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An action was instituted in the Court of First Instance of the City of Manila by P. J. O’Brien to
recover the sum of P15,000 alleged to have been lost by Leung Ben to P. J. O’Brien in a series of
gambling, banking and percentage games conducted during the two or three months prior to the
institution of the suit. InLeung Ben’s verified complaint, O’Brien asked for an attachment against the
property of Leung Ben on the ground that the latter was about to depart from the Philippine Islands
with intent to defraud his creditors. This attachment was issued, and acting under that authority, the
sheriff attached the sum of P15,000 which had been deposited by the O’Brien with the International
Banking Corporation. Leung Bien filed a motion to quash the attachment, which was dismissed by
the court. Hence this application for a writ of certiorari, the purpose of which was to quash an
attachment issued from the Court of First Instance of the City of Manila.
Was the statutory obligation to restore money won at gaming an obligation arising from
“contract,express or implied?”
Yes.Upon general principles, recognized both in the civil and common law, money lost in
gaming andvoluntarily paid by the loser to the winner cannot, in the absence of statute, be
recovered in acivil action. But Act No. 1757 of the Philippine Commission, which defines and
penalizes several forms of gambling, contains numerous provisions recognizing the right to recover
money lost in gambling or inplaying certain games. The original complaint filed in the Court of First
Instance was not clear as to theparticular section of Act No. 1757 under which the action was
brought, but was alleged that the moneywas lost at gambling, banking, and percentage game in
which the defendant was a banker. It musttherefore be assumed that the action was based upon the
right of recovery given in section 7 of said Act,which declared that an action maybe brought against
the banker by any person losing money at abanking or percentage game.It was observed that
according to the Civil Code obligations are supposed to be derived either from (1)the law, (2)
contracts and quasi-contracts, (3) illicit acts and omission, or (4) acts in which some sort of blame or
negligence is present. This enumeration of sources of obligations and the obligation imposedby law
are different types. The obligations which in the Code are indicated as quasi-contracts, as well
asthose arising ex-lege, are in the common law system, merged into the category of obligations
imposedby law, and all are denominated implied contracts.
In the case under consideration, the duty of O’Brien to refund the money which he won
from Leung Ben at gaming was a duty imposed by statute. It therefore arose ex-lege. Furthermore, it
was a duty to return a certain sum which had passed from O’Brien to Leung Ben. By all the criteria
which the common law supplies, this is a duty in the nature of debt and is properly classified as an
implied contract.
Pelayo vs. Lauron 12 Phil.453

On November 23,1906, a physician name Arthuro Pelayo filed a complaint against Marelo
Lauron and Juana Abellana. On the night of October 13 th of the same year, the plaintiff was called to
render medical assistance to the defendant’s daughter-in-law, who was about to give birth. After the
consultation of Dr. Escano, its was deemed that the operation was going to be difficult for child birth,
but regardless, Dr. Pelayo proceeded with the job of operating on the subject and also reoved the
afterbirth. The operation went on until morning, and on the same day, visited several times and
billed the defendants the just amount of 500 for the services rendered to which defendants refused
to pay. In answer to the complaint, counsel for the defendants denied all the allegation and alleged
as a special defense, that their daughter-in-law had died in consequence of said childbirth, that
when she was alive she lived with her husband independently and in separate house without any
relation whatever with them, and that, if on the day when she gave birth she was in the house of the
defendants, her stay their was accidental and due to fortuitous circumstance. Therefore, he prayed
that the defendants be absolved of the complaint with costs against the plaintiff.
Can the defendants be held liable to pay for the obligation?
No. According to Article 1089 of the Civil code, obligations are created by law, by contracts,
by quasi contracts, and by illicit acts and omissions or by those in which any kind of fault or
negligence occurs. Obligations arising from law are not presumed. Those expressly determined in
the code or in special law, etc., are the only demandable ones. Obligations arising from contracts
have legal force between the contracting parties and must be fulfilled in accordance with their
stipulations. (Arts.1090 and 1091.) The rendering of medical assistance in case of illness was
comprised among the mutual support. (Arts.142 and 143.) If every obligation consists in giving, doing
or not doing something (art1088), and spouses were mutually bound to support each other, there
can be no question but that, when either of them by reason of illness should be in need of medical
assistance, the other was under the unavoidable obligation to furnish the necessary services of a
physician in order that health may be restored, and he or she may be freed from sickness by which
life is jeopardized.
The party bound to furnish such support was therefore liable for all expenses, including the
fees of the medical expert for his professional services. In the face of the above legal precepts, it was
unquestionable that the person bound to pay the fees due to the plaintiff for the professional
services that he render to the daughter-in-law of the defendants during her childbirth, was the
husband of the patient and not her father and mother-in-law.
Bautista vs Federico O. Borromeo G.R. No. L-26002  October 31, 1969


Respondents-appellants seek to overturn the decision of the Court of First Instance of Rizal
of January 6, 1966 granting petitioners-appellees' petition for relief from judgment, setting aside the
July 23, 1965 decision of the Municipal Court of Mandaluyong, Rizal, in Civil Case 1365 and ordering
a new trial.

On September 15, 1964, the Ford truck of petitioner Roberto Tan Ting driven by Abelardo
Bautista, the other petitioner, and the Volkswagen delivery panel truck owned by respondent
Federico O. Borromeo, Inc. (hereinafter called Borromeo) were involved in a traffic accident along
Epifanio de los Santos Avenue. In said traffic accident, Quintin Delgado, a helper in Borromeo's
delivery panel truck, sustained injuries which resulted in his instantaneous death. Borromeo had to
pay Delgado's widow the sum of P4,444 representing the compensation (death benefit) and funeral
expenses due Delgado under the Workmen's Compensation Act.

