CIV LAW REV. prof. uribe. 1 ay 2013-2014. Baldueza,beley, briones,cardenas, cerilles,dacanay, flordeliza, guzman, herrra, lopez, lorica, mangalindan,

OBLIGATIONS

A. In general1. DefinitionArticle 1156. An obligation is a juridical necessity to give, to do or not to do. (n) 2. Kinds of obligations as to basis and enforceabilityAticle 1423. Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.

Article 1424. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered.

Article 1425. When without the knowledge or against the will of the debtor, a third person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has paid. Article 1426. When a minor between eighteen and twenty-one years of age who has entered into a contract without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole thing or price received, notwithstanding the fact that he has not been benefited thereby, there is no right to demand the thing or price thus returned.

Article 1427. When a minor between eighteen and twenty-one years of age, who has entered into a contract without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a fungible thing in fulfillment of the obligation, there shall be no right to recover the same from the obligee who has spent or consumed it in good faith. (1160A)

Article 1428. When, after an action to enforce a civil obligation has failed the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered.

Article 1429. When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment is valid and cannot be rescinded by the payer. Article 1430. When a will is declared void because it has not been executed in accordance with the formalities required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable.

Article 1139. Actions prescribe by the mere lapse of time fixed by law. (1961)

Article 1140. Actions to recover movables shall prescribe eight years from the time the possession thereof is lost, unless the possessor has acquired the ownership by prescription for a less period, according to articles 1132, and without prejudice to the provisions of articles 559, 1505, and 1133. (1962a)

Article 1141. Real actions over immovables prescribe after thirty years. This provision is without prejudice to what is established for the acquisition of ownership and other real rights by prescription. (1963)

Article 1142. A mortgage action prescribes after ten years. (1964a)

Article 1143. The following rights, among others specified elsewhere in this Code, are not extinguished by prescription: (1) To demand a right of way, regulated in article 649; (2) To bring an action to abate a public or private nuisance. (n)

Article 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. (n)

Article 1145. The following actions must be commenced within six years: (1) Upon an oral contract; (2) Upon a quasi-contract. (n)

Article 1146. The following actions must be instituted within four years: (1) Upon an injury to the rights of the plaintiff; (2) Upon a quasi-delict; However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. (As amended by PD No. 1755, Dec. 24, 1980.)

Article 1147. The following actions must be filed within one year: (1) For forcible entry and detainer; (2) For defamation. (n)

Article 1148. The limitations of action mentioned in articles 1140 to 1142, and 1144 to 1147 are without prejudice to those specified in other parts of this Code, in the Code of Commerce, and in special laws. (n)

Article 1149. All other actions whose periods are not fixed in this Code or in other laws must be brought within five years from the time the right of action accrues. (n)

Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought. (1969)

Article 1151. The time for the prescription of actions which have for their object the enforcement of obligations to pay principal with interest or annuity runs from the last payment of the annuity or of the interest. (1970a)

Article 1152. The period for prescription of actions to demand the fulfillment of obligation declared by a judgment commences from the time the judgment became final. (1971)

Article 1153. The period for prescription of actions to demand accounting runs from the day the persons who should render the same cease in their functions. The period for the action arising from the result of the accounting runs from the date when said result was recognized by agreement of the interested parties. (1972)

Article 1154. The period during which the obligee was prevented by a fortuitous event from enforcing his right is not reckoned against him. (n)

Article 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor. (1973a)

VILLAROEL V. ESTRADA

Nature: Complaint for sum of moneyPonente: AVANCEADate: December 19, 1940

DOCTRINE: The rule that a new promise to pay a debt must be made by the same person obligated or otherwise legally authorized by it, is not applicable to this case since there was voluntarily assumption of the obligation.

FACTS:Relevant Provision of Law: On May 9, 1912, Alexandra F. Callao, mother of defendant John F. Villarroel, obtained from the spouses Mariano Estrada and Severina a loan of P1, 000 payable after seven years. Alexandra died, leaving as the only heir the defendant. Spouses Mariano Estrada and Severina died too, leaving as the only heir to the plaintiff Bernardino Estrada. On August 9, 1930, the defendant signed a document which states in duty to the plaintiff the amount of P1, 000, with an interest of 12 percent per year. This action relates to the collection of this amount.

LC: condemn the defendant to pay the claimed amount of P1, 000 with legal interest of 12 percent per year from the August 9, 1930 until fully pay.

ISSUE: RULING:Although the action to recover the original debt has prescribed and when the lawsuit was filed in this case. However, this action is based on the original obligation contracted by the mother of the defendant, who has prescribed, but in which the defendant contracted the August 9, 1930 (Exhibito B) to assume the fulfillment of that obligation, as prescribed.Being the only defendant of the primitive herdero debtor entitled to succeed him in his inheritance, that debt legally brought by his mother, but lost its effectiveness by prescription, it is now, however, for a moral obligation, which is consideration enough to create and effective and enforceable his obligation voluntarily contracted the August 9, 1930 in Exhibito B.

The rule that a new promise to pay a debt prrescrita must be made by the same person obligated or otherwise legally authorized by it, is not applicable to this case that does not require compliance with the mandatory obligation orignalmente but from which they would voluntarily assume the obligation.

NOTE: The case is in Spanish.

ANSAY V. NDC

Nature: Complaint for 20% Christmas bonusPonente: PARAS, C. J.Date: April 29, 1960

DOCTRINE: Civil obligations are a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof".

FACTS:Relevant Provision of Law: Article 1423 of the New Civil Code

On July 25, 1956, appellants filed against appellees in the Court of First Instance of Manila a complaint praying for a 20% Christmas bonus for the years 1954 and 1955.

TC dismissed the complaint, and held, among others:the Court does not see how petitioners may have a cause of action to secure such bonus because:(a) A bonus is an act of liberality and the court takes it that it is not within its judicial powers to command respondents to be liberal;(b) Petitioners admit that respondents are not under legal duty to give such bonus but that they had only ask that such bonus be given to them because it is a moral obligation of respondents to give that but as this Court understands, it has no power to compel a party to comply with a moral obligation (Art. 142, New Civil Code.).

Appellants contend that there exists a cause of action in their complaint because their claim rests on moral grounds or what in brief is defined by law as a natural obligation.

ISSUE: W/N a Christmas bonus is a demandable obligation.

RULING:Generally, a Christmas bonus, being a natural obligation, is not demandable.

Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, BUT after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof".

It is thus readily seen that an element of natural obligation before it can be cognizable by the court is voluntary fulfillment by the obligor. Certainly retention can be ordered but only after there has been voluntary performance. But here there has been no voluntary performance. In fact, the court cannot order the performance.

Philippine Education Co.vs.CIR: From the legal point of view a bonus is not a demandable and enforceable obligation. It is so when it is made a part of the wage or salary compensation.

H. E. Heacockvs.National Labor Union: Even if a bonus is not demandable for not forming part of the wage, salary or compensation of an employee, the same may nevertheless, be granted on equitable consideration as when it was given in the past, though withheld in succeeding two years from low salaried employees due to salary increases.

Still the facts in said Heacock case are not the same as in the instant one, and hence the ruling applied in said case cannot be considered in the present action.

DBP V. CONFESOR

Nature: Complaint for payment of loanPonente: GANCAYCO, J.Date: May 11, 1989

DOCTRINE: FACTS:Relevant Provision of Law: Art. 165 of the CC

[1st PN] On February 10, 1940 spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural loan from the Agricultural and Industrial Bank (AIB), now the Development of the Philippines (DBP), in the sum of P2,000.00, Philippine Currency, as evidenced by a promissory note of said date whereby they bound themselves jointly and severally to pay the account in ten (10) equal yearly amortizations.

