Nikko Hotel Manila Garden vs Roberto Reyes

FACTS: One evening in October 1994, an exclusive party was being held at the Nikko Hotel Manila
Garden. The party was being held for a prominent Japanese national. The person in charge at the party was
Ruby Lim who was also the executive secretary of the hotel. Later during the party, she noticed Robert
Reyes (popularly known as Amay Bisaya). Reyes was not on the list of exclusive guests. Lim first tried to
find out who invited Reyes to the party. When she ascertained that the host celebrant did not invite Reyes,
Lim approached Reyes and told the latter, in a discreet voice, to finish his food and leave the party. Reyes
however made a scene and began shouting at Lim. Later, a policeman was called to escort Reyes out of the
party.
Reyes then sued Lim and Nikko Hotel Manila Garden for damages. In his version, he said that he was
invited by another party guest, Dr. Violeta Filart. He said that while he was queuing to get his food, Lim
approached him and ordered him in a loud voice to leave the party immediately. He told Lim he was invited
by Dr. Filart however when he was calling for Dr. Filart the latter ignored him. Later, he was escorted out
of the party like a common criminal.
The trial court ruled in favor of Lim and Nikko Hotel. However, the Court of Appeals ruled in favor of
Reyes as it ruled that Lim abused her right and that Reyes deserved to be treated humanely and fairly. It is
true that Lim had the right to ask Reyes to leave the party but she should have done it respectfully.
ISSUE: Whether or not Lim acted with abuse of rights.
HELD: No. The Supreme Court found the version of Lim more credible. She has been employed by the
hotel for more than 20 years at that time. Her job requires her to be polite at all times. It is very unlikely for
her to make a scene in the party she was managing. That would only make her look bad.
Reyes based his complaint on Articles 19 and 21 of the Civil Code. Art. 19 which provides:
Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
was not violated by Lim as it appears that even Reyes testified in court that when Lim told him to leave,
Lim did so very close to him – so close that they could almost kiss. This only proves that Lim intended that
only Reyes shall hear whatever is it that she’s going to tell Reyes and exclude other guests from hearing.
Article 21 on the other hand is commonly known as contra bonus mores:
Any person who willfully 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.
This article is likewise not violated. Lim, as proven by evidence on record, did not demean Reyes. They do
not know each other personally. She has no reason to treat him wrongfully especially so that Reyes himself
is a prominent person.
On the other hand, Reyes brought whatever damage he incurred upon himself. Under the doctrine of volenti
non fit injuria, by coming to the party uninvited, Reyes opens himself to the risk of being turned away, and
thus being embarrassed. The injury he incurred is thus self-inflicted. Evidence even shows that Dr. Filart
herself denied inviting Reyes into the party and that Reyes simply gate-crashed. Reyes did not even present
any supporting evidence to support any of his claims. Since he brought injury upon himself, neither Lim
nor Nikko Hotel can be held liable for damages.
 Sagrada Orden vs. National Coconut Corporation

FACTS: Plaintiff Sagrada Orden owned a piece of real property in Pandacan, Manila. During the
Japanese occupation, the land was acquired by a Japanese corporation Taiwan Tekkoshho. After the
liberation, the Alien Property Custodian of the United States took possession, control, and custody of
the real property. During the year 1946, the property was occupied by the Copra Export Management
Company under the custodianship agreement with United States Alien Property Custodian, and when
it vacated, the property occupied by defendant National Coconut Corporation.

Sagrada Orden made claim to the property before the Alien Property Custodian of the United
States but was denied. So plaintiff brought an action in court to annul the sale of property of Taiwan
Tekkosho, and recover its possession. The case did not come for trial because the parties presented a
joint petition in which it is claimed by Sagrada Orden that the sale in favor of Taiwan Tekkosho was
null and void because it was executed under threats, duress, and intimidation, and that the title be re-
issued to Sagrada Orden.

The court rendered judgment releasing the defendant from liability, but reversing to the plaintiff
the right to recover from the defendant reasonable rentals for the use and occupation of the premises.
The present action to recover the reasonable rentals from August 1946, the date when defendant began
to occupy, to the date it vacated it. The defendant did not contest its liability for the rentals at the rate
of P3, 000 per month from February 28, 1949, but resisted the claim therefore prior to that date.
Defendant contends that it occupied the property in good faith, under no obligation to pay rentals for
the use and occupation. Judgment rendered for the plaintiff to recover from the defendant the sum of
P3, 000 a month, from August, 1946, to the date the defendant vacates the premises. Thus this appeal
made by defendant.

ISSUE: Can the defendant company be held liable to pay rentals from August 1946 to the date it
vacated?

