1
CASE LIST
Breach of Contract:
Cangco v. Manila Railroad Co., G.R. No. 12191
Banuelos
Air France v. Carrascoso, G.R. No. L-21438
Dulay
Singson v. BPI, G.R. No. L-24837
Macatol
Philippine School of Business Administration v. CA, G.R.
No. 84698 Nenaria
Fabre v. CA, G.R. No. 111127
Pacquiao, JL
Light Rail Transit Authority v. Navidad, G.R. No. 145804
Pacquiao, JP
Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine
Insurance Co., Inc., G.R. No. 194121 Soriano
Orient Freight International, Inc. v. Keihin-Everett
Forwarding Co., Inc., G.R. No. 191937 Tado
Imperial v. Heirs of Sps Bayaban, G.R. No. 197626
Unas
Delicts:
Barredo v. Garcia, G.R. No. 48006
Vosotros
Elcano v. Hill, G.R. No. L-24803
Banuelos
Lorenzo v. Pp, G.R. No. 152335
Dulay
Reyes v. Doctolero, G.R. No. 185597
Macatol
Breach of Contract
Cangco v. Manila Railroad Co., G.R. No. 12191
TOPIC: Quasi-delict distinguished from Breach of
contract
G.R. No. L-12191 October 14, 1918
JOSE CANGCO, vs. MANILA RAILROAD CO.
Ponente: FISHER, J.
Facts:
Upon the occasion in question, January 20, 1915, the
plaintiff arose from his seat in the second class-car
where he was riding and, making, his exit through the
door, took his position upon the steps of the coach,
seizing the upright guardrail with his right hand for
support.
When the train had proceeded a little farther the
plaintiff Jose Cangco stepped off also, but one or both of
his feet came in contact with a sack of watermelons
with the result that his feet slipped from under him and
he fell violently on the platform. His body at once rolled
from the platform and was drawn under the moving car,
where his right arm was badly crushed and lacerated. It
appears that after the plaintiff alighted from the train
the car moved forward possibly six meters before it
came to a full stop.
The accident occurred between 7 and 8 o'clock on a
dark night, and as the railroad station was lighted dimly
by a single light located some distance away, objects
on the platform where the accident occurred were
difficult to discern especially to a person emerging from
a lighted car.
The explanation of the presence of a sack of melons on
the platform where the plaintiff alighted is found in the
fact that it was the customary season for harvesting
these melons and a large lot had been brought to the
station for the shipment to the market. They were
contained in numerous sacks which has been piled on
the platform in a row one upon another. The testimony
shows that this row of sacks was so placed of melons
and the edge of platform; and it is clear that the fall of
the plaintiff was due to the fact that his foot alighted
upon one of these melons at the moment he stepped
upon the platform. His statement that he failed to see
these objects in the darkness is readily to be credited.
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 extra-
contractual obligations — or to use the technical form
of expression, that article relates only to culpa aquiliana
and not to culpa contractual.
Legal Issue: Is the case falls under Culpa Aquiliana or
Culpa Contractual?
Held:
CULPA CONTRACTUAL. Every legal obligation must of
necessity be extra-contractual or contractual. Extra-
contractual obligation has its source in the breach or
omission of those mutual duties which civilized society
imposes upon it members, or which arise from these
relations, other than contractual, of certain members of
society to others, generally embraced in the concept of
status. The legal rights of each member of society
constitute the measure of the corresponding legal
duties, mainly negative in character, which the
existence of those rights imposes upon all other
members of society. The breach of these general duties
whether due to willful intent or to mere inattention, if
productive of injury, give rise to an obligation to
indemnify the injured party.
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 exists independently
of the breach of the voluntary duty assumed by the
parties when entering into the contractual relation.
With respect to extra-contractual obligation arising from
negligence, whether of act or omission, it is competent
for the legislature to elect — and our Legislature has so
elected — whom such an obligation is imposed is
morally culpable, or, on the contrary, for reasons of
public policy, to extend that liability, without regard to
the lack of moral culpability, so as to include
responsibility for the negligence of those person who
acts or mission are imputable, by a legal fiction, to
others who are in a position to exercise an absolute or
limited control over them. The legislature which
adopted our Civil Code has elected to limit extra-
contractual liability — with certain well-defined
exceptions — to cases in which moral culpability can be
directly imputed to the persons to be charged. This
moral responsibility may consist in having failed to
exercise due care in the selection and control of one's
agents or servants, or in the control of persons who, by
reason of their status, occupy a position of dependency
with respect to the person made liable for their
conduct.
The true explanation of such cases is to be found by
directing the attention to the relative spheres of
contractual and extra-contractual obligations. The field
of non- contractual obligation is much more broader
than that of contractual obligations, comprising, as it
does, the whole extent of juridical human relations.
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.
The contract of defendant to transport plaintiff carried
with it, by implication, the duty to carry him in safety
and to provide safe means of entering and leaving its
trains (civil code, article 1258). That duty, being
contractual, was direct and immediate, and its non-
performance could not be excused by proof that the
fault was morally imputable to defendant's servants.
The railroad company's defense involves the
assumption that even granting that the negligent
conduct of its servants in placing an obstruction upon
the platform was a breach of its contractual obligation
to maintain safe means of approaching and leaving its
trains, the direct and proximate cause of the injury
suffered by plaintiff was his own contributory
negligence in failing to wait until the train had come to
a complete stop before alighting. Under the doctrine of
comparative negligence announced in the Rakes case
(supra), if the accident was caused by plaintiff's own
negligence, no liability is imposed upon defendant's

negligence and plaintiff's 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.
