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Define Quasi-Delict
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi- delict and is governed by the provisions of this Chapter. (Art. 2176, New Civil Code)
Recite Article 2176 of NCC
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi- delict and is governed by the provisions of this Chapter. (Art. 2176, New Civil Code)
Define Tort
1. Acts giving rise to civil liability but are not necessarily the consequences of crimes or contractual obligations. (Paras, Pre-week Handbook in Civil Law, p. 588, 2012)
2. An unlawful violation of a private right, not created by contract, and which gives rise to an action for damages. It is a wrongful act or omission resulting in breach of a private legal duty, as distinguished from a mere breach of contractual duty, and damage from said breach of duty of such a character as to afford a right of redress at law in favor of the injured party against the wrongdoer (Aquino, Torts and Damages, p.1, 2013)
Elements of Quasi-Delict
Damage suffered by plaintiff
Fault or Negligence of the defendant, or some other person for whose acts he must respond
Connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff
No pre-existing contractual relation between the parties (Andamo v. International Appellate Court G.R. No. 74761, 1990)
Recite Article 23 of the New Civil Code
Article 23. Even when an act or event causing damage to another's property was not due to the fault or negligence of the defendant, the latter shall be liable for indemnity if through the act or event he was benefited.
What is the concept of Strict Liability Tort? What are some example provisions on the concept?
A strict liability tort is imposed by law despite the absence of fault or negligence on the part of the person liable. You need not be negligent to be liable. You maintain this property or use this property or engage in this activity, if something happens then you are automatically liable. The nature of the activity requires you to be careful. Few people engage in this or if they do, they are expected to know that they could be held responsible for damages or injuries caused to other persons.
EXAMPLE OF STRICT LIABILITY TORT PROVISIONS
a. Article 2183 (Possessor/User of Animal)
b. Article 2187 (Manufacturers and Processors)
c. Article 2193 (Head of Family Things Thrown or Falling from Building)
Recite the Triumvirate Provisions on Abuse of Rights
Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.
Article 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.
Article 21. Any person who wilfully causes loss or injury to another in manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
Prescription of a contract, obligation created by law and a judgment?
10 years
Prescription of an injury to the rights of a plaintiff and a quasi-delict?
4 years
Prescription when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff
1 year
Elements of Tort Interference (EKI) - memorize this thoroughly
(1) Existence of a valid contract;
(2) Knowledge on the part of the third person of the existence of a contract; and
(3) Interference of the third person is without legal justification.
Does lack of malice prevent damages and legal liability?
Yes. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones.
What is the Characterization or the “Doctrine of Qualification”?
Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall.
It is the "process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule." The purpose of “characterization" is to enable the forum to select the proper law.
Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact.
Give examples of "test factors" or "points of contact" or "connecting factors"
SAFE-PINS/SAFE-JINS
Nationality
Seat of/Principal Place of Business,
Locale or the Situs of a thing
Place of Contract/Act
Place of Performance/Effect
Intent
Place of Judicial/Legal Proceedings
Flag of a Ship
What is the “Most Significant Relationship” Rule?
Under the state of the most significant relationship rule, to ascertain what state law to apply to a dispute, the court should determine which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties. This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.
Who are considered to be Joint Tortfeasors?
Joint tortfeasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves.
Other Defn.: The person or persons whose negligence or concurrent and whose responsibility is deemed solidary.
What are the requisites before a person may be liable under quasi-delict/tort?
There must be an act or omission;
There must be damage or prejudice;
There must be causal relationship between the act or omission and the damage done;
There must be no pre-existing contractual relationship between the parties.
Elements of Article 19 of NCC
(1) the existence of a legal right or duty,
(2) an exercise of such right or discharge of such duty in bad faith, and
(3) such exercise of right or discharge of duty was made with the sole intent of prejudicing or injuring another.
Does Article 19 provide a remedy for its breach?
Article 19 is a mere moral precept. While it lays down a rule of conduct for the government of human relations and for the maintenance of social order, it does not provide a remedy for its violation. Generally, an action for damages under either Article 20 or Article 21 would be proper.
Elements of Article 20 of NCC
There’s an act contrary to law
Act is committed wilfully or negligently
Act causes damage to another
Elements of Article 21 of NCC
There is an act which is legal
Act is contrary to morals, good customs, public order or public policy
It is done with intent to injure
Who is considered the Principal or Sole Tortfeasor?
This is the person whose act or omission directly or principally causes the injury or damage.
What is the Test of Negligence?
Ask “Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation?”
If not, then he is guilty of negligence.
*Picart vs. Smith, 37 Phil. 809
What is the Collateral Source Rule?
A tortfeasor has no right to any mitigation of damages because of payments or compensation received by the injured person from an independent source.
What are the kinds of torts?
Corporate tort
Environmental tort
Medical tort
Maritime tort
Product liability tort
In the Velayo case, the defendant, Shell Company of the Philippine Islands, Ltd. (Shell), was a creditor of Commercial Air Lines, Inc. (CALI), an insolvent corporation. Shell had a debt of US$50,000 against CALI. CALI also had a plane that was located at the Ontario International Airport in California. Shell knew of CALI's insolvency and that CALI's creditors were planning to recover the plane and sell it to satisfy their debts. However, Shell assigned its debt against CALI to its sister corporation, Shell Oil Company, Inc., of the United States. Shell Oil Company then filed a lawsuit in California to recover the plane. Shell Company argued it is not liable for damages because there is nothing in the law which prohibits a company from assigning its credit, it being a common practice. Is Shell correct?
No. SC held that Shell was liable to CALI's creditors for damages. Shell's actions were a violation of Article 19 of the Civil Code, which provides that "any person must, in the exercise of his rights and in the performances of his duties, act with justice, give everyone his due and observe honesty and good faith". The basis of such liability, in the absence of law, is Article 21 of the Civil Code which states:
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.
Thus at one stroke, the legislator, if the forgoing rule is approved (as it was approved), would vouchsafe adequate legal remedy for that untold numbers of moral wrongs which is impossible for human foresight to provide for specifically in the statutes. A moral wrong or injury, even if it does not constitute a violation of a statute law, should be compensated by damages. Moral damages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy.
In Cachero v. Manila Yellow Taxi, plaintiff boarded a Yellow Taxi driven by Gregorio Mira Abinion. The taxicab bumped a Meralco post. The plaintiff fell out of the vehicle to the ground and sustained slight physical injuries. Plaintiff wrote a letter to the defendant, demanding payment covering actual transportation and medical expenses, monetary loss, compensatory and exemplary damages. Defendant offered to settle the case amicably, but the parties were not able to agree on the settlement amount. Plaintiff instituted an action for damages. The CFI lowered the moral damages. The plaintiff filed an instant appeal contending that the award for moral damages and attorney’s fees is inadequate. Is he correct?