On June 17, 1965, upon the averment that the said vehicular accident was caused by
petitioners' negligence, Borromeo started suit in the Municipal Court of Mandaluyong, Rizal to
recover from petitioners the compensation and funeral expenses it paid to the widow of Quintin

At the scheduled hearing of the case on July 23, 1965, neither petitioners nor their counsel
appeared. Borromeo was thus allowed to present its evidence ex parte. On the same day, July 23,
1965, the municipal court rendered judgment in favor of Borromeo and against the petitioners in the
principal sum of P4,444, and P500 attorney's fees, and costs. Respondents aver that this judgment
has been executed and satisfied

Borromeo paid the widow of its employee, Quintin Delgado, compensation (death benefit)
and funeral expenses for the latter's death while in the course of employment. This obligation arises
from law — Section 2 of the Workmen's Compensation Act

The same law in its Section 6 also provides that in case an employee suffers an injury for
which compensation is due under this Act by any other person besides his employer, it shall be
optional with such injured employee either to claim compensation from his employer, under this
Act, or sue such other person for damages, in accordance with law; and in case compensation is
claimed and allowed in accordance with this Act, the employer who paid such compensation or was
found liable to pay the same, shall succeed the injured employee to the right of recovering from
such person what he paid. It is evident from the foregoing that "if compensation is claimed and
awarded, and the employer pays it, the employer becomes subrogated to and acquires, by operation
of law, the worker's rights against the tortfeasor

No need then there is to establish any contractual relationship between Quintin Delgado
and herein petitioners. Indeed, there is none. The cause of action of respondent corporation is one
which does not spring from a creditor-debtor relationship. It arises by virtue of its subrogation to the
right of Quintin Delgado to sue the guilty party. Such subrogation is sanctioned by the Workmen's
Compensation Law aforesaid. It is as a subrogee to the rights of its deceased employee, Quintin
Delgado, that Borromeo filed a suit against petitioners in the Municipal Court of Mandaluyong, Rizal.

FOR THE REASONS GIVEN, the appealed decision of January 6, 1966 under review is hereby
reversed and the petition for relief is hereby dismissed.


plaintiff, before the school year 1948-1949 took up... preparatory law course in the
defendant University. After finishing his preparatory law course plaintiff enrolled in the College of
Law of the defendant from the school year 1948-1949. Plaintiff finished his law studies in the
defendant university up to and including the first... semester of the fourth year.

Plaintiff, during all the time he was... studying law in defendant university was awarded
scholarship grants, for scholastic merit, so that his semestral tuition fees were returned to him after
the ends of semesters and when his scholarship grants were awarded to him. The whole amount of
tuition fees paid by plaintiff... to defendant and refunded to him by the latter from the first semester
up to and including the first semester of his last year in the college of law or the fourth year, is in
total P1,033.87. After graduating in law from Abad Santos University he applied to take the bar...
examination. To secure permission to take the bar he needed the transcripts of his records in
defendant Arellano University. Plaintiff petitioned the latter to issue to him the needed transcripts.
The defendant refused until after he had paid back the P1,033.87 which defendant... refunded to
him as above stated. As he could not take the bar examination without those transcripts, plaintiff
paid to defendant the said sum under protest. This is the sum which plaintiff seeks to recover from
defendant in this case.

on August 16, 1949, the Director of Private Schools issued Memorandum No. 38, series of
1949, on the subject of "Scholarships", addressed to "All heads of private schools, colleges and

"2. When students are given full or partial scholarships, it is understood that such
scholarships are merited and earned. The amount in tuition and other fees corresponding to these
scholarships should not be subsequently charged to the recipient students when they decide to...
quit school or to transfer to another institution. Scholarships should not be offered merely to attract
and keep students in a school.


whether the above quoted provision of the contract between plaintiff and the defendant,
whereby the former waived his right to transfer to another school without refunding to the latter
the equivalent of his scholarships in cash, is valid or not.


The Memorandum of Director of Private Schools is not a law; that the provisions thereof are
advisory, not mandatory in nature; Moreover, the stipulation in question, asking previous students
to pay back the scholarship grant if they transfer before graduation, is contrary to public policy,
sound policy and good morals or tends clearly to undermine the security of individual rights and
hence, null and void. That, although the contractual provision "may be... unethical, yet it was more
unethical for plaintiff to quit studying with the defendant without good reasons and simply because
he wanted to follow the example of his uncle".

If Arellano University understood clearly the real essence of scholarships and the motives
which prompted this office to... issue Memorandum No. 38, s. 1949, it should have not entered into
a contract of waiver with Cui on September 10, 1951, which is a direct violation of our Memorandum
and an open challenge to the authority of the Director of Private Schools because the contract was
repugnant to... sound morality and civic honesty.

The policy enunciated in Memorandum No. 38, s. 1949 is sound policy.

Thus conceived it is not... only inconsistent with sound policy but also good morals.

The practice of awarding... scholarships to attract students and keep them in school is not
good customs nor has it received some kind of social and practical confirmation except in some
private institutions as in Arellano University. The University of the Philippines which implements
Section 5 of Article

XIV of the Constitution with reference to the giving of free scholarships to gifted children,
does not require scholars to reimburse the corresponding value of the scholarships if they transfer
to other schools. So also with the leading colleges and universities of the United

States after which our educational practices or policies are patterned. In these institutions
scholarships are granted not to attract and to keep brilliant students in school for their propaganda
value but to reward merit or help gifted students in whom society has an... established interest or a
first lien."... the decision appealed from is hereby reversed, and another one shall be entered
sentencing the defendant to pay to the plaintiff the sum of P1,033.87, with interest thereon at the
legal rate from September 1, 1954, date of the institution of this case, as well as... the costs, and
dismissing defendant's counterclaim.