As the case now before us presents itself, the only fact
from which a conclusion can be drawn to the effect that
plaintiff was guilty of contributory negligence is that he
stepped off the car without being able to discern clearly
the condition of the platform and while the train was
yet slowly moving. In considering the situation thus
presented, it should not be overlooked that the plaintiff
was, as we find, ignorant of the fact that the
obstruction which was caused by the sacks of melons
piled on the platform existed; and as the defendant was
bound by reason of its duty as a public carrier to afford
to its passengers facilities for safe egress from its
trains, the plaintiff had a right to assume, in the
absence of some circumstance to warn him to the
contrary, that the platform was clear. The place, as we
have already stated, was dark, or dimly lighted, and
this also is proof of a failure upon the part of the
defendant in the performance of a duty owing by it to
the plaintiff; for if it were by any possibility concede
that it had right to pile these sacks in the path of
alighting passengers, the placing of them adequately so
that their presence would be revealed.
Air France v. Carrascoso, G.R. No. L-21438
FACTS: Carrascoso went on a pilgrimage from Manila to
Rome with a "first class" ticket issued by Air France (AF)
through its agent, PAL. From Manila to Bangkok, he
travelled in "first class". However, in Bangkok, he was
forced by the Manager of AF to vacate his seat and
transfer to the "tourist class" as a "white man" had a
better right to the seat. He did so under protest. AF
contends that there is a need to confirm the ticket
before the passenger can actually take the "first class"
seat. Carrascoso filed a case claiming for moral and
exemplary damages. AF contended that the issuance of
a first class ticket was no guarantee that he would have
a first class ride, but that such would depend upon the
availability of first class seats.
ISSUE: WON Air France is liable to pay damages for the
tortious acts of its employee (Manager) in favor of
Carrascoso.
HELD: YES. It is evident that: First, There was a contract
to furnish plaintiff a first class passage covering,
amongst others, the Bangkok-Teheran leg; Second,
That said contract was breached when petitioner failed
to furnish first class transportation at Bangkok; and
Third, that there was bad faith when petitioner'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 stress of
the action is put on wrongful expulsion.
The responsibility of an employer for the tortious act of
its employees is well settled in law. For the willful
malevolent act of petitioner's manager, petitioner, his
employer, must answer. Article 21 of the Civil Code
says:
ART. 21. 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.
In parallel circumstances, we applied the foregoing
legal precept; and, we held that upon the provisions of
Article 2219 (10), Civil Code, moral damages are
recoverable. A contract to transport passengers is quite
different in kind and degree from any other contractual
relation. And this, because of the relation which an air-
carrier sustains with the public. Its business is mainly
with the travelling public. It invites people to avail of
the comforts and advantages it offers. The contract of
air carriage, therefore, generates a relation attended
with a public duty. Neglect or malfeasance of the
carrier's employees, naturally, could give ground for an
action for damages.
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.
Although the relation of passenger and carrier
is"contractual both in origin and nature" nevertheless
"the act that breaks the contract may be also a tort".
Petitioner'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 petitioner air carrier — a case of
quasi-delict. Damages are Proper.
Singson v. BPI, G.R. No. L-24837
G.R. No. L-24837 June 27, 1968
JULIAN C. SINGSON and RAMONA DEL CASTILLO,
plaintiffs, vs. BANK OF THE PHILIPPINE ISLANDS and
SANTIAGO FREIXAS, in his capacity as President of the
said Bank, defendants. | CONCEPCION, C.J.
Facts:
Singson was one of the defendants in a civil case filed
before the CFI Manila. Judgment was rendered
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sentencing him and his co-defendants Celso Lobregat
and Villa-Abrille & Co. to pay the sum of P105,539.56 to
Philippine Milling Co. Singson and Lobregat appealed,
while the decision became final and executory as to
Villa-Abrille. A writ of garnishment was issued to BPI
against the Villa-Abrille’s account.
The clerk of BPI who received the writ saw the
petitioner’s name and, without reading the full text,
wrote a letter for the signature of the bank President,
informing Singson of the garnishment. Subsequently,
Singson issued two checks. The one issued in favor of
B.M. Glass Service was dishonoured, and so petitioner’s
account with the latter was closed. Singson wrote a
letter to the bank, claiming that his account is not
included in the writ of garnishment. Having confirmed
so, the bank President Santiago Friexas apologized to
Singson and rectified the mistake. Singson filed a claim
for damages. The lower court ruled that damages for
quasi-delict cannot be sustained because the
relationship between the parties is contractual.
Petitioner and his wife appealed the case.
Issue: Whether the existence of a contractual relation
between the parties bar recovery of damages.
Held: NO
We have repeatedly held, however, that the existence
of a contract between the parties does not bar the
commission of a tort by the one against the order and
the consequent recovery of damages therefor.2 Indeed,
this view has been, in effect, reiterated in a
comparatively recent case. Thus, in Air France vs.
Carrascoso,3 involving an airplane passenger who,
despite his first-class ticket, had been illegally ousted
from his first-class accommodation and compelled to
take a seat in the tourist compartment, was held
entitled to recover damages from the air-carrier, upon
the ground of tort on the latter's part, for, although the
relation between a passenger and a carrier is
"contractual both in origin and nature ... the act that
breaks the contract may also be a tort".