No. In the case of Cachero v. Manila Yellow Taxi, the SC held that a mere perusal of plaintiff complaint will show that his action against the defendant is predicated on an alleged breach of contract of carriage, i.e., the failure of the defendant to bring him "safely and without mishaps" to his destination, and it is to be noted that the chauffeur of defendant's taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira, has not even been made a party defendant to this case. The defendant herein has not committed in connection with this case any "criminal offense resulting in physical injuries". The one that committed the offense against the plaintiff is Gregorio Mira, and that is why he has been already prosecuted and punished therefor. We, therefore, hold that the case at bar does not come within the exception of paragraph 1, Article 2219 of the Civil Code.
In the Baksh v. CA case, private respondent, filed a complaint against the petitioner, for breach of promise to marry. Private respondent alleged that she and Baksh had agreed to get married after the end of the school semester, but that Baksh had later changed his mind. She sought damages for the emotional distress and suffering that she had experienced as a result of Baksh's breach. How did the Court rule?
The SC held that a breach of promise to marry per se is not an actionable wrong. But where a man's promise to marry is the proximate cause of the acceptance of his love by a woman and his representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself unto him in a sexual congress, proof that the promise was only a deceptive device to inveigle her to obtain her consent to the sexual act, could justify the award of damages pursuant to Art. 21 not because of such promise to marry but because of the fraud and deceit behind it and the willful injury to her honor and reputation which followed thereafter. It is essential, however, that such injury should have been committed in a manner contrary to morals, good customs or public policy.
(Gashem Shookat Baksh v. CA, G.R. No. 97336, 19 Feb. 1993)
What is the essence of tort?
Essentially, "tort" consists in the violation of a right given or the omission of a duty imposed by law. Simply stated, tort is a breach of a legal duty.
Naguiat v. NLRC
Rico filed a complaint against the respondent, Union Bank of the Philippines, for damages. Rico alleged that Unionbank had been grossly negligent in handling his credit card account, which had resulted in his credit card being declined at a restaurant. He claimed that this had caused him embarrassment and humiliation. Union Bank defended its actions, stating that they acted in good faith and explained each disputed charge. They argued Rico failed to adhere to credit card terms and sought attorney's fees litigation expenses. The trial court ruled in favor of Rico, awarding him moral damages, exemplary damages, and attorney's fees. The CA found that the damages imposed by the RTC were excessive and modified them. Rico raised his contentions to the SC whether the modifications of the CA on his award for damages was correct. Decide.
No, the award of damages is unjustified at best.
Under Article 2220, in breaches of contract where the defendant acted fraudulently or in bad faith, it is a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due.
In this case, Union Bank neither breached its contract with Rico nor acted with willful intent to cause harm when it revoked Rico's credit card privileges when he failed to pay the minimum amount due on his SOA. Nobody can be faulted for Rico's alleged humiliation or embarrassment in Gourdo's Restaurant but himself. Damnum absque injuria – there can be no damage without injury when the loss or harm was not the result of a violation of a legal duty.
Rico v. Union Bank
To recover the damages due to embarrassment, humiliation, hurt pride, and wounded feelings inflicted by MERALCO & YAMBAO during the disconnection of the CHAVES FAMILY's electrical service; the CHAVES FAMILY filed a complaint at CFI-Manila. The court ordered MERALCO & YAMBAO to pay 10,000 pesos to the CHAVES FAMILY as payment for damages. Hence, MERALCO & YAMBAO filed an appeal in the CA, but the CA denied the petition.
It was found that the CHAVES FAMILY is a customer of MERALCO. The CHAVES FAMILY claims that MERALCO did not provide any notice before the disconnection. CHAVEZ FAMILY contends that it must be compulsory to issue a disconnection notice, MERALCO & YAMBAO say that they have the right to disconnect the electric service of the delinquent customer; because the CHAVES FAMILY failed to pay certain bills (bills in arrears).
Can Meralco be held for damages?
YES. Article 1170 of the New 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. In this case, the right to disconnect the electric service of a delinquent customer shall be accompanied by a given notice 48 hours in advanced as provided for in Section 97 of the Revised Order No. 1 of the Public Service Commission. In accordance with the previous rulings, failure to give such prior notice amounts to a tort. And since, MERALCO & YAMBAO in this particular case disregarded the rule on 48-hour notice prior to disconnection which is protected by law, MERALCO & YAMBAO is liable for damages
Meralco v. Yambao
Recite Article 1170
Article 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. (1101)
Recite Article 2220
Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.
Petitioner CFTI held a concessionaire's contract with the Army Air Force Exchange Services ("AAFES") for taxi services at Clark Air Base. The drivers, previously employed by CFTI, paid a daily fee and covered vehicle expenses. Due to the base's closure, their services were terminated. Negotiations for severance pay resulted in an agreement, but some drivers, disaffiliating from the union, filed a complaint for separation pay. They claimed to be regular employees of Naguiat Enterprises, managed by CFTI. The labor arbiter awarded a higher amount for humanitarian reasons, disagreeing with CFTI's financial claims. The NLRC modified this decision, specifying the payment in Philippine pesos. The court ordered Sergio F. Naguiat Enterprises to be jointly liable. The petitioners' motion for reconsideration was denied, leading to their appeal. Are the private respondents entitled to separation pay making the CFTI and its officers liable for torts?
Yes. According to the case of Naguiat v. NLRC, the Corp Code provides that stockholders of close family corporations shall be personally liable for corporate torts. Petitioners conceded that CFTI and NE were close family corporations. Tort is a breach of a legal duty. The Labor Code mandates the employer to grant separation pay to employees in case of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, which is the condition obtaining at bar. In this case, CFTI failed to comply with this law-imposed duty or obligation. Petitioners stopped their taxi business within Clark Air Base because of the phase-out of U.S. military presence thereat. It was not due to any great financial loss because petitioners' taxi business was earning profitably at the time of its closure.
Naguiat v. NLRC
Banana farmers alleged that the Banana foreign companies they had worked with failed to pay them the minimum wage, had not provided them with adequate safety gear, and had forced them to work long hours without overtime pay. The farmers also alleged that the companies had used pesticides and other chemicals that had harmed their health and the environment.
The banana foreign companies denied the allegations, and argued that the farmers were independent contractors, not employees. The companies also argued that they were not subject to Philippine labor laws because they were exporting their bananas to foreign markets. They argued that the specific tort asserted against defendant foreign companies in the present complaint is product liability tort and that the RTC only has jurisdiction, if and only if the Civil Code of the Philippines, or a suppletory special law prescribes a product liability tort, inclusive of and comprehending the specific tort described in the complaint of the plaintiff workers. Are the contentions of the Banana companies correct?
No. 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. Additionally, it is a settled rule in Philippine jurisdiction that jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint, irrespective of whether or not the plaintiffs are entitled to recover upon all or some of the claims asserted therein. In this case, the allegations in the Amended Joint-Complaints of NAVIDA, et al., and ABELLA, et al., attribute to defendant companies certain acts and/or omissions that led to their exposure to nematocides containing the chemical DBCP. According to NAVIDA, et al., and ABELLA, et al., such exposure to the said chemical caused ll effiects, injuries and illnesses, specifically to their reproductive system. These allegations in the complaints constitute the cause of action of plaintiff claimants — a quasi-delict, which under the Civil Code is defined as an act, or omission which causes damage to another, there being fault or negligence.
