SICAM vs. JORGE G.R. No.

159617 August 8, 2007 Facts: Lulu Jorge pawned several pieces of jewelry with Agencia de R. C. Sicam to secure a loan. On October 19, 1987, two armed men entered the pawnshop and took away whatever cash and jewelry were found inside the pawnshop vault. Sicam sent respondent Lulu a letter informing her of the loss of her jewelry due to the robbery incident in the pawnshop. Respondent Lulu expressed disbelief stating that when the robbery happened, all jewelry pawned were deposited with Far East Bank near the pawnshop since it had been the practice that before they could withdraw, advance notice must be given to the pawnshop so it could withdraw the jewelry from the bank. Respondent Lulu then requested petitioner Sicam to prepare the pawned jewelry for withdrawal on but petitioner Sicam failed to return the jewelry. Respondent Lulu is seeking indemnification for the loss of pawned jewelry and payment of damages. Petitioner is interposing the defense of caso fortuito on the robber committed against the pawnshop. Issue: WON Sicam is liable for the loss of the pawned articles in their possession? YES Held: Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore, not enough that the event should not have been foreseen 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. Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of negligence on the part of herein petitioners. A review of the records clearly shows that petitioners failed to exercise reasonable care and caution that an ordinarily prudent person would have used in the same situation. Petitioners were guilty of negligence in the operation of their pawnshop business. No sufficient precaution and vigilance were adopted by petitioners to protect the pawnshop from unlawful intrusion. There was no clear showing that there was any security guard at all. Sicams admission that the vault was open at the time of robbery is clearly a proof of petitioners failure to observe the care, precaution and vigilance that the circumstances justly demanded. Petitioner Sicam testified that once the pawnshop was open, the combination was already off. Instead of taking the precaution to protect them, they let open the vault, providing no difficulty for the robbers to cart away the pawned articles. In contrast, the robbery in this case took place in 1987 when robbery was already prevalent and petitioners in fact had already foreseen it as they wanted to deposit the pawn with a nearby bank for safekeeping. Moreover, unlike in Austria, where no negligence was committed, we found petitioners negligent in securing their pawnshop as earlier discussed. In Sicam, et al. v. Jorge, et al., G.R. No. 159617, August 8, 2007, Lulu Jorge pawned several pieces of jewelry with Agencia de R.C. Sicam to secure a loan in the amount of P59,500.00. It was alleged that two armed men entered the pawnshop and took away whatever cash and jewelry found inside the pawnshop vault. It was reported to the police. She sued for damages but Sicam interposed the defense of fortuitous event, alleging that there was robbery. The SC brushed aside the contention and said: Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of negligence on his part. In a case similarly situated, it was ruled that: It is not a defense for a repaid shop of motor vehicles to escape liability simply because the damage or loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se cannot be considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken from anothers rightful possession, as in cases of carnapping, does not automatically give rise to a fortuitous event. To be considered as such, carnapping entails more than the mere forceful taking of anothers property. It must be proved and established that the event was an act of God or was done solely by third parties and that neither the claimant nor the person alleged to be negligent has any participation. In accordance with the Rules of Evidence, the burden of proving that the loss was due to a fortuitous event rests on him who invokes it which in this case is the private respondent. However, other than the police

report of the alleged carnapping incident, no other evidence was presented by private respondent to the effect that the incident was not due to its fault. A police report of an alleged crime, to which only private respondent is privy, does not suffice to establish the carnapping. Neither does it prove that there was no fault on the party of private respondent notwithstanding the parties agreement at the pre-trial that the car was carnapped. Carnapping does not foreclose the possibility of fault or negligence on the part of private respondent. (Co. v. CA, 353 Phil. 305 (1998); Sicam, et al. v. Jorge, et al., G.R. No. 159617, August 8, 2007). In another case, it was held that to be relieved from civil liability of returning the pendant under Article 1174 of the Civil Code, it would only be sufficient that the unforeseen event, the robbery, took place without any concurrent fault on the debtors part, and this can be done by preponderance of evidence; that o be free from liability for reason of fortuitous event, the debtor must, in addition to the case itself, be free from any concurrent or contributory fault or negligence. (Sicam, et al. v. Jorge, et al., supra.). MERALCO V. RAMOY FACTS: In the year 1987, the National Power Corporation (NPC) filed with the MTC Quezon City a case for ejectment against several persons allegedly illegally occupying its properties in Baesa, Quezon City. among the defendants in the ejectment case was Leoncio Ramoy, one of the plaintiffs in the case at bar. On April 28, 1989 the MTC rendered judgment for MERALCO to demolish or remove the