(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v.
Breach of Contract
Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages. (1101)
Art. 1171. Responsibility arising from fraud is demandable in all obligations.
Any waiver of an action for future fraud is void. (1102a)
Art. 1172. Responsibility arising from negligence in the performance of
every kind of obligation is also demandable, but such liability may be
regulated by the courts, according to the circumstances. (1103)
Art. 1173. The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of Articles 1171 and
2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected of a good father of a family shall
be required. (1104a)
Art. 1174. Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were
inevitable. (1105a)
Art. 2178. The provisions of Articles 1172 to 1174 are also applicable to a
quasi-delict. (n)
CANGCO VS MANILA RAILROAD COMPANY G.R. L-12191 OCTOBER 14,
1918
FACTS:
On January 20, 1915, Jose Cangco was riding the train of Manila Railroad
Company where he was an employee. As the train drew near to his
destination, he arose from his seat. When he was about to alight from the
train, Cangco accidentally stepped on a sack of watermelons which he failed
to notice because it was already 7:00pm and it was dim when it happened.
As a result, he slipped and fell violently on the platform. His right arm was
badly crushed and lacerated which was eventually amputated.
Cangco sued Manila Railroad Company on the ground of negligence of its
employees placing the sacks of melons upon the platform and in leaving
them so placed as to be a menace to the security of passenger alighting
from the company’s trains.
The company’s defense was that granting that its employees were negligent
in placing an obstruction upon the platform, the direct and proximate cause
of the injury suffered by plaintiff was his own contributing negligence.
ISSUE: Whether or not there was a contributing negligence on the part of
the plaintiff.
HELD: In determining the question of contributory negligence in performing
such act – that is to say, whether the passenger acted prudently or
recklessly – the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger, and should
be considered.
The place was perfectly familiar to the plaintiff as it was his daily custom to
get on and off the train at the station. There could, therefore, be no
uncertainty in his mind with regard either to the length of the step which he
was required to take or the character of the platform where he was
alighting. The Supreme Court’s conclusion was that the conduct of the
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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
plaintiff in undertaking to alight while the train was yet slightly under way
was not characterized by imprudence and that therefore he was not guilty
of contributory negligence.
Jose Cangco vs Manila Railroad Co.
30 Phil 768 – Civil Law – Torts and Damages – Distinction of Liability of
Employers Under Article 2180 and Their Liability for Breach of Contract
On January 20, 1915, Cangco was riding the train of Manila Railroad Co
(MRC). He was an employee of the latter and he was given a pass so that he
could ride the train for free. When he was nearing his destination at about
7pm, he arose from his seat even though the train was not at full stop.
When he was about to alight from the train (which was still slightly moving)
he accidentally stepped on a sack of watermelons which he failed to notice
due to the fact that it was dim. This caused him to lose his balance at the
door and he fell and his arm was crushed by the train and he suffered other
serious injuries. He was dragged a few meters more as the train slowed
down.
It was established that the employees of MRC were negligent in piling the
sacks of watermelons. MRC raised as a defense the fact that Cangco was
also negligent as he failed to exercise diligence in alighting from the train as
he did not wait for it to stop.
ISSUE: Whether or not Manila Railroad Co is liable for damages.
HELD: Yes. Alighting from a moving train while it is slowing down is a
common practice and a lot of people are doing so every day without
suffering injury. Cangco has the vigor and agility of young manhood, and it
was by no means so risky for him to get off while the train was yet moving
as the same act would have been in an aged or feeble person. He was also
ignorant of the fact that sacks of watermelons were there as there were no
appropriate warnings and the place was dimly lit.
The Court also elucidated on the distinction between the liability of
employers under Article 2180 and their liability for breach of contract [of
carriage]:
NOTES: But, if the master has not been guilty of any negligence whatever in
the selection and direction of the servant, he is not liable for the acts of the
latter, whatever done within the scope of his employment or not, if the
damage done by the servant does not amount to a breach of the contract
between the master and the person injured.
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.
These two fields, figuratively speaking, concentric; that is to say, the mere
fact that a person is bound to another by contract does not relieve him
from extra-contractual liability to such person. When such a contractual
relation exists the obligor may break the contract under such conditions
that the same act which constitutes the source of an extra-contractual
obligation had no contract existed between the parties.
Manresa: Whether negligence occurs an incident in the course of the
performance of a contractual undertaking or in itself the source of an extra-
contractual undertaking obligation, its essential characteristics are identical.
Vinculum Juris: (def) It means “an obligation of law”, or the right of the
obligee to enforce a civil matter in a court of law.
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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
Petitioner Fores. The jeep got involved in an accident, and Miranda was
injured. The CFi awarded moral damages, which Fores contested in the SC.
SC held that moral damages cannot be awarded, because there was no
showing of fraud or bad faith.