RULING
No. If defendant-appellant is liable at all, its obligations, must arise from any of the four
sources of obligations, namely, law, contract or quasi-contract, crime, or negligence. Defendant-
appellant is not guilty of any offense at all, because it entered the premises and occupied it with the
permission of the entity which had the legal control and administration thereof, the Alien Property
Administration. Neither was there any negligence on its part. There was also no privity between the
Alien Property Custodian and the Taiwan Tekkosho, which had secured the possession of the property
from the plaintiff-appellee by the use of duress, such that the Alien Property Custodian or its permittee
(defendant-appellant) may be held responsible for the supposed illegality of the occupation of the
property by the said Taiwan Tekkosho. The Alien Property Administration had the control and
administration of the property not as successor to the interests of the enemy holder of the title, the
Taiwan Tekkosho. Neither is it a trustee of the former owner, the plaintiff-appellee herein, but a trustee
of then Government of the United States, in its own right, to the exclusion of, and against the claim or
title of, the enemy owner. From August, 1946, when defendant-appellant took possession, to the late
of judgment on February 28, 1948, Alien Property Administration had the absolute control of the
property as trustee of the Government of the United States, with power to dispose of it by sale or
otherwise, as though it were the absolute owner. Therefore, even if defendant-appellant were liable to
the Alien Property Administration for rentals, these would not accrue to the benefit of the plaintiff-
appellee, the owner, but to the United States Government.
 Intestate Estate of the Late Ricardo Presbitero vs. Court of Appeals

Facts: Ricardo Presbitero entered into two written contracts. Presbitero retained the services of Leonardo
Canoso to negotiate with the Land Bank of the Philippines and the Ministry of Agrarian Reform for the sale
of Hacienda Maria. The second contract was made and denominated as a “contract of service”. In the
contract of service, Presbitero bound himself to compensate the private respondent for his efforts, services,
and other related expenses in making the necessary follow up of the preparation, production of pertinent
documents required, and to effect the recovery of the proceed of the land transfer payment from the Land
Bank in an amount equivalent to 25% of the gross total sales of Presbitero’s properties which is subject of
Operation Land Transfer.
Before Presbitero’s claim with the LBP was approved, a third agreement was entered reducing 25% to 17.
5%.
When the claim was finally approved, Presbitero sent 2 letters to the LBP concerning the release of the
proceeds with the amount equivalent to 17.5% in the name of Leonardo Canoso until the final release of
the claim, and that Presbitero be informed in writing. However, Canoso (private respondent) was not given
his share as agreed upon.
Issue: whether or not the private respondent has complied with the terms and conditions of the contract
Ruling: Article 1159 of the New Civil Code states that “Obligations arising from contracts have the force
of law between the contracting parties and should be complied with in good faith”. The Supreme Court
ruled that the contracts entered into by the parties were valid contracts. The private respondent has complied
with the terms and conditions of the contract. The complementary instruments gave rise to reciprocal
obligations which are defined as those that arise from the same cause, and in which each party is a debtor
and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other.
The facts of the case clearly showed that what was clearly agreed upon by the contracting parties that the
private respondent would undertake the processing, negotiation and follow up of Presbitero’s claim with
the Land Bank of the Philippines within a stipulated period of 120 days.

Metro Manila Transport Corporation and Apolinario Ajoc vs. C.A. and Col. Sabalburo et al

FACTS: Last December 24 1986 Florentina Sabalburo and her companions were making their way to
Baclaran to buy foodstuffs for Noche Buena. Florentina Sabalburo and her companions waited for the traffic
light to turn red so that they could cross the street to take a ride to Baclaran. Upon crossing the street during
the red light, Florentina Sabalburo was hit by a fast moving MMTC bus, driven by Apolinario Ajoc.

Ms. Sabalburo was then taken by the driver and conductress of the MMTC bus to San Juan de Dios hospital.
The victim was not able to regain consciousness and she succumbed to her injuries on January 03, 1987.
The Trial court decided in favor of Sabalburo et. al and ordered MMTC to pay damages. MMTC then
appealed the case to the Court of Appeals which affirmed the decision of the trial court.

ISSUE: Was the RTC and CA correct in ordering MTCC to pay damages to the plaintiff?

- Yes, According to the S.C. both courts are correct in awarding damages to the plaintiff.
- Even though MMTC argues that the proximate cause of the victim’s death is her negligence thus
requesting the court to apply Art 2179 of the civil code, instead of Art 2176, the S.C upheld the findings of
the trial courts that the driver and MMTC had been negligent in its duties and it is this negligence that led
to the death of the victim thus showing that Art 2176 is the more applicable provision in this case.

- Also MMTC is liable for the death of the victim due to Art 2180 of the civil code, wherein the obligation
imposed by Article 2176 is demandable not only for one’s own acts or omissions-, but also for those of
persons for whom one is responsible.