[2nd PN] As the obligation remained outstanding and unpaid even after the lapse of the aforesaid ten-year period, Confesor (only the H), who was by then a member of the Congress of the Philippines, executed a second promissory note on April 11, 1961 expressly acknowledging said loan and promising to pay the same on or before June 15, 1961. The new promissory note reads as follows I hereby promise to pay the amount covered by my promissory note on or before June 15, 1961. Upon my failure to do so, I hereby agree to the foreclosure of my mortgage. It is understood that if I can secure a certificate of indebtedness from the government of my back pay I will be allowed to pay the amount out of it.

Said spouses not having paid the obligation on the specified date, the DBP filed a complaint against the spouses for the payment of the loan.

CITY COURT: ordered the defendants Patricio Confesor and Jovita Villafuerte Confesor to pay the plaintiff Development Bank of the Philippines, jointly and severally the sum of P5,760.96 plus additional daily interest, etc

CFI: reversed; dismissed the complaint in signing the promissory note alone, respondent Confesor cannot thereby bind his wife, respondent Jovita Villafuerte, pursuant to Article 166 of the New Civil Code which provides:

Art. 166. Unless the wife has been declared a non compos mentis or a spend thrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without, the wife's consent. If she ay compel her to refuses unreasonably to give her consent, the court m grant the same.Petitioner Bank contends, that the right to prescription may be renounced or waived; and that in signing the second promissory note respondent Patricio Confesor can bind the conjugal partnership; or otherwise said respondent became liable in his personal capacity.

ISSUE: W/N the right to prescription may be renounced or waived

RULING:YES. The right to prescription may be waived or renounced.

Article 1112 of Civil Code provides:Art. 1112. Persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future.Prescription is deemed to have been tacitly renounced when the renunciation results from acts which imply the abandonment of the right acquired.

There is no doubt that prescription has set in as to the first promissory note of February 10, 1940. However, when respondent Confesor executed the second promissory note on April 11, 1961 whereby he promised to pay the amount covered by the previous promissory note on or before June 15, 1961, and upon failure to do so, agreed to the foreclosure of the mortgage, said respondent thereby effectively and expressly renounced and waived his right to the prescription of the action covering the first promissory note.

This is not a mere case of acknowledgment of a debt that has prescribed but a new promise to pay the debt. The consideration of the new promissory note is the pre-existing obligation under the first promissory note. The statutory limitation bars the remedy but does not discharge the debt.

... It is this new promise, either made in express terms or deduced from an acknowledgement as a legal implication, which is to be regarded as reanimating the old promise, or as imparting vitality to the remedy (which by lapse of time had become extinct) and thus enabling the creditor to recover upon his original contract.

ISSUE #2: W/N the debt is chargeable against the conjugal partnership considering that the husband, alone, signed the 2nd PN

RULING:YES. The debt in favor of the bank is chargeable to the conjugal partnership.

Under Article 165 of the Civil Code, the husband is the administrator of the conjugal partnership. As such administrator, all debts and obligations contracted by the husband for the benefit of the conjugal partnership, are chargeable to the conjugal partnership. 3. Elements of obligations

B. Sources of civil obligationsArticle 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. (1089a)

1. LawArticle 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090) 2. ContractsArticle 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (1091a)

Article 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. (1254a) 3. Quasi-contracts

Article 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book. (n)

Article 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another. (n)

Article 2143. The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article. (n)

SECTION 1Negotiorum Gestio

Article 2144. Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridical relation does not arise in either of these instances: (1) When the property or business is not neglected or abandoned; (2) If in fact the manager has been tacitly authorized by the owner. In the first case, the provisions of articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall govern. In the second case, the rules on agency in Title X of this Book shall be applicable. (1888a)

Article 2145. The officious manager shall perform his duties with all the diligence of a good father of a family, and pay the damages which through his fault or negligence may be suffered by the owner of the property or business under management. The courts may, however, increase or moderate the indemnity according to the circumstances of each case. (1889a)

Article 2146. If the officious manager delegates to another person all or some of his duties, he shall be liable for the acts of the delegate, without prejudice to the direct obligation of the latter toward the owner of the business. The responsibility of two or more officious managers shall be solidary, unless the management was assumed to save the thing or business from imminent danger. (1890a)

Article 2147. The officious manager shall be liable for any fortuitous event: (1) If he undertakes risky operations which the owner was not accustomed to embark upon; (2) If he has preferred his own interest to that of the owner; (3) If he fails to return the property or business after demand by the owner; (4) If he assumed the management in bad faith. (1891a)

Article 2148. Except when the management was assumed to save property or business from imminent danger, the officious manager shall be liable for fortuitous events: (1) If he is manifestly unfit to carry on the management; (2) If by his intervention he prevented a more competent person from taking up the management. (n)

Article 2149. The ratification of the management by the owner of the business produces the effects of an express agency, even if the business may not have been successful. (1892a)

Article 2150. Although the officious management may not have been expressly ratified, the owner of the property or business who enjoys the advantages of the same shall be liable for obligations incurred in his interest, and shall reimburse the officious manager for the necessary and useful expenses and for the damages which the latter may have suffered in the performance of his duties. The same obligation shall be incumbent upon him when the management had for its purpose the prevention of an imminent and manifest loss, although no benefit may have been derived. (1893)

Article 2151. Even though the owner did not derive any benefit and there has been no imminent and manifest danger to the property or business, the owner is liable as under the first paragraph of the preceding article, provided: (1) The officious manager has acted in good faith, and (2) The property or business is intact, ready to be returned to the owner. (n)

Article 2152. The officious manager is personally liable for contracts which he has entered into with third persons, even though he acted in the name of the owner, and there shall be no right of action between the owner and third persons. These provisions shall not apply: (1) If the owner has expressly or tacitly ratified the management, or (2) When the contract refers to things pertaining to the owner of the business. (n) Article 2153. The management is extinguished: (1) When the owner repudiates it or puts an end thereto; (2) When the officious manager withdraws from the management, subject to the provisions of article 2144; (3) By the death, civil interdiction, insanity or insolvency of the owner or the officious manager. (n)

SECTION 2Solutio Indebiti

Article 2154. If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. (1895)

Article 2155. Payment by reason of a mistake in the construction or application of a doubtful or difficult question of law may come within the scope of the preceding article. (n)

Article 2156. If the payer was in doubt whether the debt was due, he may recover if he proves that it was not due. (n)

Article 2157. The responsibility of two or more payees, when there has been payment of what is not due, is solidary. (n)

Article 2158. When the property delivered or money paid belongs to a third person, the payee shall comply with the provisions of article 1984. (n)

Article 2159. Whoever in bad faith accepts an undue payment, shall pay legal interest if a sum of money is involved, or shall be liable for fruits received or which should have been received if the thing produces fruits. He shall furthermore be answerable for any loss or impairment of the thing from any cause, and for damages to the person who delivered the thing, until it is recovered. (1896a)

Article 2160. He who in good faith accepts an undue payment of a thing certain and determinate shall only be responsible for the impairment or loss of the same or its accessories and accessions insofar as he has thereby been benefited. If he has alienated it, he shall return the price or assign the action to collect the sum. (1897)

Article 2161. As regards the reimbursement for improvements and expenses incurred by him who unduly received the thing, the provisions of Title V of Book II shall govern. (1898)

Article 2162. He shall be exempt from the obligation to restore who, believing in good faith that the payment was being made of a legitimate and subsisting claim, destroyed the document, or allowed the action to prescribe, or gave up the pledges, or cancelled the guaranties for his right. He who paid unduly may proceed only against the true debtor or the guarantors with regard to whom the action is still effective. (1899)

Article 2163. It is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered; but he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just cause. (1901)

SECTION 3Other Quasi-Contracts

Article 2164. When, without the knowledge of the person obliged to give support, it is given by a stranger, the latter shall have a right to claim the same from the former, unless it appears that he gave it out of piety and without intention of being repaid. (1894a)

Article 2165. When funeral expenses are borne by a third person, without the knowledge of those relatives who were obliged to give support to the deceased, said relatives shall reimburse the third person, should the latter claim reimbursement. (1894a)

Article 2166. When the person obliged to support an orphan, or an insane or other indigent person unjustly refuses to give support to the latter, any third person may furnish support to the needy individual, with right of reimbursement from the person obliged to give support. The provisions of this article apply when the father or mother of a child under eighteen years of age unjustly refuses to support him.