In view, however, of the facts obtaining in the case at
bar, and considering, particularly, the circumstance,
that the wrong done to the plaintiff was remedied as
soon as the President of the bank realized the mistake
he and his subordinate employee had committed, the
Court finds that an award of nominal damages — the
amount of which need not be proven4 — in the sum of
P1,000, in addition to attorney's fees in the sum of
P500, would suffice to vindicate plaintiff's rights.5
WHEREFORE, the judgment appealed from is hereby
reversed, and another one shall be entered sentencing
the defendant Bank of the Philippine Islands to pay to
the plaintiffs said sums of P1,000, as nominal damages,

and P500, as attorney's fees, apart from the costs. It is
so ordered.
Philippine School of Business Administration v.
CA, G.R. No. 84698
Facts: A stabbing incident which caused the death of
Carlitos Bautista while on the second-floor premises of
the Philippine School of Business Administration (PSBA)
prompted the parents of the deceased to file suit in the
Regional Trial Court of Manila, for damages against the
said PSBA and its corporate officers. At the time of his
death, Carlitos was enrolled in the third year commerce
course at the PSBA. It was established that his
assailants were not members of the school's academic
community but were elements from outside the school.
Defendants a quo sought to have the suit dismissed,
alleging that since they are presumably sued under
Article 2180 of the Civil Code, the complaint states no
cause of action against them, as jurisprudence on the
subject is to the effect that academic institutions, such
as the PSBA, are beyond the ambit of the rule in the
afore-stated article.
Hence, this petition.
Issue: Whether PSBA is liable for the death of the
students?
Held: No, Article 2180, in conjunction with Article 2176
of the Civil Code, establishes the rule of in loco parentis
which provides that the damage should have been
caused or inflicted by pupils or students of the
educational institution 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.
However, such material facts will not necessarily mean
the exculpation of the petitioners from liability. When
an academic institution accepts students for
enrollment, there is established a contract between
them, resulting in bilateral obligations which both
parties are 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. On the other hand, the
student covenants to abide by the school's academic
requirements and observe its rules and regulations.
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.
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However, this impression has not prevented this Court
from determining the existence of a tort even when
HELD
there obtains a contract. In the circumstances obtaining
Yes. Considering the foregoing — the fact that it was
in the case at bar, however, there is, yet no finding that
raining and the road was slippery, that it was dark, that
the contract between the school and Bautista had been
he drove his bus at 50 kilometers an hour when even
breached thru the former's negligence in providing
on a good day the normal speed was only 20 kilometers
proper security measures. And, even if there be a
an hour, and that he was unfamiliar with the terrain,
finding of negligence, the same could give rise
Cabil was grossly negligent and should be held liable for
generally to a breach of contractual obligation only.
the injuries suffered by private respondent Amyline
Antonio.
Fabre v. CA, G.R. No. 111127
Pursuant to Arts. 2176 and 2180 of the Civil Code his
FABRE vs. CA
negligence gave rise to the presumption that his
G.R. No. 111127 (July 26, 1996)
employers, the Fabres, were themselves negligent in
the selection and supervisions of their employee.
FACTS
Due diligence in selection of employees is not satisfied
Petitioners Engracio Fabre, Jr. and his wife were owners
by finding that the applicant possessed a professional
of a 1982 model Mazda minibus. They used the bus
driver's license. The employer should also examine the
principally in connection with a bus service for school
applicant for his qualifications, experience and record of
children which they operated in Manila. The couple had
service. Due diligence in supervision, on the other
a driver, Cabil, whom they hired in 1981, after trying
hand, requires the formulation of rules and regulations
him out for two weeks, His job was to take school
for the guidance of employees and issuance of proper
children to and from the St. Scholastica's College in
instructions as well as actual implementation and
Malate, Manila.
monitoring of consistent compliance with the rules.6
Subsequently, private respondent Word for the World
In the case at bar, the Fabres, in allowing Cabil to drive
Christian Fellowship Inc. (WWCF) arranged with
the bus to La Union, apparently did not consider the
petitioners for the transportation of 33 members from
fact that Cabil had been driving for school children only,
Manila to La Union and back in consideration of which
from their homes to the St. Scholastica's College in
private respondent paid petitioners the amount of
Metro Manila. They had hired him only after a two-
P3,000.00. The group was scheduled to leave at 5pm.
week apprenticeship. They had hired him only after a
However, due to delay, they were able to depart at
two-week apprenticeship. They had tested him for
8pm.
certain matters, such as whether he could remember
the names of the children he would be taking to school,
They did not take the usual route because one bridge
which were irrelevant to his qualification to drive on a
was under repair. Cabil who was unfamiliar with the
long distance travel, especially considering that the trip
area was forced to take a detour through the town of
to La Union was his first. The existence of hiring
Baay in Lingayen, Pangasinan and was driving at
procedures and supervisory policies cannot be casually
50kph. At 11:30 that night, petitioner Cabil came upon
invoked to overturn the presumption of negligence on
a sharp curve on the highway and skid to the left road
the part of an employer.
shoulder. The bus hit the left traffic steel brace and sign
As already stated, this case actually involves a contract
along the road and rammed the fence of one Escano.
of carriage. Petitioners, the Fabres, did not have to be
The bus came to rest off the road.
engaged in the business of public transportation for the
provisions of the Civil Code on common carriers to
Several passengers were injured. Private respondent
apply to them.