DOCTRINE. The liability of common carriers is contractual; therefore, there

is a presumption of liability on the part of the carrier, upon mere proof of
injury to the passenger. They also cannot escape liability by proving that
they exercised due diligence in the selection and supervision of their
employees. In addition, moral damages cannot be awarded in the absence
of fraud or bad faith on the part of the common carrier, unless a passenger
dies (NCC 1763)

FACTS.

 Respondent Miranda was one of passengers on a jeepney driven by

Eugenio Luga, owned by petitioner Fores. While the vehicle was
descending the Sta. Mesa bridge at an excessive rate of speed, the
FORES v. MIRANDA driver lost control, causing it to swerve and to hit the bridge wall.
No. L-68729/ MAR 4 1959/ REYES, JBL, J/ TRANSPO – Common Carriers: o Five of the passengers were injured, including the respondent
Nature and Basis of Liability (NCC 1733) /RLAurellano who suffered a fracture of the upper right humerus.
NATURE Petition to review NTC order  The driver was charged with serious physical injuries through reckless
imprudence, and upon interposing a plea of guilty was sentenced
PETITIONER Paz Fores
accordingly.
RESPONDENTS Irineo Miranda
 Miranda was awarded Php 5k actual damages and attorney’s fees, and
Php 10k moral damages.

SUMMARY. Respondent Miranda was a passenger in a jeep operated by  Fores assails the award for damages

