtle and jumped into a ditch immediately after its right rear tire exploded. The evidence
shows that the passenger jeepney was running at a very fast speed before the accident. We agree with the
observation of the petitioner that a public utility jeep running at a regular and safe speed will not jump into a ditch
when its right rear tire blows up. There is also evidence to show that the passenger jeepney was overloaded at the
time of the accident. The petitioner stated that there were three (3) passengers in the front seat and fourteen (14)
passengers in the rear.
While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible, this fact
alone does not make the explosion of the tire a fortuitous event. No evidence was presented to show that the accident
was due to adverse road conditions or that precautions were taken by the jeepney driver to compensate for any
conditions liable to cause accidents. The sudden blowing-up, therefore, could have been caused by too much air
pressure injected into the tire coupled by the fact that the jeepney was overloaded and speeding at the time of the
accident.

In Lasam v. Smith (45 Phil. 657), we laid down the following essential characteristics of caso fortuito:
xxx xxx xxx
... In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the
following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of
the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It
must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it
must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any
participation in the aggravation of the injury resulting to the creditor. (5 Encyclopedia Juridica
Espanola, 309.)
In the case at bar, the cause of the unforeseen and unexpected occurrence was not independent of the human will.
The accident was caused either through the negligence of the driver or because of mechanical defects in the tire.
Common carriers should teach their drivers not to overload their vehicles, not to exceed safe and legal speed limits,
and to know the correct measures to take when a tire blows up thus insuring the safety of passengers at all times.
Relative to the contingency of mechanical defects, we held in Necesito, et al. v. Paras, et al. (104 Phil. 75), that:
... The preponderance of authority is in favor of the doctrine that a passenger is entitled to recover
damages from a carrier for an injury resulting from a defect in an appliance purchased from a
manufacturer, whenever it appears that the defect would have been discovered by the carrier if it had
exercised the degree of care which under the circumstances was incumbent upon it, with regard to
inspection and application of the necessary tests. For the purposes of this doctrine, the manufacturer
is considered as being in law the agent or servant of the carrier, as far as regards the work of
constructing the appliance. According to this theory, the good repute of the manufacturer will not
relieve the carrier from liability' (10 Am. Jur. 205, s, 1324; see also Pennsylvania R. Co. v. Roy, 102
U.S. 451; 20 L. Ed. 141; Southern R. Co. v. Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed Note, 29
ALR 788.: Ann. Cas. 1916E 929).
The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over
the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no
privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no
remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not
an insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his
equipment if such flaws were at all discoverable. ...
It is sufficient to reiterate that the source of a common carrier's legal liability is the contract of carriage, and by entering
into the said contract, it binds itself to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of a very cautious person, with a due regard for all the circumstances. The records show
that this obligation was not met by the respondents.
The respondents likewise argue that the petitioner cannot recover any amount for failure to prove such damages
during the trial. The respondents submit that if the petitioner was really injured, why was he treated in Danao City and
not in Mandaue City where the accident took place. The respondents argue that the doctor who issued the medical
certificate was not presented during the trial, and hence not cross-examined. The respondents also claim that the
petitioner was not wearing any wrist watch during the accident.
It should be noted that the City Court of Cebu found that the petitioner had a lacerated wound on his right palm aside
from injuries on his left arm, right thigh and on his back, and that on his way back to Danao City, he discovered that his
"Omega" wrist watch was lost. These are findings of facts of the City Court of Cebu which we find no reason to disturb.
More so when we consider the fact that the Court of First Instance of Cebu impliedly concurred in these matters when
it confined itself to the question of whether or not the tire blow out was a fortuitous event.
WHEREFORE, the decision of the Court of First Instance of Cebu, Branch IV appealed from is hereby REVERSED
and SET ASIDE, and the decision of the City Court of Cebu, Branch I is REINSTATED, with the modification that the
damages shall earn interest at 12% per annum and the attorney's fees are increased to SIX HUNDRED PESOS
(P600.00). Damages shall earn interests from January 27, 1975.
SO ORDERED.