Article 2167. When through an accident or other cause a person is injured or becomes seriously ill, and he is treated or helped while he is not in a condition to give consent to a contract, he shall be liable to pay for the services of the physician or other person aiding him, unless the service has been rendered out of pure generosity.

Article 2168. When during a fire, flood, storm, or other calamity, property is saved from destruction by another person without the knowledge of the owner, the latter is bound to pay the former just compensation.

Article 2169. When the government, upon the failure of any person to comply with health or safety regulations concerning property, undertakes to do the necessary work, even over his objection, he shall be liable to pay the expenses.

Article 2170. When by accident or other fortuitous event, movables separately pertaining to two or more persons are commingled or confused, the rules on co-ownership shall be applicable. Article 2171. The rights and obligations of the finder of lost personal property shall be governed by articles 719 and 720.

Article 2172. The right of every possessor in good faith to reimbursement for necessary and useful expenses is governed by article 546.

Article 2173. When a third person, without the knowledge of the debtor, pays the debt, the rights of the former are governed by articles 1236 and 1237.

Article 2174. When in a small community a majority of the inhabitants of age decide upon a measure for protection against lawlessness, fire, flood, storm or other calamity, any one who objects to the plan and refuses to contribute to the expenses but is benefited by the project as executed shall be liable to pay his share of said expenses.

Article 2175. Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter.

CRUZ V. TUASON AND CO.

Nature: complaint for recovery of improvements and conveyance of landPonente: BARREDO, JDate: April 29, 1977

DOCTRINE: a presumed qauasi-contract cannot emerge as against one party when the subject matter thereof is already covered by an existing contract with another party.

FACTS:Relevant Provision of Law: Art 2141, CC (quasi-contract)

Faustino Cruz filed a complaint for recovery of improvements and conveyance of land. He alleged two separate causes of action, namely:(1) that upon request of the Deudors (the family of Telesforo Deudor who laid claim on the land in question on the strength of an "informacion posesoria" ) plaintiff made permanent improvements valued at P30,400.00 on said land having an area of more or less 20 quinones and for which he also incurred expenses in the amount of P7,781.74, and since defendants-appellees are being benefited by said improvements, he is entitled to reimbursement from them of said amounts and(2) that in 1952, defendants availed of plaintiff's services as an intermediary with the Deudors to work for the amicable settlement of Civil Case No. Q-135, then pending also in the Court of First Instance of Quezon City, and involving 50 quinones of land, of Which the 20 quinones aforementioned form part, and notwithstanding his having performed his services, as in fact, a compromise agreement entered into on March 16, 1963 between the Deudors and the defendants was approved by the court, the latter have refused to convey to him the 3,000 square meters of land occupied by him, (a part of the 20 quinones above) which said defendants had promised to do "within ten years from and after date of signing of the compromise agreement", as consideration for his services.

Defendants filed a MD on the following grounds:(1) As regards that improvements made by plaintiff, that the complaint states no cause of action, the agreement regarding the same having been made by plaintiff with the Deudors and not with the defendants, hence the theory of plaintiff based on Article 2142 of the Code on unjust enrichment is untenable; and(2) anent the alleged agreement about plaintiffs services as intermediary in consideration of which, defendants promised to convey to him 3,000 square meters of land, that the same is unenforceable under the Statute of Frauds, there being nothing in writing about it, and, in any event,(3) that the action of plaintiff to compel such conveyance has already prescribed.

CFI: dismissed the complaint on three grounds: (1) failure of the complaint to state a cause of action (defendant is not privy to the agreement between plaintiff and the Deudors); (2) the cause of action of plaintiff is unenforceable under the Statute of Frauds; and (3) the action of the plaintiff has already prescribed.

ISSUE: W/N plaintiffs claim (2nd COA) is unenforceable under the State of Frauds

RULING:No. Statute of Frauds is inapplicable. Nevertheless, plaintiff still cannot claim from defendant.

It is elementary that the Statute refers to specific kinds of transactions and that it cannot apply to any that is not enumerated therein.

The contract is not a sale of real property or any interest therein: In the instant case, what appellant is trying to enforce is the delivery to him of 3,000 square meters of land which he claims defendants promised to do in consideration of his services as mediator or intermediary in effecting a compromise of the civil action, Civil Case No. 135, between the defendants and the Deudors. In no sense may such alleged contract be considered as being a "sale of real property or of any interest therein." Indeed, not all dealings involving interest in real property come under the Statute.

There is already partial execution of the agreement: Moreover, appellant's complaint clearly alleges that he has already fulfilled his part of the bargains to induce the Deudors to amicably settle their differences with defendants as, in fact, on March 16, 1963, through his efforts, a compromise agreement between these parties was approved by the court. In other words, the agreement in question has already been partially consummated, and is no longer merely executory. And it is likewise a fundamental principle governing the application of the Statute that the contract in dispute should be purely executory on the part of both parties thereto.

We cannot, however, escape taking judicial notice, in relation to the compromise agreement relied upon by appellant, that in several cases We have decided, We have declared the same rescinded and of no effect. Thus, viewed from what would be the ultimate conclusion of appellant's case, We entertain grave doubts as to whether or not he can successfully maintain his alleged cause of action against defendants, considering that the compromise agreement that he invokes did not actually materialize and defendants have not benefited therefrom

ISSUE #2 (TOPICAL): W/N plaintiff can claim based on a quasi-contract (unjust enrichment).

RULING:No. Art 2142, CC is not applicable.

Art. 2142 states,Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.

From the very language of this provision, it is obvious that a presumed qauasi-contract cannot emerge as against one party when the subject matter thereof is already covered by an existing contract with another party.

Predicated on the principle that no one should be allowed to unjustly enrich himself at the expense of another, Article 2124 creates the legal fiction of a quasi-contract precisely because of the absence of any actual agreement between the parties concerned. Corollarily, if the one who claims having enriched somebody has done so pursuant to a contract with a third party, his cause of action should be against the latter, who in turn may, if there is any ground therefor, seek relief against the party benefited.

It is essential that the act by which the defendant is benefited must have been voluntary and unilateral on the part of the plaintiff. As one distinguished civilian (Ambrosio Padilla) puts it, "The act is voluntary, because the actor in quasi-contracts is not bound by any pre-existing obligation to act. It is unilateral, because it arises from the sole will of the actor who is not previously bound by any reciprocal or bilateral agreement. The reason why the law creates a juridical relation and imposes certain obligation is to prevent a situation where a person is able to benefit or take advantage of such lawful, voluntary and unilateral acts at the expense of said actor."

In the case at bar, since appellant has a clearer and more direct recourse against the Deudors with whom he had entered into an agreement regarding the improvements and expenditures made by him on the land of appellees. it Cannot be said, in the sense contemplated in Article 2142, that appellees have been enriched at the expense of appellant.

SIDE ISSUE (Procedural): the impugned main order was issued on August 13, 1964, while the appeal was made on September 24, 1964 or 42 days later. Clearly, this is beyond the 30-day reglementary period for appeal. Hence, the subject order of dismissal was already final and executory when appellant filed his appeal.