Amyline Antonio, who was seriously injured, brought
this case in the RTC of Makati, Metro Manila. As a result
The same circumstances detailed above, supporting the
of the accident, she is now suffering from paraplegia
finding of the trial court and of the appellate court that
and is permanently paralyzed from the waist down.
petitioners are liable under Arts. 2176 and 2180 for
quasi delict, fully justify findings them guilty of breach
RTC - all the evidence presented have shown the
of contract of carriage under Arts. 1733, 1755 and 1759
negligent act of the defendants which ultimately
of the Civil Code.
resulted to the accident subject of this case; awarded
damages in favor of Antonio
Light Rail Transit Authority v. Navidad, G.R. No.
CA – affirmed RTC with respect to Amyline Antonio but 145804
dismissed it with respect to the other plaintiffs on the FACTS: The case before the Court is an appeal from the
ground that they failed to prove their respective claims decision and resolution of the Court of Appeals,
ISSUE exonerating Prudent Security Agency (Prudent) from
Whether or not there was a breach of contract on the liability and finding Light Rail Transit Authority (LRTA)
part of petitioner spouses Fabre (YES)

and Rodolfo Roman liable for damages on account of
the death of Nicanor Navidad.
Nicanor Navidad, then drunk, entered the EDSA LRT
station after purchasing a token. Junelito Escartin, the
security guard assigned to the area approached
Navidad. A misunderstanding or an altercation between
the two apparently ensued that led to a fist fight. At the
exact moment that Navidad fell, an LRT train, operated
by petitioner Rodolfo Roman, was coming in. Navidad
was struck by the moving train, and he was killed
instantaneously.
The widow of Nicanor, herein respondent Marjorie
Navidad, along with her children, filed a complaint for
damages against Junelito Escartin, Rodolfo Roman, the
LRTA, and Prudent for the death of her husband. LRTA
and Roman filed a counterclaim against Navidad and a
cross-claim against Escartin and Prudent. Prudent, in its
answer, denied liability and averred that it had
exercised due diligence in the selection and supervision
of its security guards.
RTC judged in favor of Navidad and ordered Prudent
Security and Escartin to pay damages while Roman and
LRTA was dismissed for lack of merit. Hence this
present petition
ISSUE: (1) Whether LRTA is liable? – Transportation
issue
(2) Should Prudent be made likewise liable?
HELD: (1)YES. LRTA is liable Common carriers are
burdened with the duty of exercising utmost diligence
in ensuring the safety of passengers. Such duty of a
common carrier to provide safety to its passengers so
obligates it not only during the course of the trip but for
so long as the passengers are within its premises and
where they ought to be in pursuance to the contract of
carriage.
(2) NO. If at all, that liability could only be for tort
under the provisions of Article 2176 and related
provisions, in conjunction with Article 2180 of the Civil
Code. The premise, however, for the employer’s liability
is negligence or fault on the part of the employee. Once
such fault is established, the employer can then be
made liable on the basis of the presumption juris
tantum that the employer failed to exercise
diligentissimi patris families in the selection and
supervision of its employees. The liability is primary and
can only be negated by showing due diligence in the
selection and supervision of the employee, a factual
matter that has not been shown. Absent such a
showing, one might ask further, how then must the
liability of the common carrier, on the one hand, and an
independent contractor, on the other hand, be
described? It would be solidary. A contractual obligation
can be breached by tort and when the same act or
omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article
2194 of the Civil Code can well apply. In fine, a liability
for tort may arise even under a contract, where tort is
that which breaches the contract. Stated differently,
when an act which constitutes a breach of contract
would have itself constituted the source of a quasi-
delictual liability had no contract existed between the
parties, the contract can be said to have been breached
by tort, thereby allowing the rules on tort to apply.
Cräläwviralibräry
This Court is concluded by the factual findings of the
Court of Appeals that there is nothing to link (Prudent)
to the death of Nicanor (Navidad), for the reason that
the negligence of its employee, Escartin, has not been
duly proven.
The award of nominal damages in addition to actual
damages is untenable. Nominal damages are
adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It
is an established rule that nominal damages cannot co-
exist with compensatory damages.
Torres-Madrid Brokerage, Inc. v. FEB Mitsui
Marine Insurance Co., Inc., G.R. No. 194121
Facts:
A shipment of various electronic goods from Thailand
and Malaysia arrived at the Port of Manila for Sony
Philippines, Inc. (Sony). Previous to the arrival, Sony
had engaged the services of Torres-Madrid Brokerage,
Inc. (TMBI) to facilitate, process, withdraw, and deliver
the shipment from the port to its warehouse in Binan,
Laguna.
TMBI - who did not own any delivery trucks -
subcontracted the services of Benjamin Manalastas'
company, BMT Trucking Services (BMT), to transport
the shipment from the port to the Binan warehouse.
Incidentally, TMBI notified Sony who had no objections
to the arrangement.
The four trucks left BMT's garage for Laguna. However,
only three trucks arrived at Sony's Binan warehouse.
The truck driven by Rufo Reynaldo Lapesura (NSF-391)
was found abandoned along the Diversion Road in
Filinvest, Alabang, Muntinlupa City. Both the driver and
the shipment were missing.
TMBI notified Sony of the loss through a letter dated
October 10, 2000. It also sent BMT a letter dated March
29, 2001, demanding payment for the lost shipment.