building and structure they built on the land of the plaintiff and to vacate the premises. On June 20, 1999 NPC wrote to MERALCO requesting the immediate disconnection of electric power supply to all residential and commercial establishments beneath the NPC transmission lines along Baesa, Quezon City. In a letter dated August 17, 1990 MERALCO requested NPC for a joint survey to determine all the establishments which are considered under NPC property. In due time, the electric service connection of the plaintiffs was disconnected. During the ocular inspection ordered by the Court, it was found out that the residence of the plaintiffs-spouses was indeed outside the NPC property. ISSUES: (1) WON the Court of Appeals gravely erred when it found MERALCO negligent when it disconnected the subject electric service of respondents. (2) WON the Court of Appeals gravely erred when it awarded moral and exemplary damages and attorneys fees against MERALCO under the circumstances that the latter acted in good faith in the disconnection of the electric services of the respondents. RULING: (1) No. The Court agrees with the CA that under the factual milieu of the present case, MERALCO failed to exercise the utmost degree of care and diligence required of it, pursuant to Articles 1170 & 1173 of the Civil Code. It was not enough for MERALCO to merely rely on the Decision of the MTC without ascertaining whether it had become final and executory. Verily, only upon finality of the said Decision can it be said with conclusiveness that respondents have no right or proper interest over the subject property, thus, are not entitled to the services of MERALCO. (2) No. MERALCO willfully caused injury to Leoncio Ramoy by withholding from him and his tenants the supply of electricity to which they were entitled under the Service Contract. This is contrary to public policy because, MERALCO, being a vital public utility, is expected to exercise utmost care and diligence ithe performance of its obligation. Thus, MERALCOs failure to exercise utmost care and diligence in the performance of its obligation to Leoncio Ramoy is tantamount to bad faith. Leoncio Ramoy testified that he suffered wounded feelings because of MERALCOs actions. Furthermore, due to the lack of power supply, the lessees of his four apartments on subject lot left the premises. Clearly, therefore LeoncioRamoy is entitled to moral damages in the amount awarded by the CA. Nevertheless, Leoncio is the sole person entitled to moral damages as he is the only who testified on the witness stand of his wounded feelings. Pursuant to Article 2232 of the Civil Code, exemplary damages cannot be awarded as MERALCOs acts cannot be considered wanton, fraudulent, reckless, oppressive or malevolent. Since the Court does not deem it proper to award exemplary damages in this case then the CAs award of attorneys fees should likewise be deleted, as pursuant to Article 2208 of the Civil Code of which the grounds were not present Solar Harvest, Inc. Vs. Davao Corrugated Carton Facts: In the 1 Quarter of 1998, Solar Harvest and Davao Corrugated entered into an unwritten agreement. SolarHarvest placed orders for customized boxes for its business of exporting bananas at USD 1.10 each. Petitioner made afull payment of USD 40,150.00. By Jan. 3,
st

2001 petitioner had not received any of the ordered boxes. On Feb. 19, 2001Davao Corrugated replied that as early as April 3, 1998, order/boxes are completed and Solar Harvest failed to pick the mup from their warehouse within 30 days from completion as agreed upon. Respondent mentioned that petitioner even placed additional order of 24,000.00 boxes, out of which, 14,000 had already been manufactured without any advance payment from Solar Harvest. Davao Corrugated then demanded that Solar Harvest remove boxes from their warehouse, pay balance of USD 15,400.00 for the additional boxes and P132,000 as storage fee. On August 17, 2001 Solar harvest filed complaint against Davao Corrugated for sum of money and damages claiming that the agreement was for the delivery of the boxes, which Davao Corrugated did not do. They further alleged that whenever repeated follow-up was made to Davao Corrugated, t to cancel the order and demanded payment and/or refund which Davao Corrugated refused to pay. Davao Corrugated counterclaimed that they had already completed production of the 36,500 boxes plusan additional 14,000 boxes (which was part of the additional 24,000 order that is unpaid). The agreement was for SolarHarvest to pick up the boxes, which they did not do. They even averred that ready for pick up. On Feb. 20, 1999, Que visited the factory again and said that they ought to sell the boxes to recoup some of the costs of the14,000 additional orders because their transaction to ship the bananas did not materialize. Solar Harvest denies that they made the additional order. On March 20, 2004 the RTC ruled in favor of Davao Corrugated. ISSUE: Whether or not Davao Corrugated was responsible for breach of contract as Solar Harvest had not yet demandedfrom it the delivery of the boxes? HELD: NO. The CA held that it was unthinkable that for around 2 years petitioner merely followed up and did notdemand the delivery of the boxes. Even assuming that the agreement is for delivery by Davao Corrugated, respondentwould not be liable for breach of contract as petitioner had not yet demanded from it the delivery of the boxes. There isno error in the decision of the RTC. Furthermore, the claim for reimbursement is actually one for rescission or resolutionof contract under Article 1191 of the Civ. Code. The right to rescind contracts arises once the party defaults in theperformance of his