GUTIERREZ HERMANOS V. ORENSE

Nature: Complaint to compel defendant to execute an instrument transferring all the right, interest, title and share which the defendant has in the subject property.Ponente: TORRES, J.Date: December 4, 1914

DOCTRINE:

FACTS:Relevant Provision of Law: Article 1259 of the Civil Code

On March 5, 1913, counsel for Gutierrez Hermanos filed a complaint, afterwards amended, against Engacio Orense, in which he set forth, that on and before February 14, 1907, the defendant Orense had been the owner of a parcel of land, with the buildings and improvements thereon (masonry house with the nipa roof), situated in the pueblo of Guinobatan, Albay, xxx; hat the said property has up to date been recorded in the new property registry in the name of the said Orense xxx; that, on February 14, 1907, Jose Duran, a nephew of the defendant, with the latter's knowledge and consent, executed before a notary a public instrument whereby he sold and conveyed to the plaintiff company, for P1,500, the aforementioned property, the vendor Duran reserving to himself the right to repurchase it for the same price within a period of four years from the date of the said instrument; that the plaintiff company had not entered into possession of the purchased property, owing to its continued occupancy by the defendant and his nephew, Jose Duran, by virtue of a contract of lease executed by the plaintiff to Duran, which contract was in force up to February 14, 1911; that the said instrument of sale of the property, executed by Jose Duran, was publicly and freely confirmed and ratified by the defendant Orense; that, in order to perfect the title to the said property, but that the defendant Orense refused to do so, without any justifiable cause or reason, wherefore he should be compelled to execute the said deed by an express order of the court, xxx that the defendant had been occupying the said property since February 14, 1911, and refused to pay the rental thereof, notwithstanding the demand made upon him for its payment at the rate of P30 per month, the just and reasonable value for the occupancy of the said property, the possession of which the defendant likewise refused to deliver to the plaintiff company, in spite of the continuous demands made upon him, the defendant, with bad faith and to the prejudice of the firm of Gutierrez Hermanos, claiming to have rights of ownership and possession in the said property.

CFI: ordered the defendant to make immediate delivery of the property in question, through a public instrument, by transferring and conveying to the plaintiff all his rights in the property described in the complaint

(FACTS WHICH LED TO THE FILING OF CIVIL CASE) After the lapse of the four years stipulated for the redemption, the defendant refused to deliver the property to the purchaser, the firm of Gutierrez Hermanos, and to pay the rental thereof. His refusal was based on the allegations that he had not executed any written power of attorney to Jose Duran, nor had he given the latter any verbal authorization to sell the said property to the plaintiff firm in his name; and that, prior to the execution of the deed of sale, the defendant performed no act such as might have induced the plaintiff to believe that Jose Duran was empowered and authorized by the defendant to effect the said sale.

The plaintiff firm, therefore, charged Jose Duran, in the Court of First Instance of the said province, with estafa (CRIMINAL CASE). CFI acquitted Duran since Orense, when called to the witness stand, stated that he had consented to the sale of the property. Thus, plaintiff firm filed the present civil case.ISSUE: W/N defendant must fulfill the obligation contracted by his nephew.

RULING:YES. The owner of the property consented to the sale made by the nephew.

It having been proven at the trial that he gave his consent to the said sale, it follows that the defendant conferred verbal, or at least implied, power of agency upon his nephew Duran, who accepted it in the same way by selling the said property. The principal must therefore fulfill all the obligations contracted by the agent, who acted within the scope of his authority. (Civil Code, arts. 1709, 1710 and 1727.)

Even should it be held that the said consent was granted subsequently to the sale, it is unquestionable that the defendant, the owner of the property, approved the action of his nephew, who in this case acted as the manager of his uncle's business, and Orense'r ratification produced the effect of an express authorization to make the said sale. (Civil Code, arts. 1888 and 1892.)Article 1259 of the Civil Code prescribes:"No one can contract in the name of another without being authorized by him or without his legal representation according to law.

A contract executed in the name of another by one who has neither his authorization nor legal representation shall be void, unless it should be ratified by the person in whose name it was executed before being revoked by the other contracting party.

The sale of the said property made by Duran to Gutierrez Hermanos was indeed null and void in the beginning, but afterwards became perfectly valid and cured of the defect of nullity it bore at its execution by the confirmation solemnly made by the said owner upon his stating under oath to the judge that he himself consented to his nephew Jose Duran's making the said sale.

If the defendant Orense acknowledged and admitted under oath that he had consented to Jose Duran's selling the property in litigation to Gutierrez Hermanos, it is not just nor is it permissible for him afterward to deny that admission, to the prejudice of the purchaser, who gave P1,500 for the said property.

ADILLE V. CA

Nature: Action for partition with accountingPonente: SARMIENTO, JDate: January 29, 1988

DOCTRINE:

FACTS:Relevant Provision of Law: Art. 1456, implied trust

The land in question Lot 14694 of Cadastral Survey of Albay located in Legaspi City with an area of some 11,325 sq. m. originally belonged to one Felisa Alzul as her own private property; she married twice in her lifetime; the first, with one Bernabe Adille, with whom she had as an only child, herein defendant Rustico Adille; in her second marriage with one Procopio Asejo, her children were herein plaintiffs,

[sale] Now, sometime in 1939, said Felisa sold the property in pacto de retro to certain 3rd persons, period of repurchase being 3 years, but she died in 1942 without being able to redeem and after her death, but during the period of redemption, herein defendant (child of 1st M) repurchased, by himself alone, and after that, he executed a deed of extra-judicial partition representing himself to be the only heir and child of his mother Felisa with the consequence that he was able to secure title in his name alone also, so that OCT. No. 21137 in the name of his mother was transferred to his name, that was in 1955.

After some efforts of compromise had failed, his half-brothers and sisters, herein plaintiffs, filed present case for partition with accounting on the position that he was only a trustee on an implied trust when he redeemed,-and this is the evidence, but as it also turned out that one of plaintiffs, Emeteria Asejo was occupying a portion, defendant counterclaimed for her to vacate.

LC: defendant was and became absolute owner, he was not a trustee, and therefore, dismissed case and also condemned plaintiff occupant, Emeteria to vacate

CA: reversed TC;

Petitioner (defendant) contends,the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property.

ISSUE: May petitioner, as a co-owner, acquire exclusive ownership over the property held in common?

If not, whether petitioner acts as a TRUSTEE or a NEGOTIORUM GESTOR.

RULING:No, petitioner cannot acquire exclusive ownership under the circumstances. Since there is fraud, petitioner is a mere trustee of the property. The doctrine of negotiorum gestio cannot apply in the case at bar.

The right of repurchase may be exercised by a co-owner with respect to his share alone.

Necessary expenses may be incurred by one co-owner, subject to his right to collect reimbursement from the remaining co-owners. There is no doubt that redemption of property entails a necessary expense. Under the Civil Code:ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership.

The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name. ut the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership.

Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing co-ownership. Registration of property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one.

The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states:ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

The petitioner's pretension that he was the sole heir to the land in the affidavit of extrajudicial settlement he executed preliminary to the registration thereof betrays a clear effort on his part to defraud his brothers and sisters and to exercise sole dominion over the property.

RE: negotiorum gestioIt is the view of the CA that the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he had constituted himself a negotiorum gestor under Article 2144 of the Civil Code, OR for his exclusive benefit, in which case, he is guilty of fraud, and must act as trustee, the private respondents being the beneficiaries, under the Article 1456.

