DBP VS CONFESOR G.R. No.

48889 May 11, 1988

FACTS:

On February 10, 1940, spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural
loan from Agricultural and Industrial Bank, now Development Bank of the Philippines, in the sum
of P2,000, as evidenced by a promissory note of said date whereby they bound themselves jointly
and severally to pay the amount in ten equal yearly amortizations.

As the obligation remained unpaid even after the lapse if the ten-year period, Confesor, who was
then a member of the Congress of the Philippines, executed a second promissory note on April 11,
1961, expressly acknowledging the said loan and promising to pay the same on or before June 15,
1961.

The spouses still failed to pay the obligation on the specified date. As a result, the DBP filed a
complaint on September 11, 1970 in the City Court of Iloilo City. The city court ordered payment
from spouses. The CFI of Iloilo reversed the decision. Hence, this petition.

ISSUE: Whether or not a promissory which was executed in consideration of a previous

promissory note which has already been barred by prescription is valid.

HELD: Yes, the second promissory note is valid because the said promissory note is not a mere
acknowledgement of the debt that has prescribed already. Rather, it is a new promise to pay the
debt. A new promise is a new cause of action. Although a debt barred by prescription is
enforceable, a new contract recognizing and assuming the prescribed debt would be valid and
enforceable.

CRUZ vs TUASON & CO. G.R. No. L-23749 April 29, 1977

FACTS:

As requested by the Deudors, the family of Telesforo Deudor who laid claim in question on the
strength of an informacion posesoria, Cruz made permanent improvements on the said land having
an area of more or less 20 quinones.

The improvements were valued at P30,400 and for which he incurred expenses amounting to
P7,781.74
In 1952, Tuason & Co. availed of Cruz’ services as an intermediary with the Deudors, to work for
the amicable settlement in a civil case. The said case involved 50 quiones of land, of which the 20
quiones of land mentioned formed part.

A compromise agreement between the Deudors and Tuason & Co. was entered into on 1963 which
was approved by court.

Cruz alleged that Tuason & Co. promised to convey him the 3,000 sq. meters of land occupied by
him which was part of the 20 quiones of land within 10 years from the date of signing of the
compromise agreement between the Deudors and the latter as consideration of his services. The
said land was not conveyed to him by Tuason & Co.

Cruz further alleged that Tuason & Co. was unjustly enriched at his expense since they enjoyed
the benefits of the improvements he made on the land acquired by the latter.

The trial court dismissed the case on the ground that there was no cause of action. Hence, this
appeal.

ISSUE: Whether or not a presumed quasi-contract be emerged as against one part when the subject
matter thereof is already covered by a contract with another party.

HELD: From the very language of this provision, it is obvious that a presumed qauasi-contract
cannot emerge as against one party when the subject mater thereof is already covered by an existing
contract with another party. Predicated on the principle that no one should be allowed to unjustly
enrich himself at the expense of another, Article 2124 creates the legal fiction of a quasi-contract
precisely because of the absence of any actual agreement between the parties concerned.
Corollarily, if the one who claims having enriched somebody has done so pursuant to a contract
with a third party, his cause of action should be against the latter, who in turn may, if there is any
ground therefor, seek relief against the party benefited. It is essential that the act by which the
defendant is benefited must have been voluntary and unilateral on the part of the plaintiff. As one
distinguished civilian puts it, "The act is voluntary. because the actor in quasi-contracts is not
bound by any pre-existing obligation to act. It is unilateral, because it arises from the sole will of
the actor who is not previously bound by any reciprocal or bilateral agreement. The reason why
the law creates a juridical relations and imposes certain obligation is to prevent a situation where
a person is able to benefit or take advantage of such lawful, voluntary and unilateral acts at the
expense of said actor." In the case at bar, since appellant has a clearer and more direct recourse
against the Deudors with whom he had entered into an agreement regarding the improvements and
expenditures made by him on the land of appellees. It Cannot be said, in the sense contemplated
in Article 2142, that appellees have been enriched at the expense of appellant.