Navida et. al. v. Hon. Dizon
Spouses Cruz owned a property levied for unpaid taxes. Bustos won it in an auction and applied for a new title. Notices of lis pendens showed the property was part of MSI's rehabilitation case. Bustos sought to exclude it from the Stay Order, claiming it still belonged to Spouses Cruz. The RTC and CA disagreed. The CA held that the Cruz Spouses were the owners during the delinquency sale and at the time of the Stay Order. Bustos appealed, arguing against Cruz's liability for MSI's debts, the Stay Order's impact on taxation, and the time bar rule. Respondents countered that Cruz, as stockholders and officers, were personally liable for MSI's debts, and that the Rehabilitation Plan's approval barred further contestation. Did the CA correctly considered the properties of Spouses Cruz answerable for the obligations of MSI?
No. According to the Corporation Code, stockholders actively engaged in the management or operation of the business and affairs of a close corporation shall be held to strict fiduciary duties to each other and among themselves. The stockholders shall be personally liable for corporate torts unless the corporation has obtained reasonably adequate liability insurance. In this case, neither the CA nor the RTC showed its basis for finding that MSI is a close corporation. The courts a quo did not at all refer to the Articles of Incorporation of MSI. The Petition submitted by respondent in the rehabilitation proceedings before the RTC did not even include those Articles of Incorporation among its attachments. Neither did the RTC or the CA explain the factual circumstances for this Court to discuss the personally liability of respondents to their creditors because of "corporate torts."
Bustos v. MSI
Respondent Candano Shipping Lines, Inc. signed a time charter agreement with Apo Cement Corp. over the former's vessel, M/V Romeo. The agreement was executed for the delivery of Apo Cement's cargo consisting of cement from Cebu to Albay. M/V Romeo was loaded with 31,250 bags of cement, equivalent to 1,250 metric tons. The cargo was insured with CGU International Insurance.
M/V Romeo was on its way out of the pier in Apo channel when it collided with M/V Aleson Carrier, which was owned by Aleson Shipping. M/V Aleson's front hull hit the side of M/V Romeo. As a result, a gaping hole in the mid-section of M/V Romeo caused it to instantly sink, taking with it the bags of cement worth P3,427,500. Apo Cement demanded payment from Candano, and Aleson Shipping, but to no avail; hence, it made an insurance claim with CGU Insurance, which was granted. CGU Insurance then filed a case against Candano and Aleson before the RTC claiming actual damages and attorney's fees. The RTC found Aleson Shipping solely liable for the collision.
The CA affirmed the decision of the lower court. Aleson Shipping moved for reconsideration, but it was denied. Thus they filed a Rule 45 petition before the SC. Petitioner contends that there can be no presumption of negligence against it as it is not a common carrier under a contract of carriage which must exercise extraordinary diligence. Decide the case.
Petitioner’s contention fails. In the case of Aleson v. CGU, the court held that an action based on quasi-delict resulting from maritime collision is not specifically regulated by the Civil Code, but by the Code of Commerce. Under the Code of Commerce, to be cleared of liability under the provisions on Collisions, a vessel must show that it exercised ordinary diligence. This level of diligence is the diligence which "an ordinary prudent man would exercise with regard to his own property." Applying this standard to petitioner, it failed to observe the diligence by the law. Based on the testimony of its own witness, M/V Aleson was recklessly operated. Captain Cabeltes admitted that M/V Romeo was still in the pier when M/V Aleson was about to enter the Apo channel. Despite knowledge of this information, Captain Cabeltes failed to act with caution. He himself declared that he was informed by the pier operator to standby and to not enter the wharf yet, but it still proceeded.
Petitioners maintain that the construction of the Agus Regulation Dam in 1979 altered the water level of Lake Lanao, with the water held causing flood around the lakeshores, which in turn destroyed their farmlands and crops. Petitioners reiterate that they suffered damages due to the flooding, specifically in 1979, 1984, 1985, 1986, 1991, 1992, 1993, 1994 and 1995, since the Agus Regulation Dam became operational. On the other hand, the NPC denies liability for environmental tort based on negligence, claiming that it was neither at fault nor negligent in performing its duties under Memorandum Order No. 398. Is the contention of NPC correct?
NO. According to the case of Sanggacala v. NPC, essential elements of an environmental tort based on negligence are the following: that the environmental harm is (1) is to a well-defined area or specific person or class of persons, (2) is readily supported by general and specific causation, and (3) closely fits the traditional elements of a tort cause of action.
In this case, the essential elements of an environmental tort action based on negligence are present.
The environmental harm in a well-defined area or specific person or class of persons is the damage to the farmlands and other properties of petitioners sited along the shore of Lake Lanao.
The finding of the respondent's negligence in operating the Agus Regulation Dam caused inundation and damage to petitioners' properties shows a general and specific causation and closely fits the traditional elements of a tort cause of action.
Essential elements of an environmental tort based on negligence
SFW
that the environmental harm is to a Well-defined area or specific person or class of persons;
is readily Supported by general and specific causation, and;
closely Fits the traditional elements of a tort cause of action.
What does Environmental Harm include in the context of Environment Tort?
Environmental harm may include "immediate and future physical injury to people, emotional distress from fear of future injury, social and economic disruption, remediation costs, property damage, ecological damage, and regulatory harms."
Sanggacala v. NPC
X filed a complaint against his doctors for medical malpractice four years and five months after the alleged malpractice occurred. However, X explicitly anchors his action on the implied contract for medical treatment with his doctors. It is the position of X that an action alleging medical negligence may be brought at the same time under the contract theory. Since he has also alleged the contractual relation of physician and patient, X argues that the prescriptive period of actions based on quasi-delict under Art. 1146 of the Civil Code should not apply. Instead, Arts. 1144 and 1145 on prescription of contracts should govern this case.
The doctors filed a motion to dismiss the complaint on the ground that it was barred by prescription. They argue that X’s action was based on quasi-delict and is already barred, having been filed beyond the four-year prescriptive period. Are the doctor’s contentions correct?
YES. In the case of De Jesus v. Uyloan, medical malpractice or, more appropriately, medical negligence, is that type of claim which a victim (patient) has available to him or her to redress a wrong committed by a medical professional which has caused bodily harm. For lack of a specific law geared towards the type of negligence committed by members of the medical profession in this jurisdiction, such claim for damages is almost always anchored on the alleged violation of Art. 2176 of the Civil Code. Hence if it’s a violation of Article 2176, the action should have been instituted within four years. De Jesus’ cause of action accrued on September 15, 2010, the day Dr. Uyloan and Dr. Ojeda performed the operation on his gallbladder. Clearly, the filing of the case against said physicians on November 10, 2015, is already barred by prescription.