The evidence, of course, points to the second alternative (TRUST) the petitioner having asserted claims of exclusive ownership over the property and having acted in fraud of his co-heirs. He cannot therefore be said to have assume the mere management of the property abandoned by his co-heirs, the situation Article 2144 of the Code contemplates. In any case, as the CA itself affirms, the result would be the same whether it is one or the other. The petitioner would remain liable to the Private respondents, his co-heirs.

RE: prescriptionThis Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of co-ownership is ended. In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents was presented in 1974. Has prescription then, set in?

We hold in the negative. Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). (No repudiation on the part of the private respondents/plaintiffs.

ANDRES v. MANTRUST

Ponente: CORTES, J.Date: September 15, 1989

DOCTRINE: Requisites of solution indebiti:(1) that he who paid was not under obligation to do so; and,(2) that payment was made by reason of an essential mistake of fact

FACTS:Relevant Provision of Law: Art. 2154, CC

Petitioner, using the business name "Irene's Wearing Apparel," was engaged in the manufacture of ladies garments, children's wear, men's apparel and linens for local and foreign buyers. Among its foreign buyers was Facets Funwear, Inc. (hereinafter referred to as FACETS) of the United States.

In the course of the business transaction between the two, FACETS from time to time remitted certain amounts of money to petitioner in payment for the items it had purchased. Sometime in August 1980, FACETS instructed the First National State Bank of New Jersey, Newark, New Jersey, U.S.A. (hereinafter referred to as FNSB) to transfer $10,000.00 to petitioner via PNB.

Acting on said instruction, FNSB instructed private respondent Manufacturers Hanover and Trust Corporation to effect the above- mentioned transfer through its facilities and to charge the amount to the account of FNSB with private respondent. Although private respondent was able to send a telex to PNB to pay petitioner $10,000.00 through the Pilipinas Bank, where petitioner had an account, the payment was not effected immediately because the payee designated in the telex was only "Wearing Apparel." Upon query by PNB, private respondent sent PNB another telex dated August 27, 1980 stating that the payment was to be made to "Irene's Wearing Apparel." On August 28, 1980, petitioner received the remittance of $10,000.00 through Demand Draft No. 225654 of the PNB.

Meanwhile, on August 25, 1980, after learning about the delay in the remittance of the money to petitioner, FACETS informed FNSB about the situation. On September 8, 1980, unaware that petitioner had already received the remittance, FACETS informed private respondent about the delay and at the same time amended its instruction by asking it to effect the payment through the Philippine Commercial and Industrial Bank (hereinafter referred to as PCIB) instead of PNB.

Accordingly, private respondent, which was also unaware that petitioner had already received the remittance of $10,000.00 from PNB instructed the PCIB to pay $10,000.00 to petitioner. Hence, on September 11, 1980, petitioner received a second $10,000.00 remittance.

Private respondent (Mantrust) asked petitioner for the return of the second remittance of $10,000.00 but the latter refused to pay.

LC: in favor of petitioner as defendant; Art. 2154 of the New Civil Code is not applicable to the case because the second remittance was made not by mistake but by negligence and petitioner was not unjustly enriched by virtue thereof

CA: Art 2154 is applicable; reversed CFI

ISSUE: W/N petitioner has an obligation to return the $10,000.

RULING:Art. 2154 of the New Civil Code provides that:

Art. 2154. If something received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.

This provision is taken from Art. 1895 of the Spanish Civil Code which provided that:

Art. 1895. If a thing is received when there was no right to claim it and which, through an error, has been unduly delivered, an obligation to restore it arises.

Article 1895 [now Article 2154] of the Civil Code abovequoted, is therefore applicable. This legal provision, which determines the quasi-contract of solution indebiti, is one of the concrete manifestations of the ancient principle that no one shall enrich himself unjustly at the expense of another.

For this article to apply the following requisites must concur: (1) that he who paid was not under obligation to do so; and,(2) that payment was made by reason of an essential mistake of fact" [City of Cebu v. Piccio, 110 Phil. 558, 563 (1960)].

Petitioner: he had the right to demand and therefore to retain the second $10,000.00 remittance. It is alleged that even after the two $10,000.00 remittances are credited to petitioner's receivables from FACETS, the latter allegedly still had a balance of $49,324.00. Hence, it is argued that the last $10,000.00 remittance being in payment of a pre-existing debt, petitioner was not thereby unjustly enriched.

SC: The contract of petitioner, as regards the sale of garments and other textile products, was with FACETS. It was the latter and not private respondent which was indebted to petitioner. On the other hand, the contract for the transmittal of dollars from the United States to petitioner was entered into by private respondent with FNSB. Petitioner, although named as the payee was not privy to the contract of remittance of dollars. There being no contractual relation between them, petitioner has no right to apply the second $10,000.00 remittance delivered by mistake by private respondent to the outstanding account of FACETS.

Petitioner: the payment by respondent bank of the second $10,000.00 remittance was not made by mistake but was the result of negligence of its employees.

SC: The Court holds that the finding by the Court of Appeals that the second $10,000.00 remittance was made by mistake, being based on substantial evidence, is final and conclusive. CA held:

The fact that Facets sent only one remittance of $10,000.00 is not disputed. In the written interrogatories sent to the First National State Bank of New Jersey through the Consulate General of the Philippines in New York, Adelaide C. Schachel, the investigation and reconciliation clerk in the said bank testified that a request to remit a payment for Facet Funwear Inc. was made in August, 1980. That there was a mistake in the second remittance of US $10,000.00 is borne out by the fact that both remittances have the same reference invoice number which is 263 80.

Petitioner: when one of two innocent persons must suffer by the wrongful act of a third person, the loss must be borne by the one whose negligence was the proximate cause of the loss.

SC: The rule is that principles of equity cannot be applied if there is a provision of law specifically applicable to a case.

PUYAT AND SONS V. MANILA

Nature: action for refundPonente: PAREDES, JDate: April 30, 1963

DOCTRINE: (Citing a US case) It is too well settled in this state to need the citation of authority that if money be paid through a clear mistake of law or fact, essentially affecting the rights of the parties, and which in law or conscience was not payable, and should not be retained by the party receiving it, it may be recovered. Both law and sound morality so dictate

FACTS:Relevant Provision of Law: On August 11, 1958, the plaintiff Gonzalo Puyat & Sons, Inc., filed an action for refund of Retail Dealerls Taxes paid by it, corresponding to the first Quarter of 1950 up to the third Quarter of 1956, amounting to P33,785.00, against the City of Manila and its City Treasurer. The case was submitted on the following stipulation of facts, to wit

"1. That the plaintiff is a corporation duly organized and existing according to the laws of the Philippines, with offices at Manila; while defendant City Manila is a Municipal Corporation duly organized in accordance with the laws of the Philippines, and defendant Marcelino Sarmiento is the duly qualified incumbent City Treasurer of Manila;

"2. That plaintiff is engaged in the business of manufacturing and selling all kinds of furniture xxx

"3. That acting pursuant to the provisions of Sec. 1. group II, of Ordinance No. 3364, defendant City Treasurer of Manila assessed from plaintiff retail dealer's tax corresponding to the quarters hereunder stated on the sales of furniture manufactured and sold by it at its factory site, all of which assessments plaintiff paid without protest in the erroneous belief that it was liable therefor xxx

"4. That plaintiff, being a manufacturer of various kinds of furniture, is exempt from the payment of taxes imposed under the provisions of Sec. 1, Group II, of Ordinance No. 3364, which took effect on September 24, 1956, on the sale of the various kinds of furniture manufactured by it pursuant to the provisions of Sec. 18(n) of Republic Act No. 409 (Revised Charter of Manila), as restated in Section 1 of Ordinance No.3816.

xxx"6. That on October 30, 1956, the plaintiff filed with defendant City Treasurer of Manila, a formal request for refund of the retail dealer's taxes unduly paid by it.