- It should be shown that whenever an employee’s negligence causes damage or injury to another, there
instantly arises a presumption juris tantum that there was negligence on the part of the employer, either in
the selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in
vigilando). Hence, to escape solidary liability for a quasi-delict committed by his employee, an employer
must rebut the presumption by presenting convincing proof that in the selection and supervision of his
employee, he has exercised the care and diligence of a good father of a family. In the present case, petitioner
MMTC failed to rebut the presumption of negligence on its part.

HELD: The Decision of the Court of Appeals is affirmed.

Obligations and Contracts Terms:

CULPA AQUILIANA- refers to acts or omissions which cause damage to another, there being fault or
negligence on the part of the defendant, who is obliged by law to pay for the damages done.

Art 2176 of the Civil Code is applied if there’s no pre-existing contractual relation between the parties.
Although the Supreme Court has already held that a quasi- delict can occur even if there is a contractual
relation, since the act that lead to the breaking a contract may also be a tort

MAKATI STOCK EXCHANGE, INC., vs. MIGUEL V. CAMPOS

FACTS: Respondent Miguel V.Campos filed a petition with the Securities, Investigation and Clearing
Department(SICD) of the Securities and Exchange Commission (SEC) against the petitioners Makati Stock
Exchange, Inc. (MKSE)The petition sought: (1) to nullify the Resolution dated 3 June 1993 of the MKSE
Board of Directors, whichallegedly deprived him of his right to participate equally in the allocation of Initial
Public Offerings (IPO) of corporations registered with MKSE; (2) the delivery of the IPO shares he was
allegedly deprived of, for which hewould pay IPO prices;.SICD granted the issuance of a Temporary
Restraining Order to enjoin petitioners from implementing orenforcing the resolution of the MKSE. they
also issued a writ of preliminary injunction for the implementation orenforcement of the MKSE Board
Resolution in question.On March 11,1994, petitioners filed a motion to dismiss on the following grounds:
(1) Petition becamemoot due to the cancellation of the license of the MKSE (2) The SICD had no jurisdiction over the petition
and (3)the petition failed to state a cause of action. However, the SICD denied petitioner s motion to
dismiss.

ISSUE:Whether or not the petition failed to state a cause of action.

HELD:The petition filed by respondent Miguel Campos should be dismissed for failure to state a cause
of action.A cause of action is the act or omission by which a party violates a right of another.It contains three essential
elements: 1) the legal right of the plaintiff 2) the correlative obligation of thedefendant and 3) the act
or omission of the defendant in violation of said legal right. If these elements are absent,the complaint
will be dismissed on the ground of failure to state a cause of action. Furthermore, the petition filedby
respondent failed to lay down the source or basis of respondent s right and/or petitioner s
obligation.Article 1157 of the Civil Code, provides that Obligations arise from: law, Contracts, Quasi
Contracts, Actsor omissions punished by law and quasi delicts. Therefore an obligation imposed on a
person and thecorresponding right granted to another, must be rooted in at least one of these five
sources.The mere assertion of a right and claim of an obligation in an initiatory pleading, whether a
Complaint orPetition, without identifying the basis or source thereof, is merely a conclusion of fact and
law. A pleading shouldstate the ultimate facts essential to the rights of action or defense asserted, as
distinguished from mereconclusions of fact or conclusions of law.The Respondent merely quoted in his
Petition the MKSE Board Resolution, passed sometime in 1989,granting him the position of Chairman
Emeritus of MKSE for life. However, there is nothing in the said Petitionfrom which the Court can
deduce that respondent, by virtue of his position as Chairman Emeritus of MKSE, wasgranted by law,
contract, or any other legal source, the right to subscribe to the IPOs of corporations listed in thestock
market at their offering prices.

THE METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. ANA GRACE ROSALES
AND YO YUK TO, Respondents.

FACTS: Respondent Ana Grace Rosales (Rosales) is the owner of China Golden Bridge Travel Services,
a travel agency. Respondent Yo Yuk To is the mother of respondent Rosales.
In 2000, respondents opened a Joint Peso Account with Petitioner Metropolitan Bank and Trust
Company. As of August 4, 2004, respondents’ Joint Peso Account showed a balance of P2,515,693.52.
In May 2002, respondent Rosales accompanied her Taiwanese National client, Liu Chiu Fang, to
petitioner’s branch in Escolta to open a savings account, as required by the Philippine Leisure and
Retirement Authority (PLRA). Respondent Rosales acted as an interpreter for Liu Chiu Fang.
Respondents opened with petitioner’s Pritil-Tondo branch a Joint Dollar Account with an initial
deposit of US$14,000.00.
On July 31, 2003, petitioner issued a “Hold Out” order against respondents’ accounts.
On September 3, 2003, a criminal case for Estafa through False Pretences, Misrepresentation,
Deceit, and Use of Falsified Documents, against respondent Rosales. Petitioner accused respondent Rosales
and an unidentified woman as the ones responsible for the unauthorized and fraudulent withdrawal of
US$75,000.00 from Liu Chiu Fang’s dollar account with petitioner’s Escolta branch. The Office of the City
Prosecutor dismissed the complaint.
Respondents filed a Complaint for Breach of Obligation and Contract with damages against
petitioner. Respondents alleged that they attempted several times to withdraw their deposits but were unable
to because petitioner had placed their accounts under “Hold Out” status. Petitioner alleged that respondents
have no cause of action because it has a valid reason for issuing the “Hold Out” order. It averred that due
to fraudulent scheme of respondent Rosales, it was compelled to reimburse Liu Chiu Fang the amount of
US$75,000.00 and to file a criminal complaint against respondent Rosales.
While the criminal case was being tried, the City Prosecutor of Manila filed an Estafa case against
respondent Rosales.
 The RTC rendered a decision finding petitioner liable for damages for breach of contract. It ruled
that it is the duty of petitioner to release the deposit to respondents as the act of withdrawal of a bank deposit
is an act of demand by the creditor.
The CA affirmed the decision of the RTC.