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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
o She further contends that she sold the jeep to
ISSUES & RATIO.
1. MAIN ISSUE: WON the award of moral damages is correct – NO,
because moral damages are not recoverable in actions predicated on
the breach of contract of carriage, in the absence of fraud or bad faith
on the part of the common carrier
By contrasting the provisions of NCC 2219 and 222o it immediately
becomes apparent that:
 In case of breach of contract (including one of transportation)
proof of bad faith or fraud (dolus), i.e., wanton or deliberately
injurious conduct, is essential to justify an award of moral
damages; and
 That a breach of contract cannot be considered included in the
descriptive term ‘analogous cases’ used in NCC 2219; not only
because NCC 2220 specifically provides for the damages that are
caused by contractual breach, but because the definition of quasi-
delict in NCC 2176 of the Code expressly excludes the cases
where there is a ‘preexisting contractual relation between the
parties.’
The exception to the basic rule of damages now under consideration is a
mishap resulting in the death of a passenger, in which case NCC 1764 makes
the common carrier expressly subject to the rule of NCC 2206, that entitles
the spouse, descendants and ascendants of the deceased passenger to
demand moral damages for mental anguish by reason of the death of the
deceased. But the exceptional rule of NCC 1764 makes it all the more
evident that where the injured passenger does not die, moral damages are
not recoverable unless it is proved that the carrier was guilty of malice or
bad faith.
 The mere carelessness of the driver does not per se constitute or
justify an inference of malice or bad faith on the part of the
carrier
 No other evidence of malice on part of common carrier
The action for breach of contract imposes on the defendant carrier a
presumption of liability upon mere proof of injury to the passenger; that
latter is relieved from the duty to establish the fault of the carrier, or of his
employees, and the burden is placed on the carrier to prove that it was due
to an unforeseen event or to force majeure. Moreover, the carrier, unlike
in suits for quasi-delict, may not escape liability by proving that it has
exercised due diligence in the selection and supervision of its employees
SUB-ISSUE: WON carrier’s violation of its engagement to safely transport
passengers involves a reach of the passenger’s confidence, and therefore
should be regarded as breach in bad faith – NO. The theory is untenable
because under it, the carrier is always deemed in bad faith, and it would
never be accountable for simple negligence
The distinction between fraud, bad faith or malice in the sense of deliberate
or wanton wrong doing and negligence (as mere carelessness) is too
fundamental in our law to be ignored. It is true that negligence may be
occasionally so gross as to amount to malice, but that fact must be shown
in evidence, and a carrier's bad faith is not to be lightly inferred from a
mere finding that the contract was breached through negligence of the
carrier's employees.
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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
2. OTHER ISSUE: WON approval of the Public Service Commission is
necessary for the sale of a public service vehicle even without
conveying the authority to operate the same – YES, because of PSL,
Sec. 20. If the transfer is not registered, it is not effective and binding in
so far as the responsibility of the grantee to the public is concerned
DECISION.
CA decision modified. Moral damages deleted. But affirmed in all other
aspects.
FAR EAST BANK AND TRUST COMPANY V. C.A. & LUISA. LUNA
G.R. No. 108164 February 23, 1995
FACTS:
Private respondent Luis A. Luna applied for, and was accorded, a Fareast
card issued by petitioner FEBTC.
Clarita informed FEBTC that she lost her credit card. In order to replace the
lost card, Clarita submitted an affidavit of loss. In cases of this nature, the
bank's internal security procedures and policy would be torecord the lost
card, along with the principal card, as a "HotCard" or "Cancelled Card" in its
master file.
Luis then tendered a despedida lunch for a close friend. When he presented
his fareast card to pay for the lunch, the card was not honored, forcing him
to pay in cash the bill. Naturally, Luis felt embarrassed by this incident.
Private respondent Luis Luna, through counsel, demanded from FEBTC the
payment of damages. Adrian V. Festejo, a vice-president of the bank,
expressed the bank's apologies, admitting that they have failed to inform
Luis about its security policy.
Private respondents then filed a complaint for damages in the RTC, which
rendered a decision ordering FEBTC to pay private respondents moral
damages, exemplary damages, and attorney’s fees.
ISSUE:
Whether or not private respondents are entitled of moral damages.
HELD:
NO. In culpa contractual, moral damages may be recovered where the
defendant is shown to have acted in bad faith or with malice in the breach
of the contract.
Concededly, the bank was negligent for failing to inform Luis of his own
card's cancellation. Nothing in the findings of the trial court and the
appellate court can sufficiently indicate any deliberate intent on the part of
FEBTC to cause harm to private respondents. The failure to inform Luis is
not considered to be so gross that it would amount to malice or bad faith.
Malice or bad faith implies a conscious and intentional design to do a
wrongful act for a dishonest purpose or moral obliguity; it is different from
the negative idea of negligence in that malice or bad faith contemplates a
state of mind affirmatively operating with furtive design or ill-will.
Article 21 of the Code contemplates a conscious act to cause harm. In
relation to a breach of contract, its application can be warranted only when
the defendant's disregard of his contractual obligation is so deliberate as to
approximate a degree of misconduct certainly no less worse than fraud or
bad faith. Most importantly, Article 21 is a mere declaration of a general
principle in human relations that clearly must, in any case, give way to the
specific provision of Article 2220 of the Civil Code authorizing the grant of
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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
moral damages in culpa contractual solely when the breach is due to fraud
or bad faith.
The decision is modified by deleting the award of moral and exemplary
damages to private respondents; in its stead, petitioner is ordered to pay
nominal damages sanctioned under Article 2221 of the Civil Code
Air France vs Rafael Carrascoso
Civil Law – Torts and Damages – Negligence – Malfeasance – Quasi-Delict
Remedial Law – Evidence – Hearsay Rule – Res Gestae – Startling Event
In March 1958, Rafael Carrascoso and several other Filipinos were tourists
en route to Rome from Manila. Carrascoso was issued a first class round
trip ticket by Air France. But during a stop-over in Bangkok, he was asked by
the plane manager of Air France to vacate his seat because a white man
allegedly has a “better right” than him. Carrascoso protested but when
things got heated and upon advise of other Filipinos on board, Carrascoso