"7. That on July 24, 1958, the defendant City Treasurer of Manila definitely denied said request for refund.

LC: ordered the defendants to refund the amount of P29,824.00; Of the payments made by the plaintiff, only that made on October 25, 1950 in the amount of P1,250.00 has prescribed Payments made in 1951 and thereafter are still recoverable since the extra-judicial demand made on October 30, 1956 was well within the six-year prescriptive period of the New Civil Code.

CITY OF MANILA (defendants): the taxes in question were voluntarily paid by appellee company and since, in this jurisdiction, in order that a legal basis arise for claim of refund of taxes erroneously assessed, payment thereof must be made under protest, and this being a condition sine qua non, and no protest having been made, -- verbally or in writing, thereby indicating that the payment was voluntary, the action must fail.

PUYAT AND SONS: the payments could not have been voluntary. At most, they were paid "mistakenly and in good faith" and "without protest in the erroneous belief that it was liable thereof." Voluntariness is incompatible with protest and mistake. It submits that this is a simple case of "solutio indebiti"

ISSUE: W/N the amounts paid by plaintiff-appelele, as retail dealer's taxes under Ordinance 1925, as amended by Ordinance No. 3364of the City of Manila, without protest, are refundable

RULING:

Plaintiff-Appellee is entitled to the refund.

Appellants do not dispute the fact that appellee-company is exempted from the payment of the tax in question.

Newport v. Ringo (US case): "It is too well settled in this state to need the citation of authority that if money be paid through a clear mistake of law or fact, essentially affecting the rights of the parties, and which in law or conscience was not payable, and should not be retained by the party receiving it, it may be recovered. Both law and sound morality so dictate. Especially should this be the rule as to illegal taxation

RE: Requirement of protest

In the opinion of the Secretary of Justice (Op. 90,Series of 1957, in a question similar to the case at bar, it was held that the requiredment of protest refers only to the payment of taxes which are directly imposed by the charter itself, that is, real estate taxes, which view was sustained by judicial and administrative precedents, one of which is the case of Medina, et al., v. City of Baguio, G.R. No. L-4269, Aug. 29, 1952. In other words, protest is not necessary for the recovery of retail dealer's taxes, like the present, because they are not directly imposed by the charter.

ISSUE #2: IF yes on #1, W/N the claim for refund filed in October 1956, in so far as said claim refers to taxes paid from 1950 to 1952 has already prescribed

CITY OF MANILA: article 1146 (NCC), which provides for a period of four (4) years (upon injury to the rights of the plaintiff), apply to the case.

PUYAT AND SONS: provisions of Act 190 (Code of Civ. Procedure) should apply, insofar as payments made before the effectivity of the New Civil Code on August 30, 1950, the period of which is ten (10) years, (Sec. 40,Act No. 190; Osorio v. Tan Jongko, 51 O.G. 6211) and article 1145 (NCC), for payments made after said effectivity, providing for a period of six (6) years (upon quasi-contracts like solutio indebiti).

RULING:Even if the provisions of Act No. 190 should apply to those payments made before the effectivity of the new Civil Code, because "prescription already running before the effectivity of of this Code shall be govern by laws previously in force xxx " (Art. 1116, NCC), Still payments made before August 30, 1950 are no longer recoverable in view of the second paragraph of said article (1116), which provides:

"but if since the time this Code took effect the entire period herein required for prescription should elapse the present Code shall be applicable even though by the former laws a longer period might be required".

Anent the payments made after August 30, 1950, it is obvious that the action has prescribed with respect to those made before October 30, 1950 only, considering the fact that the prescription of action is interrupted xxx when is a written extra-judicial demand x x x" (Art. 1155, NCC), and the written demand in the case at bar was made on October 30, 1956 (Stipulation of Facts).

MODIFIED in the sense that only payments made on or after October 30, 1950 should be refunded, the decision appealed from is affirmed, in all other respects.

4. Acts or omissions punished by law

Article 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost. This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone. (1098)

Article 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant.(n)

RPC Article 100.Civil liability of a person guilty of felony.- Every person criminally liable for a felony is also civilly liable.RPC Article 104.What is included in civil liability.- The civil liability established in Articles 100, 101, 102, and 103 of this Code includes:1. Restitution;2. Reparation of the damage caused;3. Indemnification for consequential damages.5. Quasi-delicts

Article 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)

Article 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. (1902a)

SALUDAGA V. FEU

Nature: Complaint for damagesPonente: YNARES-SANTIAGO, J.Date: April 30, 2008

DOCTRINE:

FACTS:Relevant Provision of Law:

Petitioner Joseph Saludaga was a sophomore law student of respondent Far Eastern University (FEU) when he was shot by Alejandro Rosete (Rosete), one of the security guards on duty at the school premises on August 18, 1996. Petitioner was rushed to FEU-Dr. Nicanor Reyes Medical Foundation (FEU-NRMF) due to the wound he sustained. Meanwhile, Rosete was brought to the police station where he explained that the shooting was accidental. He was eventually released considering that no formal complaint was filed against him.

Petitioner thereafter filed a complaint for damages against respondents on the ground that they breached their obligation to provide students with a safe and secure environment and an atmosphere conducive to learning. Respondents, in turn, filed a Third-Party Complaintagainst Galaxy Development and Management Corporation (Galaxy), the agency contracted by respondent FEU to provide security services within its premises and Mariano D. Imperial (Imperial), Galaxy's President, to indemnify them for whatever would be adjudged in favor of petitioner, if any; and to pay attorney's fees and cost of the suit. On the other hand, Galaxy and Imperial filed a Fourth-Party Complaint against AFP General Insurance.

TC: held FEU and GALAXY liable

CA: reversed; dismissed the complaint; shooting was a fortuitous event

ISSUE: W/N FEU is liable based on the contract between it and its student

RULING:

YES. FEU is liable (culpa contractual).

PSBA v CA: 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.

It is settled that in culpa contractual, the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. In the instant case, we find that, when petitioner was shot inside the campus by no less the security guard who was hired to maintain peace and secure the premises, there is a prima facie showing that respondents failed to comply with its obligation to provide a safe and secure environment to its students.

Re: Force majeure

Respondents failed to discharge the burden of proving that they exercised due diligence in providing a safe learning environment for their students. They failed to prove that they ensured that the guards assigned in the campus met the requirements stipulated in the Security Service Agreement. Indeed, certain documents about Galaxy were presented during trial; however, no evidence as to the qualifications of Rosete as a security guard for the university was offered.

It was not proven that they examined the clearances, psychiatric test results, 201 files, and other vital documents enumerated in its contract with Galaxy. Total reliance on the security agency about these matters or failure to check the papers stating the qualifications of the guards is negligence on the part of respondents. A learning institution should not be allowed to completely relinquish or abdicate security matters in its premises to the security agency it hired. To do so would result to contracting away its inherent obligation to ensure a safe learning environment for its students.

Consequently, respondents' defense offorce majeuremust fail. In order forforce majeureto be considered, respondents must show that no negligence or misconduct was committed that may have occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One's negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person's participation - whether by active intervention, neglect or failure to act - the whole occurrence is humanized and removed from the rules applicable to acts of God

Re: Damages

Article 1170 of the Civil Code provides that those who are negligent in the performance of their obligations are liable for damages. Accordingly, for breach of contract due to negligence in providing a safe learning environment, respondent FEU is liable to petitioner for damages.

