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Makati Stock Exchange v. Campos G.R. No. 138814 April 16, 2009 CHICO-NAZARIO, J.: Leigh Taritz C. Ganancial Facts On 10 February 1994, respondent Miguel V. Campos filed with the Securities, Investigation and Clearing Department (SICD) of the Securities and Exchange Commission (SEC), a petition against herein petitioners Makati Stock Exchange, Inc. (MKSE) and MKSE directors seeking: (1) the nullification of the Resolution of the MKSE Board of Directors, which allegedly deprived him of his right to participate equally in the allocation of Initial Public Offerings (IPO) of corporations registered with MKSE; (2) the delivery of the IPO shares he was allegedly deprived of, for which he would pay IPO prices; and (3) the payment of ₱2 million as moral damages, ₱1 million as exemplary damages, and ₱500,000.00 as attorney’s fees and litigation expenses. SICD granted respondent’s prayer. Petitioners assailed the SICD Order before the SEC en banc. Consequently, SEC en banc nullified the SIDC Order and ordered the dismissal of the case. Respondent assailed the SEC en banc Orders before the Court of Appeals. Appellate court granted the petition. Petitioners filed a Motion for Reconsideration but was denied by the Court of Appeals. Hence the petition. Issue Whether or not the Court of Appeals erred in holding that SEC en banc committed grave abuse of discretion in ruling in favor of herein respondent Ruling Yes. The decision of the Court of Appeals was reversed and the SEC en banc orders were reinstated. A right is a claim or title to an interest in anything whatsoever that is enforceable by law. An obligation is defined in the Civil Code as a juridical necessity to give, to do or not to do. For every right enjoyed by any person, there is a corresponding obligation on the part of another person to respect such right. Art. 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. Therefore, an obligation imposed on a person, and the corresponding right granted to another, must be rooted in at least one of these five sources. There is no question that the original petition asserts a right of herein respondent and stipulates the correlative obligation of petitioners to respect respondent’s right. However, the petition failed to lay down its source or basis. In the absence of the source granting the right to participate equally in the allocation of Initial Public Offerings (IPO) of corporations registered with MKSE, the Court cannot grant respondent’s petition which allegedly resulted from the MKSE Board Resolution. In the main, the SEC en banc did correctly dismiss the petition for its failure to state the basis for respondent’s alleged right. Petition granted.

Manzanilla v. Court of Appeals G.R. No. L-75342 March 15, 1990 MEDIALDEA, J.: Leigh Taritz C. Ganancial Facts In 1963, spouses Manzanilla sold on installment an undivided one-half portion of their residential house and lot located at Casiana St., Santol, Quezon City while mortgaged to the Government Service Insurance System (GSIS), which fact was known to the vendees, spouses Campo. The vendees took possession of the premises upon payment of the first installment. The property was foreclosed and was sold at public auction where GSIS was the highest bidder. Despite, Manzanilla spouses executed a Deed of Absolute Sale of the property in favor of the Campo spouses. Manzanilla recovered the property thus; an Absolute Deed of Sale was executed by GSIS in favor of the Manzanilla spouses. On 1973, petitioner Ines Carpio purchased the property from the Manzanilla spouses and agreed to assume the mortgage in favor of Biñan Rural Bank. On 1973, private respondent Justina Campo registered with the Register of Deeds. On 1977, petitioner Ines Carpio filed an ejectment case against Justina Campo. A complaint for quieting of title against the Manzanilla spouses and Ines Carpio was filed. Decision rendered in favor of Campo. Court of Appeals affirmed the trial court’s decision. Petitioners' Motion for Reconsideration was likewise denied. Hence, this petition Issue Whether or not petitioners Manzanillas are under any legal duty to reconvey the undivided one-half portion of the property to private respondent Justina Campo Ruling No. There may be a moral duty on the part of petitioners to convey the one-half portion of the property previously sold to private respondents. However, they are under no legal obligation to do so. The failure of either the Manzanilla spouses or the Campo spouses to redeem the property from GSIS, title to the property was consolidated in the name of GSIS. The new title cancelled the old title in the name of the Manzanilla spouses. GSIS at this point had a clean title free from any lien in favor of any person including that of the Campo spouses. Thus, as regards to the rights of Carpio, she is a buyer in good faith and for value. Hence, the action to quiet title filed by private respondent must fail. Justice is done according to law. As a rule, equity follows the law. There may be a moral obligation, often regarded as an equitable consideration, but if there is no enforceable legal duty, the action must fail although the disadvantaged party deserves commiseration or sympathy. Petition granted.

Rural Bank of Parañaque, Inc. v. Remolado G.R. No. L-62051 March 18, 1985 AQUINO, J.: Leigh Taritz C. Ganancial Facts Isidra Remolado, owned a 308 square meters lot located at 41 Molave Street, United Parañaque, Rizal, which was leased to Beatriz Cabagnot. On April 17, 1971 she mortgaged it again to the bank. She eventually secured loans in total of ₱18,000 which later become overdue. The bank foreclosed the mortgage and bought the property. The one-year period of redemption was to expire on August 21, 1973. No redemption was made. The bank consolidated its ownership over the property. Title was cancelled. On September 24, 1973, the bank gave her up to 10 am of October 31, within which to repurchase. Contrary to her promise, she did not repurchase the property on October 31, or on November 5, she and her daughter delivered P33,000 rash to the bank's assistant manager as repurchase price. The amount was returned to them the next day. November 6, Remolado filed an action to compel the bank to reconvey the property to her. The repurchase price was not consigned. On November 15, the bank sold the property to Pilar Aysip for P50,000. A new title was issued to Aysip with an annotation of lis pendens. The trial court ordered the bank to return the property to Remolado. The Appellate Court affirmed the judgment. The bank appealed to this Court contending that Remolado had no more right of redemption and, therefore, no cause of action against the bank. Issue Whether or not the trial court and the Appellate Court erred in ordering the reconveyance of the property Ruling Yes. The Appellate Court's judgment is reversed and set aside. The complaint and counterclaim are dismissed. The notice of lis pendens is cancelled. Justice is done according to law. As a rule, equity follows the law. There may be a moral obligation, often regarded as an equitable consideration, but if there is no enforceable legal duty, the action must fail although the disadvantaged party deserves commiseration or sympathy. The bank acted within its legal rights when it refused to give Remolado any extension to repurchase after October 31, 1973. It had given her about two years to liquidate her obligation. She failed to do so. Moreover, there was no binding agreement for its repurchase. Even on the assumption that the bank should be bound by its commitment to allow repurchase on or before October 31, 1973, still Remolado had no cause of action because she did not repurchase the property on that date. Petition granted.

Development Bank of the Philippines v. Adil G.R. No. L-48889 May 11, 1989 GANCAYCO, J.: Leigh Taritz C. Ganancial Facts On February 10, 1940 spouses Villafuerte obtained an agricultural loan from the Development of the Philippines (DBP), in the sum of ₱2,000.00 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. As the obligation remained outstanding and unpaid even after the lapse of the aforesaid ten-year period, Confesor, 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. Said spouses not having paid the obligation on the specified date, the DBP filed a complaint. The decision ordered the spouses to pay DBP. On appeal, decision was reversed. A motion for reconsideration was denied thereafter. Hence this petition wherein petitioner alleges that the decision of respondent judge is contrary to law and runs counter to decisions of this Court when respondent judge (a) refused to recognize the law that the right to prescription may be renounced or waived; and (b) 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 Whether or not a promissory note which was executed in consideration of a previous promissory note the enforcement of which had been barred by prescription is valid Ruling Yes. The decision to pay DBP was reinstated. The right to prescription may be waived or renounced. Article 1112 of Civil Code provides: 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 Court had ruled in a similar case that when a debt is already barred by prescription, it cannot be enforced by the creditor. But a new contract recognizing and assuming the prescribed debt would be valid and enforceable. Thus, it has been held —Where, therefore, a party acknowledges the correctness of a debt and promises to pay it after the same has prescribed and with full knowledge of the prescription he thereby waives the benefit of prescription. Petition granted.

Asuncion v. Court of Appeals G.R. No. 109125 December 2, 1994 VITUG, J.: Leigh Taritz C. Ganancial Facts Ang Yu Asuncion and Keh Tiong, et al. are lessees of residential and commercial spaces owned by against spouses Cu Unjieng and Jose Tan. Before October 9, 1986, defendants informed that they are offering to sell the premises and are giving them priority to acquire the same. Lesses asked that they specify the terms and conditions of the offer to sell, however, no reply. Since defendants failed to specify the terms and conditions of the offer to sell and because of information received that defendants were about to sell the property, they filed the complaint to compel defendants to sell the property to them. Lower court decision was in favor of the defendants and ruled that should the defendants subsequently offer their property for sale at a price of ₱11-million or below, plaintiffs will have the right of first refusal. On appeal, Court affirmed with modification holding that there was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. While case was pending consideration by this Court, the Unjieng spouses executed a Deed of Sale transferring the property to Buen Realty and Development Corporation. As the new owner of the property, demand lessees to vacate. In reply to petitioner states that they brought the property subject to the notice of lis pendens. The lessees filed a Motion for Execution. Consequently, granted. The appellate court, on appeal to it by private respondent, set aside the orders. Hence, the petition contending that Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendens. Issue Whether or not the Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendens Ruling No. The Supreme Court affirmed the setting aside of the writ of execution. Art. 1156, Civil Code: An obligation is a juridical necessity to give, to do or not to do. The essential elements of obligation are: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (b) the object which is the prestation or conduct required to be observed; and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects. Among the sources of an obligation is a contract which is a meeting of minds between two persons whereby one binds himself to give something or to render some service. Observe, however, that the option is not the contract of sale itself. The optionee has the right, but not the obligation, to buy. Once the option is exercised timely, the offer is accepted before a breach of the option, a bilateral promise to sell and to buy ensues and both parties are then reciprocally bound to comply with their respective undertakings. Petition denied.

Ocampo III v. People G.R. No. 156547 (543 S 487) February 4, 2008 AZCUNA, J.: Leigh Taritz C. Ganancial Facts The Department of Budget and Management released National Aid for Local Government Units (NALGU) funds in the amount of ₱100 Million to the Province of Tarlac to assist local governments in their various projects and services. Ocampo, governor of Tarlac from February 22, 1988 up to June 30, 1992, loaned out ₱56.6 million to the Lingkod Tarlac Foundation, Inc. (LTFI) for the implementation of various livelihood projects. The loan was made pursuant to a Memorandum of Agreement (MOA) entered into by the Province of Tarlac, represented by Ocampo, and LTFI, represented by petitioner Flores, on August 8, 1988. It turned out that Ocampo resigned as chairperson and trustee of the LTFI prior to August 8, 1988, the date when petitioner Ocampo and LTFI entered into the MOA. Thus, the loan becomes the subject of 25 criminal cases but was reduced into 2 against Ocampo. The Sandiganbayan convicted Ocampo and Flores of the crime of malversation of public funds. Hence the petition contending that the loan was private in character since it was a loan contracted with the Lingkod Tarlac Foundation, Inc., thus cannot be subject of malversation of public funds. Issue Whether the amount loaned out was private in nature Ruling Yes. Based on the foregoing, it is clear that the funds released by the Province of Tarlac, including the money allegedly malversed by petitioners were in the nature of a loan to LTFI. Art. 1953 of the Civil Code provides that " a person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality." Hence, petitioner Ocampo correctly argued that the NALGU funds shed their public character when they were lent to LTFI as it acquired ownership of the funds with an obligation to repay the Province of Tarlac the amount borrowed. The relationship between the Province of Tarlac and the LTFI is that of a creditor and debtor. Failure to pay the indebtedness would give rise to a collection suit. The fact that the petitionerGovernor contracted the loan, the public fund changed its nature to private character, thus it is not malversation which is the subject of this case, instead it must be a simple collection of money suit against the petitioner in case of non-payment. Therefore, the petitioner is acquitted for the crime of malversation. Petition granted.

Metropolitan Bank & Trust Company v. Ana Grace Rosales and Yo Yuk To G.R. No. 183204 January 13, 2014 DEL CASTILLO, J.: Leigh Taritz C. Ganancial Facts In 2000, respondent Ana Grace Rosales and Yo Yuk To opened a Joint Peso Account with Petitioner Metropolitan Bank and Trust Company. In May 2002, Rosales accompanied and acted as interpreter to her client Liu Chiu Fang, a Taiwanese National applying for a retiree’s visa from the Philippine Leisure and Retirement Authority (PLRA), to petitioner to open a savings account. Respondents opened with petitioner a Joint Dollar Account. On July 31, 2003, petitioner issued a "Hold Out" order against respondents’ accounts. Petitioner filed a criminal case for Estafa through False Pretences, Misrepresentation, Deceit, and Use of Falsified Documents against respondent Rosales unauthorized and fraudulent withdrawal of US$75,000.00 from Liu Chiu Fang’s dollar account. The Office of the City Prosecutor dismissed the criminal case for lack of probable cause. Respondents filed before the Regional Trial Court a Complaint for Breach of Obligation and Contract with Damages against petitioner alleging that they attempted several times to withdraw their deposits but were unable to because petitioner had placed their accounts under "Hold Out" status but without explanation. While the case for breach of contract was being tried, the City Prosecutor reversed the dismissal of the charge of estafa. The lower court held the petitioner liable for breach of contract. Reconsideration were denied, hence, the petition. Issue Whether or not petitioner breached its contract with respondents Ruling Yes. Petitioner’s reliance on the "Hold Out" clause is misplaced. The clause applies only if there is a valid and existing obligation arising from any of the sources of obligation enumerated in Article 115779 of the Civil Code, to wit: law, contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to show that respondents have an obligation to it under any law, contract, quasi-contract, delict, or quasi-delict. And although a criminal case was filed by petitioner against respondent Rosales, this is not enough reason for petitioner to issue a "Hold Out" order as the case is still pending and no final judgment of conviction has been rendered against respondent Rosales. In fact, it is significant to note that at the time petitioner issued the "Hold Out" order, the criminal complaint had not yet been filed. Thus, considering that respondent Rosales is not liable under any of the five sources of obligation, there was no legal basis for petitioner to issue the "Hold Out" order. Accordingly, we agree with the findings of the RTC and the CA that the "Hold Out" clause does not apply in the instant case. Therefore, we find that petitioner is guilty of breach of contract when it unjustifiably refused to release respondents’ deposit despite demand. Petition denied.

Leung Ben v. O'Brien G.R. No. L-13602 (38 Phil 182) April 6, 1918 STREET, J.: Leigh Taritz C. Ganancial Facts On December 12, 1917 an action was instituted in the Court of the First Instance by O’Brien to recover from Leung Ben the sum of ₱15, 000.00 alleged to have been lost by the plaintiff to the defendant in a series of gambling, banking and percentage games conducted during the two or three months prior to the institution of the suit. In his verified complaint the plaintiff asked for an attachment, under sections 424 and 412 (1) of the Code of Civil Procedure against the property of the defendant on the ground that the latter was about to depart from the Philippine Island with intent to defraud his creditors. The attachment was issued and acting on the authority thereof, the sheriff attached the sum of ₱15, 000.00 which had been deposited by the defendant with the International Banking Corporation. The defendant moved to quash the attachment stating that the provision of law under which this attachment was issued requires that there should be a cause of action arising upon contract, express or implied; the court however, dismissed said motion. Petitioner Leung Ben filed his petition for writ of certiorari. The contention of the petitioner is that the statutory action to recover money lost at gaming is that the statutory action to recover money lost at gaming is no such an action as is contemplated in this provision, and he therefore insists that the original complaint shows on its face that the remedy of attachment is not available in aid thereof. Issue Whether or not the statutory obligation to restore money won at gaming an obligation arising from contract, express or implied Ruling Yes. In the common law the duty to return money won in this way is an implied contract, or quasi-contract. The duty of the defendant to refund the money which he won from the plaintiff at gaming is a duty imposed by statute. It therefore arises ex lege. Furthermore, it is a duty to return a certain sum which had passed from the plaintiff to the defendant. By all the criteria which the common law supplies, this a duty in the nature of debt and is properly classified as an implied contract. It is well- settled by the English authorities that money lost in gambling or by lottery, if recoverable at all, can be recovered by the loser in an action of indebitatus assumpsit for money had and received. Hence, the cause of action stated in the complaints in the court is based on a contract, express or implied and is therefore of such nature that the court had authority to issue writ of attachment. Petition denied.

Pelayo v. Lauron G.R. No. L-4089 (12 Phil 453) January 12, 1909 TORRES, J.: Leigh Taritz C. Ganancial Facts On October 13, 1906, the plaintiff Arturo Pelayo was called to the house of defendants Marcelo Lauron and Juana Abella and was requested by them to render medical assistance to their daughter-in-law who was about to give birth to a child. The plaintiff found it necessary to remove the fetus by means of an operation. On demand for fee, the defendants refused to pay services rendered by the plaintiff at ₱500.00. Thus, the plaintiff filed a complaint against the defendants. In answer, the defendants denied and alleged that their daughter-in-law died as a consequence of the said childbirth, and when she was still alive, she lived with her husband independently and in a separate house and without any relation with them, and she gave birth she in the house of the defendants and her stay there due to fortuitous circumstances. Thus, the defendants prayed that they be absolved. The lower court rendered judgment in favor of the defendants absolving them from the complaint. Hence the petition. Issue Whether or not the parents-in-law are under any obligation to pay the fees claimed by the plaintiff Ruling No. The defendants were not, nor are they now, under any obligation by virtue of any legal provision, to pay the fees claimed, nor in consequence of any contract entered into between them and the plaintiff from which such obligation might have arisen. The rendering of medical assistance in case of illness is comprised among the mutual obligations to which spouses are bound by way of mutual support. When either of them by reason of illness should be in need of medical assistance, the other is under the unavoidable obligation to furnish the necessary services of a physician in order that the health may be restored; the party bound to furnish such support is therefore, liable for all the expenses, including the fees of the medical expert for his professional services. The liability arises from the obligation, which the law has expressly established, between married couples. It is therefore the husband of the patient who is bound to pay for the services of the plaintiff. The fact that it was not the husband who called the plaintiff and requested the medical assistance for his wife is no bar to his fulfillment of such obligation, as the defendants, in view of the imminent danger to which the life of the patient was at that moment exposed, considered that the medical assistance was urgently needed. Therefore, plaintiff should direct his action against the husband of the patient, and not against her parents-in-law. Petition denied.

Hotel Nikko v. Reyes G.R. No. 154259 February 28, 2005 CHICO-NAZARIO, J.: Leigh Taritz C. Ganancial Facts Roberto Reyes, with the screen name “Amay Bisaya,” alleged that while he was having coffee at the lobby of Hotel Nikko, he was spotted by his friend Dr. Filart and invited him to join her in a party at the hotel’s penthouse in celebration of the natal day of the hotel’s manager, Mr. Masakazu Tsuruoka. At the buffet dinner Mr. Reyes lined-up but, to his great shock, shame and embarrassment, he was stopped by Ruby Lim, the Executive Secretary of Hotel Nikko. Reyes alleged that Ruby Lim, in a loud voice and within the presence and hearing of the other guests told him to leave the party because he was not invited. Mr. Reyes tried to explain that he was invited by Dr. Filart but the latter completely ignored him thus adding to his shame and humiliation. Mr. Reyes filed before the court asking for damages under Articles 19 and 21 of the Civil Code. Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be made liable for damages as respondent Reyes assumed the risk as he was a “gate-crasher.” Trial Court ruled in favor of herein petitioner. Court of Appeals reversed and ordered to pay for damages hence, this petition. Issue Whether or not Hotel Nikko and Ruby Lim are jointly and severally liable with Dr. Filart for damages under Articles 19 and 21 of the Civil Code. Ruling No. The Supreme Court agreed with the lower court’s ruling that Ms. Lim did not abuse her right to ask Mr. Reyes to leave the party as she talked to him politely and discreetly. Damages may be granted under Art. 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 and Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. However, considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made such that they nearly kissed each other, the request was meant to be heard by him only and there could have been no intention on her part to cause embarrassment to him. Thereby, Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs from that of its employee. Had respondent simply left the party as requested, there was no need for the police to take him out. Petition granted.

St. Mary’s Academy v. Carpitanos G.R. No. 143363 February 6, 2002 PARDO, J.: Leigh Taritz C. Ganancial Facts from 13 to 20 February 1995, defendant-appellant St. Mary’s Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of the enrollment campaign was the visitation of schools from where prospective enrollees were studying. As a student of St. Mary’s Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was driven by James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned turtle. Sherwin Carpitanos died as a result of the injuries he sustained from the accident. Trial court granted the recovery for damages; Court of Appeals affirmed under Articles 218 and 219 of the Family Code, pointing out that petitioner was negligent in allowing a minor to drive and in not having a teacher accompany the minor students in the jeep. Motion for reconsideration was denied. Hence, this appeal. Issue Whether or not the petitioner is liable for damages for the death of Sherwin Ruling No. Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special parental authority are principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor while under their supervision, instruction, or custody. However, in this case, the respondents failed to show that the negligence of petitioner was the proximate cause of the death of the victim. Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide of the jeep. Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor’s parents primarily. The negligence of petitioner St. Mary’s Academy was only a remote cause of the accident. Between the remote cause and the injury, there intervened the negligence of the minor’s parents or the detachment of the steering wheel guide of the jeep. Hence, with the overwhelming evidence presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment of the steering wheel guide of the jeep, it is not the school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin Carpitanos. Petition granted.

Guanio v. Makati Shangri-la Hotel G.R. No. 190601 February 7, 2011 CARPIO MORALES, J.: Leigh Taritz C. Ganancial Facts Petitioner spouses Luigi M. Guanio and Anna Hernandez-Guanio booked at the Shangri-la Hotel Makati. The parties eventually agreed on a final price ₱1,150 per person. On July 27, 2001, the parties finalized and signed their contract. During the reception, respondent’s representatives, Catering Director Bea Marquez and Sales Manager Tessa Alvarez, did not show up despite their assurance that they would; their guests complained of the delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotel’s waiters were rude and unapologetic when confronted about the delay; and despite Alvarez’s promise that there would be no charge for the extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for the threehour extension of the event up to 4:00 A.M. the next day. They further claim that they brought wine and liquor in accordance with their open bar arrangement, but these were not served to the guests who were forced to pay for their drinks. Thus, a letter-complaint to the Makati Shangri-la Hotel and Resort, Inc. and received an apologetic reply from Krister Svensson, the hotel’s Executive Assistant Manager in charge of Food and Beverage. On the complaint for breach of contract and damages trial court rendered a decision in favor of the plaintiffs and was reversed by the CA, upon appeal, the latter holding that the proximate cause of petitioners’ injury was an unexpected increase in their guests. Hence, this appeal. Issue Whether or not the CA correctly held that the proximate cause of petitioners’ injury was an unexpected increase in their guests Ruling No. The Court finds that since petitioners’ complaint arose from a contract, the doctrine of proximate cause finds no application to it, the latter applicable only to actions for quasi-delicts, not in actions involving breach of contract. Breach of contract is defined as the failure without legal reason or excuse to comply with the terms of a contract, whole or part. The appellate court, and even the trial court, observed that petitioners were remiss in their obligation to inform respondent of the change in the expected number of guests. The observation is reflected in the records of the case. Petitioners’ failure to discharge such obligation thus excused respondent from liability for “any damage or inconvenience” occasioned thereby. However, under considerations of equity, the Court deems it just to award nominal damages. Petition partly granted.

TSPI, Inc. v. TSPOC Employees Union G.R. No. 163419 (545 SCRA 215) February 13, 2008 VELASCO, JR., J.: Leigh Taritz C. Ganancial Facts TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union for the increase of salary for the latter’s members of 10%,12% and 11% for the year 2000, 2001 and 2002, respectively. On October 6, 2000 Wage Order No. NCR-08 was issued increasing salaries from P 223.50 to P 250.00 starting November 1, 2000. Conformably, the wages of the 17 probationary employees were increased to P250.00 and became regular employees therefore receiving another 10% increase in salary. In January 2001, TSPIC implemented the new wage rates as mandated by the CBA. As a result, the 9 employees who were senior to the 17 recently regularized employees, received less wages. On January 19, 2001, TSPIC’s HRD notified the 24 employees who are private respondents, that due to an error in the automated payroll system, they were overpaid and the overpayment would be deducted from their salaries starting February 2001. The Union on the other hand, asserted that there was no error and the deduction of the alleged overpayment constituted diminution of pay. It was brought to grievance machinery however TSPIC and the Union failed to reach an agreement. In the arbitration, decision ruled in favor of the union and that TSPIC violated the Labor Code. Appeal and Motion for Reconsideration were denied. Hence, this appeal. Issue Whether or not the TSPIC’s decision to deduct the alleged overpayment from the salaries of the affected members of the Union constitute diminution of benefits Ruling Yes. It is considered that Collective Bargaining Agreement entered into by unions and their employers are binding upon the parties and be acted in strict compliance therewith. Thus, the CBA in this case is the law between the employers and their employees. The court ruled any amount given to the employees in excess of what they were entitled to may be legally deducted by TSPIC. TSPIC, in turn, must refund to individual respondents any amount deducted from their salaries which was in excess of what TSPIC is legally allowed to deduct from the salaries based on the computations. As correctly pointed out by TSPIC, the overpayment of its employees was a result of an error. This error was immediately rectified by TSPIC upon its discovery. We have ruled before that an erroneously granted benefit may be withdrawn without violating the prohibition against non-diminution of benefits. Therefore, there was no overpayment when there was an increase of salary for the members of the union simultaneous with the increasing of minimum wage for workers. The CBA should be followed thus, the senior employees who were first promoted as regular employees shall be entitled for the increase in their salaries and the same with lower rank workers. Petition partly granted.

Regino v. Pangasinan College G.R. No. 156109 November 18, 2004 PANGANIBAN, J.: Leigh Taritz C. Ganancial Facts Petitioner Khristine Rea M. Regino, a first-year computer science student of Pangasinan Colleges of Science and Technology (PCST), went to college through the financial support of her relatives. She enrolled Logic and Statistics subjects under Rachelle Gamurot and Elissa Baladad, respectively as teachers. In February 2002, PCST held a fund-raising campaign dubbed “The Rave Party and Dance Revolution”. Each student was required to pay for two tickets at the price of P100.00 each. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores; those who refused to pay were denied the opportunity to take the final examinations. Financially strapped and prohibited by her religion from attending dance parties and celebration, Regino refused to pay tickets. On March 14 and 15, 2002, the scheduled dates of examinations in Logics and Statistics, the teachers allegedly disallowed her from taking the tests. Petitioner then filed as pauper litigant, a complaint for damages against PCST. The Regional Trial Court dismissed the complaint for lack of merit. It ruled that Commission on Higher Education, not the court, has jurisdiction over the controversy. Issue Whether or not there was a breach of contract Ruling Yes. The Court characterized the relationship between the school and the student as a contract, in which a student, once admitted by the school is considered enrolled for one semester. The school-student relationship is also reciprocal. Thus, it has consequences appurtenant to and inherent in all contracts of such kind -- it gives rise to bilateral or reciprocal rights and obligations. The school undertakes to provide students with education sufficient to enable them to pursue higher education or a profession. On the other hand, the students agree to abide by the academic requirements of the school and to observe its rules and regulations. In the present case, PCST imposed the assailed revenue-raising measure belatedly, in the middle of the semester. It exacted the dance party fee as a condition for the students' taking the final examinations, and ultimately for its recognition of their ability to finish a course. The fee, however, was not part of the school-student contract entered into at the start of the school year. Hence, it could not be unilaterally imposed to the prejudice of the enrollees. Petition granted.

Ayala Corp v. Rosa Diana Realty G.R. No. 134284 (346 SCRA 663) December 1, 2000 DE LEON, J.: Leigh Taritz C. Ganancial Facts On April 20, 1976, Ayala Corporation sold their registered parcel of land to Manuel Sy married and Sy Ka Kieng with Special Conditions of Sale and Deed Restrictions. Manuel Sy and Sy Ka Kieng failed to construct the building in violation of the Special Conditions of Sale, however, were able to sell the lot to Rosa-Diana Realty and Development Corporation. An undertaking was executed promising to abide by said Special Condition of Sale executed between Ayala and the original vendees, for the release of certificate of title. Consequently, upon presentation of the building plan, Ayala released title, thereby enabling Rosa-Diana to register the Deed of Sale on its favor and obtain certificate of Title in its name. However, Rosa-Diana submitted another set of building plan which was different to the previous to the building official of Makati. During the construction, Ayala filed for specific performance seeking to compel the latter to comply with the Deed of Restriction annotated. In the alternative, Ayala prayed for rescission of the sale of the subject lot to Rosa-Diana Realty. The lower court denied. Ayala tried to cause the annotation a notice of lis pendens on Rosa-Diana’s title but the Register of Deed of Makati refused registration holding that the case pending before the trial court is an action in personam which does not involve the title, use or possession of the property. The Land Registration Authority reversed the ruling of the Register of Deeds, however, Court of Appeals reversed again. Issue Whether or not respondent Rosa-Diana has the obligation to enforce the Deed of Restrictions contained in the contract it entered with Ayala. Ruling Yes, respondent has the obligation to enforce the Deed of Restrictions contained in the contract it entered with Ayala. Contractual obligations between parties have the force of law between them and absent any allegation that the same are contrary to law, morals, good customs, public order or public policy, they must be complied with in good faith. Article 1159 of the New Civil Code provides obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Respondent freely consented to be bound by the deed restrictions when it entered into a contract of sale with spouses. While respondent claims that Ayala was no longer enforcing the deed restrictions, the Undertaking it executed belies this same claim. Respondent agreed to construct and complete the construction of the house on said lot as required under the special condition of sale and likewise bound itself to abide and comply with the condition of the rescission of the scale by Ayala Land, Inc. on the grounds therein stated. Petition granted.

Padcom Condominium Corporation v. Ortigas Center Association, Inc. G.R.No. 146807 May 9, 2002 DAVIDE, JR., C.J.: Leigh Taritz C. Ganancial Facts Petitioner Padcom Condominium Corporation owns and manages the Padilla Office Condominium Building. The land on which the building stands was originally acquired from the Ortigas & Company, Limited Partnership by Tierra Development Corporation (TDC). Among the terms and conditions in the deed of sale was the requirement that the transferee and its successor-in-interest must become members of an association for realty owners and long-term lessees in the area later known as the Ortigas Center. Respondent Ortigas Center Association, Inc. was organized to advance the interests and promote the general welfare of the real estate owners and long-term lessees of lots in the Ortigas Center. The association sought the collection of membership dues of P2,724.40 per month. Due to PADCOM’s failure and refusal to pay its arrears in monthly dues, including interests and penalties thereon, the Association filed a complaint for collection of sum of money. The Association averred that purchasers of lands within the Ortigas Center complex from OCLP are obligated under their contracts of sale to become members of the Association. This obligation was allegedly passed on to PADCOM when it bought the lot from TDC, its predecessor-in-interest. The trial court dismissed the complaint but was reversed by the Court of Appeals. Hence, this petition for review. Issue Whether or not PADCOM is obliged to pay it dues incidental thereto as automatic members of the association Ruling Yes. PADCOM is deemed to be a regular member upon the acquisition of the lot pursuant to the automatic membership clause annotated in the Certificate of Title of the property and the Deed of Transfer. PADCOM voluntarily agreed to be bound by and respect the condition, and thus to join the Association. Having ruled that PADCOM is a member of the Association, it is obligated to pay its dues incidental thereto as mandated by Article 1159 of the Civil Code which states that “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith”. Assuming in gratis argumenti that PADCOM is not a member of the Association, it cannot evade payment without violating the equitable principles underlying quasi-contracts. Article 2142 of the Civil Code provides that “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”. Petition denied.

Southern Philippines Power Corp. v. Commissioner of Internal Revenue G.R.No. 179632, October 19, 2011 ABAD, J.: Leigh Taritz C. Ganancial Facts Petitioner Southern Philippines Power Corporation (SPP), a power company that generates and sells electricity to the National Power Corporation (NPC), applied with the Bureau of Internal Revenue (BIR) for zero-rating of its transactions under Section 108(B)(3) of the National Internal Revenue Code (NIRC). The BIR approved the application for taxable years 1999 and 2000. SPP filed a claim with Commissioner of Internal Revenue (CIR) for a ₱5,083,371.57 tax credit or refund for 1999 and ₱6,221,078.44 in tax credit or refund for 2000. Before the lapse of the two-year prescriptive period for such actions, SPP filed with the Court of Tax Appeals (CTA) Second Division a petition for review covering its claims for refund or tax credit. The petition claimed only the aggregate amount of ₱8,636,126.75 which covered the last two quarters of 1999 and the four quarters in 2000. The Second Division denied SPP’s claims for refund. On appeal, the CTA En Banc affirmed the Second Division’s decision dated July 31, 2007. The CTA En Banc denied SPP’s motion for reconsideration. Hence, this petition. Issue Whether or not the CTA En Banc correctly ruled that SPP was not entitled to a tax refund or credit. Ruling No. A claim for tax credit or refund, arising out of zero-rated transactions, is essentially based on excess payment. In zero-rating a transaction, the purpose is not to benefit the person legally liable to pay the tax, like SPP, but to relieve exempt entities like NPC which supplies electricity to factories, offices, and homes, from having to shoulder the tax burden that ultimately would be passed to the public. The principle of solutio indebiti should govern this case since the BIR received something that it was not entitled to. Thus, it has to return the same. The government should not use technicalities to hold on to money that does not belong to it. Only a preponderance of evidence is needed to grant a claim for tax refund based on excess payment. Notably, SPP does no other business except sell the power it produces to NPC, a fact that the CIR did not contest in the parties’ joint stipulation of facts.8 Consequently, the likelihood that SPP would claim input taxes paid on purchases attributed to sales that are not zero-rated is close to nil. Petition granted.

Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. G.R. No. 184823, October 6, 2010 DEL CASTILLO, J.: Leigh Taritz C. Ganancial Facts Respondent Aichi Forging Company of Asia, Inc., a corporation duly organized and existing under the laws of the Republic of the Philippines, is engaged in the manufacturing, producing, and processing of steel and its by-products. It is registered with the Bureau of Internal Revenue (BIR) as a Value-Added Tax (VAT) entity and its products, "close impression die steel forgings" and "tool and dies," are registered with the Board of Investments (BOI) as a pioneer status. On September 30, 2004, respondent filed a claim for refund/credit of input VAT for the period July 1, 2002 to September 30, 2002 in the total amount of ₱3,891,123.82 with the petitioner Commissioner of Internal Revenue (CIR), through the Department of Finance (DOF) One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center. Respondent filed a Petition for Review with the CTA for the refund/credit of the same input VAT. The Second Division of the CTA rendered a Decision partially granting respondent’s claim for refund/credit. Motion for reconsideration was denied, thus, petitioner elevated the matter to the CTA En Banc via a Petition for Review. CTA En Banc affirmed the Second Division’s Decision allowing the partial tax refund/credit in favor of respondent. Hence, this petition. Issue Whether or nor respondent’s judicial and administrative claims for tax refund/credit were filed within the two-year prescriptive period, thus is entitled to it Ruling No. A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return of taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only his entitlement to a refund but also his compliance with the procedural due process as non-observance of the prescriptive periods within which to file the administrative and the judicial claims would result in the denial of his claim. Section 112 (A) of the NIRC provides in no uncertain terms that unutilized input VAT payments not otherwise used for any internal revenue tax due the taxpayer must be claimed within two years reckoned from the close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said tax was paid or not. Prescriptive period commences from the close of the taxable quarter when the sales were made and not from the time the input VAT was paid nor from the time the official receipt was issued. Thus, when a zero-rated VAT taxpayer pays its input VAT a year after the pertinent transaction, said taxpayer only has a year to file a claim for refund or tax credit of the unutilized creditable input VAT. Consequently, claim for refund or tax credit filed had already prescribed. Petition granted.

Moreño-Lentfer v. Wolff G.R. No. 152317 November 10, 2004 QUISUMBING, J.: Leigh Taritz C. Ganancial Facts On March 6, 1992, Petitioners with respondent, engaged the notarial services of Atty. Rodrigo C. Dimayacyac for: (1) the sale of a beach house owned by petitioner Cross in Sabang, Puerto Galera, Oriental Mindoro, and (2) the assignment of Cross' contract of lease on the land where the house stood. The sale of the beach house and the assignment of the lease right would be in the name of petitioner Victoria Moreño-Lentfer, but the total consideration of 220,000 Deutschmarks (DM) would be paid by respondent Hans Jurgen Wolff. A promissory note was executed by said respondent in favor of petitioner Cross. According to respondent, the Lentfer spouses were his confidants who held in trust for him, a time deposit account in the amount of DM 200,000 at Solid Bank Corporation. Apprised of his interest to own a house along a beach, the Lentfer urged him to buy petitioner Cross' beach house and lease rights in Puerto Galera. Respondent agreed and through a bank-to-bank transaction, he paid Cross the amount of DM 221,700 as total consideration for the sale and assignment of the lease rights. However, Cross, Moreño-Lentfer and Atty. Dimayacyac surreptitiously executed a deed of sale whereby the beach house was made to appear as sold to Moreño-Lentfer for only P100,000. Upon learning of this, respondent filed a Complaint for annulment of sale and reconveyance of property with damages and prayer for a writ of attachment. Trial court dismissed the complaint for failure to establish a cause of action. On appeal, the appellate court reversed the decision of the trial court. Hence, this petition. Issue Whether or not the principle of solutio indebiti, the principle of justice and equity, apply in the case at bar Ruling Yes. The quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich himself unjustly at the expense of another. It applies where (1) a payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the payment, and (2) the payment is made through mistake, and not through liberality or some other cause. In the instant case, the payment was clearly a mistake. Since Moreño-Lentfer received something when there was no right to demand it, she had an obligation to return it. We are convinced petitioner had been unjustly enriched at the expense of respondent. She acquired the properties through deceit, fraud and abuse of confidence. The principle of justice and equity does not work in her favor but in favor of respondent Wolff. Whatever she may have received by mistake from and at the expense of respondent should thus be returned to the latter, if the demands of justice are to be served. Petition denied.

Genova v. De Castro G.R. No. 132076 July 22, 2003 YNARES-SANTIAGO, J.: Leigh Taritz C. Ganancial Facts Petitioner, ventured into the business of movie production, was the owner of a parcel of land. In order to finance his film project, he obtained a loan from respondent Levita de Castro for P1,000,000.00 with interest of 5% per annum. By way of security and as required, petitioner turned over his owner’s duplicate certificate of title and signed blank sheets of paper with the understanding that their Deed of Mortgage will be printed thereon. Meanwhile, petitioner remained in possession of the property. It appears that previously, petitioner had obtained a loan from the United Coconut Planters Bank secured by a real estate mortgage over the subject property. He defaulted in the payment of his obligations, whereupon the bank caused the extrajudicial foreclosure of the mortgage and purchased the property as the highest bidder at the sale at public auction. Subsequently, respondent redeemed the property from UCPB. It turned out that instead of printing a Deed of Mortgage on the blank sheets of paper which petitioner had earlier signed, respondent caused to be printed thereon an "Absolute Deed of Sale of a Registered Land" in her favor. Metropolitan Trial Court ruled in favor of the respondent. Regional Trial Court reversed which was reversed again by the Court of Appeals. Hence, the instant petition arguing that the payments he has made to respondent must be returned based on the principle of solutio indebiti under Article 2154 of the Civil Code. Issue Whether or not payments he has made to respondent must be returned based on the principle of solutio indebiti under Article 2154 of the Civil Code Ruling No. There is solutio indebiti where: (1) payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the payment; and (2) the payment is made through mistake, and not through liberality or some other cause. Article 2154 of the Civil Code provides: 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. The first element of quasi-contract solutio indebiti is lacking. There can be no mistaken payment in this case because petitioner made payments pursuant to an agreement to repurchase the property. Hence, the principle of solutio indebiti finds no application in this case. This notwithstanding, petitioner is entitled to a refund of what he had paid based on equitable grounds. We find it iniquitous for the respondent to forfeit both petitioner’s land and hard-earned money. Petition partly granted.

Titan-Ikeda Construction & Development Corporation v. Primetown Property Group, Inc. G.R. No. 158768 February 12, 2008 CORONA, J.: Leigh Taritz C. Ganancial Facts The respondent Primetown Property Corporation entered into contract with the petitioner Titan-Ikeda Construction Corporation for the structural works of a 32-storey prime tower. After the construction of the tower, respondent again awarded to the petitioner the amount of P 130,000,000.00 for the tower’s architectural design and structure. However, in 1994, the respondent entered into a contract of sale of the tower in favor of the petitioner in a manner called full-swapping. Since the respondent had allegedly constructed almost one third of the project as well as selling some units to third persons unknown to the petitioner. Integrated Inc. took over the project, thus the petitioner is demanding for the return of its advanced payment in the amount of P2, 000,000.00 as well as the keys of the unit. Respondent filed a complaint for collection of sum of money against petitioner. Regional Trial Court ruled in favor of herein petitioners and ordered the payment of damages. Court of Appeals reversed the lower court decision. Petitioner moved for reconsideration but it was denied. Hence, this petition. Issue Whether or not the petitioner is entitled to damages Ruling No. A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Since, in a contract it is necessarily that there is a meeting of the minds of the parties in which this will be the binding law upon them. Thus, in a reciprocal obligation, both parties are obliged to perform their obligation simultaneously and in good faith. In this case, petitioner, Titan-Ikeda Construction cannot recover damages because it was found out there was no solutio indebiti or mistake in payment in this case since the latter is just entitled to the actual services it rendered to the respondent and thus it is ordered to return the condominium units to the respondent. Petition granted.

Traders Royal Bank Employees Union-Independent v. NLRC G.R. No. 120592 March 14, 1997 REGALADO, J.: Leigh Taritz C. Ganancial Facts Petitioner Traders Royal Bank Employees Union and private respondent Atty. Emmanuel Noel A. Cruz, entered into a retainer agreement on February 26, 1987 whereby the former obligated itself to pay the latter a monthly retainer fee of P3,000.00 in consideration of the law firm's undertaking to render the services enumerated in their contract. During the existence of that agreement, petitioner union referred to private respondent the claims of its members for holiday, mid-year and year-end bonuses against their employer, Traders Royal Bank (TRB). A complaint was filed by private respondent before the National Labor Relations Commission (NLRC). The NLRC ruled in favor of the employees. Pending the hearing of the application for the writ of execution, TRB challenged the decision of the NLRC before the Supreme Court. The decision deleted the mid- and end-year bonuses. Upon receipt of the decision, private respondent filed a motion before Labor Arbiter Lorenzo for the determination of his attorney's fees, praying that ten percent (10%) of the total award for holiday pay differential computed by TRB at P175,794.32, or the amount of P17,579.43, be declared as his attorney's fees, and that petitioner union be ordered to pay and remit said amount to him. Consequently, the union is ordered to pay the attorney’s fees. NLRC affirmed the decision. Motion for reconsideration was denied. Hence, this petition. Issue Whether or not the petitioner is obliged to pay for attorney’s fees Ruling Yes. The fact that petitioner and private respondent failed to reach a meeting of the minds with regard to the payment of professional fees for special services will not absolve the former of civil liability for the corresponding remuneration therefor in favor of the latter. Obligations do not emanate only from contracts. 31 One of the sources of extra-contractual obligations found in our Civil Code is the quasi-contract premised on the Roman maxim that nemo cum alterius detrimento locupletari protest. As embodied in our law, 32 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. A quasi-contract between the parties in the case at bar arose from private respondent's lawful, voluntary and unilateral prosecution of petitioner's cause without awaiting the latter's consent and approval. Petitioner cannot deny that it did benefit from private respondent's efforts as the law firm was able to obtain an award of holiday pay differential in favor of the union. It cannot even hide behind the cloak of the monthly retainer of P3,000.00 paid to private respondent because, as demonstrated earlier, private respondent's actual rendition of legal services is not compensable merely by said amount. Petition denied.

Philippine National Bank v. Court of Appeals G.R. No. 97995 January 21, 1993 ROMERO, J.: Leigh Taritz C. Ganancial Facts Private Respondent B.P. Mata & Co. Inc., acted as a manning agent for several foreign firms, one of which is Star Kist Foods, Inc. As part of their agreement, Mata makes advances for the crew's medical expenses, National Seaman's Board fees, Seaman's Welfare fund, and standby fees and for the crew's basic personal needs. Subsequently, Mata sends monthly billings to its foreign principal Star Kist, which in turn reimburses Mata by sending a telegraphic transfer through banks for credit to the latter's account. Security Pacific National Bank (SEPAC) of Los Angeles transmitted a cable message to the International Department of PNB to pay the amount of US$14,000 to Mata by crediting the latter's account with the Insular Bank of Asia and America (IBAA), per order of Star Kist. Six years later, PNB requested Mata for refund of US$14,000 (P97,878.60) after it discovered it error in effecting the payment. PNB filed a civil case for collection and refund of US$14,000 against Mata arguing that based on a constructive trust under Article 1456 of the Civil Code, it has a right to recover the said amount it erroneously credited to respondent Mata. The Regional Trial Court dismissed the complaint ruling squarely under Article 2154 on solutio indebiti and not under Article 1456 on constructive trust. Appellate Court affirmed. Consequently, recipient is duty bound to return the amount paid by mistake. But the appellate court concluded that petitioner's demand for the return of US$14,000 cannot prosper because its cause of action had already prescribed. Hence, this appeal. Issue Whether or not petitioner may still claim the US$14,000 it erroneously paid private respondent under a constructive trust Ruling No. The case fulfills the requisites of solutio indebiti as under Article 2154 that something (in this case money) has been received when there was no right to demand it and (2) the same was unduly delivered through mistake. There is a presumption 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." However, while petitioner may avail of an action to enforce a constructive trust or the quasi-contract of solutio indebiti, it has been deprived of a choice, for prescription has effectively blocked quasi-contract as an alternative, leaving only constructive trust as the feasible option. But petitioner's claim cannot prosper since it is already barred by laches. It is a well-settled rule now that an action to enforce an implied trust, whether resulting or constructive, may be barred not only by prescription but also by laches. Petition denied.

Commissioner of Internal Revenue v. Acesite (Philippines) Hotel Corporation G.R. No. 147295 February 16, 2007 VELASCO, JR., J.: Leigh Taritz C. Ganancial Facts Acesite is the owner and operator of the Holiday Inn Manila Pavilion Hotel. It leases 6,768.53 square meters of the hotel’s premises to the Philippine Amusement and Gaming Corporation for casino operations. For the period January 96 to April 1997, Acesite incurred VAT amounting to P30,152,892.02 from its rental income and sale of food and beverages to PAGCOR. Acesite tried to shift the said taxes to PAGCOR by incorporating it in the amount assessed to PAGCOR but the latter refused to pay the taxes on account of its tax-exempt status. Thus, PAGCOR paid the amount due to Acesite minus the P30,152,892.02 VAT while the latter paid the VAT to the Commissioner of Internal Revenue as it feared the legal consequences of non-payment of the tax. However, Acesite belatedly arrived at the conclusion that its transaction with PAGCOR was subject to zero rate as it was rendered to a tax-exempt entity. Acesite filed an administrative claim for refund with the CIR but the latter failed to resolve the same. Thus, Acesite filed a petition with the Court of Tax Appeals which granted the refund. On appeal, decision was affirmed. Hence, this petition. Issue Whether or not the Court of Appeals erred in granting the refund Ruling No. Tax refunds are based on the principle of quasi-contract or solutio indebiti and the pertinent laws governing this principle are found in Arts. 2142 and 2154 of the Civil Code, which provide, thus: Art. 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. Art. 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. When money is paid to another under the influence of a mistake of fact, that is to say, on the mistaken supposition of the existence of a specific fact, where it would not have been known that the fact was otherwise, it may be recovered. The ground upon which the right of recovery rests is that money paid through misapprehension of facts belongs in equity and in good conscience to the person who paid it. Enshrined in the basic legal principles is the time-honored doctrine that no person shall unjustly enrich himself at the expense of another. It goes without saying that the Government is not exempted from the application of this doctrine. Petition denied.

Locsin v. Mekeni G.R. No. 192105 December 9, 2013 DEL CASTILLO, J.: Leigh Taritz C. Ganancial Facts In February 2004, respondent Mekeni Food Corporation offered petitioner Antonio Locsin II the position of Regional Sales Manager to oversee Mekeni’s National Capital Region Supermarket/Food Service and South Luzon operations. His employment includes a car plan where 50% be paid by the company and 50% be deducted monthly to his salary at amount of ₱5,000.00. Consistently, Mekeni furnished petitioner with a used Honda Civic car valued at ₱280,000.00. On his resignation, a total of ₱112,500.00 had been deducted from his monthly salary and applied as part of the employee’s share in the car plan. Petitioner made an offer to purchase his service vehicle by paying the outstanding balance thereon. But they did not agree, thus, petitioner had to returned the vehicle to Mekeni. Petitioner filed against Mekeni a Complaint for the recovery of monetary claims consisting of unpaid salaries, commissions, sick/vacation leave benefits, and recovery of monthly salary deductions which were earmarked for his cost-sharing in the car plan. Labor Arbiter direct respondents to turn-over to complainant the subject vehicle upon the said complainant’s payment to them of the sum of ₱100,435.84.The NLRC reversed and held that petitioner’s amortization payments on his service vehicle amounting to ₱112,500.00 should be reimbursed; if not, unjust enrichment would result, as the vehicle remained in the possession and ownership of Mekeni. Court of appeals reversed the grant of reimbursement of the share ₱112,500.00. Hence, this appeal.

Issue Whether or not reimbursement is proper Ruling Yes. It is unfair to deny petitioner a refund of all his contributions to the car plan. There is unjust enrichment ''when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience." The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense of another. Conversely, petitioner cannot recover the monetary value of Mekeni’s counterpart contribution to the cost of the vehicle; that is not property or money that belongs to him, nor was it intended to be given to him in lieu of the car plan. In other words, Mekeni’s share of the vehicle’s cost was not part of petitioner’s compensation package. To start with, the vehicle is an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to refund petitioner’s payments, so should petitioner not be awarded the value of Mekeni’s counterpart contribution to the car plan, as this would unjustly enrich him at Mekeni’s expense. Petition partly granted

Flores v. Lindo G.R. No. 183984 April 13, 2011 CARPIO, J.: Leigh Taritz C. Ganancial Facts On 31 October 1995, Edna Lindo obtained a loan from Arturo Flores amounting to ₱400,000 payable on 1 December 1995 with 3% compounded monthly interest and 3% surcharge in case of late payment. To secure the loan, Edna executed a Deed of Real Estate Mortgage covering a property in her name and her husband Enrico Jr. Edna also signed a Promissory Note and the Deed for herself and for Enrico as his attorney-in-fact. Edna issued three checks as partial payments for the loan. All checks were dishonored for insufficiency of funds, prompting petitioner to file a Complaint for Foreclosure of Mortgage with Damages against respondents. The trial court ruled that petitioner was not entitled to judicial foreclosure of the mortgage. Petitioner filed a Complaint for Sum of Money with Damages against respondents. Respondents, in their Answer, admitted the loan but stated that it only amounted to ₱340,000 and that Enrico was not a party to the loan because it was contracted by Edna without Enrico’s signature. Motion to dismiss was denied. On appeal, the Court of Appeals set aside the decision denying the motion to dismiss. Court of Appeals dismissed the complaint for collection of sum of money on the ground of multiplicity of suits. Petitioner filed a motion for reconsideration but was denied. Hence, this petition. Issue Whether or not the Court of Appeals committed a reversible error in dismissing the complaint for collection of sum of money on the ground of multiplicity of suits. Ruling Yes. There is unjust enrichment "when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience." The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense of another. The main objective of the principle against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or consideration. The principle is applicable in this case considering that Edna admitted obtaining a loan from petitioners, and the same has not been fully paid without just cause. Considering the circumstances of this case, the principle against unjust enrichment, being a substantive law, should prevail over the procedural rule on multiplicity of suits. The Court of Appeals, in the assailed decision, found that Edna admitted the loan, except that she claimed it only amounted to ₱340,000. Edna should not be allowed to unjustly enrich herself because of the erroneous decisions of the two trial courts when she questioned the validity of the Deed. Petition granted.

Cruz v. J. M. Tuason & Company, Inc. G.R. No. L-23749 April 29, 1977 BARREDO, J.: Leigh Taritz C. Ganancial Facts Plaintiff, Faustino Cruz, filed a complaint contains two (2) causes of action — the first being an action for sum of money in the amount of P7,781.74 representing actual expenses and P38,400.00 as reasonable compensation for services in improving the 50 quinones now in the possession of defendants. The second cause of action deals with the 3,000 sq. ms. which defendants have agreed to transfer into Plaintiff for services rendered in effecting the compromise between the Deudors and defendants. Thereby, alleging appellees are being benefited by said improvements, he is entitled to reimbursement. The Court of First instance dismissed the complaint of appellant Cruz for the recovery of improvements he has made on appellees' land and to compel appellees to convey to him 3,000 square meters of land on three grounds: (1) failure of the complaint to state a cause of action; (2) the cause of action of plaintiff is unenforceable under the Statute of Frauds; and (3) the action of the plaintiff has already prescribed. Hence, this appeal. Issue Whether or not the defendants should reimburse the plaintiff Ruling Yes. Article 2142. Certain lawful voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shill be unjustly enriched or benefited at the expense of another. Article 2142 deals with quasi-contracts or situations where there is no contract between the parties to the action. Further, as we can readily see from the title thereof, that the same bears the designation 'extra contractual obligations' or obligations which do not arise from contracts. While it is true that there was no agreement between plaintiff and defendants herein for the improvement of the 50 quinones since the latter are presently enjoying and utilizing the benefits brought about through plaintiff's labor and expenses, defendants should pay and reimburse him therefor under the principle that 'no one may enrich himself at the expense of another.' in this posture, the complaint states a cause of action against the defendants. Petition granted.

People v. Bayotas G.R. No. 102007 September 2, 1994 ROMERO, J.: Leigh Taritz C. Ganancial Facts Rogelio Bayotas was charged with rape and eventually convicted. Pending appeal of his conviction, Bayotas died. Consequently, the Supreme Court dismissed the criminal aspect of the appeal. The Solicitor General, in its comment, expressed his view that the death of the accused did not extinguish his civil liability as a result of his commission of the offense charged. The Solicitor General insists that the appeal should still be resolved for the purpose of reviewing his conviction by the lower court on which the civil liability is based. Counsel of the accused, on the other hand, opposed the view of the Solicitor General arguing that the death of the accused while pending appeal extinguishes both his criminal and civil penalties. In support of his position, said counsel invoked the ruling of the Court of Appeals in People v. Castillo and Ocfemia which held that the criminal liability in a criminal case takes root in the criminal liability; and therefore, civil liability is extinguished if accused should die before final judgment is rendered. Issue Whether or not the death of the accused pending appeal of his conviction extinguish his civil liability Ruling Yes. The Court resolved this issue stating Article 89 of the Revised Penal Code which states that criminal liability is totally extinguished by the death of the convict. As to the personal penalties and as to the pecuniary penalties, liability therefore is extinguished only when the death of the offender occurs before final judgment. Since the death of the accused occurred while his appeal is pending, the decision has not yet become final and executory; thus, his civil liability together with his criminal liability is extinguished. However, if the civil obligation arises from other sources of obligation other than the crime complained of, the civil liability of the accused survived in spite of his death pending his appeal. A preponderance of evidence is sufficient to prove his civil liability. Petition denied.

People v. Go G.R. No. 168539 March 25, 2014 PERALTA, J.: Leigh Taritz C. Ganancial Facts Ma. Cecilia L. Pesayco filed a complaint with the Office of the Ombudsman against several individuals for alleged violation of R.A. 3019. Among those charged was herein respondent, who was then the Chairman and President of PIATCO, for having supposedly conspired with then DOTC Secretary Arturo Enrile (Secretary Enrile) in entering into a contract which is grossly and manifestly disadvantageous to the government. The Office of the Deputy Ombudsman for Luzon found probable cause to indict herein respondent for violation of Section 3(g) of R.A. 3019. While there was likewise a finding of probable cause against Secretary Enrile, he was no longer indicted because he died prior to the issuance of the resolution finding probable cause. Acting on the Motion to Quash filed by accused Go and that the lone accused is a private person and his alleged co-conspirator-public official was already deceased long before this case was filed in court, for lack of jurisdiction over the person of the accused, the Court grants the Motion to Quash and the Information filed in this case is hereby ordered quashed and dismissed. Hence, the instant petition Issue Whether or not the Court of Appeals erred in quashing and dismissing the complaint Ruling Yes. It is true that by reason of Secretary Enrile's death, there is no longer any public officer with whom respondent can be charged for violation of R.A. 3019. It does not mean, however, that the allegation of conspiracy between them can no longer be proved or that their alleged conspiracy is already expunged. The only thing extinguished by the death of Secretary Enrile is his criminal liability. His death did not extinguish the crime nor did it remove the basis of the charge of conspiracy between him and private respondent. As a recapitulation, it would not be amiss to point out that the instant case involves a contract entered into by public officers representing the government. The SB is a special criminal court which has exclusive original jurisdiction in all cases involving violations of R.A. 3019 committed by person enumerated therein. This includes private individuals who are charged as coprincipals, accomplices or accessories with the said public officers. In the instant case, respondent is being charged for violation of Section 3(g) of R.A. 3019, in conspiracy with then Secretary Enrile. Ideally, under the law, both respondent and Secretary Enrile should have been charged before and tried jointly by the Sandiganbayan. However, by reason of the death of the latter, this can no longer be done. Nonetheless, for reasons already discussed, it does not follow that the SB is already divested of its jurisdiction over the person of and the case involving herein respondent. Petition granted

L.G. Foods Corporation v. Pagapong-Agraviador G.R. No. 158995 September 26, 2006 GARCIA, J.: Leigh Taritz C. Ganancial Facts On February 26, 1996, Charles Vallereja, a 7-year old son of the spouses Vallejera, was hit by a Ford Fiera van owned by the petitioners and driven at the time by their employee, Vincent Norman Yeneza y Ferrer. Charles died as a result of the accident. An Information for Reckless Imprudence Resulting to Homicide was filed against the driver. Unfortunately, before the trial could be concluded, the accused driver committed suicide. On account, Trial court dismissed the case. Spouses Vallejera filed a complaint for damages against the petitioners as employers of the deceased driver, basically alleging that as such employers, they failed to exercise due diligence in the selection and supervision of their employees. Petitioners denied liability, claiming that they had exercised the required due diligence in the selection and supervision of their employees, including the deceased driver. The trial court denied the motion to dismiss and motion for reconsideration. On appeal, the Court of Appeals denied the petition and upheld the trial court. Hence, the petitioners' present recourse citing Maniago v. CA as defense that it should have been dismissed for failure of the respondent spouses to make a reservation to institute a separate civil action for damages when the criminal case against the driver was filed. Issue Whether or not the Civil action for damages will prosper Ruling Yes. Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not conditioned upon prior recourse against the negligent employee and a prior showing of insolvency of such employee. Petitioners' reliance on Maniago is obviously misplaced. There, the civil case was filed while the criminal case against the employee was still pending. Here, the criminal case against the employee driver was prematurely terminated due to his death. Precisely, Civil Case was filed by the respondent spouses because no remedy can be obtained by them against the petitioners with the dismissal of the criminal case against their driver during the pendency thereof. The circumstance that no reservation to institute a separate civil action for damages was made when the criminal case was filed is of no moment for the simple reason that the criminal case was dismissed without any pronouncement having been made therein. In reality, therefor, it is as if there was no criminal case to speak of in the first place. And for the petitioners to insist for the conviction of their driver as a condition sine qua non to hold them liable for damages is to ask for the impossible. Petition denied.

People v. Nurfrashir Hashim G.R. No. 194255 June 13, 2012 SERENO, J.: Leigh Taritz C. Ganancial Facts Bernadette Pansacala and Nurfrasir Hashim y Saraban, without having previously obtained from the Philippine Overseas Employment Administration, license or authority to engage in the recruitment and deployment of overseas workers, did then and there willfully, unlawfully and feloniously, illegally recruit for a promised employment in Brunei and Malaysia, thus causing and prompting the persons of BBB and AAA to apply which employment however did not materialize because in truth and in fact, the promised employment is nonexistent, in flagrant violation of the above-mentioned law and causing damage and prejudice to said complainants. Subsequently, BBB, AAA, CCC, went abroad but become sex workers or prostitutes. Consequently, Pansacala and Nurfrasir Hashim were arrested, charged and convicted by the Trial Court of the crime of illegal recruitment. Payment of damages were likewise ordered. On appeal, the CA affirmed the findings of trial court however, reduced the award of damages. Issue Whether or not the accused were liable for damages Ruling Yes. Art. 2219, New Civil Code provides: Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasidelicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The criminal case of Trafficking in Persons as a Prostitute is an analogous case to the crimes of seduction, abduction, rape, or other lascivious acts. In fact, it is worse. To be trafficked as a prostitute without one’s consent and to be sexually violated four to five times a day by different strangers is horrendous and atrocious. There is no doubt that Lolita experienced physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, and social humiliation when she was trafficked as a prostitute in Malaysia. Since the crime of Trafficking in Persons was aggravated, being committed by a syndicate, the award of exemplary damages is likewise justified. Petition granted.

Abellana v. People G.R. No. 174654 August 17, 2011 Ponente Leigh Taritz C. Ganancial Facts In 1985, petitioner Felixberto A. Abellana extended a loan to private respondents spouses Alonto, secured by a Deed of Real Estate Mortgage. Subsequently, or in 1987, petitioner prepared a Deed of Absolute Sale conveying said lots to him. The Deed of Absolute Sale was signed by spouses Alonto in Manila. However, it was notarized in Cebu City allegedly without the spouses Alonto appearing before the notary public. Thereafter, petitioner caused the transfer of the titles to his name and sold the lots to third persons. Respondent spouses filed a complaint charging petitioner with Estafa through Falsification of Public Document. The Regional Trial Court convicted the petitioner of Falsication of Public Document. On appeal, the appellate court held that petitioner who was charged with and arraigned for estafa through falsification of public document under Article 171(1) of the RPC could not be convicted of Falsification of Public Document by a Private Individual under Article 172(1) in relation to Article 171(2). Thus, the Court of appeals reversed the conviction. Nonetheless, the civil liability was affirmed. Issue Whether or not petitioner could still be held civilly liable notwithstanding his acquittal. Ruling No. In criminal procedure a judgment of acquittal shall state whether the evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to prove his guilt beyond reasonable doubt. The "extinction of the penal action does not carry with it the extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil liability might arise did not exist." Civil liability arises when one, by reason of his own act or omission, done intentionally or negligently, causes damage to another. Hence, for petitioner to be civilly liable, it must be proven that the acts he committed had caused damage to the spouses. Based on the records of the case, we find that the acts allegedly committed by the petitioner did not cause any damage. Even assuming that the spouses Alonto did not personally appear before the notary public, the same does not necessarily nullify or render void ab initio the parties' transaction. Since the defective notarization does not ipso facto invalidate the Deed of Absolute Sale, the transfer of said properties from spouses Alonto to petitioner remains valid. Hence, when on the basis of said Deed of Absolute Sale, petitioner caused the cancellation of spouses Alonto's title and the issuance of new ones under his name, and thereafter sold the same to third persons, no damage resulted to the spouses Alonto. Petition granted.

Andamo v. Intermediate Appellate Court G.R. No. 74761 (191 SCRA 195) November 6, 1990 FERNAN, C.J.: Leigh Taritz C. Ganancial Facts Petitioner spouses Andamo are the owners of a parcel of land which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a religious corporation. Within the land of respondent corporation, water paths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioners' land, caused a young man to drown, damaged petitioners' crops and plants, washed away costly fences, endangered the lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction. Petitioners instituted a criminal action against officers and directors of herein respondent corporation, for destruction by means of inundation under Article 324 of the Revised Penal Code and another action for damages. Resolving respondent corporation's motion to dismiss, the trial court dismissed Civil Case for lack of jurisdiction, as the criminal case which was instituted ahead of the civil case was still unresolved. Respondent Appellate Court, First Civil Cases Division, promulgated a decision affirming the questioned order of the trial court. A motion for reconsideration filed by petitioners was denied by the Appellate Court. Hence, this appeal. Issue Whether or not a corporation, which has built through its agents, water paths, water conductors and contrivances within its land, thereby causing inundation and damage to an adjacent land, can be held civilly liable for damages under Articles 2176 and 2177 of the Civil Code on quasi-delicts such that the resulting civil case can proceed independently of the criminal case Ruling Yes. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. Clearly, the water paths and contrivances are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of building these water paths and the damage sustained by petitioners. While the property involved belonged to the public domain and the property is privately owned, the fact remains that petitioners' complaint sufficiently alleges that petitioners have sustained and will continue to sustain damage due to the water paths and contrivances built. Indeed, the recitals of the complaint, the alleged presence of damage to the petitioners, the act or omission of respondent corporation supposedly constituting fault or negligence, and the causal connection between the act and the damage, with no pre-existing contractual obligation between the parties make a clear case of a quasidelict or culpa aquiliana. Petition granted.

Barredo v. Garcia G.R. No. L-48006 (73 Phil 607) July 8, 1942 BOCOBO, J.: Leigh Taritz C. Ganancial Facts May 3, 1936, there was a head-on collision between a taxi of the Malate Taxicab driven by Pedro Fontanilla and a carretela guided by Pedro Dimapilis. The carretela was overturned, and one of its passengers, 16-year-old Faustino Garcia, suffered injuries from which he died two days later. Fontanilla was convicted. A separate civil action was reserved. Severino Garcia and Timotea Almario, parents of the deceased, brought the action against Fausto Barredo as the sole proprietor of the Malate Taxicab and employer of Pedro Fontanilla. The Court of First Instance of Manila awarded damages in favor of the plaintiffs. On appeal, the main theory of the defense is that the liability of Fausto Barredo is governed by the Revised Penal Code; hence, his liability is only subsidiary, as there has been no civil action against Pedro Fontanilla, the person criminally liable, Barredo cannot be held responsible in this case. The Court of Appeals expressed that the liability sought to be imposed against Fausto Barredo is not a civil obligation arising from a felony or a misdemeanor, but an obligation imposed in Article 1903 of the Civil Code by reason of his negligence in the selection or supervision of his servant or employee. Issue Whether or not the plaintiffs may bring this separate civil action against Fausto Barredo, thus making him primary and directly responsible under Article 1903 of the Civil Code as the employer of Pedro Fontanilla. Ruling Yes. A quasi-delict or culpa aquiliana is a separate and distinct legal institution under the Civil Code with substantivity of its own, and individuality that is entirely apart and independent from a delict or crime. Upon this principle, the primary and direct responsibility of employers may be safely anchored. To hold that there is only one way to make the employer’s liability effective, and that is, to sue the driver and exhaust his properties is tantamount to compelling the plaintiff to follow a devious and cumbersome method of obtaining relief. True, there is such a remedy under our laws, but there is also an expeditious way, which is based on the primary and direct responsibility of the employer under Article 1903 of the Civil Code. At this juncture, it should be said that the primary and direct responsibility of employers and presumed negligence are principles calculated to protect society. Workmen and employees should be carefully chosen and supervised in order to avoid injury to the public. It is the masters or employers who principally reap the profits resulting from the services of their servants. It is but right that they should guarantee the latter’s careful conduct for the personnel and patrimonial safety of the others. Hence, the petitioner is liable. Petition denied.

Del Carmen, Jr. v. Geronimo Bacoy G.R. No. 173870 April 25, 2012 DEL CASTILLO, J.: Leigh Taritz C. Ganancial Facts Emilia Bacoy Monsalud, Leonardo Monsalud, Sr. and Glenda Monsalud, were on their way home from a Christmas party they attended. On their way, they were run over by a Fuso passenger jeep driven by Allan Maglasang. The jeep was registered in the name of petitioner Oscar del Carmen, Jr. Allan was found guilty of Reckless Imprudence Resulting in Multiple Homicide. During the pendency of said criminal case, Emilia’s father, Geronimo Bacoy filed an independent civil action for damages based on culpa aquiliana against herein petitioners on behalf of the children. Defendants refused to assume civil liability for the victims’ deaths. Oscar Sr. averred that the Monsaluds have no cause of action against them do not own the jeep and that they were never the employers of Allan. For his part, Oscar Jr. claimed to be a victim himself. He alleged that Allan and his friends stole his jeep while it was parked beside his driver’s rented house to take it for a joyride. Trial Court exculpated the spouses del Carmen from civil liability for insufficiency of evidence. However, their son Oscar Jr. was held civilly liable in a subsidiary capacity. Motion for reconsideration was affirmed absolving Oscar Jr. On Geronimo’s appeal, the Court of Appeals pronounce Oscar Del Carmen, Jr. and Allan Maglasang primarily liable, jointly and severally, to pay the plaintiffs. Hence, this petition.

Issue Whether or not petitioner, Oscar Jr. is liable for damages Ruling Yes. Absent the circumstance of unauthorized use or that the subject vehicle was stolen which are valid defenses available to a registered owner, Oscar Jr. cannot escape liability for quasi-delict resulting from his jeep’s use. Under the doctrine of res ipsa loquitur, "where the thing that caused the injury complained of is shown to be under the management of the defendant or his servants; and the accident, in the ordinary course of things, would not happen if those who had management or control used proper care, it affords reasonable evidence – in the absence of a sufficient, reasonable and logical explanation by defendant – that the accident arose from or was caused by the defendant’s want of care." Negligence is presumed under the doctrine of res ipsa loquitur. The doctrine is based partly on "the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it while the plaintiff has no such knowledge, and is therefore compelled to allege negligence in general terms." Oscar Jr. hence, being negligent is liable. Petition denied.

Philippine Hawk Corporation v. Lee G.R. No. 166869 February 16, 2010 PERALTA, J.: Leigh Taritz C. Ganancial Facts A vehicular accident resulted to the death Silvino Tan, and physical injuries to Vivian Tan Lee. The accident involved a motorcycle, a passenger jeep, and a bus with Body No. 119. The bus was owned by petitioner Philippine Hawk Corporation, and was then being driven by Margarito Avila. Respondent sought in a petition filed payment of indemnity for the death of Silvino Tan and other damages. Petitioner denied liability for the vehicular accident, alleging that the immediate and proximate cause of the accident was the recklessness or lack of caution of Silvino Tan. Petitioner asserted that it exercised the diligence of a good father of the family in the selection and supervision of its employees, including Margarito Avila. The trial court rendered judgment against petitioner and defendant Margarito Avila, wherein it adjudged guilty of simple negligence. It further held petitioner bus company liable for failing to exercise the diligence of a good father of the family in the selection and supervision of Avila, having failed to sufficiently inculcate in him discipline and correct behavior on the road. The CA affirmed the decision of the trial court. Issue Whether or not petitioner is liable to respondent for damages Ruling Yes. The Court upholds the finding of the trial court and the Court of Appeals that petitioner is liable to respondent, since it failed to exercise the diligence of a good father of the family in the selection and supervision of its bus driver, Margarito Avila, for having failed to sufficiently inculcate in him discipline and correct behavior on the road. Whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption that the employer failed to exercise the due diligence of a good father of the family in the selection or supervision of its employees. To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee. Indeed, petitioner's tests were concentrated on the ability to drive and physical fitness to do so. It also did not know that Avila had been previously involved in sideswiping incidents. Hence, is liable to respondent for damages. Petition denied.

Dy Teban v. Ching G.R. No. 161803 (543 SCRA 560) February 4, 2008 Ponente Leigh Taritz C. Ganancial Facts On July 3, 1995, the prime mover with trailer suffered a tire blowout. The driver, Cresilito Limbaga, under the LIBERTY FOREST, INC., parked the prime mover askew occupying a substantial portion of the national highway. The prime mover was not equipped with triangular, collapsible reflectorized plates, the early warning device required under Letter of Instruction No. 229. As substitute was banana trunk with leaves on the front and the rear portion of the prime mover to warn incoming motorists. At around 4:45 a.m. the next day, Rogelio Ortiz, with helper Romeo Catamora, was driving a Nissan van owned by petitioner Dy Teban Trading, Inc. To avoid hitting the parked prime mover occupying its lane, the incoming Joana Paula bus swerved to the right, onto the lane of the approaching Nissan van. Ortiz saw two bright and glaring headlights and the approaching passenger bus. He pumped his break slowly, swerved to the left to avoid the oncoming bus but the van hit the front of the stationary prime mover. The passenger bus hit the rear of the prime mover. Consequently, was an information for damages. RTC rendered a decision in favor of petitioner Dy Teban Trading, Inc. but was reversed by the appellate court. Hence, the appeal. Issue Whether or not there was negligence on the respondent and thus liable for damages Ruling Yes. The CA erred in absolving private respondents from liability for the vehicular collision. Article 2176 of the Civil Code provides that 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. To sustain a claim based on quasi-delict, the following requisites must concur: (a) damage suffered by plaintiff; (b) fault or negligence of defendant; and (c) connection of cause and effect between the fault or negligence of defendant and the damage incurred by plaintiff. All the elements of quasi delict have been proven by clear and convincing evidence. There was negligence on the part of the respondent when the latter failed to put and used an early warning device because it was found out that there was no early warning device being prescribed by law that was used by the driver in order to warn incoming vehicle. Furthermore, the proximate cause of the accident was due to the position of the trailer where it covered a cemented part of the road, thus confused and made trick way for other vehicles to pass by. Thus, the respondent is declared liable due to violation of road rules and regulations. Petition granted.

Safeguard Security v. Tangco G.R. No. 165732 (511 SCRA 67) December 14, 2006 AUSTRIA-MARTINEZ, J.: Leigh Taritz C. Ganancial Facts On November 3, 1997, Evangeline Tangco went to Ecology Bank to renew her time deposit per advice of the bank's cashier as she would sign a specimen card. Evangeline, a duly licensed firearm holder with corresponding permit to carry the same outside her residence, approached security guard Pajarillo, who was stationed outside the bank, and pulled out her firearm from her bag to deposit the same for safekeeping. Suddenly, Pajarillo shot Evangeline with his service shotgun hitting her in the abdomen instantly causing her death. The heirs of the victim filed a criminal case against security guard and an action against Safeguard Security for failure to observe diligence of a goof father implied upon the act of its agent. The RTC found respondents to be entitled to damages. The Court of Appeals affirmed that Safeguard as employer of Pajarillo to be jointly and severally liable with Pajarillo. Hence, this appeal. Issue Whether Safeguard Security can be held liable for the acts of its agent. Ruling Yes. The law presumes that any injury committed either by fault or omission of an employee reflects the negligence of the employer. In quasi-delicts cases, in order to overcome this presumption, the employer must prove that there was no negligence on his part in the supervision of his employees. It was declared that in the selection of employees and agents, employers are required to examine them as to their qualifications, experience and service records. Thus, due diligence on the supervision and operation of employees includes the formulation of suitable rules and regulations for the guidance of employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his employees. Thus, in this case, Safeguard Security committed negligence in identifying the qualifications and ability of its agents. Hence, liable for damages. Petition denied.

Villanueva v. Domingo G.R. No. 144274 (438 SCRA 485) September 20, 2004 CORONA, J.: Leigh Taritz C. Ganancial Facts In 22 October 1991, a collision was made by a green Mitsubishi lancer registered under the name of Nostradamus Villanueva as owner but was driven by Renato dela Cruz Ocfemia against a silver Mitsubishi lancer driven by Leandro Domingo and owned by petitioner Priscilla Domingo. The incident caused the car of Domingo bumped another two parked vehicles. A charged was filed against Ocfemia and the registered owner Villanueva. Villanueva claimed that he must not be held liable for the incident because he is no longer the owner of the car, that it was already swapped to another car. The trial court ordered the petitioner to pay the damages incurred by the silver Mitsubishi lancer car. The Court of Appeals upheld the trial court’s decision. Issue Whether or not the registered owner of a motor vehicle be held liable for damages arising from a vehicular accident involving his motor vehicle while being operated by the employee of its buyer without the latter’s consent and knowledge Ruling Yes. We have consistently ruled that the registered owner of any vehicle is directly and primarily responsible to the public and third persons while it is being operated. Whether the driver is authorized or not by the actual owner is irrelevant to determining the liability of the registered owner who the law holds primarily and directly responsible for any accident, injury or death caused by the operation of the vehicle in the streets and highways. To require the driver of the vehicle to be authorized by the actual owner before the registered owner can be held accountable is to defeat the very purpose why motor vehicle legislations are enacted in the first place. Under the Motor Vehicle law, it was declared that the registered owner of any vehicle is primary land directly liable for any injury it incurs while it is being operated. Thus, even the petitioner claimed that he was no longer the present owner of the car, still the registry was under his name, thus it is presumed that he still possesses the car and that the damages caused by the car be charge against him being the registered owner. The primary function of Motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle, responsibility therefore can be fixed on a definite individual, the registered owner. Thus, being the registered owner, the petitioner is liable for damages. Petition denied.

Calalas v. CA G.R. No. 122039 May 31, 2000 MENDOZA, J.: Leigh Taritz C. Ganancial Facts Eliza Sunga was a passenger of a jeepney owned and operated by the petitioner Calalas. Private respondent Sunga sat in the rear portion of the jeepney where the conductor gave Sunga an extension seat. When the jeep stopped, Sunga gave way to a passenger going outside the jeep. However, an Isuzu Truck driven by Verene and owned by Salva, accidentally hit Sunga causing the latter to suffer physical injuries where the attending physician ordered three months of rest. Sunga filed an action for damages against the petitioner for breach of contract of common carriage. On the other hand, the petitioner Calalas filed an action against Salva, being the owner of the truck. The lower court rendered judgment against Salva as thirdparty defendant and absolved Calalas of liability. Court of Appeals reversed the decision ruling that the cause is base on contract of carriage, not quasi-delict. Issue Whether the petitioner is liable based on breach of contract of common carriage Ruling Yes. Quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor. Breach of contract or culpa contractual, is premised upon the negligence in the performance of a contractual obligation. In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and it became the duty of petitioner to prove that he had to observe extraordinary diligence in the care of his passengers pursuant to the contract of carriage. Thus, is a case on Culpa Contractual where there were pre-existing obligations and that the fault is incidental to the performance of the obligation. Thus, it was clearly observed that the petitioner has negligence in the conduct of his duty when he allowed Sunga to seat in the rear portion of the jeep which is prone to accident. Therefore, petitioner is liable. Petition denied.

Picart v. Smith G.R. No. L-12219 (37 Phil 813) March 15, 1918 STREET, J.: Leigh Taritz C. Ganancial Facts The plaintiff Picart, riding on his pony was half way across the Carlatan bridge when the defendant Smith approached from the opposite direction in an automobile. As the defendant neared the bridge, he saw a horseman on it and blew his horn to give warning of his approach. The plaintiff saw the automobile coming and heard the warning signals. However, thinking that he has no sufficient time to go to the other side of the road, he pulled the pony closely up against the railing on the right side of the bridge instead of going to the left. The defendant, instead of veering to the right while yet some distance away or slowing down, continued to approach directly toward the horse. When he had gotten quite near, there being then no possibility of the horse getting across to the other side, the defendant quickly turned his car sufficiently to the right to escape hitting the horse alongside of the railing where it as then standing; but in so doing the automobile passed in such close proximity to the animal that it became frightened and turned its body across the bridge with its head toward the railing. In so doing, it was struck on the hock of the left hind leg by the flange of the car and the limb was broken. The horse fell and its rider was thrown off with some violence. As a result of its injuries the horse died. The plaintiff received contusions which caused temporary unconsciousness and required medical attention for several days. The lower court absolved the defendant. Hence, the appeal. Issue Whether or not the defendant is liable of the crime. Ruling Yes. The plaintiff himself was not free from fault, for he was guilty of antecedent negligence in planting himself on the wrong side of the road. But the defendant was also negligent; and in such case the problem always is to discover which agent is immediately and directly responsible. It will be noted that the negligent acts of the two parties were not contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these circumstances the law is that the person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party. When a traveler has reached a point where he cannot extricate himself and vigilance on his part will not avert the injury, his negligence in reaching that position becomes the condition and not the proximate cause of the injury and will not preclude a recovery. Hence, defendant being negligent is liable for damages. Petition granted.

De Leon v. Soriano G.R. No. L-2724 August 24 1950 TUASON, J.: Leigh Taritz C. Ganancial Facts Jose de Leon, Cecilio de Leon and Albina de Leon, petitioners, were natural children of Felix de Leon, deceased, while Asuncion Soriano, respondent, is his widow. In the administration and settlement of the decedent's estate then pending in the Court of First Instance, the said widow, on the one hand, and the natural children, on the other, reached on an agreement, approved by the probate court, whereby the natural children obligated themselves to deliver certain amount of palay to the respondent. The petitioners made deliveries to in total of 3,400 cavanes short of the 5,700 cavanes which should have been delivered. Defendants averred that their failure to pay the exact quantities of palay promised was due to "the Huk troubles in Central Luzon which rendered impossible full compliance with the terms of the agreement;" and it was contended that "inasmuch as the obligations of the defendants to deliver the full amount of the palay is depending upon the produce as this is in the nature of an annuity, . . . the obligations of the defendants have been fully fulfilled by delivering in good faith all that could be possible under the circumstances." The court gave judgment for the plaintiff for 3,400 cavanes of palay or its equivalent in cash, which was found to be 24,900, and legal interest. The judgment was affirmed by the appellate court. Issue Whether or not the petitioners are still obliged to fulfill the obligation Ruling Yes. The alleged Huk troubles in Central Luzon does not excuse them from complying with the obligation. Article 1182 of the Civil Code which was in force at the time agreement in question was entered into, provide that "Any obligation which consists in the delivery of a determinate thing shall be extinguished if such thing should be lost or destroyed without fault on the part of the debtor and before he is in default. Inversely, the obligation is not extinguished if the thing that perishes is indeterminate. Except as to quality and quantity, the first of which is itself generic, the contract sets no bounds or limits to the palay to be paid, nor was there even any stipulation that the cereal was to be the produce of any particular land. Any palay of the quality stipulated regardless of origin on however acquired lawfully would be obligatory on the part of the obligee to receive and would discharge the obligation. It seems therefore plain that the alleged failure of crops through alleged fortuitous cause did not excuse performance. Petition denied.