Prescription of written contract, obligations created by law, and judgment
Article 1144 of NCC - 10 years:
Article 1144. The following actions must be brought within ten years from the time the right of action accrues: |
(1) Upon a written contract; |
(2) Upon an obligation created by law; |
(3) Upon a judgment. (n) |
Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8).
The statutory basis for a civil action for damages for malicious prosecution are found in the provisions of the New Civil Code on Human Relations and on damages, particularly Articles ____.
Malicious Prosecution
'An action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R, November 19,1956).'
To constitute malicious prosecution, however, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless.
What constitutes malicious prosecution?
Does the the mere act of submitting a case to the authorities for prosecution make one liable for malicious prosecution?
No
Four Elements of Malicious Prosecution
(1) the prosecution did occur, and the defendant was himself the prosecutor or that he instigated its commencement;
(2) the criminal action finally ended with an acquittal;
(3) in bringing the action, the prosecutor acted without probable cause; and
(4) the prosecution was impelled by legal malice an improper or a sinister motive.
What is the gravamen of malicious prosecution?
the deliberate initiation of an action with the knowledge that the charges were false and groundless not the filing of a complaint based on the wrong provision of law
The nature and purpose of Article 19 of the Civil Code as discussed in Globe Mackay Radio and Cable Corp. v. CA
This article, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which must be observed not only in the exercise of one's rights but also in the performance of one's duties. These standards are the following: to act with justice; to give everyone his due; and to observe honesty and good faith.
Does Article 19 provide a remedy for its violation?
No. Generally, an action for damages under either Article 20 or Article 21 would be proper.
In Chevron Philippines, Inc. v. Mendoza, the Supreme Court has held that abuse of rights under Article 19 has three elements, namely?
(1) the existence of a legal right or duty,
(2) an exercise of such right or discharge of such duty in bad faith, and
(3) such exercise of right or discharge of duty was made with the sole intent of prejudicing or injuring another.
What is the crucial element to a violation of Article 19?
Bad Faith
Article 19
This article imposes upon all persons exercising their legal rights the duty to act with justice, give everyone his due, and to observe honesty and good faith.
Failure to discharge duties in Article 19 of NCC is compensable under what Article if the act is contrary to law?
Article 20
Failure to discharge duties in Article 19 of NCC is compensable under what Article if the act is legal but "contrary to morals, good customs, or public policy?
Article 21
Recite Article 19
Article 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.
Recite Article 20
Article 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.
Recite Article 21
Article 21. Any person who wilfully causes loss or injury to another in manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
Is bad faith under the law presumed?
Bad faith under the law cannot be presumed; it must be established by clear and convincing evidence.
Are Joint Tortfeasors equally liable?
No. In the case of Go v. Cordero, the Supreme Court held that joint tortfeasors are not liable pro rata. The damages can not be apportioned among them, except among themselves. They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable for the whole amount.
Prescription of the following:
(1) Upon an injury to the rights of the plaintiff; |
(2) Upon a quasi-delict; |
Article 1146. The following actions must be instituted within four years: |
(1) Upon an injury to the rights of the plaintiff; |
(2) Upon a quasi-delict; |
However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. (As amended by PD No. 1755, Dec. 24, 1980.) |
In the event that the injured party receives money or compensation from a third party, is the tortfeasor entitled to any reduction in damages?
No. In the case of MMPSEU vs. Mitsubishi Motors, the Supreme Court held that according to the collateral source rule, "a tortfeasor has no interest in, and thereby no right to benefit from, money received by the injured person from sources unrelated to the defendant."
Define the Collateral Source Rule
This rule was originally applied to tort cases wherein the defendant is prevented from benefiting from the plaintiff’s receipt of money from other sources. Under this rule, if an injured person receives compensation for his injuries from a source wholly independent of the tortfeasor, the payment should not be deducted from the damages which he would otherwise collect from the tortfeasor.
Prescription for cases that were filed by the subrogee-insurer during the applicability of the Vector ruling (i.e., from Vector's, finality on August 15, 2013 up until the finality of HENSON Decision/Ruling
10 YEARS from the time of payment by the insurer to the insured, which gave rise to an obligation created by law.
RATIONALE: Since the Vector doctrine was the prevailing rule at this time, issues of prescription must be resolved under Vector's, parameters.
Prescription for cases that were filed by the subrogee-insurer prior to the applicability of the Vector ruling (i.e., before August 15, 2013),
4 YEARS from the time the tort is committed against the insured by the wrongdoer.
RATIO: The Vector doctrine, which espoused unique rules on legal subrogation and prescription as aforedescribed, was not yet a binding precedent at this time; hence, issues of prescription must be resolved under the rules prevailing before Vector, which, incidentally, are the basic principles of legal subrogation vis-a-vis prescription of actions based on quasi-delicts.
Prescription for cases where the tort was committed and the consequent loss/injury against the insured occurred prior to the finality of HENSON Decision
the subrogee-insurer is given a period not exceeding four (4) years from the time of the finality of this Decision to file the action against the wrongdoer: provided, that in all instances, the total period to file such case shall not exceed ten (10) years from the time the insurer is subrogated to the rights of the insured.
RATIO: The erroneous reckoning and running of the period of prescription pursuant to the Vector doctrine should not be taken against any and all persons relying thereon because the same were based on the then- prevailing interpretation and construction of the Court. Hence, subrogees-insurers, who are, effectively, only now notified of the abandonment of Vector, must be given the benefit of the present doctrine on subrogation as ruled in this Decision.
However, the benefit of the additional period (i.e., not exceeding four 4 years) under this Decision must not result in the insured being given a total of more than ten (10) years from the time the insurer is subrogated to the rights of the insured (i.e., the old prescriptive period in Vector); otherwise, the insurer would be able to unduly propagate its right to file the case beyond the ten (10)-year period accorded by Vector to the prejudice of the wrongdoer.
Prescription for cases where the tort was committed and the consequent loss/injury against the insured occurred only upon or after the finality of HENSON Decision
the Vector doctrine would hold no application. The prescriptive period is four (4) years from the time the tort is committed against the insured by the wrongdoer.
Rationale: Since the cause of action for quasi-delict and the consequent subrogation of the insurer would arise after notice of Vector's abandonment, all persons would now be bound by the present doctrine on subrogation as ruled in this Decision.
Jurisdiction over tort cases
Regular Courts
In the case of Sps. Dalen, et. al v. Mitsui, how did the SC rule on the jurisdictional issue?
SC held that in deciding whether a case arises out of employer-employee relations, the Court formulated the "reasonable causal connection rule", wherein if there is a reasonable connection between the claim asserted and the employer-employee relations, then the case is within the jurisdiction of the labor courts.
In this case, petitioners' claim for damages is grounded on respondents' gross negligence which caused the sinking of the vessel and the untimely demise of their loved ones. Based on this, the subject matter of the complaint is one of claim for damages arising from quasi-delict, which is within the ambit of the regular court's jurisdiction.