DISPOSITIVE:a. respondent Far Eastern University (FEU) isORDEREDto pay petitioner actual damages in the amount of P35,298.25, plus 6% interest per annum from the filing of the complaint until the finality of this Decision. After this decision becomes final and executory, the applicable rate shall be twelve percent (12%) per annum until its satisfaction;b. respondent FEU is alsoORDEREDto pay petitioner temperate damages in the amount of P20,000.00; moral damages in the amount of P100,000.00; and attorney's fees and litigation expenses in the amount of P50,000.00;c. the award of exemplary damages isDELETED.The Complaint against respondent Edilberto C. De Jesus (Prfesident of FEU) isDISMISSED. The counterclaims of respondents are likewiseDISMISSED.

SAGRADA ORDEN VS NACOCO

Nature: Action to recover the possession of a parcel of land and the warehouses, as well as the rentals for its occupation and usePonente: LabradorDate: June 30, 1952

DOCTRINE: In order for an obligation to exist, it must be created by law, contract, quasi-contract, delicts, or quasi-delicts.

FACTS:Relevant Provision of Law: Old Civil Code Article 1089. 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 occur

On January 4, 1942, during the Japanese occupation, a Japanese corporation by the name of Taiwan Tekkosho acquired a certain parcel of land owned by the plaintiff for the sum of Php140,000.00, and title was issued in its name. After the end of World War 2, the Alien Property Custodian of the USA took possession, control and custody thereof for the reason that the land belonged to an enemy national. Afterwards the property was occupied by the Copra Export Management Company, which later vacated it in favor of the National Coconut Corporation.

Sagrada Orden made a claim of the property before the Alien Property Custodian but this was denied, so it brought an action at the CFI of Manila to annul the sale of the property to Taiwan Tekkosho and to recover its possession.

The case did not come to trial as the parties presented a joint petition where it was claimed that the sale in favor of Taiwan Tekkosho was null and voide because it was executed under threats, duress, and intimidation, and it was agreed that the title should be re-issued in favor of Sagrada Orden. The parties also prayed that NACOCO and the Alien Property Administration be released from liability, and that NACOCO would pay rentals.

CFI released NACOCO from any liability but denied plaintiff the right to recover reasonable rentals.

Plaintiff appeals to recover reasonable rentals from August 1946, which as when NACOCO began occupying the premises, and to vacate it.

Respondent, on the other hand, admits rentals but only starting February 28, 1949, when the judgment of the CFI was issued. It defends itself by saying it occupied the property in good faith, and had no obligation whatsoever to pay rentals for the use and occupation of the warehouse.

ISSUE:Whether or not NACOCO is liable for rentals from the time of its occupancy or from the time of the judgment of the CFI.

RULING: It is not liable for rentals at all.If defendant is liable at all, its obligations must arise from any of the four sources of obligations: law, contract or quasi-contract, crime, or negligence.

NACOCO is not guilty of any offense at all since it entered the premises and occupied the same with the permission of the Alien Property Administration, which had legal control and administration. Its not negligent of anything either. There was no privity of contract or obligation between the Alien Property Custodian and Taiwan Tekkosho such that the Alien Property Custodian or its permittee (NACOCO) can be held responsible for the illegal occupation by Taiwan Takkosho. Note: the Alien Property Custodian did not occupy the property as successor to the interests of Taiwan Tekkosho, but by expression provision of the law. When NACOCO took possession of the property, the Alien Property Administration had the absolute control of the property as the trustee of the US Government; as such, if NACOCO is liable for rentals, it would accrue to the US Government and not to Sagrada Orden.

Furtehrmore, there was no agreement between the Alien Property Custodian and NACOCO for the payment of rentals on the property. The predecessor of NACOCO, Copra Export, did not pay any rentals or had to pay any compensation of any kind. When the NACOCO succeeded Copra Export, it must have also been free from payment of rentals, especially since its a Government corporation.

As such, there is no basis on any of the sources of obligations to find that NACOCO is liable for rentals to Sagrada Orden.

PEOPLES CAR INC. VS COMMANDO SECURITY SERVICE AGENCY

Nature: Action for damagesPonente: TeehankeeDate: May 22, 1973

DOCTRINE: Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith

FACTS:Relevant Provision of Law: NCC Article 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

Peoples Car Inc and Commando Security Service Agency entered into a Guard Service Contract where the latter would safeguard and protect the business premises of Peoples Car from theft, pilferage, robbery, vandalism and all other unlawful acts of any person or persons prejudicial to the interest of the plaintiff.

On April 5, 1970, at around 1AM, one of the security guards, without any authority or consent whatsoever, brought out of the compound of the plaintiff a car belonging to Joseph Luy, a customer, and eventually lost control of the said car, causing the same to fall into a ditch. Plaintiff filed a complaint of qualified theft against the security guard; plaintiff alleges that it had to suffer damages by way of payment for the repairs of the car in the amount of Php7,079, as well as car rental value in the sum of Php1,410 as plaintiff had to loan a car to Joseph Luy for 47 days while the car was being repaired. As such, plaintiff incurred a total of Php8,489.10 in damages.

Plaintiff claimed that the entire amount is imputable to Commando Security as, under paragraph 5 of their contract, defendant assumed liability for acts done during their watch hours by guards, while Commando alleges, under paragraph 4 of the contract, that its liability should not exceed Php1,000.

TC ruled in favor of the interpretation of Commando Security.

ISSUE: What is the extent of the liability of Commando Security in light of the contract that the parties entered into

RULING: It is liable for the entire Php8,489.10.The limitation to Php1,000 per guard post is only applicable for loss or damage through the negligence of its guards during watch hours provided that the same is duly reported to the plaintiff within 24 hours of the occurrence and the negligence is verified after proper investigation with the attendance of both contracting parties. Its inapplicable in this case as the property of the plaintiff was not lost or damaged at its premises, and was there just mere negligence of the security guard.

Rather, this case involves a security guard who willfully and unlawfully drove out a car and lost control of the same, causing the plaintiff to incur actual damages in the amount of Php8,489.10. Consequently, defendant is liable for the entire damages under paragraph 5, where the defendant assumes liability for the acts during their watch hours and that it releases plaintiff from any and all liabilities to the third parties arising from acts or omissions done by guards during their tour of duty. As the act here is wanton and unlawful, the defendant is liable.

Contrary to TCs determination, plaintiff was not required to tell Luy that it was not liable under the Guard Service Contract with Commando, and that it should have brought the action in court. The TC also required that Luy would file a third-party complaint (rather than dismiss the action vs. plaintiff) or to have plaintiff file a crossclaim (if Luy did not opt to dismiss the action). The recommendations of the TC are unduly technical and unrealistic

Plaintiff was in law liable to Luy for the damages caused by the security guard, but it was also justified in making good such damages and relying in turn on the defendants honoring its contract. Plaintiff couldnt tell its customer that it was not liable since the customer could not hold defendant to account for damages as the customer had no privity of contract with the defendant.

CANGCO VS MANILA RAILROAD

Nature: Action for damages based on quasi-delictPonente: FisherDate: October 4, 1918

DOCTRINE: The liability arising from culpa aquillana is based on a voluntary act or omission, which, without willful intent but by mere negligence, has caused damage to another. An employer who exercises all possible care in the selection and direction of his employee would not occur any liability. For the liability to exist, there should actually be some fault attributable to the defendant personally.

FACTS:Relevant Provision of Law: Civil Code ART. 1903. The obligation imposs=ed by the next preceding articles is enforceable not only for personal acts and omissions, but also for those of persons for whom another is responsible..

Jose Cango was an employee of the Mania Railroad Company as a clerk. To travel from his home to his place of work, he used a pass, as supplied by the company, which entitled him to ride on the companys trains for free.

On January 20, 1915, at around 7 to 8PM, Cangco was about to disembark from the slowing train, when one or both of his feet came in contact with sack of watermelons resulting in him falling violently on the platform; his body rolled from the platform and was drawn under the moving car where his right arm was badly crushed and lacerated. The platform was dimly lit so that it was difficult to discern the objects on the platform.