ISSUE: Whether or not petitioner is liable for breach of contract?

HELD: Yes. The Court finds petitioner guilty of breach of contract when it unjustifiably refused to release
respondents’ deposit despite demand. In cases of breach of contract, moral damages may be recovered only
if the defendant acted fraudulently or in bad faith, or is guilty of gross negligence amounting to bad faith,
or in wanton disregard of his contractual obligations.
In this case, a review of the circumstances surrounding the issuance of the “Hold Out” order reveals
that petitioner issued a “Hold Out” order in bad faith. First of all, the order was issued without legal basis.
Second, petitioner did not inform respondents of the reason for the “Hold Out.” Third, the order was issued
prior to the filing of the criminal complaint.
The Court finds that petitioner indeed acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner when it refused to release the deposits of respondent without any legal basis.

GEORGE W. BATCHELDER vs. THE CENTRAL BANK OF THE PHILIPPINES

G.R. No. L-25071 March 29, 1972

Facts: Monetary Board Resolution No. 857 requires Filipino and American resident contractors for
constructions in U.S. military bases in the Philippines to surrender to the Central Bank their dollar earnings
under their respective contracts but were entitled to utilize 90% of their surrendered dollars for importation
at the preferred rate of commodities for use within or outside said U.S. military bases. Resolution 695
moreover, denies their right to reacquire at the preferred rate ninety per cent (90%) of the foreign exchange
the sold or surrendered earnings to Central Bank for the purpose of determining whether the imports against
proceeds of contracts entered into prior to April 25, 1960 are classified as dollar-to-dollar transactions or
not.

George Batchelder, an American Citizen permanently residing in the Philippines who is engaged
in the Construction Business, surrendered to the Central Bank his dollar earnings amounting to U.S.
$199,966.00. He compels Central Bank of the Philippines to resell to him $170,210.60 at the preferred rate
of exchange of two Philippine pesos for one American dollar, more specifically P2.00375 which was denied
by the court.

He then contended that said decision failed to consider that if there was no contract obligating the
bank to resell to him at the preferred rate, the judgment of the lower court can and should nevertheless be
sustained on the basis of there being such an obligation arising from law.

Issue: Whether or not Central Bank has the obligation arising from law to resell the US$154,094.56 to
Batchelder at the preferred rate.

Held: Central Bank was intended to attain basic objectives in the field of currency and finance.
“It shall be the responsibility of the Central Bank of the Philippines to administer the monetary
and banking system of the Republic. It shall be the duty of the Central Bank to use the powers
granted to it under this Act to achieve the following objectives: (a) to maintain monetary stability
in the Philippines; (b) to preserve the international value of the peso and the convertibility of the
peso into other freely convertible currencies; and (c) to promote a rising level of production,
employment and real income in the Philippines."

It is, of course, true that obligations arise from 1) law; 2) contracts; 3) quasi-contracts; 4) acts or
omissions punished by law and 5) quasi-delicts. One of the sources an obligation then is a law. A legal
norm could so require that a particular party be chargeable with a prestation or undertaking to give or to
deliver or to do or to render some service. It is an indispensable requisite though that such a provision, thus
in fact exists. There must be a showing to that effect. As early as 1909 in Pelayo v. Lauron, Court through
Justice Torres, categorically declared: "Obligation arising from law are not presumed." For in the language
of Justice Street in Leung Ben v. O'Brien, a 1918 decision, such an obligation is "a creation of the positive
law." They are ordinarily traceable to code or statute. It is true though, as noted in the motion for
reconsideration following People v. Que Po Lay, that a Central Bank circular may have the force and effect
of law, especially when issued in pursuance of its quasi-legislative power. That of itself, however, is no
justification to conclude that it has thereby assumed an obligation.