In Filcon v. UCPB, what guideline was applied when it came to prescription?
The SC applied paragraph 1(b) of the Henson Ruling Guidelines. Since the action was filed on February 1, 2012, prior to Vector, the applicable prescriptive period is four (4) years pursuant to Article 1146 of the Civil Code. Respondent, therefore, had four (4) years from November 16, 2007 when the vehicular mishap took place or until November 16, 2011 within which to file its action for sum of money against Vergara and his employer Filcon.
Within the four (4) year prescriptive period, or on September 1, 2011, respondent sent petitioners a demand letter of even date. The latter never denied receipt thereof. Pursuant to Article 1155 of the Civil Code, respondent's demand letter and petitioners' receipt thereof had the effect of interrupting the four (4) year prescriptive period and gave respondent a whole fresh period of four (4) years from petitioners' receipt of the demand letter within which to file the action for sum of money. Records show that respondent filed the action just within five (5) months from September 1, 2011, the date when it sent the demand letter to petitioners, who, as stated, never denied receipt thereof.
The Court of Appeals, thus, correctly reversed the dispositions of both MeTC and RTC and in lieu thereof, properly ruled that complaint was filed within the prescriptive period of four (4) years.
Test factors to be considered under the most significant relationship principle [SAFE-JINS]
SAFE-JINS
(1) The Nationality of a person, his [or her] domicile, his [or her] residence , his [or her] place of sojourn, or his [or her] origin;
(2) the Seat of a legal or juridical person, such as a corporation;
(3) the Situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real rights are involved;
(4) the place where an Act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into Effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised;
(6) the Intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis,·
(7) the place where Judicial or administrative proceedings are instituted or done. The lex fori -the law of the forum is particularly important because, as we have seen earlier, matters of ‘procedure’ not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law, and
(8) the Flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.
Lex loci delicti
Law of the place of the wrong or tort
In the case of Vde de Alacañeses v. Alacañeses, what is the ruling on the issue whether or not Philippine law may be applied to order the division of an international carrier's indemnity payment to a Filipino widow?
The SC held under the Doctrine of Qualification, it was necessary to determine under what category a certain set of facts or rules fall. This is to enable the forum to select the proper law to apply to a case. Additionally, choice-of-law rules invariably consist of a factual relationship (like a property right or a contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing. In this case, pursuant to these guidelines and upon scrutiny of the records, this Court holds that the following "points of contact" are material: (1) the parties' nationality; (2) Kenya Air’s principal place of business; (3) the place where the tort was committed; and (4) the intention of the contracting parties as to the law that should govern their agreement.
To recall, the parties to this case are Filipinos. However, Kenya Air is a foreign corporation, with principal place of business in Kenya. The tort was committed aboard one of its planes, and it granted the disputed amount of money to petitioner as settlement. Moreover, the Release and Receipt stipulated that it "shall be subject to the laws of Kenya[,]"and that it "was signed in the Philippines simply as a matter of convenience of Claimant [petitioner]." It appears that the only "point of contact" with Philippine law was that Efren, petitioner, and respondents happened to be Filipino.
Courts do not take judicial notice of foreign law. However, this Court finds that petitioner properly pleaded and proved the applicable Kenyan law.
Test of Negligence
The test of negligence is: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence.
Picard v. Smith *Not in discussion/Added Info
In the case of Ruiz v. Secretary, was the non-recognition of Ruiz and Herrera as Architects to the construction of the Veteran’s Hospital violative of Article 21 of the Civil Code?
No. Article 21 of the Civil Code states that any person who willfully causes loss or injury to another in a manner contrary to morals, good customs or public policy, shall compensate the latter for the damages. In this case, the pleadings do not show that damages were ever asked or alleged, in connection with this case, predicated upon the article aforecited. And under the facts and circumstances obtaining in this case, one cannot plausibly sustain the contention that the failure or refusal to extend the recognition was an act contrary to morals, good customs or public policy.
Ruiz v. Secretary
Recite Article 22 of NCC
Article 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.
Recite Article 26 of NCC
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief:
PMVI
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition.
Recite Article 27 of NCC
Article 27. Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken.
Recite Article 34 of NCC
Article 34. When a member of a city or municipal police force refuses or fails to render aid or protection to any person in case of danger to life or property, such peace officer shall be primarily liable for damages, and the city or municipality shall be subsidiarily responsible therefor. The civil action herein recognized shall be independent of any criminal proceedings, and a preponderance of evidence shall suffice to support such action.
Recite Article 28 of NCC
Article 28. Unfair competition in agricultural, commercial or industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby suffers damage.
Recite Article 35 of NCC
Article 35. When a person, claiming to be injured by a criminal offense, charges another with the same, for which no independent civil action is granted in this Code or any special law, but the justice of the peace finds no reasonable grounds to believe that a crime has been committed, or the prosecuting attorney refuses or fails to institute criminal proceedings, the complaint may bring a civil action for damages against the alleged offender. Such civil action may be supported by a preponderance of evidence. Upon the defendant's motion, the court may require the plaintiff to file a bond to indemnify the defendant in case the complaint should be found to be malicious.
Recite Article 32 of NCC
Article 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without due process of law;
(7) The right to a just compensation when private property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house, papers, and effects against unreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not contrary to law;
(13) The right to take part in a peaceable assembly to petition the Government for redress of grievances;
(14) The right to be a free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a speedy and public trial, to meet the witnesses face to face, and to have compulsory process to secure the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness against one's self, or from being forced to confess guilt, or from being induced by a promise of immunity or reward to make such confession, except when the person confessing becomes a State witness;
(18) Freedom from excessive fines, or cruel and unusual punishment, unless the same is imposed or inflicted in accordance with a statute which has not been judicially declared unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article, whether or not the defendant's act or omission constitutes a criminal offense, the aggrieved party has a right to commence an entirely separate and distinct civil action for damages, and for other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be instituted), and may be proved by a preponderance of evidence.
The indemnity shall include moral damages. Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the Penal Code or other penal statute.
Araceli Santos sued Apolonio Tanjanco, alleging that he promised to marry her and, in consideration of this promise, she consented to a sexual relationship. She became pregnant, had to quit her job, and suffered emotional distress when Tanjanco refused to marry her as promised. Santos sought recognition of the unborn child, financial support, and damages. The lower court dismissed the case for lack of a cause of action, but the Court of Appeals allowed it to proceed on the grounds of causing harm contrary to morals and good customs. Tanjanco appealed to the Supreme Court, arguing that actions for breach of a promise to marry are not recognized in the jurisdiction, citing precedent cases. Was the breach of promise to marry in this case is actionable under Article 21 of NCC?