Pit appears that the sack of melons were on the platform as it was customary season for harvesting and a large lot had been brought to the station for the shipment to the market. They were contained in numbers sacks, which had been piled on the platform in a row upon another near the edge of the platform.

As a result of the accident, Cangco had to undergo two surgeries resulting in the amputation of his arm until near the shoulder, and he expended actual medical damages in the amount of Php790.25. He thus filed an action with the CFI of Manila to recover damages based on the negligence of the employees in leaving the sacks of watermelons at the edge of the platform.

CFI ruled that while negligence was attributable to the defendant, the plaintiff had failed to exercise due caution in alighting from the train and so was precluded from recovering

ISSUE: Whether or not Cangco is entitled to recover damages from MRR for the negligent actions of MRRs employees in placing the sacks of watermelons at the edge of the platform

RULING: Yes, Manila railroad is liable for damages for breach of contract of carriage.It cannot be doubted that the employees of the railroad company were negligent in piling the sacks on the platform and that their presence caused the plaintiff to suffer his injuries; as such, they constituted an effective legal cause of the injuries sustained by the plaintiff. However, it must still be weighed against the contributory negligence of the plaintiff.

The foundation of the legal liability of the defendant is the contract of carriage; the obligation to respond for the damage arises from the failure of the defendant to exercise due care in its performance. The liability of is direct and immediate, and differs from the presumptive responsibility for the negligence of its employees as imposed by Civil Code Article 1903, which can be rebutted by proof of the exercise of due care in the selection and supervision of employees. Article 1903 is not applicable to contractual obligations (culpa contractual), but only to extra-contractual obligations (culpa aquiliana).

Court cites precedent in the Rakes case where the Court stated that Article 1903 of the Civil Code is inapplicable to acts of negligence which constitute the breach of contract; they would be subject instead to articles 1101, 1103 and 1104.

The distinction is important as the liability imposed on employers for damages based on the negligence of the employees is not based on respondeat superior which would impose the master liable in every case and unconditionally but on the principle in Article 1902, which imposes upon all persons who by their own fault or negligence cause injury to another, the obligation to indemnify the damages. As such, the employer would not be liable for damages done by a negligent employee if the employer were not negligent in the selection and direction of the employee, and the act did not amount to breach of the contract between the third person and the employer.

The liability arising from culpa aquillana is based on a voluntary act or omission, which, without willful intent but by mere negligence, has caused damage to another. An employer who exercises all possible care in the selection and direction of his employee would not occur any liability. For the liability to exist, there should actually be some fault attributable to the defendant personally.

On the other hand, the liability of masters and employers for the negligent acts or omissions of their servants or agents, when such acts or omissions cause damages which amount to the breach of a contact, is not based upon a mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract.

The Court describes extra-contractual obligations arise from the breach or omission of the mutual duties which civilized society imposes on its members such that the breach of these will result in the obligation to indemnify. The viniculum juris is the wrongful or negligent act or omission itself, while in contractual relations, the viniculum exists independently from the breach of the voluntary duty.

The positions of parties who have taken a contract with each other versus those who havent are different. The burden of proof is on the plaintiff to show the negligence in culpa aquillana, while in a contract, it is sufficient to prove the contract and the nonperformance.

Here: the duty was based on a contract of carriage, which is direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to defendants employees.

Defendants allegation that the plaintiff should not have gotten off from the train prior to its slowing down is insufficient to deny damages as it is not negligence per se for a passenger to alight from a moving train. The train here was barely moving and it seems to be a common practice to do so without any injury. Any contributory negligence on the part of the plaintiff would still be on the negligence of the defendant as the platform was dark and dimly lit.

Dissent: J. MalcolmThe contributory negligence of the plaintiff, in attempting to alight from a moving train should absolve defendant from liability.

GUTIERREZ VS. GUTIERREZ

Nature: Action to recover damages from physical injuries from an automobile accidentPonente: MalcolmDate: September 23, 1931

DOCTRINE: The head of the house, the owner of an automobile, who maintains it for the general use of the family, is liable for its negligent operation by one of his children where the car is occupied and being used at the time of the injury for the pleasure of other members of the owners family.

FACTS:Relevant Provision of Law: Spanish Civil Code ART. 1903. The obligation imposed by the next preceding articles is enforceable not only for personal acts and omissions, but also for those of persons for whom another is responsible.The father, and, in case of his death or incapacity, the mother, are liable for any damages caused by the minor children who live with them.

On February 2, 1930, a passenger truck, and an automobile, driven by Bonifacio Gutierrez and owned by his parents, Mr. and Mrs. Manuel Gutierrez, collided with one another as they were passing on the Talon Bridge on the Manila South Road. Narciso was a passenger on the truck, and he suffered a fracture in his right leg, which required medical attendance and had not yet healed at the date of the trial.

The parties conceded that the collusion was caused by negligence. However, the plaintiff blames both sets of drivers, while the truck owner blames the automobile driver, while the automobile owners blame the truck driver.

ISSUE: Who among the defendants are liable the truck owner or the automobile owner?

RULING: Bonifacio, at the time of the accident, was only 18 and was driving at an excessive rate and so contributed to the accident by his negligence. As such, based on article 1903 of the Civil Code, the father would be liable for damages caused by the minor.

Citing US cases as precedent, the Court ruled that it has been held that the head of the house, the owner of an automobile, who maintains it for the general use of the family, is liable for its negligent operation by one of his children where the car is occupied and being used at the time of the injury for the pleasure of other members of the owners family.

On the other hand, the liability of Cortez, the owner of the passenger truck, and Velasco, the drier, rests on a contract, which was sufficiently proven in evidence. The trial court found that the speed of the truck at the time and lack of care of the driver also contributed to the accident.

Cortez and Velascos contention that Narciso contributed to the accident by sticking his leg outside the truck cant be counted on as it was not pleaded in court and there was no evidence presented.

NOTES: Villa-Real had a concurring opinion which merely voted for an indemnity of Php7,500.

C. Compliance with obligationsArticle 19. 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.

Article 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. (1094a)

Article 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him. (1095)

Article 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him by article 1170, may compel the debtor to make the delivery. If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor. If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall be responsible for any fortuitous event until he has effected the delivery. (1096)

Article 1166. The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned. (1097a)

Article 1244. The debtor of a thing cannot compel the creditor to receive a different one, although the latter may be of the same value as, or more valuable than that which is due. In obligations to do or not to do, an act or forbearance cannot be substituted by another act or forbearance against the obligee's will. (1166a)

Article 1246. When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and circumstances have not been stated, the creditor cannot demand a thing of superior quality. Neither can the debtor deliver a thing of inferior quality. The purpose of the obligation and other circumstances shall be taken into consideration. (1167a)

Article 1260. Once the consignation has been duly made, the debtor may ask the judge to order the cancellation of the obligation. Before the creditor has accepted the consignation, or before a judicial declaration that the consignation has been properly made, the debtor may withdraw the thing or the sum deposited, allowing the obligation to remain in force. (1180)

Article 440. The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. (353)

Article 442. Natural fruits are the spontaneous products of the soil, and the young and other products of animals. Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (355a)

D. Kinds of civil obligations1. As to perfection and extinguishmenta. PureArticle 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once. Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event. (1113) Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them. (1128a)

(NOTE: My syllabus is cut and I dont know what follows after these provisions, Im sorry. Macel)

PAY VS PALANCA

Nature: Action for a sum of money based on a promissory notePonente: FernandoDate: June 28, 1974

DOCTRINE: An obligation that does not depend on a future or uncertain event, or upon a past event unknown to the parties, is demandable at once. The filing of an action only 15 years after is too late to enforce.

FACTS:Relevant Provision of Law: NCC 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandab