SHEN MENDOZA

28. Philippine National Bank Vs. Spouses Cheah Chee Chong and Ofelia Camacho
Cheah/Spouses Cheah Chee Chong and Ofelia Camacho Chea Vs. Philippine National Bank,
G.R. Nos. 170865/G.R. No. 170892. April 25, 2012,
NOTE: to be follow

29. GALILEO A. MAGLASANG, doing business under the name GL Enterprises, Petitioner, vs.
NORTHWESTERN INC., UNIVERSITY, Respondent. G.R. No. 188986, March 20, 2013

FACTS:
In compliance with the CHED’s requirement before a school could offer maritime transp
ortationprograms, on June 10, 2004, Northwestern University (Northwestern), respondent, engag
ed theservices of GL enterprises, petitioner, to install a new Integrated Bridge System or IBS.
Theparties executed two contracts.Two months after the execution of the contracts, GL E
nterprises started delivering materials.However, when they were installing the components, Nort
hwestern halted the operations.GL enterprises requested for an explanation. Northwestern explai
ned that the stoppage \
was because the materials and equipment were substandard. It explained that the components
(1)were old;
(2) did not have manual and warranty certificates;
(3) contained indications of beingreconditioned machines;
(4) did not meet with CHED and IMO standards.GL enterprises file a complaint for breach of co
ntract.The RTC rendered a decision that both parties are at fault.
However, the CA, found that GLenterprises was the only at fault, for delivering defectiv
e equipment that materially andsubstantially breached the contracts. Applying Article 1191 of th
e Civil Code, the CA declaredthe rescission of the contracts.
Issue: Whether the CA gravely erred in (1) finding substantial breach on the part of GLenterprise
s.
Held: The Supreme Court said that, the CA correctly applied Article 1191, which provides thus:
The power to rescind obligations is implied in reciprocal ones, in case of the obligorsshould not c
omply with what is incumbent upon him.The injured party may choose between the fulfillment a
nd the rescission of theobligation, with the payment of damages in either case. He may also seek
rescission,even after he has chosen fulfillment, if the rescission becomes impossible.The court
shall decree the rescission, unless there be just cause authorizing the fixingof a period.The Supre
me Court said that the two contracts require substantial breach. Then, it went also tocite the defin
ition, in the case of Cannu v. Galang, that substantial breach are fundamentalbreaches that defea
t the object of the parties entering into an agreement, since the law is n0tconcerned with trifles.
In the case at hand, it was incumbent upon GL enterprises to supply components that wouldcreat
e an IBS that would effectively facilitate the learning of the students. However, it miserablyfailed
it meetings its responsibility. It supplied substandard equipment when it deliveredcomponents (1
) were old; (2) did not have manual and warranty certificates; (3) containedindications of being r
econditioned machines; (4) did not meet with CHED and IMO standards.
Also, GL enterprises did not also refute that it delivered defective equipment.Evidently, the mat
erials were not likely to pass the CHED and IMO standards

30. COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner, vs. THE HONORABLE

COURT OF APPEALS (Fifth Division) and MS. LYDIA GERONIMO, respondents.G.R. No.
110295 | 1993-10-18

Facts:

Respondent Lydia Geronimo was the proprietess of Kindergarten Wonderland Canteen, engaged
in the sale of soft drinks and other goods to the students of Kindergarten Wonderland and to the
public. On August 12, 1989, some parents of the students complained that the Coke and Sprite soft
drinks contained fiber-like matter and other foreign substances. She discovered the presence of
some fiber-like substances in the contents of some unopened Coke bottles and a plastic matter in
the contents of an unopened Sprite bottle. The Department of Health informed her that the samples
she submitted are adulterated. Her sales of soft drinks plummeted, and not long after that, she had
to close shop. She became jobless and destitute. She demanded from the petitioner the payment of
damages but was rebuffed by it. She then filed a complaint before the RTC of Dagupan City, which
granted the motion to dismiss filed by petitioner, on the ground that the complaint is based on
contract, and not on quasi-delict, as there exists pre-existing contractual relation between the
parties. Thus, on the basis of Article 1571, in relation to Article 1562, the complaint should have
been filed within six months from the delivery of the thing sold. The CA reversed the RTC decision
and held that Geronimo’s complaint is one for quasi-delict because of petitioner’s act of
negligently manufacturing adulterated food items intended to be sold for public consumption; and
that the existence of contractual relations between the parties does not absolutely preclude an
action by one against the other for quasi-delict arising from negligence in the performance of a
contract. Hence, this petition.

Issue:

Whether or not the action for damages by the proprietess against the soft drinks manufacturer
should be treated as one for breach of implied warranty against hidden defects, which must be filed
within six months from the delivery of the thing sold, or one for quasi-delict, which can be filed
within four years pursuant to Article 1146 of the Civil Code.

Held:

The action in based on quasi-delict, therefore, it prescribes in four years. The allegations in the
complaint makes a reference to the reckless and negligent manufacture of “adulterated food items
intended to be sold for public consumption.” The vendee’s remedies are not limited to those
prescribed in Article 1567 of the Civil Code. The vendor could be liable for quasi-delict under
Article 2176, and an action based thereon may be brought by the vendee.

The existence of a contract between the parties does not bar the commission of a tort by the one
against the other and the consequent recovery of damages therefor. Liability for quasi-delict may
still exist despite the presence of contractual relations.

31. Singson vs. Bank of the Philippine Islands, 17 this Court stated:

23 SCRA 1117

FACTS:

Singson, was one of the defendants in a civil case, in which judgment had been rendered
sentencing him and his co-defendants therein Lobregat and Villa-Abrille & Co., to pay a sum of
money to the plaintiff therein. Said judgment became final and executory as only against Ville-
Abrille for its failure to file an appeal. A writ of garnishment was subsequently served upon BPI
— in which the Singsons had a current account — insofar as Villa-Abrille’s credits against the
Bank were concerned.

Upon receipt of the said Writ of Garnishment, a clerk of the bank, upon reading the name of the
Singson in the title of the Writ of Garnishment as a party defendants, without further reading the
body and informing himself that said garnishment was merely intended for the deposits of
defendant Villa-Abrille & Co., et al, prepared a letter informing Singson of the garnishment of
his deposits by the plaintiff in that case.

Subsequently, two checks issued by the plaintiff Julian C. Singson, one in favor of B. M. Glass
Service and another in favor of the Lega Corporation, were dishonored by the bank. B. M. Glass
Service then wrote to Singson that the check was not honored by BPI because his account therein
 had already been garnished and that they are now constrained to close his credit account with
them.

Singson wrote to BPI, claiming that his name was not included in the Writ of Execution and
Notice of Garnishment, which was served upon the bank. The defendants lost no time to rectify
the mistake that had been inadvertently committed.

Thus this action for damages.

ISSUE: WON the existence of a contract between the parties bars a plaintiff’s claim for damages
based on torts?

HELD: NO. The existence of a contract between the parties does not bar the commission of a
tort by the one against the order and the consequent recovery of damages therefore. Indeed, this
view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs.
Carrascoso, involving an airplane passenger who, despite his first-class ticket, had been illegally
ousted from his first-class accommodation and compelled to take a seat in the tourist
compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort
on the latter’s part, for, although the relation between a passenger and a carrier is “contractual
both in origin and nature … the act that breaks the contract may also be a tort”.

In view, however, of the facts obtaining in the case at bar, and considering, particularly, the
circumstance, that the wrong done to the plaintiff was remedied as soon as the President of the
bank realized the mistake he and his subordinate employee had committed, the Court finds that
an award of nominal damages — the amount of which need not be proven — in the sum of
P1,000, in addition to attorney’s fees in the sum of P500, would suffice to vindicate plaintiff’s
rights

43. Philcomsat v. Globe Telecom 429 SCRA 153, G.R. No. 147324 (May 25, 2004)

Facts:

1. Globe Telecom, Inc. (Globe) is engaged in the coordination of the provision of various
communication facilities for the military bases of the United States of America (US) in the Clark
Air Base and Subic Naval Base.
2. Saud communication facilities were installed and configured for the exclusive use of the US
Defense Communications Agency (USDCA).
3. Globe contracted Philippine Communications Satellite Corporation (Philcomsat) for the provision
of the communication facilities.
4. Philcomsat and Globe entered into an agreement whereby Philcomsat obliged itself to establish,
operate and provide an IBS Standard B earth station (earth station) for the exclusive use of the
USDCA. Globe promised to pay Philcomsat monthly rentals for each leased circuit involved.
5. Philcomsat installed and established the earth station and the USDCA made use of the same.
6. Senate passed and adopted its resolution, expressing its decision not to concur in the ratification
of the Treaty of Friendship, Cooperation and Security and its Supplementary Agreements that was
supposed to extend the term of the use by the US of Subic Naval Base, among others.
7. PH government sent a Note Verbale to the US government through the US Embassy, notifying it
of the Philippine termination of the RP-US Military Base Agreement. The withdrawal of all US
military forces from Subic Naval Base should be completed by December 31. 1992.
8. Globe notified Philcomsat of its intention to discontinue the use of the earth station.
9. Philcomsat demand payment of rentals for the balance of lease term, despite the non-use of earth
station.

Issue/s:

1. Whether the termination of the RP-US Military Base Agreement, the non-ratification of the Treaty
of Friendship, Cooperation and Security, and the consequent withdrawal of US military forces and
personnel from Cubi Point constitute force majeure which would exempt Globe from complying
with its obligation to pay rentals under its Agreement with Philcomsat.
2. Whether Globe is liable to pay rentals under the Agreement for the month of December 1992.
3. Whether Philcomsat is entitled to attorney’s fees and exemplary damages.

Ruling:

1. Yes. Philcomsat and Globe had no control over the non-renewal of the term of the RP-US Military
Base Agreement when the same expired in 1991, because the prerogative to ratify the treaty
extending the life thereof belonged to the Senate. Neither did the parties have control over the
subsequent withdrawal of the US military forces and personnel from Cubi Point in December 1992.

As a consequence of the termination of the RP-US Military Base Agreement the continued stay of
all US Military forces and personnel from Subic Naval Base would no longer be allowed, hence,
plaintiff would no longer be in any position to render service it was obligated under the Agreement.

Events made impossible the continuation of the Agreement until the end of its five-year term
without fault on the part of either party. Such fortuitous events rendered Globe exempt from
payment of rentals for the remainder of the term of the Agreement.

Philcomsat would like to charge globe rentals for the balance of the lease term without being any
corresponding telecommunications service subject of the lease. It will be grossly unfair and
iniquitous to hold globe liable for lease charges for a service that was not and could not have been
rendered due to an act of the government which was clearly beyond globes control.

2. Yes. The US military forces and personnel completely withdrew from Cubi Point only on
December 31, 1992. Thus, until that date, USDCA had control over the earth station and had the
option of using the same. Furthermore, Philcomsat could not have removed or rendered ineffective
 said communication facility until after December 31, 1992 because Cubi Point was accessible only
to US naval personnel up to that time.

3. No. The award of attorney’s fees is the exemption rather than the rule. In cases where both parties
have legitimate claims against each other and no party actually prevailed, such as in the present
case where the claims of both parties were sustained in part, an award of attorney’s fees would not
be warranted.

Exemplary damages may be awarded in cases involving contracts, if the erring party acted in
wanton, fraudulent, reckless, oppressive or malevolent manner. It was not shown that Globe acted
wantonly or oppressively in not heeding Philcomsats demands for payment of rentals. Globe had
valid grounds for refusing to comply with its contractual obligations after 1992.

44. MAURO GANZON, petitioner, vs. COURT OF APPEALS and GELACIO E.

TUMAMBING, respondents., G.R. No. L-48757 | 1988-05-30

FACTS: Gelacio > Ganzon (via Capt. Niza) > Lighter “Batman” (common carrier) (loaded half)
1. November 28, 1956: Gelacio Tumambing (Gelacio) contracted the services of of Mauro
B. Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on
board the light LCT “Batman”
2. December 1, 1956: Gelacio delivered the scrap iron to Filomeno Niza, captain of the
lighter, for loading which was actually begun on the same date by the crew of the lighter
under the captain’s supervisor.
3. When about half of the scrap iron was already loaded, Mayor Jose Advincula of
Mariveles, Bataan arrived and demanded P5000 from Gelacio
1. Upon resisting, the Mayor fired at Gelacio so he had to be taken to the hospital
2. Loading of the scrap iron was resumed
4. December 4, 1956: Acting Mayor Basilio Rub (Rub), accompanied by 3 policemen,
ordered captain Filomeno Niza and his crew to dump the scrap iron where the lighter was
docked
1. Later on Rub had taken custody of the scrap iron
5. RTC: in favor of Gelacio and against Ganzon
ISSUE: W/N Ganzon should be held liable under the contract of carriage

HELD: YES. Petition is DENIED.

1. Ganzon thru his employees, actually received the scraps is freely admitted.
2. Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the
delivery, actual or constructive, by the carrier to the consignee, or to the person who has a
right to receive them.
3. The fact that part of the shipment had not been loaded on board the lighter did not impair
the said contract of transportation as the goods remained in the custody and control of the
carrier, albeit still unloaded.
4. failed to show that the loss of the scraps was due to any of the following causes
enumerated in Article 1734 of the Civil Code, namely:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Hence, the petitioner is presumed to have been at fault or to have acted negligently.
1. By reason of this presumption, the court is not even required to make an express finding
of fault or negligence before it could hold the petitioner answerable for the breach of the
contract of carriage.
1. exempted from any liability had he been able to prove that he observed
extraordinary diligence in the vigilance over the goods in his custody, according
to all the circumstances of the case, or that the loss was due to an unforeseen
event or to force majeure. As it was, there was hardly any attempt on the part of
the petitioner to prove that he exercised such extraordinary diligence.
2. We cannot sustain the theory of caso fortuito - "order or act of competent public
authority"(Art. 1174 of the Civil Code)
1. no authority or power of the acting mayor to issue such an order was given in
evidence. Neither has it been shown that the cargo of scrap iron belonged to the
Municipality of Mariveles.
1. Ganzon was not duty bound to obey the illegal order to dump into the sea
the scrap iron.
2. Moreover, there is absence of sufficient proof that the issuance of the
same order was attended with such force or intimidation as to completely
overpower the will of the petitioner's employees. The mere difficulty in
the fullfilment of the obligation is not considered force majeure.
52. NAKPIL VS. CA
Facts:
The plaintiff, Philippine Bar Association, a civic-non-profit association, incorporated under the
Corporation Law, decided to construct an office building on its 840 square meters lot located at
the corner of Aduana and Arzobispo Streets, Intramuros, Manila.
The... construction was undertaken by the United Construction, Inc. on an "administration" basis,
on the suggestion of Juan J. Carlos, the president and general manager of said corporation.
The proposal was approved by plaintiff's board of directors and signed by its president
Roman Ozaeta, a third-party defendant in this case.
The plans and specifications for the building were prepared by the other third-party defendants
Juan F. Nakpil & Sons. The building was completed in June, 1966.
In the early morning of August 2, 1968 an unusually strong earthquake hit Manila and its environs
and the building in question sustained major damage. The front columns of the building buckled,
causing the building to tilt forward dangerously.
The tenants vacated the... building in view of its precarious condition. As a temporary remedial
measure, the building was shored up by United Construction, Inc. at the cost of P13,661.28.
On November 29, 1968, the plaintiff commenced this action for the recovery of damages arising
from the partial collapse of the building against United Construction, Inc. and its President and
General Manager Juan J. Carlos as defendants.
Defendants in turn filed a third-party complaint against the architects who prepared the plans and
specifications, alleging in essence that the collapse of the building was due to the defects in the
said plans and specifications.
Issues:
The pivotal issue in this case is whether or not an act of God, - an unusually strong earthquake -
which caused the failure of the building, exempts from liability, parties who are otherwise liable
because of their negligence.
Ruling:
The applicable law governing the rights and liabilities of the parties herein is Article 1723 of the
New Civil Code, which provides:
"Art. 1723. The engineer or architect who drew up the plans and specifications for a building is
liable for damages if within fifteen years from the completion of the structure the same should
collapse by reason of a defect in those plans and specifications, or... due to the defects in the
ground. The contractor is likewise responsible for the damage if the edifice falls within the same
period on account of defects in the construction or the use of materials of inferior quality furnished
by him, or due to any violation of the terms... of the contract. If the engineer or architect supervises
the construction, he shall be solidarily liable with the contractor.
On the other hand, the general rule is that no person shall be responsible for events which could
not be foreseen or which, though foreseen, were inevitable
There is no dispute that the earthquake of August 2, 1968 is a fortuitous event or an act of God.
The principle embodied in the act of God doctrine strictly requires that the act must be one
occasioned exclusively by the violence of nature and all human agencies are to be excluded from
creating or entering into the cause of the mischief.
The negligence of the defendant and the third-party defendants petitioners was established beyond
dispute both in the lower court and in the Intermediate Appellate Court. Defendant United
Construction Co., Inc. was found to have made substantial deviations from the plans... and
specifications, and to have failed to observe the requisite workmanship in the construction as well
as to exercise the requisite degree of supervision; while the third-party defendants were found to
have inadequacies or defects in the plans and specifications prepared by... them.
In any event, the relevant and logical observations of the trial court as affirmed by the Court of
Appeals that "while it is not possible to state with certainty that the building would not have
collapsed were those defects not present, the fact remains that several buildings in... the same area
withstood the earthquake to which the building of the plaintiff was similarly subjected", cannot be
ignored.
There should be no question that the NAKPILS and UNITED are liable for the damage resulting
from the partial and eventual collapse of the PBA building as a result of the earthquakes.
Principles:
Thus it has been held that when the negligence of a person concurs with an act of God in producing
a loss, such person is not exempt from liability by showing that the immediate cause of the damage
was the act of God. To be exempt from liability for loss because of an act... of God, he must be
free from any previous negligence or misconduct by which that loss or damage may have been
occasioned.