NO. Article 21 of the New Civil Code provides that any person who willfully causes loss or injury to another in a manner contrary to morals, good customs and public policy, shall compensate the latter for the damages. In the case at bar, plaintiff Araceli was a woman of adult age, maintained intimate sexual relations with appellant with repeated acts of intercourse. Such is not compatible to the idea of seduction. Plainly, there is voluntariness and mutual passion; for had the appellant been deceived she would not have again yielded to his embraces much less for one year without exacting fulfillment of the alleged promises of marriage and she would have cut all relationship upon finding that the defendant did not intend to fulfill his promises. One cannot be held liable for a breach of promise to marry.
Tanjanco v. CA, 1966
Tobias uncovered fraudulent activities within the company Globe Mackay, which led to financial losses. He reported this to his superiors, but was subsequently accused and mistreated by the company's executives. Despite police reports clearing Tobias, the company pursued criminal charges against him. Ultimately, all charges were dismissed. Tobias was later terminated from his job, leading to an illegal dismissal case. He eventually entered into a compromise agreement with Globe Mackay. During the proceedings, the respondent was applying to different companies but his previous employer wrote a letter to another company, falsely claiming Tobias was dismissed due to dishonesty. Tobias filed a civil case against Globe Mackay, alleging malicious and abusive conduct. Globe Mackay contended that they are not liable for damages to private respondent. Are they correct?
NO. Article 19 of the New Civil Code provides that 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. In this case, it must be underscored that Globe Mackay have been guilty of committing several actionable tortious acts, i.e., the abusive manner in which they dismissed Tobias from work including the baseless imputation of guilt and the harassment during the investigations; the defamatory language heaped on Tobias as well as the scornful remark on Filipinos; the poison letter sent to RETELCO which resulted in Tobias' loss of possible employment; and, the malicious filing of the criminal complaints.
Albenson Enterprises Corporation delivered steel plates to Guaranteed Industries. As part payment, Guaranteed issued a check, but it bounced due to a closed account. Albenson discovered that the check was connected to Eugenio S. Baltao. Upon inquiry, it was found that E.L. Woodworks, owned by Eugenio Baltao III, was registered in Eugenio S. Baltao's name. Eugenio S. Baltao denied issuing the check. Charges were filed against him for violation of Batas Pambansa Bilang 22. He was later exonerated due to lack of evidence and proper notification. Eugenio S. Baltao then filed a complaint for damages against Albenson, Jesse Yap, and Benjamin Mendiona, citing unjust filing of a criminal case. Baltao argues that liability under Articles 19, 20, and 21 of the Civil Code is so encompassing that it likewise includes liability for damages for malicious prosecution under Article 2219 (8). Is he correct?
No. In the case of Albenson Enterprise v. CA, the court held that a civil action for damages for malicious prosecution is allowed under the New Civil Code and in order that such a case can prosper, however, the following three (3) elements must be present, to wit:
(1) The fact of the prosecution and the further fact that the defendant was himself the prosecutor, and that the action was finally terminated with an acquittal;
(2) That in bringing the action, the prosecutor acted without probable cause;
(3) The prosecutor was actuated or impelled by legal malice (Lao vs. Court of Appeals, 199 SCRA 58, [1991]).
In this case, there is no proof of a sinister design on the part of petitioners to vex or humiliate private respondent by instituting the criminal case against him. While petitioners may have been negligent to some extent in determining the liability of private respondent for the dishonored check, the same is not so gross or reckless as to amount to bad faith warranting an award of damages.
GF Equity was the owner of the Alaska Basketball Team and hired Valenzona as the coach for the team. Their contract stipulates that they (GF Equity) can terminate the contract at their sole discretion if they think that the coach is not performing well. They terminated Valenzona after several team losses. Valenzona filed a complaint for breach of contract, claiming unjust termination. Was the stipulation violative of the principle of mutuality of contracts thus, making the GF equity liable under Article 19 in relation to 20?
YES. Article 19 of the New Civil Code provides that every person must, in the exercise of his rights, and performance of his duties, act with justice, give everyone his due and observe honesty and good faith. In the case at bar, the assailed stipulation was violative of the mutuality principle under Article 1308 of the same code and is null and void. The nullity of the stipulation should have prevented GF Equity from the right to pre-terminate the contract. The pre-termination must have legal basis, for it be declared justified. However, GF Equity failed, to advance any ground to justify the pre-termination. It simply invoked the assailed provision which is null and void. While GF Equity's act of pre-terminating Valenzona's services cannot be considered willful as it was based on a stipulation, albeit declared void, it, in doing so, failed to consider the abuse of rights principle enshrined in Art. 19 of the Civil Code.
G.F. Equity v. Valenzona
Dart Phil. suddenly noticed that there’s some anomalies in the distribution of tupperwares to the Sps. Francisco. Before, Dart Phil. agreed with the respondents that they would deliver the tupperwares on the basis of credit. They became suspicious of the spouses and audited them and gave them a warning. The spouses promised to follow the agreement but they were still violating their obligations.
Dart Phil. changed their agreement now to prepaid instead of credit. Spouses Francisco filed a complaint against Dart Phil. for breach of contract in relation to the change of payment. Because of this change, they (Sps.) were in delay to their buyers because they couldn’t buy the tupperwares. They contend that there was an abuse of right on the part of Dart Phil. Are the Spouses correct?
No. Article 19 of the New Civil Code provides that every person must, in the exercise of his rights, and performance of his duties, act with justice, give everyone his due and observe honesty and good faith. In this case, there was no bad faith on the part of Dart Phil. Bad faith involves a dishonest purpose or some moral obloquy and conscious doing of a wrong, a breach of known duty due to some motives or interest or ill will that partakes of the nature of fraud. Petitioner’s exercise of its rights under the agreement to conduct an audit, to vary the manner of processing purchase orders, and to refuse the renewal of the agreement was supported by legitimate reasons, principally, to protect its own business. The exercise of its rights was not impelled by any evil motive designed, whimsically and capriciously, to injure or prejudice respondents. The rights exercised were all in accord with the terms and conditions of the distributorship agreement, which has the force of law between them.
Dart Phil. v. Sps. Francisco
Fudalan applied for electrical service from Bohol I Electric Cooperative Inc. (BOHECO I) to illuminate his farmhouse in Baclayon, Bohol. He was advised that he needed a certification from Raso, the Barangay Power Association (BAPA) Chairperson. Despite efforts to reach Raso, Fudalan was unable to obtain her certification. Fudalan then consented to the tapping of his electrical line to that of BAPA upon the assurance of Albelda, a BOHECO I authorized electrician, that he would not be charged with pilferage of electricity because his electric usage shall be determined by the check meter of BOHECO I at the base of the drop line and shall be billed accordingly. Lomarda, the BOHECO I District Manager, became aware of Fudalan's electrical connection and ordered his linemen to cut off Fudalan's electricity. Lomarda also accused Fudalan of premature tapping and pilferage of electricity and demanded the payment of P1,792.00 in exchange for the issuance of a certification and for the continued availment of their electrical services. Fudalan refused to pay, and Lomarda maintained the disconnection of his electricity. Fudalan filed a complaint for damages against Lomarda and Raso, alleging that their acts tarnished his image, besmirched his reputation, and defamed his honor and dignity. Are Lomarda and Raso liable for damages for damages under Art. 21 of the Civil Code?
Yes, Lomarda and Raso are liable for damages under Article 19, in relation to Article 21 since Article 19 by itself does not provide an actionable tort, it may be alleged together with Article 20 and 21 for the granting of adequate legal remedy. Thus, Article 19 of the New Civil Code provides that 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. While, Article 21 of the New Civil Code provides that any person who willifully causes loss or injury to another in a manner contrary to morals, good customs, and public policy, shall compensate the latter for the damages. In this case, while it appears that petitioners were engaged in a legal act, i.e., exacting compliance with the requirements for the installation of respondent's electricity in his farmhouse, the circumstances of this case show that the same was conducted contrary to morals and good customs, and were in fact done with the intent to cause injury to respondent. Petitioners did not only fail to apprise respondent of the proper procedure to expedite compliance with the requirements, they also misled him to believe that everything can be settled, extorted money from him when only a meager amount was due, and worse, publicly humiliated him in front of many people which ended up in the disconnection of his electricity altogether.
Lomarda v. Fudalan
UP wanted to build a research complex called Biotech. Ferdinand Marcos Foundation volunteered to fund the equipments for Biotech’s research complex. Philab was arranged to deliver laboratory and office equipment for the said project. UP also executed a MOA with the Foundation where the Foundation agreed to shoulder the expenses in constructing the said research complex. The UP Board of Regents also approved a MOA with Philab later on. Philab demanded payment in installments, but in the last installments, the Foundation could not pay due to the ousting of the Marcos. Philab demanded from the Foundation and then filed a case against UP. For UP’s defense, it contended that it was not privy to the contract and the demand should be made with the Foundation only. UP denied liability and alleged that PHILAB had no cause of action against it because it was merely the donee/beneficiary of the laboratory furniture in the BIOTECH; and that the FEMF, which funded the project, was liable to the PHILAB for the purchase price of the laboratory furniture. UP specifically denied obliging itself to pay for the laboratory furniture supplied by PHILAB. The Foundation countered that there would be unjust enrichment on the part of UP if it did not pay. Is the Foundation’s contention correct?
NO. According to the case of UP v. Philab, unjust enrichment claims do not lie simply because one party benefits from the efforts or obligations of others, but instead it must be shown that a party was unjustly enriched in the sense that the term unjustly could mean illegally or unlawfully. Article 22 of the New Civil Code provides that every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. In this case, the essential requisites for the application of Article 22 of the New Civil Code do not obtain as Philab had a remedy against the FEMF via an action based on an implied-in-fact contract with the FEMF for the payment of its claim. UP legally acquired the laboratory furniture under the MOA with FEMF; hence, it is entitled to keep the laboratory furniture.
Land Bank of the Philippines received three Development Bank of the Philippines checks for specific recipients. Due to an error, two checks meant for different recipients were credited to Gualberto Catadman's account, resulting in a total of P115,062.68 being credited to him. Catadman initially promised to repay in installments but stopped after paying P15,000. Land Bank then filed a case for collection of the remaining sum before the Municipal Trial Court in Cities (MTCC) of Davao City. MTCC ruled that Catadman's obligation was a natural one and not a civil obligation, meaning Land Bank had no right of action against him. It advised Land Bank to seek reimbursement from its employee responsible for the error. RTC ruled that Catadman should have returned the money if he had observed honesty and good faith. CA considered the negligence of Land Bank and the bad faith of Catadman, applying a 60-40 ratio for responsibility. Did the CA erred in not finding the petitioner liable for the full amount mistakenly credited despite concluding that the latter was unjustly enriched at the expense of Land Bank and acted in bad faith?
Yes. Under Article 22 of the Civil Code, "every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him." In this case, Catadman received the amount of P115,002.68 through his bank account when the same was erroneously credited with the amount. Notwithstanding the knowledge that the money was not his, he spent the same and kept his silence about it at the expense of Land Bank.
In order that accion in rem verso may prosper, the essential elements must be present:
(1) that the defendant has been enriched,
(2) that the plaintiff has suffered a loss,
(3) that the enrichment of the defendant is without just or legal ground, and
(4) that the plaintiff has no other action based on contract, quasi-contract, crime or quasi-delict
National Power Corporation (NPC) and Benguet Electric Cooperative (BENECO) entered into a contract for the sale of electricity. Subsequently, they executed a Transition Contract for the Supply of Electricity, where NPC agreed to supply electric power to BENECO at multiple points, including the Irisan Substation. The metering system was installed in the Irisan Substation in 1999, and the Current Transformer Ratio (CTR) was set at 75/5, resulting in a multiplier of 5,196.31. This setting was used for billing from May 2000 to February 2004, and BENECO received a Prompt Payment Discount (PPD) from NPC during this period.
In February 2004, BENECO discovered that the CTR should have been 150/5 and not 75/5, which meant that it had been underbilled by NPC for nearly four years. NPC demanded payment of the underbilling, but BENECO refused, claiming that NPC's negligence in not detecting the error sooner should absolve them of the obligation. NPC revoked BENECO's PPD and billed them for the underbilling and interest charges. Does the BENECO's non-payment of the underbilling constitute unjust enrichment?
No. In the case of NPC v. Beneco, the Court held that the principle of unjust enrichment under Article 22 of the Civil Code is not a catch-all provision that can be conveniently invoked when a party has suffered a loss and that this is especially true when a contract exists between the parties. It further held that, it is necessary to show that the enrichment of one party is without a just or legal ground, and that the plaintiff has no other action against the other party. In other words, there is no unjust enrichment when the person who benefited has a valid claim to such benefit. Here, NPC and BENECO executed a Contract of Sale of Electricity and a Transition Contract for the Supply of Electricity to govern their rights and obligations in the supply of electric power and energy. Therefore, any action that one may bring against the other shall be based on the provisions of their contract and the principle of unjust enrichment will not apply.
A loan agreement of P375 million was made between petitioners WPI, WII, and WGI as borrowers and SSS as the lender. To secure the loan, WII provided a real estate mortgage, and WGI delivered common shares to an escrow agent. Additional agreements followed.
WPI made partial payments and offered to settle the debt through a property swap. The properties couldn't be transferred due to tax issues, leading to a proposal for loan restructuring. However, SSS rejected the proposal and demanded the full outstanding amount. Unable to pay, WPI faced foreclosure, and SSS acquired the properties. Despite the foreclosure, a substantial debt remained.
In response, SSS filed a complaint against WPI, WII, and WGI, alleging fraud and bad faith. WPI argued it had acted in good faith, while WII and WGI maintained their distinct legal status and countered SSS's actions. The RTC declared that the contract of loan was void and under the principle of unjust enrichment, ordered the parties to return the amount and properties received under the contract of loan. Was the RTC correct in ruling that there was unjust enrichment?