Adille vs CA G.R. No. L-44546 January 29, 1988

FACTS:

The property in dispute was originally owned by Felisa Alzul who got married twice. Her child in
the first marriage was petitioner Rustico Adile and her children in the second marriage were
respondents Emetria Asejo et al.

During her lifetime, Felisa Alzul sodl the property in pacto de retro with a three-year repurchase
period.

Felisa died before she could repurchase the property.

During the redemption period, Rustico Adille repurchased the property by himself alone at his own
expense, and after that, he executed a deed of extra-judicial partition representing himself to be the
only heir and child of his mother Felisa. Consequently, he was able to secure title in his name
alone.

His half-siblings, herein respondents, filed a case for partition and accounting claiming that
Rustico was only a trustee on an implied trust when he redeemed the property, and thus, he cannot
claim exclusive ownership of the entire property.

ISSUE:
Whether or not a co-owner may acquire exclusive ownership over the property held in common.
Whether or nor Rustico had constituted himself a negotiorum gestor

HELD: No. The right to repurchase may be exercised by a co-owner with respect to his share
alone. Although Rustico Adille redeemed the property in its entirety, shouldering the expenses did
not make him the owner of all of it.

Yes. The petitioner, in taking over the property, did so on behalf of his co-heirs, in which event,
he had constituted himself a negotiorum gestor under Art 2144 of the Civil Code, or for his
exclusive benefit, in which case, he is guilty of fraud, and must act as trustee, the respondents
being the beneficiaries, pursuant to Art 1456.
SAGRADA ORDEN vs. NATIONAL COCONUT
CORPORATION G.R. No. L-3756 June 30,
1952 91 PHIL. 503 Obligations, Sources of
Obligations
OCTOBER 30, 2017

FACTS:

This is an action to recover the possession of a piece of real property (land and warehouses)
situated in Pandacan Manila, and the rentals for its occupation and use. The land belongs to the
plaintiff, Sagrada Orden, in whose name the title was registered before the war. During the
Japanese military occupation, the land was acquired by a Japanese corporation, Taiwan
Tekkosho

After the liberation, the Alien Property Custodian of the United States took possession, control,
and custody of the real property.

During the year 1946, the property was occupied by the Copra Export Management Company
under the custodianship agreement with United States Alien Property Custodian, and when it
vacated, the property was occupied by defendant National Coconut Corporation.

Sagrada Orden made claim to the property before the Alien Property Custodian of the United
States but was denied.

Hence, plaintiff brought an action in court to annul the sale of property of Taiwan Tekkosho, and
recover its possession.

The present action is to recover the reasonable rentals from August, 1946, the date when the
defendant began to occupy the premises, to the date it vacated it. The defendant does not contest
its liability for the rentals at the rate of P3,000 per month from February 28, 1949 (the date
specified in the judgment in said civil case), but resists the claim therefor prior to this date. It
interposes the defense that it occupied the property in good faith, under no obligation whatsoever
to pay rentals for the use and occupation of the warehouse.

ISSUE:
Can the defendant company be held liable to pay rentals from August 1946 to the date it
vacated?

RULING:

No. If defendant-appellant is liable at all, its obligations, must arise from any of the four sources
of obligations, namely, law, contract or quasi-contract, crime, or negligence. Defendant-
appellant is not guilty of any offense at all, because it entered the premises and occupied it with
the permission of the entity which had the legal control and administration thereof, the Alien
Property Administration. Neither was there any negligence on its part.

There was also no privity between the Alien Property Custodian and the Taiwan Tekkosho,
which had secured the possession of the property from the plaintiff-appellee by the use of duress,
such that the Alien Property Custodian or its permittee (defendant-appellant) may be held
responsible for the supposed illegality of the occupation of the property by the said Taiwan
Tekkosho.

