Francisco Chavez v. Raul M. Gonzales
The Press Secretary showed to the public two
GR No. 168338, 15 February 2008
Ponente: Puno
FACTS:
A year following the 2004 national and local elections, Press Secretary Ignacio
Bunye disclosed to the public how the opposition planned to destabilize the
administration by releasing an audiotape of a mobile phone conversation
allegedly between President Gloria Macapagal Arroyo and Commissioner
Garcillano of the Commission on Elections (COMELEC). The conversation was
alleged to have been audio-taped through wire-tapping. On June 8, 2005,
respondent Secretary Raul Gonzales of the Department of Justice (DOJ)
warned reporters who are in possession of copies of the said conversation, as
well as those broadcasting companies and/or publishers that they may be held
liable under the Anti-Wiretapping Act. Consequently, the National
Telecommunications Commission (NTC) issued a press release strengthening
the prohibition on the dissemination of the same – that the broadcasting/airing
of such information shall be just cause for the suspension, revocation and/or
cancellation of the licenses or authorizations issued by the Commission.
Petitioner Francisco Chavez filed a petition against respondent Chavez and
NTC, praying for the issuance of writs of certiorari and prohibition for the
nullification of the acts, issuances and orders of respondents – as they were
outright violations of the freedom of expression and of the press, and the right
of the people to information on matters of public concern.
ISSUE: Whether or not the acts of the respondents abridge freedom of speech
and of the press.
HELD:
Yes. Generally, restraints on freedom of speech and expression are evaluated
by either or a combination of three tests, i.e., (a) the dangerous tendency
doctrine, which limits speech once a rational connection has been established
between the speech restrained and the danger contemplated;   (b)
the balancing of interests tests, a standard when courts balance conflicting
social values and individual interests, and  (c) the clear and present danger
rule which rests on the premise that speech may be restrained because there
is substantial danger that the speech will likely lead to an evil the government
has a right to prevent.
It appears that the great evil which government wants to prevent is the airing of
a tape recording in alleged violation of the anti-wiretapping law. However,
respondents’ evidence falls short of satisfying the clear and present danger
test.  Firstly, the various statements of the Press Secretary obfuscate the
identity of the voices in the tape recording. Secondly, the integrity of the taped
conversation is also suspect.
versions, one supposed to be a “complete” version and the other, an “altered”
version.  Thirdly, the evidence of the respondents on the who’s and the how’s
of the wiretapping act is ambivalent, especially considering the tape’s different
versions. The identity of the wire-tappers, the manner of its commission and
other related and relevant proofs are some of the invisibles of this
case.  Fourthly, given all these unsettled facets of the tape, it is even arguable
whether its airing would violate the anti-wiretapping law.
We rule that not every violation of a law will justify straitjacketing the
exercise of freedom of speech and of the press.
The need to prevent their violation cannot per se  trump the exercise of
free speech and free press, a preferred right whose breach can
lead to greater evils.  For this failure of the respondents alone to offer proof to
satisfy the clear and present danger test, the Court has no option but to uphold
the exercise of free speech and free press. There is no showing that the feared
violation of the anti-wiretapping law clearly endangers the national security of
the State.
Telefast v. Castro Digest G.R. No. 73867
Telefast v. Castro
G.R. No. 73867 February 29, 1988
Facts:
1. The petitioner is a company engaged in transmitting telegrams. The
plaintiffs are the children and spouse of Consolacion Castro who died in the
Philippines. One of the plaintiffs, Sofia sent a telegram thru Telefast to her
father and other siblings in the USA to inform about the death of their mother.
Unfortunately, the deceased had already been interred but not one from the
relatives abroad was able to pay their last respects. Sofia found out upon her
return in the US that the telegram was never received. Hence the suit for
damages on the ground of breach of contract. The defendant-petitioner argues
that it should only pay the actual amount paid to it.
2. The lower court ruled in favor of the plaintiffs and awarded
compensatory, moral, exemplary, damages to each of the plaintiffs with 6%
interest p.a. plus attorney’s fees.  The Court of Appeals affirmed this ruling but
modified and eliminated the compensatory damages to Sofia and exemplary
damages to each plaintiff, it also reduced the moral damages for each. The
petitioner appealed contending that, it can only be held liable for P 31.92, the
fee or charges paid by Sofia C. Crouch for the telegram that was never sent to
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the addressee, and that the moral damages should be removed since
defendant's negligent act was not motivated by "fraud, malice or recklessness.
Issue: Whether or not the award of the moral, compensatory and
exemplary damages is proper.
RULING: Yes, there was a contract between the petitioner and private
respondent Sofia C. Crouch whereby, for a fee, petitioner undertook to send
said private respondent's message overseas by telegram. Petitioner failed to
do this despite performance by said private respondent of her obligation by
paying the required charges. Petitioner was therefore guilty of contravening its
and is thus liable for damages. This liability is not limited to actual or quantified
damages. To sustain petitioner's contrary position in this regard would result in
an inequitous situation where petitioner will only be held liable for the actual
cost of a telegram fixed thirty (30) years ago.
Art. 1170 of the Civil Code provides that "those who in the performance of their
obligations are guilty of fraud, negligence or delay, and those who in any
manner contravene the tenor thereof, are liable for damages." Art. 2176 also
provides that "whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done."
Award of Moral, compensatory and exemplary damages is proper.
The petitioner's act or omission, which amounted to gross negligence, was
precisely the cause of the suffering private respondents had to undergo.  Art.
2217 of the Civil Code states: "Moral damages include physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury. Though incapable
of pecuniary computation, moral damages may be recovered if they are the
proximate results of the defendant's wrongful act or omission."
Then, the award of P16,000.00 as compensatory damages to Sofia C. Crouch
representing the expenses she incurred when she came to the Philippines
from the United States to testify before the trial court. Had petitioner not been
remiss in performing its obligation, there would have been no need for this suit
or for Mrs. Crouch's testimony.
The award of exemplary damages by the trial court is likewise justified for each
of the private respondents, as a warning to all telegram companies to observe
due diligence in transmitting the messages of their customers.
Arrieta v. National Rice and Corn Corporation, 10 SCRA 79
September 10, 2016
FACTS :
Mrs. Paz Arrieta participated in public bidding called by NARIC on May 19,
1952 for the supply of 20,000 metric tons of Burmese rice. Her bid was $
203.00 per metric ton, it was the lowest that’s why the contract was awarded to
her. On July 1,1952, Arrieta and NARIC entered into contract. Arrieta was
obligated to deliver 20,000 metric ton of Burmese rice at $203.00 per metric
ton to NARIC. In return, NARIC committed itself to pay for the imported rice “
by means of an irrevocable, confirmed and assignable letter of credit in US
currency in favour of Arrieta and/or supplier in Burma (THIRI SETKYA),
immediately.” NARIC took the first step to open the letter of credit on July 30,
1952 by forwarding to the PNB its application for commercial letter of credit.
Arrieta with the help of a counsel, advised NARIC of the necessity for the
opening of the letter because she tender her supplier in Ragoon, Burma of 5
% of the price of 20,000 tons at $180.70 and if she didn’t comply the 5% will
be confiscated if the required letter of credit is not received by them before
August 4, 1952. PNB informed NARIC that their application of credit letter
amounting to $3,614,000.00 was approved with the condition of 50% marginal
cash be paid. NARIC does not meet the condition. The allocation of Arrieta’s
supplier in Ragoon was cancelled and the 5% deposit was forfeited.
ISSUE :
Does NARIC liable for damages?
HELD :
Yes, because the reason of the cancellation of the contract by Arrieta in
Ragoon, Burma was the failure of NARIC to open the letter of credit within a
specific period of time. One who assumes contractual obligation and fails to
perform in which he knew and was aware when he entered in the contract,
should be liable for his failure to do what is required by a law. Under the Art.
1170 of the Civil Code, not only the debtors guilty of fraud, negligence or
default but also a debtor of every, in general, who fails in the performance of
his obligation is bound to indemnify for the losses and damages caused
thereby.
TANGUILIG VS COURT OF APPEALS
G.R. No. 117190. January 2, 1997
FACTS: On April 1987 Vicente Herce Jr. rendered the services of Jacinto
Tanguilig to construct a windmill system for him for P60,000 with a  one-year
guaranty from the date of completion. Pursuant to the agreement Herce paid a
down payment of P30,000 and an installment payment of P15,000 leaving a
balance of P15,000.00.
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On 14 March 1988, due to the refusal and failure of Herce to pay the balance,
Tanguilig filed a complaint to collect the amount. Herce denied the claim
saying that he had already paid this amount to the San Pedro General
Merchandising Inc. (SPGMI) which constructed the deep well to which the
windmill system was to be connected.  According to Herce, since the deep well
formed part of the system the payment he tendered to SPGMI should be
credited to his account by Tanguilig. Moreover, assuming that he owed a
balance, this should be offset by the defects in the windmill system which
caused the structure to collapse after a strong wind hit their place.
Tanguilig denied that the construction of a deep well was included in the
agreement to build the windmill system. The trial court held that the
construction of the deep well was not part of the windmill
project  as  evidenced clearly by the letter proposals submitted by Tanguilig to
Here. It noted that if the intention of the parties is to include the construction of
the deep well in the project, the same should be stated in the proposals. With
respect to the repair of the windmill, the trial court found that "there is no clear
and convincing proof that the windmill system fell down due to the defect of the
construction.”
The Court of Appeals reversed the trial court.  It ruled that the construction of
the deep well was included in the agreement of the parties because the term
"deep well" was mentioned in both proposals
Issue: (1) Whether or not the installation of the deep well was part of the
contract and (2) Whether or not the windmill collapsed soley due to a fortuitous
event?
HELD: Nowhere in either proposal is the installation of a deep well mentioned,
even remotely.
Court has consistently held that in order for a party to claim exemption from
liability by reason of fortuitous event under Art. 1174 of the Civil Code, the
event should be the sole and proximate cause of the loss or destruction of the
object of the contract. Tanguilig failed to show that the collapse of the windmill
was due solely to a fortuitous event.
Tanguilig's argument that private Herce was already in default in the payment
of his outstanding balance of P15,000.00 and hence should bear his own loss,
is untenable. In reciprocal obligations, neither party incurs in delay if the other
does not comply or is not ready to comply in a proper manner with what is
incumbent upon him.
Herce is directed to pay Tanguilig the balance of P15,000 with interest at the
legal rate from the date of the filing of the complaint.  In return, Tanguilig is
ordered to "reconstruct subject defective windmill system, in accordance with
the one-year guaranty and to complete the same within three (3) months from
the finality of this decision.
Khe Hong Cheng vs Court of Appeals,
GR No. 1444169, March 20, 2001
Facts:
October 4, 1985 PATC shipped 3,400 bags of copra on board the
vessel M/V Prince Eric of Butuan Shipping Line (owned by Khe Hong Cheng.)
for delivery at Dipolog City However the vessel sank somewhere between
Negros Island and Northeastern Mindanao on its way to Dipolog. Due to the
loss of shipment,American Home Insurance Company (respondent Philam's
assured) paid the amount of P354,000.00 (the value of the copra) to the
consignee.
American Home instituted Civil Case No. 1335 to (RTC) of Makati to
recover the money paid to the consignee, based on breach of contract of
carriage. 
December 29, 1993- The trial court rendered judgment against Khe
Hong Cheng and ordered him to pay P354,000.00 representing the amount
paid by the plaintiff to the PATC with legal interest and other costs.
After the decision became final and executory, an alias writ of
execution was granted October 1996. The sheriff in his earnest efforts found
no property under the name of Button Shipping Lines and/or petitioner Khe
Hong Cheng to levy or garnish for the satisfaction of the trial court's decision. 
January 17, 1997 the sheriff and the counsel of Philam discovered that
Khe no longer had any property. Turned out that he had conveyed the subject
properties to his children. He donated parcels of land in favor of his children on
December 20,1989 while the case is still pending.
February 25, 1997, respondent Philam filed a complaint with the RTC
for the rescission of the deeds of donation executed by petitioner Khe Hong
Cheng in favor of his children and for the nullification of their titles.
Petitioners moved for its dismissal on the ground that the action had
already prescribed. More than 4 years after said registration of deeds of
donation.
The trial court denied the motion to dismiss. It held that respondent
Philam's complaint had not yet prescribed and the prescriptive period began to
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run only from December 29, 1993, the date of the decision of the trial court in
Civil Case No. 1335
CA affirmed the trial court's decision in favor of respondent Philam.
Citing Articles 1381 and 1383 they ruled that the four year period to institute
the action for rescission began to run only in January 1997, when it first
learned that Khe Hong Cheng had no more properties to satisfy the judgement
award. Petitioner now assails CA’s decision.
Issue: Whether or not the action to rescind the donations has already
prescribed.
Ruling: No. The action to rescind the donations had not yet prescribed.
The Court enunciated the principle that it is the legal possibility of bringing the
action which determines the starting point for the computation of the
prescriptive period for the action.  In connection with Article 1383 it is thus
apparent that an action to rescind or an accion pauliana must be of last resort.
For an accion pauliana to accrue, the following requisites must concur:
1) That the plaintiff asking for rescission has a credit prior to the alienation,
although demandable later 2) That the debtor has made a subsequent contract
conveying a patrimonial benefit to a third person; 3) That the creditor has no
other legal remedy to satisfy his claim, but would benefit by rescission of the
conveyance to the third person; 4) That the act being impugned is fraudulent;
5) That the third person who received the property conveyed, if by onerous
title, has been an accomplice in the fraud.
An accion pauliana accrues only when the creditor discovers that he
has no other legal remedy for the satisfaction of his claim against the debtor
other than an accion pauliana. It is an action of a last resort. For as long as the
creditor still has a remedy at law for the enforcement of his claim against the
debtor, the creditor will not have any cause of action against the creditor for
rescission of the contracts entered into by and between the debtor and another
person or persons. It presupposes a judgment and the issuance by the trial
court of a writ of execution for the satisfaction of the judgment and the failure of
the Sheriff to enforce and satisfy the judgment of the court.
The date of the decision of the trial court against the debtor is
immaterial. What is important is that the credit of the plaintiff antedates that of
the fraudulent alienation by the debtor of his property. After all, the decision of
the trial court against the debtor will retroact to the time when the debtor
became indebted to the creditor.
Philam learned about the unlawful conveyances made by petitioner
Khe Hong Cheng in January 1997 and that he no longer had any properties in
his name. It was only then that respondent Philam's action for rescission of the
deeds of donation accrued because then it could be said that respondent
Philam had exhausted all legal means to satisfy the trial court's judgment in its
favor. Since respondent Philam filed its complaint for accion pauliana against
petitioners on February 25, 1997, barely a month from its discovery that
petitioner Khe Hong Cheng had no other property to satisfy the judgment
award against him, its action for rescission of the subject deeds clearly had not
yet prescribed.
Article 1389 of the Civil Code simply provides that, the action to claim
rescission must be commenced within four years. Since it is silent as to when
the prescriptive period would commence Article 1150 applies.
Siguan v. Lim 318 SCRA 725, G.R. No. 134685 (November 19, 1999) Facts: 1.
On 25 and 26 August 1990, Rosa Lim (respondent, LIM) issued two Metrobank
checks to satisfy her debts to Maria Antonia Siguan (petitioner, SIGUAN). 2.
Upon presentment by SIGUAN with the drawee bank, the checks were
dishonoured for the reason account closed. 3. Criminal case for violation of BP
22 was filed by SIGUAN against LIM. 4. On December 29 1992, RTC
convicted LIM as charged. The case is pending before this Court for review. 5.
On August 10, 1989, LIM executed a Deed of Donation in favour of her
children, and the same was registered with the Office of the Register of Deeds
on July 2, 1991. 6. June 23, 193, SIGUAN filed an accion pauliana against LIM
and her children, to rescind the questioned Deed of Donation and to declare as
null and void the new transfer certificates of title. Issue/s: 1. Whether or not the
questioned Deed of Donation was made in fraud of petitioner and, therefore,
rescissible. Ruling: 1. No. The rescission required the existence of creditors at
the time of alleged fraudulent alienation, and this must be proved as one of the
bases of the judicial pronouncement setting aside the contract. Without prior
existing debt, there can neither be injury nor fraud. While it is necessary that
the credit of the plaintiff in the accion pauliana must exist prior to the fraudulent
alienation, the date of the judgment enforcing it is immaterial. Since LIMs
indebtedness to SIGUAN was incurred in August 1990, or a year after the
execution of the Deed of Donation, the first requirement of accion pauliana was
not met. Even assuming arguendo that petitioner became a creditor of LIM
prior to the celebration of the contract of donation, still her action for rescission
would not fare well because the third requisite was not met. It is essential that
the party asking for rescission prove that he has exhausted all other legal
means to obtain satisfaction of his claim. SIGUAN neither alleged nor proved
that she did so. On his score, her action for rescission of the questioned deed
is not maintainable even if the fraud charged actually did exist. The fourth
requisite for an accion pauliana to prosper is not present either. (4) the act
being impugned is fraudulent. It was not sufficiently established that the
properties left behind by LIM were not sufficient to cover her debts existing
before the donation was made. Note / Doctrine:  Requisites of accion pauliana
1. Plaintiff asking for rescission has a credit prior to the alienation, although
demandable later. 2. Debtor has made a subsequent contract conveying a
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patrimonial benefit to a third persons. 3. Creditor has no other legal remedy to
satisfy his claim, but would benefit by rescission of the conveyance to the
person. 4. Act being impugned is fraudulent. 5. The third parsons who received
the property conveyed, if by onerous title, has been an accomplice in the fraud.
 (New Civil Code) Article 1381. Contracts entered into in fraud of creditors
may be rescinded only when the creditors cannot in any manner collect the
claims due to them.  (New Civil Code) Article 1383. The action for rescission
is but a subsidiary remedy which cannot be instituted except when the party
suffering damage has no other legal means to obtain reparation for the same. 
(New Civil Code) Article 1387(1). All contracts by virtue of which the debtor
alienates property by gratuitous title are presumed to have been entered into in
fraud of creditors when donor did not reserve sufficient property to pay all
debts contracted before the donation.  (New Civil Code) Article 759. Donation
is always presumed to be in fraud of creditors when at the time thereof the
donor did not reserve sufficient property to pay his debts prior to the donation.
 (New Civil Code) Article 1384. Rescission shall only be to the extent
necessary to cover the damages caused.  Only the creditor who brought the
action for rescission can benefit from the rescission; those who are strangers
to the action cannot benefit from its effects.  Revocation is only to the extent
of the plaintiff creditors unsatisfied debts; as to the excess, alienation is
maintained.
MARIA ANTONIA SIGUAN, petitioner, vs.
ROSA LIM, LINDE LIM, INGRID LIM and NEIL LIM, respondents.
(1999, Davide Jr.)
FACTS:
 Rosa Lim (Lim) issued two Metrobank checks in the sums of P300,000
and P241,668, respectively, payable to “cash.”
 Upon presentment by petitioner Siguan with the drawee bank, the
checks were dishonored for the reason “account closed.” Demands to
make good the checks proved futile.
 Lim was charged w/ estafa, and found guilty. CA affirmed this decision
on appeal. However on appeal to the SC, Lim was acquitted, though
her civilly liable in the amount of P169,000, as actual damages, plus
legal interest, was retained.
 While these proceedings were happening, Lim executed a Deed of
Donation (DoD) conveying the following parcels of land in favor of her
children, registered with the Office of the Register of Deeds of Cebu
City. New transfer certificates of title were thereafter issued in the
names of the donees.
 Siguan filed an accion pauliana against Lim and her children before in
RTC Cebu City to rescind the DoD and to declare as null and void the
new TCTs issued for the lots covered by the questioned deed.
Petitioner claimed that through the DoD, Lim had fraudulently
transferred all her real property to her children in bad faith and in fraud
of creditors, including her. She further alleged that Lim confederated
with her children in antedating the DoD to petitioner’s and other
creditors’ prejudice; and that Lim, at the time of the fraudulent
conveyance, left no sufficient properties to pay her obligations.
 Lim denied any liability to petitioner. She maintained that the DoD was
not antedated but was made in good faith at a time when she had
sufficient property. She alleged that the Deed of Donation was
registered only on 2 July 1991 because she was seriously ill.
 TC: ordered the rescission of the DoD, declared TCTs void, Lims to
pay Siguan P10,000 as moral damages; P10,000 as attorney’s fees;
and P5,000 as expenses of litigation
 CA: reversed decision, thus appeal.
 Petitioner's argument: CA decision contrary to Oria vs McMicking
ruling, w/c enumerated circumstances for existence of fraud. They also
contended that CA misapplied the Rules of Court, and that they
overlooked NCC Art 759 w/c provides: “The donation is always
presumed to be in fraud of creditors when at the time of the execution
thereof the donor did not reserve sufficient property to pay his debts
prior to the donation.” In this case, Lim made no reservation of
sufficient property to pay her creditors prior to the execution of the
DoD.
 Respondents argue that (a) having agreed on the law and requisites of
accion pauliana, petitioner cannot take shelter under a different law;
(b) petitioner cannot invoke the credit of Victoria Suarez, who is not a
party to this case, to support her accion pauliana; (c) CA correctly
applied or interpreted Section 23 of Rule 132 of the Rules of Court; (d)
petitioner failed to present convincing evidence that the DoD was
antedated and executed in fraud of petitioner; and (e) CA correctly
struck down the awards of damages, attorney’s fees and expenses of
litigation because there is no factual basis therefor in the body of the
TC’s decision.
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ISSUE: WoN the Deed of Donation executed by respondent Rosa Lim in
favor of her children can be rescinded for being in fraud of her alleged
creditor, petitioner Siguan?
HELD: NO.
 For accion pauliana to prosper, the ff. requisites must be present: (1)
the plaintiff asking for rescission has a credit prior to the alienation,
although demandable later; (2) the debtor has made a subsequent
contract conveying a patrimonial benefit to a third person; (3) the
creditor has no other legal remedy to satisfy his claim; (4) the act being
impugned is fraudulent; (5) the third person who received the property
conveyed, if it is by onerous title, has been an accomplice in the fraud.
 The general rule is that rescission requires the existence of creditors at
the time of the alleged fraudulent alienation, and this must be proved
as one of the bases of the judicial pronouncement setting aside the
contract. W/o any prior existing debt, there can neither be injury nor
fraud.
 However, while it is necessary that the credit of the plaintiff in the
accion pauliana must exist prior to the fraudulent alienation, the date of
the judgment enforcing it is immaterial. Even if the judgment be
subsequent to the alienation, it is merely declaratory, with retroactive
effect to the date when the credit was constituted. In the instant case,
the alleged debt of Lim in favor of petitioner was incurred in August
1990, while the deed of donation was purportedly executed on 10
August 1989. SC disagreed w/ the allegation of the petitioner that the
questioned deed was antedated to make it appear that it was made
prior to petitioner’s credit.
 Notably, that deed is a public document, it having been acknowledged
before a notary public As such, it is evidence of the fact which gave
rise to its execution and of its date, pursuant to Section 23, Rule 132 of
the Rules of Court. Petitioner’s contention that the public documents
referred to in said Section 23 are only those entries in public records
made in the performance of a duty by a public officer does not hold
water.
 The petitioner's contentions are not enough to overcome the
presumption as to the truthfulness of the statement of the date in the
questioned deed, which is 10 August 1989. Petitioner’s claim against
Lim was constituted only in August 1990, or a year after the
questioned alienation, making the first two requisites for the rescission
of contracts are absent.
 For the presumption of fraud to apply, it must be established that the
donor did not leave adequate properties which creditors might have
recourse for the collection of their credits existing before the execution
of the donation. Since petitioner’s alleged credit existed only a year
after the deed of donation was executed, she be said to have been
prejudiced or defrauded by such alienation.
 Further, petitioner did not present evidence that would indicate the
actual market value of Lim's properties. It was not, therefore,
sufficiently established that the properties left behind by Lim were not
sufficient to cover her debts existing before the donation was made.
Hence, the presumption of fraud will not come into play.
 The seven badges of fraud mentioned in Oria vs McMicking is not an
exclusive list, circumstances evidencing fraud are as varied as the
men who perpetrate the fraud in each case. But in this case the
petitioner failed to discharge the burden of proving any of the
circumstances enumerated above or any other circumstance from
which fraud can be inferred. Accordingly, since the four requirements
for the rescission of a gratuitous contract are not present in this case,
petitioner’s action must fail.
 In any case it is essential that the party asking for rescission under
accion pauliana to prove that he has exhausted all other legal means
to obtain satisfaction of his claim. Petitioner neither alleged nor proved
that she did so. On this score, her action for the rescission of the
questioned deed is not maintainable even if the fraud charged actually
did exist.
PETITION DISMISSED, CA decision affirmed.
JUAN F. NAKPIL & SONS, and JUAN F. NAKPIL vs. THE COURT OF
APPEALS, UNITED CONSTRUCTION COMPANY, INC., JUAN J. CARLOS,
and the PHILIPPINE BAR ASSOCIATION
G.R. No. L-47851
October 3, 1986
FACTS: Private respondents – Philippine Bar Association (PBA) – a non-profit
organization formed under the corporation law decided to put up a building in
Intramuros, Manila. Hired to plan the specifications of the building were Juan
Nakpil & Sons, while United Construction was hired to construct it. The
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proposal was approved by the Board of Directors and signed by the President,
Ramon Ozaeta. The building was completed in 1966. In 1968, there was an
unusually strong earthquake which caused the building heavy damage, which
led the building to tilt forward, leading the tenants to vacate the premises.
United Construction took remedial measures to sustain the building. PBA filed
a suit for damages against United Construction, but United Construction
subsequently filed a suit against Nakpil and Sons, alleging defects in the plans
and specifications.Technical Issues in the case were referred to Mr. Hizon, as
a court appointed Commissioner. PBA moved for the demolition of the building,
but was opposed. PBA eventually paid for the demolition after the building
suffered more damages in 1970 due to previous earthquakes. The
Commissioner found that there were deviations in the specifications and plans,
as well as defects in the construction of the building.
ISSUE: Whether or not an act of God (fortuitous event) exempts from liability
parties who would otherwise be due to negligence?
HELD: Art. 1174 of the NCC, states that no person shall be responsible for
events, which could not be foreseen. But to be exempt from liability due to an
act of God, the following must occur: 1) cause of breach must be independent
of the will of the debtor 2) event must be unforeseeable or unavoidable 3)
event must be such that it would render it impossible for the debtor to fulfill the
obligation 4) debtor must be free from any participation or aggravation of the
industry to the creditor. Although the general rule for fortuitous events stated
in Article 1174 of the Civil Code exempts liability when there is an Act of God,
thus if in the concurrence of such event there be fraud, negligence, delay in the
performance of the obligation, the obligor cannot escape liability therefore
there can be an action for recovery of damages. The negligence of the
defendant was shown when and proved that there was an alteration of the
plans and specification that had been so stipulated among them. Therefore,
therefore there should be no question that NAKPIL and UNITED are liable for
damages because of the collapse of the building. One who negligently creates
a dangerous condition cannot escape liability for the natural and probable
consequences thereof, although the act of a third person, or an act of God for
which he is not responsible, intervenes to precipitate the loss.
Republic v. Luzon Stevedoring (1967)
Petitioners: REPUBLIC OF THE PHILIPPINES, PLAINTIFF-APPELLEE
Respondents: LUZON STEVEDORING CORPORATION, DEFENDANT-
APPELLANT
Ponente: REYES, J.B.L.
Topic: Remedies for Breach
SUMMARY: (1-2 sentence summary of facts, issue, ratio and ruling)
FACTS:
- Barge L-1892 owned by Luzon. was being towed down the Pasig river by two
tugboats "Bangus" and "Barbero” (also owned by Luzon).
- The barge rammed against one of the wooden piles of Nagtahan bailey
bridge, smashing the posts and causing the bridge to list. At the time, the
river’s current was swift and the water was high due to heavy rains in Manila.
- The Republic sued the company for the actual and consequential damages
caused (P200,000).
- Luzon disclaimed liability, on the grounds that it had exercised due diligence
in the selection and supervision of its employees; that the damages to the
bridge were caused by force majeure; that plaintiff has no capacity to sue; and
that the Nagtahan bailey bridge is an obstruction to navigation.
- CFI held Luzon liable for the damage caused by its employee and ordered it
to pay the actual cost of the repair of the Nagtahan bailey bridge
(P192,561.72), with legal interest thereon from the date of the filing of the
complaint.
- Luzon appealed directly to SC, raising questions both of fact and of law.
ISSUES:
 WON the collision of Luzon’s barge with the supports or piers of the
Nagtahan bridge was in law caused by fortuitous event or force
majeure
o NO. Considering that the Nagtahan bridge was an immovable
and stationary object and provided with adequate openings for
the passage of water craft, including barges, it is undeniable
that the unusual event that the barge, exclusively controlled by
appellant, rammed the bridge supports raises a presumption of
negligence on Luzon’s part or its employees manning the
barge or the tugs that towed it. For in the ordinary course of
events, such a thing does not happen if proper care is
used. In Anglo American Jurisprudence, the inference arises
by what is known as the "res ipsa loquitur" rule.
o Luzon strongly stresses the precautions taken by it: that it
assigned two of its most powerful tugboats to tow down river
its barge; that it assigned to the task the more competent and
experienced among its patrons, had the towlines, engines and
equipment double-checked and inspected; that it instructed its
patrons to take extra precautions; and concludes that it had
done all it was called to do, and that the accident, therefore,
should be held due to force majeure or fortuitous event.
o These very precautions, however, completely destroy the
appellant's defense. For caso fortuito or force majeure (which
in law are identical in so far as they exempt an obligor from
7
 liability) by definition, are extraordinary events not forseeable
or avoidable, "events that could not be foreseen, or which,
though foreseen, were inevitable" (A1174, NCC). It is,
therefore, not enough that the event should not have been
fore seen or anticipated, as is commonly believed but it
must be one impossible to foresee or to avoid. The mere
difficulty to foresee the happening is not impossibility to
foresee the same.
NOTES:
SC: when a party appeals directly to the Supreme Court, and submits his case
there for decision, he is deemed to have waived the right to dispute any finding
of fact made by the trial Court. The only questions that may be raised are
those of law.
Dioquino v. Laureano
G.R. No. L-25906
Facts: Attorney Pedro Dioquino, a practicing lawyer of Masbate, is the owner
of a car. On March 31, 1964, he went to the office of the MVO, Masbate, to
register the same. Attorney Dioquino requested the defendant Federico
Laureano to introduce him to one of the clerks in the MVO Office, who could
facilitate the registration of his car and the request was graciously attended to.
Defendant Laureano rode on the car of Atty. Dioquino on his way to the P.C.
Barracks at Masbate. While about to reach their destination, the car driven by
plaintiff's driver and with defendant Federico Laureano as the sole passenger
was stoned by some 'mischievous boys,' and its windshield was broken.
The defendant Federico Laureano refused to file any charges against the boy
and his parents because he thought that the stone-throwing was merely
accidental and that it was due to force majeure. Laureano refused to pay for
the damaged done to the windshield and challenged the case for judicial
adjudication. There is no question that the plaintiff tried to convince the
defendant Federico Laureano just to pay the value of the windshield and he
even came to the extent of asking the wife to convince her husband to settle
the matter amicably but the defendant Federico Laureano refused to make any
settlement, clinging [to] the belief that he could not be held liable because a
minor child threw a stone accidentally on the windshield and therefore, the
same was due to force majeur.
Including in the action filed the wife, Aida de Laureano, and the father, Juanito
Laureano.
Issue:
(1) Wheter or not there was fortuitous event and Federico Laureano
is liable to pay for damages.
(2) Whether or not the plaintiff is liable for damages for including
Federico Laureano’s wife and father.
Held:
(1) The express language of Art. 1174 of the present Civil Code states
that "Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be, foreseen, or
which, though foreseen were inevitable." Authorities of repute are
in agreement, more specifically concerning an obligation arising
from contract "that some extraordinary circumstance independent
of the will of the obligor, or of his employees, is an essential
element of a caso fortuito." 5 If it could be shown that such indeed
was the case, liability is ruled out. There is no requirement of
"diligence beyond what human care and foresight can provide." 6
The throwing of the stone by the child was clearly unforeseen or if
foreseen, was inevitable. Hence, the law being what it is, such a
belief on the part of defendant Laureano was justified and he shall
not be held liable for the damages caused to the car.
(2) No moral damages should be awarded against the parties.
Mistaken as plaintiff apparently was, it cannot be concluded that
he was prompted solely by the desire to inflict needless and
unjustified vexation on them. Considering the equities of the
situation, plaintiff having suffered a pecuniary loss which while
resulting from a fortuitous event, perhaps would not have occurred
at all had not defendant Federico Laureano borrowed his car, we,
feel that he is not to be penalized further by his mistaken view of
the law in including them in his complaint. Well-worth paraphrasing
is the thought expressed in a United States Supreme Court
decision as to the existence of an abiding and fundamental
principle that the expenses and annoyance of litigation form part of
the social burden of living in a society which seeks to attain social
control through law.
Austria vs Court Of Appeals GR No. L-
29640 June 10, 1971
NATURE:
Guillermo Austria petitions for the review of the decision rendered by the Court
of Appeals, on the sole issue of whether in a contract of agency (consignment
of goods for sale) it is necessary that there be prior conviction for robbery
8
before the loss of the article shall exempt the consignee from liability for such
loss.
FACTS
On Jan. 1961, Maria G. Abad acknowledged having received from
Guillermo Austria one (1) pendant with diamonds valued at P4,500.00, to be
sold on commission basis or to be returned on demand.- On Feb. 1961,
however, while walking home Abad was said to have been accosted by two
men, who hit her and snatched her purse containing the pieces of jewelry and
cash. The incident became the subject of a criminal case against certain
persons. As Abad failed to return the jewelry or pay for its value
notwithstanding demands, Austria brought an action against her and her
husband for recovery of the pendant or of its value, and damages. Answering
the allegations of the complaint, defendants spouses set up the defense that
the alleged robbery had extinguished their obligation.
Trial court rendered judgment for the plaintiff. It was held that
defendants failed to prove the fact of robbery, or, if indeed it was committed,
that defendant Maria Abad was guilty of negligence when she went home
without any companion, although it was already getting dark and she was
carrying a large amount of cash and valuables on the day in question, and
such negligence did not free her from liability for damages for the loss of the
jewelry.
CA reversed the judgment on the basis of the lack of credibility of the
two defense witnesses who testified on the occurrence of the robbery, and
holding that the facts of robbery and defendant Maria Abad's possession of the
pendant on that unfortunate day have been duly established, declared
respondents not responsible for the loss of the jewelry on account of a
fortuitous event.
Plaintiff thereupon instituted the present proceeding.
ISSUE
1. Whether or not Court of Appeals erred in finding that there was robbery in
the case, thus extinguishing Abad’s liability, although nobody has been found
guilty of the supposed crime.
2. Whether or not Abad was guilty of negligence.
HELD
1. No. To constitute a caso fortuito that would exempt a person from
responsibility, it is necessary that (1) the event must be independent of the
human will (or rather, of the debtor's or obligor's); (2) the occurrence must
render it impossible for the debtor to fulfill the obligation in a normal manner,
and that (3) the obligor must be free of participation in, or aggravation of, the
injury to the creditor.
The point at issue in this proceeding is how the fact of robbery is to be
established in order that a person may avail of the exempting provision of
Article 1174 of the new Civil Code, which reads as follows:" ART. 1174. Except
in cases expressly specified by law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk,
no person shall be responsible for those events which could not be foreseen,
or which, though foreseen, were inevitable."
The emphasis of the provision is on the events, not on the agents or
factors responsible for them. To avail of the exemption granted in the law, it is
not necessary that the persons responsible for the occurrence should be found
or punished; it would only be sufficient to establish that the unforeseeable
event, the robbery in this case, did take place without any concurrent fault on
the debtor's part, and this can be done by preponderant evidence.
2. No. It is undeniable that in order to completely exonerate the debtor
for reason of a fortuitous event, such debtor must also be free of any
concurrent or contributory fault or negligence. This is apparent from Article
1170 of the Civil Code of the Philippines, providing that:
"ART. 1170. Those who in the performance of their obligations are
guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof. are liable for damages."- It is clear that
under the circumstances prevailing at present in the City of Manila and
its suburbs, with their high incidence of crimes against persons and
property, that renders travel after nightfall a matter to be sedulously
avoided without suitable precaution and protection. The conduct of
respondent Maria G. Abad, in returning alone to her house in the
evening, carrying jewelry of considerable value, would be negligent per
se, and would not exempt her from responsibility in the case of a
robbery. We are not persuaded, however, that the same rule should
obtain ten years previously, in 1961, when the robbery in question did
take place, for at that time criminality had not by far reached the levels
attained in the present day.
Disposition:
Petition in this case is hereby dismissed, with costs against the
petitioner.