BMT refused to pay, insisting that the goods were
"hijacked."
4
In the meantime, Sony filed an insurance claim with the
Mitsui, the insurer of the goods.
After being subrogated to Sony's rights, Mitsui sent
TMBI a demand letter dated August 30, 2001 for
payment of the lost goods. TMBI refused to pay Mitsui's
claim. As a result, Mitsui filed a complaint against TMBI
on November 6, 2001.
TMBI alleged that BMT's driver, Lapesura, was
responsible for the theft/hijacking of the lost cargo and
claimed BMT's negligence as the proximate cause of
the loss. TMBI prayed that in the event it is held liable
to Mitsui for the loss, it should be reimbursed by BMT.
RTC found TMBI and Benjamin Manalastas jointly and
solidarity liable to pay Mitsui PHP 7,293,386.23 as
actual damages, attorney's fees equivalent to 25% of
the amount claimed, and the costs of the suit. The RTC
held that TMBI and Manalastas were common carriers
and had acted negligently.
TMBI denied that it was a common carrier required to
exercise extraordinary diligence. It maintains that it
exercised the diligence of a good father of a family and
should be absolved of liability because the truck was
"hijacked" and this was a fortuitous event.
BMT claimed that it had exercised extraordinary
diligence over the lost shipment, and argued as well
that the loss resulted from a fortuitous event.
The CA affirmed the RTC's decision.
Issue:
Is TMBI liable to Sony/Mitsui? (Yes)
Is BMT liabke to TMBI? (Yes)
Ruling: A brokerage may be considered a common
carrier if it also undertakes to deliver the
goods for its customers
Despite TMBI's present denials, we find that the
delivery of the goods is an integral, albeit ancillary, part
of its brokerage services. TMBI admitted that it was
contracted to facilitate, process, and clear the
shipments from the customs authorities, withdraw them
from the pier, then transport and deliver them to Sony's
warehouse in Laguna.
That TMBI does not own trucks and has to subcontract
the delivery of its clients' goods, is immaterial. As long
as an entity holds itself to the public for the transport of
goods as a business, it is considered a common carrier
regardless of whether it owns the vehicle used or has to
actually hire one.
The theft or the robbery of the goods is not considered
a fortuitous event or a force majeure. Nevertheless, a
common carrier may absolve itself of liability for a
resulting loss: (1) if it proves that it exercised
extraordinary diligence in transporting and safekeeping

the goods; or (2) if it stipulated with the shipper/owner
of the goods to limit its liability for the loss, destruction,
or deterioration of the goods to a degree less than
extraordinary diligence.
Despite the subcontract, TMBI remained responsible for
the cargo. Under Article 1736, a common carrier's
extraordinary responsibility over the shipper's goods
lasts from the time these goods are unconditionally
placed in the possession of, and received by, the carrier
for transportation, until they are delivered, actually or
constructively, by the carrier to the consignee.
That the cargo disappeared during transit while under
the custody of BMT - TMBI's subcontractor - did not
diminish nor terminate TMBFs responsibility over the
cargo. Article 1735 of the Civil Code presumes that it
was at fault.
Instead of showing that it had acted with extraordinary
diligence, TMBI simply argued that it was not a common
carrier bound to observe extraordinary diligence. Its
failure to successfully establish this premise carries
with it the presumption of fault or negligence, thus
rendering it liable to Sony/Mitsui for breach of contract.
Specifically, TMBI's current theory - that the hijacking
was attended by force or intimidation - is untenable.
First, TMBI alleged in its Third Party Complaint against
BMT that Lapesura was responsible for hijacking the
shipment. Further, Victor Torres filed a criminal
complaint against Lapesura with the NBI. These actions
constitute direct and binding admissions that Lapesura
stole the cargo. Justice and fair play dictate that TMBI
should not be allowed to change its legal theory on
appeal.
Second, neither TMBI nor BMT succeeded in
substantiating this theory through evidence. Thus, the
theory remained an unsupported allegation no better
than speculations and conjectures. The CA therefore
correctly disregarded the defense of force majeure.
TMBI and BMT are not solidarily liable
to Mitsui
Art. 2194. The responsibility of two or more persons
who are liable for quasi-delict is solidary.
Notably, TMBI's liability to Mitsui does not stem from a
quasi-delict (culpa aquiliana) but from its breach of
contract (culpa contractual). The tie that binds TMBI
with Mitsui is contractual, albeit one that passed on to
Mitsui as a result of TMBI's contract of carriage with
Sony to which Mitsui had been subrogated as an insurer
who had paid Sony's insurance claim. The legal reality
that results from this contractual tie precludes the
application of quasi-delict based Article 2194.
A third party may recover from a
common carrier for quasi-delict
but must prove actual negligence
We likewise disagree with the finding that BMT is
directly liable to Sony/Mitsui for the loss of the cargo.
While it is undisputed that the cargo was lost under the
actual custody of BMT (whose employee is the primary
suspect in the hijacking or robbery of the shipment), no
direct contractual relationship existed between
Sony/Mitsui and BMT. If at all, Sony/Mitsui's cause of
action against BMT could only arise from quasi-delict,
as a third party suffering damage from the action of
another due to the latter's fault or negligence, pursuant
to Article 2176 of the Civil Code.
We have repeatedly distinguished between an action
for breach of contract {culpa contractual) and an action
for quasi-delict (culpa aquiliana).