The Alien Property Administration had the control and administration of the property not as
successor to the interests of the enemy holder of the title, the Taiwan Tekkosho. Neither is it a
trustee of the former owner, the plaintiff-appellee herein, but a trustee of then Government of the
United States, in its own right, to the exclusion of, and against the claim or title of, the enemy
owner. From August, 1946, when defendant-appellant took possession, to the late of judgment
on February 28, 1949, Alien Property Administration had the absolute control of the property as
trustee of the Government of the United States, with power to dispose of it by sale or otherwise,
as though it were the absolute owner. Therefore, even if defendant appellant were liable to the
Alien Property Administration for rentals, these would not accrue to the benefit of the plaintiff-
appellee, the owner, but to the United States Government.
Saludaga vs FEU
AUGUST 26, 2018JEFF REY

JOSEPH SALUDAGA, petitioner,

vs.
FAR EASTERN UNIVERSITY and EDILBERTO C. DE JESUS in his capacity
as President of FEU, respondents.
G.R. No. 179337 April 30, 2008
Facts:
Petitioner Joseph Saludaga was a sophomore law student of respondent Far Eastern
University (FEU) when he was shot by Alejandro Rosete (Rosete), one of the security
guards on duty at the school premises.
Petitioner thereafter filed a complaint for damages against respondents on the ground
that they breached their obligation to provide students with a safe and secure
environment and an atmosphere conducive to learning. Respondents, in turn, filed a
Third-Party Complaint against Galaxy Development and Management Corporation
(Galaxy), the agency contracted by respondent FEU to provide security services
within its premises to indemnify them for whatever would be adjudged in favor of
petitioner.

RTC: FEU and its President was ordered to pay jointly and severally Saludaga
damages. Galaxy and its President was ordered to indemnify jointly and severally
FEU for such amount.

CA: Dismissed, ruling that: a) the incident was a fortuitous event; b) that respondents
are not liable for damages for the injury suffered by the petitioner from the hands of
their own security guard in violation of their built-in contractual obligation to
petitioner, being their law student at the time, to provide him with a safe and secure
educational environment; c) that Rosete, who shot petitioner, was not FEU’s
employee by virtue of the contract for security services between Galaxy and FEU,
notwithstanding the fact that petitioner, not being a party to it, is not bound by the
same under the principle of relativity of contracts; and, d) FEU exercised due
diligence in selecting Galaxy as the agency which would provide security services
within the respondent FEU.

In his appeal, petitioner sued respondents for damages based on the alleged breach of
student-school contract for a safe learning environment. Respondents aver that the
shooting incident was a fortuitous event because they could not have reasonably
foreseen nor avoided the accident caused by Rosete as he was not their employee; and
that they complied with their obligation to ensure a safe learning environment for their
students by having exercised due diligence in selecting the security services of
Galaxy.

Issue #1:
Whether or not there is a contractual obligation between Saludaga and FEU.
Held #1: YES.
It is undisputed that petitioner was enrolled as a sophomore law student in respondent
FEU. As such, there was created a contractual obligation between the two parties. On
petitioner’s part, he was obliged to comply with the rules and regulations of the
school. On the other hand, respondent FEU, as a learning institution is mandated to
impart knowledge and equip its students with the necessary skills to pursue higher
education or a profession. At the same time, it is obliged to ensure and take adequate
steps to maintain peace and order within the campus.
Issue #2:
Whether or not FEU is guilty of culpa contractual.
Held #2: YES.
It is settled that in culpa contractual, the mere proof of the existence of the contract
and the failure of its compliance justify, prima facie, a corresponding right of relief.
Here, petitioner was shot inside the campus by no less the security guard who was
hired to maintain peace and secure the premises, there is a prima facie showing that
respondents failed to comply with its obligation to provide a safe and secure
environment to its students. Also, respondents failed to prove that they ensured that
the guards assigned in the campus met the requirements stipulated in the Security
Service Agreement. No evidence as to the qualifications of Rosete as security guard
was presented. Respondents also failed to show that they undertook steps to ascertain
and confirm that the security guards assigned to them actually possess the
qualifications required in the Security Service Agreement.