gave up his seat and was transferred to the plane’s tourist class.
After their tourist trip when Carrascoso was already in the Philippines, he
sued Air France for damages for the embarrassment he suffered during his
trip. In court, Carrascoso testified, among others, that he when he was
forced to take the tourist class, he went to the plane’s pantry where he was
approached by a plane purser who told him that he noted in the plane’s
journal the following:
First-class passenger was forced to go to the tourist class against his will,
and that the captain refused to intervene
The said testimony was admitted in favor of Carrascoso. The trial court
eventually awarded damages in favor of Carrascoso. This was affirmed by
the Court of Appeals.
Air France is assailing the decision of the trial court and the CA. It avers that
the issuance of a first class ticket to Carrascoso was not an assurance that
he will be seated in first class because allegedly in truth and in fact, that
was not the true intent between the parties.
Air France also questioned the admissibility of Carrascoso’s testimony
regarding the note made by the purser because the said note was never
presented in court.
ISSUE 1: Whether or not Air France is liable for damages and on what basis.
ISSUE 2: Whether or not the testimony of Carrasoso regarding the note
which was not presented in court is admissible in evidence.
HELD 1: Yes. It appears that Air France’s liability is based on culpa-
contractual and on culpa aquiliana.
Culpa Contractual
There exists a contract of carriage between Air France and Carrascoso.
There was a contract to furnish Carrasocoso a first class passage; Second,
That said contract was breached when Air France failed to furnish first class
transportation at Bangkok; and Third, that there was bad faith when Air
France’s employee compelled Carrascoso to leave his first class
accommodation berth “after he was already, seated” and to take a seat in
the tourist class, by reason of which he suffered inconvenience,
embarrassments and humiliations, thereby causing him mental anguish,
serious anxiety, wounded feelings and social humiliation, resulting in moral
damages.
The Supreme Court did not give credence to Air France’s claim that the
issuance of a first class ticket to a passenger is not an assurance that he will
be given a first class seat. Such claim is simply incredible.
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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
Culpa Aquiliana
Here, the SC ruled, even though there is a contract of carriage between Air
France and Carrascoso, there is also a tortuous act based on culpa
aquiliana. Passengers do not contract merely for transportation. They have
a right to be treated by the carrier’s employees with kindness, respect,
courtesy and due consideration. They are entitled to be protected against
personal misconduct, injurious language, indignities and abuses from such
employees. So it is, that any rule or discourteous conduct on the part of
employees towards a passenger gives the latter an action for damages
against the carrier. Air France’s contract with Carrascoso is one attended
with public duty. The stress of Carrascoso’s action is placed upon his
wrongful expulsion. This is a violation of public duty by the Air France — a
case of quasi-delict. Damages are proper.
HELD: 2: Yes. The testimony of Carrascoso must be admitted based on res
gestae. The subject of inquiry is not the entry, but the ouster incident.
Testimony on the entry does not come within the proscription of the best
evidence rule. Such testimony is admissible. Besides, when the dialogue
between Carrascoso and the purser happened, the impact of the startling
occurrence was still fresh and continued to be felt. The excitement had not
as yet died down. Statements then, in this environment, are admissible as
part of the res gestae. The utterance of the purser regarding his entry in the
notebook was spontaneous, and related to the circumstances of the ouster
incident. Its trustworthiness has been guaranteed. It thus escapes the
operation of the hearsay rule. It forms part of the res gestae.
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION VS. CA
Case Digest
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION VS. COURT
OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, SEGUNDA R.
BAUTISTA, and ARSENIA D. BAUTISTA,
February 4, 1992
FACTS: Carlitos Bautista was a third year student at the Philippine
School of Business Administration. Assailants, who were not members of
the schools academic community, while in the premises of PSBA,
stabbed Bautista to death. This incident prompted his parents to file a
suit against PSBA and its corporate officers for damages due to their
alleged negligence, recklessness and lack of security precautions,
means and methods before, during and after the attack on the victim.
The defendants filed a motion to dismiss, claiming that the compliant
states no cause of action against them based on quasi-delicts, as the
said rule does not cover academic institutions. The trial court denied the
motion to dismiss. Their motion for reconsideration was likewise
dismissed, and was affirmed by the appellate court. Hence, the case was
forwarded to the Supreme Court.
ISSUE: Whether or not PSBA is liable for the death of the student.
RULING: Because the circumstances of the present case evince a
contractual relation between the PSBA and Carlitos Bautista, the rules
on quasi-delict do not really govern. A perusal of Article 2176 shows that
obligations arising from quasi-delicts or tort, also known as extra-
contractual obligations, arise only between parties not otherwise bound
by contract, whether express or implied. However, this impression has
not prevented this Court from determining the existence of a tort even
when there obtains a contract.
Article 2180, in conjunction with Article 2176 of the Civil Code,
establishes the rule in in loco parentis. Article 2180 provides that the
damage should have been caused or inflicted by pupils or students of the
educational institution sought to be held liable for the acts of its pupils or
students while in its custody. However, this material situation does not
exist in the present case for, as earlier indicated, the assailants of
Carlitos were not students of the PSBA, for whose acts the school could
be made liable. But it does not necessarily follow that PSBA is absolved
form liability.
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(Digest) Concept of Quasi-Delict; Distinctions; Quasi-delict v. Breach of Contract
When an academic institution accepts students for enrollment, there is
established a contract between them, resulting in bilateral obligations
which both parties is bound to comply with. For its part, the school
undertakes to provide the student with an education that would
presumably suffice to equip him with the necessary tools and skills to
pursue higher education or a profession. This includes ensuring the
safety of the students while in the school premises. On the other hand,
the student covenants to abide by the school's academic requirements
and observe its rules and regulations.

Failing on its contractual and implied duty to ensure the safety of their
student, PSBA is therefore held liable for his death.

Petition denied.