In culpa contractual, the plaintiff only needs to establish
the existence of the contract and the obligor's failure to
perform his obligation. It is not necessary for the
plaintiff to prove or even allege that the obligor's non-
compliance was due to fault or negligence because
Article 1735 already presumes that the common carrier
is negligent. The common carrier can only free itself
from liability by proving that it observed extraordinary
diligence. It cannot discharge this liability by shifting
the blame on its agents or servants.
On the other hand, the plaintiff in culpa aquiliana must
clearly establish the defendant's fault or negligence
because this is the very basis of the action.53
Moreover, if the injury to the plaintiff resulted from the
act or omission of the defendant's employee or servant,
the defendant may absolve himself by proving that he
observed the diligence of a good father of a family to
prevent the damage,
In the present case, Mitsui's action is solely premised
on TMBl's breach of contract. Mitsui did not even sue
BMT, much less prove any negligence on its part. If BMT
has entered the picture at all, it is because TMBI sued it
for reimbursement for the liability that TMBI might incur
from its contract of carriage with Sony/Mitsui.
Accordingly, there is no basis to directly hold BMT liable
to Mitsui for quasi-delict.
BMT is liable to TMBI for breach
of their contract of carriage
We do not hereby say that TMBI must absorb the loss.
By subcontracting the cargo delivery to BMT, TMBI
entered into its own contract of carriage with a fellow
common carrier.
The cargo was lost after its transfer to BMT's custody
based on its contract of carriage with TMBI. Following
Article 1735, BMT is presumed to be at fault. Since BMT
5
failed to prove that it observed extraordinary diligence
in the performance of its obligation to TMBI, it is liable
to TMBI for breach of their contract of carriage.
In these lights, TMBI is liable to Sony (subrogated by
Mitsui) for breaching the contract of carriage. In turn,
TMBI is entitled to reimbursement from BMT due to the
latter's own breach of its contract of carriage with TMBI.
The proverbial buck stops with BMT who may either: (a)
absorb the loss, or (b) proceed after its missing driver,
the suspected culprit, pursuant to Article 2181.
Orient Freight International, Inc. v. Keihin-
Everett Forwarding Co., Inc., G.R. No. 191937
Imperial v. Heirs of Sps Bayaban, G.R. No. 197626
Delicts
Barredo v. Garcia, G.R. No. 48006
Facts:
At about half past one in the morning of May 3, 1936,
on the road between Malabon and Navotas, Province of
Rizal, there was a head-on collision between a taxi of
the Malate Taxicab driven by Pedro Fontanilla and a
carretela guided by Pedro Dimapilis. The carretela was
overturned, and one of its passengers, 16-year-old boy
Faustino Garcia, suffered injuries from which he died
two days later. A criminal action was filed against
Fontanilla in the Court of First Instance of Rizal, and he
was convicted.
The court in the criminal case granted the petition that
the right to bring a separate civil action be reserved.
Severino Garcia and Timotea Almario, parents of the
deceased, brought an action in the Court of First
Instance of Manila against Fausto Barredo as the sole
proprietor of the Malate Taxicab and employer of Pedro
Fontanilla.
On July 8, 1939, the Court of First Instance of Manila
awarded damages in favor of the plaintiffs for P2,000
plus legal interest from the date of the complaint. This
decision was modified by the Court of Appeals by
reducing the damages to P1,000 with legal interest
from the time the action was instituted.
It is undisputed that Fontanilla’s negligence was the
cause of the mishap, as he was driving on the wrong
side of the road, and at high speed.
As to Barredo’s (employer) responsibility, the Court of
Appeals found:
". . . It is admitted that defendant is Fontanilla’s
employer. There is no proof that he exercised the
diligence of a good father of a family to prevent the
damage. In fact it is shown he was careless in

employing Fontanilla who had been caught several
times for violation of the Automobile Law and speeding.
Therefore, he must indemnify plaintiffs under the
provisions of article 1903 of the Civil Code."
The main theory of the defense is that the liability of
Fausto Barredo is governed by the Revised Penal Code;
hence, his liability is only subsidiary, and as there has
been no civil action against Pedro Fontanilla, the person
criminally liable, Barredo cannot be held responsible in
this case.
The Court of Appeals held that the liability sought to be
imposed upon Barredo in this action is not a civil
obligation arising from a felony or a misdemeanor (the
crime of Pedro Fontanilla), but an obligation imposed in
article 1903 of the Civil Code by reason of his
negligence in the selection or supervision of his servant
or employee.
Issue:
Whether or not the plaintiffs may bring this separate
civil action against Fausto Barredo (employer), thus
making him primarily and directly responsible under
article 1903 of the Civil Code as an employer of Pedro
Fontanilla.
Held:
Yes. A separate action against the employer, Barredo,
may be filed.
Renowned jurists and authorities support the
proposition that a quasi-delict or "culpa aquiliana" is a
separate legal institution under the Civil Code, with a
substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime.
Upon this principle, and on the wording and spirit of
article 1903 of the Civil Code, the primary and direct
responsibility of employers may be safely anchored.
It will thus be seen that while the terms of article 1902
of the Civil Code seem to be broad enough to cover the
driver’s negligence in the instant case, nevertheless
article 1093 limits cuasi-delitos to acts or omissions
"not punishable by law." But inasmuch as article 365 of
the Revised Penal Code punishes not only reckless but
even simple imprudence or negligence, the fault or
negligence under article 1902 of the Civil Code has
apparently been crowded out.