Issue #3:
Whether or not the presence of force majeure may absolve FEU from liability.
Held #3: NO.
In order for force majeure to be considered, respondents must show that no negligence
or misconduct was committed that may have occasioned the loss. An act of God
cannot be invoked to protect a person who has failed to take steps to forestall the
possible adverse consequences of such a loss. One’s negligence may have concurred
with an act of God in producing damage and injury to another; nonetheless, showing
that the immediate or proximate cause of the damage or injury was a fortuitous event
would not exempt one from liability. When the effect is found to be partly the result
of a person’s participation – whether by active intervention, neglect or failure to act –
the whole occurrence is humanized and removed from the rules applicable to acts of
God.
Issue #4:
Whether or not the petitioner is entitled to indemnification for damages.
Held #4: YES. Petitioner is entitled to actual damages, moral damages, temperate
damages, attorney’s fees, and litigation expenses. The petitioner is not entitled to
exemplary damages.
Article 1170 of the Civil Code provides that those who are negligent in the
performance of their obligations are liable for damages. Accordingly, for breach of
contract due to negligence in providing a safe learning environment, FEU is liable to
petitioner for damages. It is essential in the award of damages that the claimant must
have satisfactorily proven during the trial the existence of the factual basis of the
damages and its causal connection to defendant’s acts.

Petitioner spent expenses for his hospitalization and medical expenses. Since the case
involved an obligation arising from a contract and not a loan or forbearance of money,
the proper rate of legal interest is 6% per annum of the amount demanded. The
interest shall continue to run from the filing of the complaint until the finality of the
Decision. After the decision becomes final and executory, the applicable rate shall be
12% per annum until its satisfaction. Also, transportation expenses and those incurred
in the hiring of a personal assistant while recuperating were not however supported by
receipts. In the absence thereof, no actual damages may be awarded.

Nonetheless, Art. 2224 of the Civil Code states that temperate damages may be
recovered where it has been shown that the claimant suffered some pecuniary loss but
the amount thereof cannot be proved with certainty.

SC awarded petitioner moral damages for the “physical suffering, mental anguish,
fright, serious anxiety, and moral shock resulting from the shooting incident”. SC
stressed that the moral damages are in the category of an award designed to
compensate the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer.

Attorney’s fees and litigation expenses were also reasonable in view of Art. 2208 of
Civil Code.

However, the award of exemplary damages is deleted considering the absence of

proof that the respondents acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner.

Issue #5:
Whether or not the FEU President himself is vicariously liable.
Held: NO.
FEU President cannot be held liable for damages under Art. 2180 of CC because
respondents are not employers of Rosete. The latter was employed by Galaxy. The
instructions issued by respondents’ Security Consultant to Galaxy and its security
guards are ordinarily no more than requests commonly envisaged in the contract for
services entered into by a principal and a security agency. They cannot be construed
as the element of control as to treat respondents as the employers of Rosete. Where
the security agency recruits, hires and assigns the works of its watchmen or security
guards to a client, the employer of such guards or watchmen is such agency, and not
the client, since the latter has no hand in selecting the security guards. Thus, the duty
to observe the diligence of a good father of a family cannot be demanded from the
said client.
Issue #6:
Whether or not Galaxy and its President were liable for damages.
Held #6: YES.
For the acts of negligence and for having supplied respondent FEU with an
unqualified security guard, which resulted to the latter’s breach of obligation to
petitioner, it is proper to hold Galaxy liable to respondent FEU for such damages
equivalent to the above-mentioned amounts awarded to petitioner.
Also, unlike the FEU President, SC deemed Galaxy President to be solidarily liable
with Galaxy for being grossly negligent in directing the affairs of the security agency.
It was the Galaxy President who assured petitioner that his medical expenses will be
shouldered by Galaxy, but said representations were not fulfilled because they
presumed that petitioner and his family were no longer interested in filing a formal
complaint against them.