YES. Article 22 of the New Civil Code provides that every person who through an act or performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. In this case, the contract of loan does not fall under any of the allowed transactions of RA 8282, Section 26 and is therefore void. For the sake of justice and equity, and in consonance with the salutary principle of non-enrichment at another's expense, the parties must restore to each other what they had received by virtue of the contract of loan. They should not be allowed to benefit from entering into the contract of loan in violation of the SSS law, and must be restored to their relative positions prior to the execution of said contract.
Waterfront et. al. v. SSS
When is Accion In Rem Verso applicable?
An accion in rem verso is considered merely an auxiliary action, available only when there is no other remedy on contract, quasi-contract, crime, and quasi-delict.
Elements of Article 22
There is enrichment or gain on the part of the defendant
The enrichment was through the expense of the plaintiff
The enrichment on the part of the defendant is without just or legal ground
Nestor and Allem Nicolas resided in an apartment in Pasig City leased from Florence Concepcion. Nestor was in the business of supplying office equipment. Florence invested capital with the condition that profits would be split after her investment was returned. Rodrigo Concepcion, Florence's brother-in-law, accused Nestor of an adulterous relationship with Florence. He confronted Nestor, claiming Nestor received money from Florence for a trip to Baguio. To clarify, Nestor and Rodrigo visited relatives who denied knowledge of the affair. Rodrigo later threatened Florence over the phone. This caused Nestor extreme embarrassment, affecting his business. Allem began doubting Nestor's fidelity, leading to marital conflicts. Nestor demanded a public apology and damages from Rodrigo, but received no response. The Nicolas spouses filed a civil suit for damages against him. Rodrigo for his part contended that there was no legal basis to award damages to the spouses and that the alleged act imputed to himdo not fall under Arts. 26 and 2219 of the Civil Code since it does not constitute libel, slander, or any other form of defamation. Neither does it involve prying into the privacy of another's residence or meddling with or disturbing the private life or family relation of another. Is his contention correct?
No. In the case of Concepcion v. CA, the court held that under Article 26 and Article 2219 of the New Civil Code, the rights of persons are protected, and damages are provided for violations thereof. The violations mentioned in the codal provisions are not exclusive but are merely examples and do not preclude other similar or analogous acts. Due to the incident, respondent Nestor Nicolas suffered mental anguish, besmirched reputation, wounded feelings and social humiliation as a proximate result of petitioner’s abusive, scandalous and insulting language. As such, the Supreme Court held that the incident clearly falls under the aforementioned articles and the person who violated those rights should be liable of the damages.
AAA was the girlfriend of Spouses Dorao’s son, Paul. Spouses Dorao disapproved of AAA and Paul’s relationship. On multiple occasions, Spouses Dorao would publicly call AAA a flirt and a woman of loose morals. Worse, Spouses Dorao started spreading derogatory rumors about AAA among other students, parents, and guardians. For this reason, AAA fell into a depression, attempted suicide, and abruptly dropped out of school.
Seeking to protect their child, AAA’s parents went to court claiming damages against Spouses Dorao for their alleged violation of AAA’s and their family’s right to privacy and peaceful life. In defense, Spouses Dorao argued that their actions were done pursuant to a concomitant parental duty to provide a moral fiber to Paul.
Were the Spouses Dorao liable for damages?
Yes. Article 21 and 26 of the New Civil Code provides:
Article 21. Any person who willfully causes loss or injury to another in a manner contrary to morals, good customs, and public policy, shall compensate the latter for the damage.
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief:
( 1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition.
In the case at bar, Spouses Dorao undoubtedly exposed AAA to public ridicule which caused the latter mental anguish, besmirched reputation, wounded feelings, and social humiliation. These acts are contrary to public policy; therefore, petitioners are liable for damages pursuant to Articles 21 of the Civil Code. In the same vein, petitioners' acts of spreading malicious rumors against AAA and publicly hurling defamatory accusations against respondents undoubtedly constitute an invasion of respondents' rights under Article 26 of the Civil Code.
P Company, engaged in manufacturing of matches, assails the legality of the tax which the city treasurer collected on out-of-town deliveries of matches by virtue of the city ordinance which taxes goods stored and/or sold within the city. The company sought a refund of the sales tax and damages against the city treasurer for not following the advice of the city fiscal, as legal adviser of the city, that all out-of-town deliveries of matches are not subject to sales tax.
Is the city treasurer liable for damages under Art. 27 of the NCC?
No. Article 27 of the Civil Code provides that "any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken." In this case, it cannot be said that the city treasurer acted wilfully in not refunding to the plaintiff the taxes that it paid under protest on out-of-town sales of matches. The record clearly reveals that the city treasurer honestly believed that he was justified under section 9 of the tax ordinance in collecting the sales tax on out-of-town deliveries, considering that the company's branch office was located in Cebu City and that all out-of-town purchase order for matches were filled up by the branch office and the sales were duly reported to it. The city treasurer acted within the scope of his authority and in consonance with his bona fide interpretation of the tax ordinance.
As a rule, Where an officer is invested with discretion in matters brought before him and when so acting he is usually given immunity from liability to persons who may be injured as the result or an erroneous or mistaken decision, provided the acts complained of are done within the scope of the officer's authority and without malice, or corruption. It has been held previously by the SC that an erroneous interpretation of an ordinance does not constitute nor does it amount to bad faith that would entitle an aggrieved party to an award for damages Cabungcal vs. Cordovan 120 Phil. 667).
Phil. Match v. City of Cebu
The Municipal Council of Malasiqui, Pangasinan, passed Resolution No. 159 to manage the 1959 Malasiqui town fiesta celebration. They created a committee to oversee the event, including the construction of two stages for performances. The "zarzuela" play titled "Midas Extravaganza" was donated by a group of Malasiqui employees. During the performance on January 22, 1959, the stage collapsed, resulting in the death of Vicente Fontanilla, who was pinned underneath.
The heirs of Vicente Fontanilla filed a complaint in September 1959 to claim damages, naming the Municipality of Malasiqui, the Municipal Council of Malasiqui, and its individual members in 1959 as defendants. Can the Municipality can be held liable under Article 27 of the NCC?
No. Article 27 of the New Civil Code provides that any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that maybe taken. In this case, Article 27 is inapplicable as this particular article covers a case of nonfeasance or non-performance by a public officer of his official duty; it does not apply to a case of negligence or misfeasance in carrying out an official duty.
The Court of Appeals in its decision now under review held that the celebration of a town fiesta by the Municipality of Malasiqui was not a governmental function. We upheld that ruling. The legal consequence thereof is that the Municipality stands on the same footing as an ordinary private corporation with the municipal council acting as its board of directors. It is an elementary principle that a corporation has a personality, separate and distinct from its officers, directors, or persons composing it and the latter are not as a rule co-responsible in an action for damages for tort or negligence (culpa aquiliana) committed by the corporation’s employees or agents unless there is a showing of bad faith or gross or wanton negligence on their part.
Torio v. Rosalina
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