It is this overlapping that makes the "confusion worse
confounded." However, a closer study shows that such
a concurrence of scope in regard to negligent acts does
not destroy the distinction between the civil liability
arising from a crime and the responsibility for cuasi-
delitos or culpa extra-contractual. The same negligent
act causing damages may produce civil liability arising
from a crime under article 100 of the Revised Penal
Code, or create an action for cuasi-delito or culpa extra-
contractual under articles 1902-1910 of the Civil Code.
Some of the differences between crimes under the
Penal Code and the culpa aquiliana or cuasi-delito
under the Civil Code are:.
1. That crimes affect the public interest, while cuasi-
delitos are only of private concern.
2. That, consequently, the Penal Code punishes or
corrects the criminal act, while the Civil Code, by
means of indemnification, merely repairs the damage.
3. That delicts are not as broad as quasi-delicts,
because the former are punished only if there is a penal
law clearly covering them, while the latter, cuasi-
delitos, include all acts in which "any kind of fault or
negligence intervenes." However, it should be noted
that not all violations of the penal law produce civil
responsibility, such as begging in contravention of
ordinances, violation of the game laws, infraction of the
rules of traffic when nobody is hurt. (See Colin and
Capitant, "Curso Elemental de Derecho Civil," Vol. 3, p.
728.) .
According to renowed jurists, in the likes of Maura,
Dorado Montero, Amandi, Oyuelos, and others, they
have clearly demonstrated the separate individuality of
cuasi-delitos or culpa aquiliana under the Civil Code.
Specifically they show that there is a distinction
between civil liability arising from criminal negligence
(governed by the Penal Code) and responsibility for
fault or negligence under Articles 1902 to 1910 of the
Civil Code, and that the same negligent act may
produce either a civil liability arising from a crime under
the Penal Code, or a separate responsibility for fault or
negligence under Articles 1902 to 1910 of the Civil
Code. Still more concretely the authorities above cited
render it inescapable to conclude that the employer – in
this case the defendant-petitioner – is primarily and
directly liable under Article 1903 of the Civil Code.”
"Article 1903 of the Civil Code not only establishes
liability in cases of negligence, but also provides when
the liability shall cease. It says:
"‘The liability referred to in this article shall cease when
the persons mentioned therein prove that they
employed all the diligence of a good father of a family
to avoid the damage.’"
"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 the selection of
the servant or employee, or in supervision over him
after the selection, or both; and
6
(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.
"This theory bases the responsibility of the master
ultimately on his own negligence and not on that of his
servant."
The doctrine of the case just cited was followed by this
Court in Cerf v. Medel (33 Phil., 37 [year 1915]). In the
latter case, the complaint alleged that the defendant’s
servant had so negligently driven an automobile, which
was operated by defendant as a public vehicle, that
said automobile struck and damaged the plaintiff’s
motorcycle. This Court, applying article 1903 and
following the rule in Bahia v. Litonjua and Leynes, said
in part (p. 41) that:
"The master is liable for the negligent acts of his
servant where he is the owner or director of a business
or enterprise and the negligent acts are committed
while the servant is engaged in his master’s
employment as such owner"
Elcano v. Hill, G.R. No. L-24803
Facts of the Case:
Respondent Reginald Hill killed the son of the plaintiffs
named Agapito Elcano. A criminal complaint was
instituted against him but he was acquitted on the
ground that his act was not criminal, because of lack of
intent to kill, couple with mistake. Subsequently,
plaintiffs filed a complaint for recovery of damages
against defendant Reginald Hill, a minor, married at the
time of the occurrence, and his father, the defendant
Marvin Hill, with who he was living and getting
subsistence, for the same killing. A motion to dismiss
was filed by the defendants. The Court of First Instance
of Quezon City denied the motion. Nevertheless, the
civil case was finally dismissed upon motion for
reconsideration.
Issues:
1. WON the present civil action for damages is barred
by the acquittal of Reginald in the criminal case.
2. WON Article 2180 (2nd and last paragraphs) of the
Civil Code may be applied against Atty. Hill,
notwithstanding the undisputed fact that at the time of
the occurrence complained of. Reginald, though a
minor, living with and getting subsistence from his
father, was already legally married.
Ruling of the Court:

1. No, the present civil action for damages is not barred
by the acquittal of Reginald in the criminal case. Firstly,
there is a distinction as regards the proof required in a
criminal case and a civil case. To find the accused guilty
in a criminal case, proof of guilt beyond reasonable
doubt is required, while in a civil case, preponderance
of evidence is sufficient to make the defendant pay in
damages. Furthermore, a civil case for damages on the
basis of quasi-delict does is independently instituted
from a criminal act. As such the acquittal of Reginald
Hill in the criminal case has not extinguished his liability
for quasi-delict, hence that acquittal is not a bar to the
instant action against him.
2. Yes, the above mentioned provision may still be
applied against Atty Marvin Hill. Although parental
authority is terminated upon emancipation of the child,
emancipation by marriage is not absolute, i.e. he can
sue and be sued in court only with the assistance of his
father, mother or guardian. As in the present case,
killing someone else contemplated judicial litigation,
thus, making Article 2180 apply to Atty. Hill.However,
inasmuch as it is evident that Reginald is now of age, as
a matter of equity, the liability of Atty. Hill has become
milling, subsidiary to that of his son.
Lorenzo v. Pp, G.R. No. 152335
Reyes v. Doctolero, G.R. No. 185597
Facts: The case arose from an altercation between
respondent Orico Doctolero, a security guard of
respondent Grandeur Security and Services Corporation
and petitioners John E.R. Reyes and Merwin Joseph
Reyes in the parking area of respondent Makati Cinema
Square. The respondents shot the petitioners but both
parties alleged different version of the incident.
Petitioners filed with the Regional Trial Court a
complaint for damages against respondents Doctolero
and Avila and their employer Grandeur, charging the
latter with negligence in the selection and supervision
of its employees. They likewise impleaded MCS on the
ground that it was negligent in getting Grandeur’s
services. In their complaint, petitioners prayed that
respondents be ordered, jointly and severally, to pay
them actual, moral, and exemplary damages,
attorney’s fees and litigation costs.
Respondents Doctolero and Avila failed to file an
answer despite service of summons upon them. Thus,
they were declared in default in an Order dated
December 12, 1997.
For its part, Grandeur asserted that it exercised the
required diligence in the selection and supervision of its
employees. It likewise averred that the shooting
incident was caused by the unlawful aggression of
petitioners who took advantage of their “martial arts”
skills.
On the other hand, MCS contends that it cannot be held
liable for damages simply because of its ownership of
the premises where the shooting incident occurred. It
argued that the injuries sustained by petitioners were
caused by the acts of respondents Doctolero and Avila,
for whom respondent Grandeur should be solely
responsible.
On January 18, 1999, the RTC rendered judgment
against respondents Doctolero and Avila, finding them
responsible for the injuries sustained by petitioners. In
reconsidering its Decision, the RTC held that it re-
evaluated the tacts and the attending circumstances of
the present case and was convinced that Grandeur has
sufficiently overcome the presumption of negligence. It
gave credence to the testimony of Grandeur’s witness,
Eduardo Ungui, the head of the Human Resources
Department (HRD) of Grandeur, as regards the various
procedures in its selection and hiring of security guards.
Issue: Whether Grandeur and MCS may be held
vicariously liable for the damages caused by
respondents Doctolero and Avila to petitioners John and
Mervin Reyes.
Ruling: MCS is not liable to petitioners. As a general
rule, one is only responsible for his own act or omission.
This general rule is laid down in Article 2176 of the Civil
Code, which provides:
Art. 2176. Whoever by act or omission causes damage
to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by
the provisions of this Chapter.
The law, however, provides for exceptions when it
makes certain persons liable for the act or omission of
another. One exception is an employer who is made
vicariously liable for the tort committed by his
employee under paragraph 5 of Article 2180. Here,
although the employer is not the actual tortfeasor, the
law makes him vicariously liable on the basis of the civil
law principle of pater familias for failure to exercise due
care and vigilance over the acts of one’s subordinates
to prevent damage to another.
It must be stressed, however, that the above rule is
applicable only if there is an employer-employee
relationship. This employer-employee relationship
cannot be presumed but must be sufficiently proven by
the plaintiff. The plaintiff must also show that the
employee was acting within the scope of his assigned
task when the tort complained of was committed. It is
only then that the defendant, as employer, may find it
necessary to interpose the defense of due diligence in
the selection and supervision of employees. In the
absence of such relationship, vicarious liability under
7
Article 2180 of the Civil Code cannot be applied. We
find no employer-employee relationship between MCS
and respondent guards. The guards were merely
assigned by Grandeur to secure MCS’ premises
pursuant to their Contract of Guard Services. Thus, MCS
cannot be held vicariously liable for damages caused by
these guards’ acts or omissions. Neither can it be said
that a principal-agency relationship existed between
MCS and Grandeur.
On the other hand, paragraph 5 of Article 2180 of the
Civil Code may be applicable to Grandeur, it being
undisputed that respondent guards were its employees.
When the employee causes damage due to his own
negligence while performing his own duties, there
arises the juris tantum presumption that the employer
is negligent, rebuttable only by proof of observance of
the diligence of a good father of a family. The
“diligence of a good father” referred to in the last
paragraph of Article 2180 means diligence in the
selection and supervision of employees.
To rebut the presumption of negligence, Grandeur must
prove two things: first, that it had exercised due
diligence in the selection of respondents Doctolero and
Avila, and second, that after hiring Doctolero and Avila,
Grandeur had exercised due diligence in supervising
them.
Here, both the RTC and the CA found that Grandeur was
able to sufficiently prove, through testimonial and
documentary evidence, that it had exercised the
diligence of a good father of a family in the selection
and hiring of its security guards. As testified to by its
HRD head Ungui, and corroborated by documentary
evidence including clearances from various government
agencies, certificates, and favorable test results in
medical and psychiatric examinations.
The question of diligent supervision, however, depends
on the circumstances of employment. Ordinarily,
evidence demonstrating that the employer has
exercised diligent supervision of its employee during
the performance of the latter’s assigned tasks would be
enough to relieve him of the liability imposed by Article
2180 in relation to Article 2176 of the Civil Code.
Considering all the evidence borne by the records, we
find that Grandeur has sufficiently exercised the
diligence of a good father of a family in the selection
and supervision of its employees. Hence, having
successfully overcome the legal presumption of
negligence, it is relieved of liability from the negligent
acts of its employees, respondents Doctolero and Avila.