obligation. Article 1191 should be taken in conjunction with Article 1169: Those obliged to deliver orto do something in delay from the time the obligee judicially or extrajudicially demands form them the fulfilment of theirobligation. However the demand from creditor shall not be necessary in order that delay may exist.: When the obligation or the law expressly so declares, or When from the nature and the circumstance of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; OR When the demand would be useless, as when the obligor has rendered it beyond his power to perform. In reciprocal obligations, the general rule is that the fulfilment of demand is necessary because once a party fulfills his obligation and the other party fails to do his, the latter automatically incurs delay. st When dates are set, the default for each obligation is determined by the rules given in the 1 paragraph of the article. Thus even in reciprocal obligations, if the period for the fulfilment of the obligation is fixed, demand from the obligee is still necessary before the obligor can be considered in default and before a cause of action for rescission will accrue. In the case of Solar Harvest, merely following up the order was not the same as demanding for the boxes. The SC held that Solar Harvests petition is denied and that Davao Corrugated did not commit breach of contract and may remove the boxes from their premises after petitioner is given a period of time to remove them from their warehouse as they deem proper (Court gave 30day period to comply with this MINDANAO TERMINAL AND BROKERAGESERVICE, INC.- versus -PHOENIX ASSURANCE COMPANY OF NEW YORK/MCGEE & CO., INC FACTS:Del Monte Philippines, Inc. contractedpetitioner Mindanao Terminal and BrokerageService, Inc., a stevedoring company, to loadand stow a shipment of 146,288 cartons of fresh green Philippine bananas and 15,202cartons of fresh pineapples belonging to DelMonte Fresh Produce International, Inc. into the cargo hold of the vessel M/V Mistrau. The vessel was docked at the port of Davao City and the goods were to be transported by it to the port of Inchon, Korea in favor of consignee Taegu Industries, Inc. Del Monte Produce insured the shipment under an "open cargo policy" with private respondent Phoenix Assurance Company of New York , a nonlife insurance company, and private respondent McGee & Co. Inc. (McGee), the underwriting manager/agent of Phoenix. The vessel set sail from the port of Davao City and arrived at the port of Inchon, Korea. It was then discovered upon discharge that some of the cargo was in bad condition. The Marine Cargo Damage Surveyor of Incok Loss and Average Adjuster of Korea, through its representative Byeong Yong Ahn (Byeong),surveyed the extent of the damage of the shipment. In a survey report, it was stated that16,069 cartons of the banana shipment and2,185 cartons of the pineapple shipment were so damaged that they no longer had commercial value. Mindanao Terminal loaded and stowed the cargoes aboard the M/V Mistrau. The vessel set sail from the port of Davao City and arrived at the port of Inchon, Korea. It was then discovered upon discharge that some of the cargo was in bad condition. Del Monte Produce filed a claim under the open cargo policy for the damages to its shipment. McGees Marine Claims Insurance Adjuster evaluated the claim and recommended that payment in the amount of $210,266.43 be made. Phoenix and McGee

instituted an action for damages against Mindanao Terminal After trial, the RTC held that the only participation of Mindanao Terminal was to load the cargoes on board the M/V Mistrau under the direction and supervision of the ships officers, who would not have accepted the cargoes on board the vessel and signed the foremans report unless they were properly arranged and tightly secured to withstand voyage across the open seas. Accordingly, Mindanao Terminal cannot be held liable for whatever happened to the cargoes after it had loaded and stowed them. Moreover, citing thes urvey report, it was found by the RTC that the cargoes were damaged on account of a typhoon which M/V Mistrau had encountered during the voyage. It was further held that Phoenix and McGee had no cause of action against Mindanao Terminal because the latter,whose services were contracted by Del Monte,a distinct corporation from Del Monte Produce,had no contract with the assured Del MonteProduce. The RTC dismissed the complaint andawarded the counterclaim of Mindanao Terminal in the amount of P83,945.80 as actualdamages and P100,000.00 as attorneys fees.ISSUE:Whether or not Phoenix and McGeehave a cause of action and whether Mindanao Terminal is liable for not having exercisedextraordinary diligence in the transport andstorage of the cargo.RULING:No, in the present case, Mindanao Terminal, as a stevedore, was only chargedwith the loading and stowing of the cargoesfrom the pier to the ships cargo hold; it wasnever the custodian of the shipment of DelMonte Produce. A stevedore is not a commoncarrier for it does not transport goods orpassengers; it is not akin to a warehousemanfor it does not store goods for profit. **Phoenix and McGee appealed to the Court of Appeals. The appellate court reversed and set aside the decision The same court ordered Mindanao Terminal to pay Phoenix and McGee"the total amount of $210,265.45 plus legalinterest from the filing of the complaint untilfully paid and attorneys fees of 20% of theclaim." It sustained Phoenixs and McGeesargument that the damage in the cargoes wasthe result of improper stowage by MindanaoTerminal.** Mindanao Terminal filed a motion for reconsideration, which the Court of Appealsdenied in its 26 February 2004 resolution.Hence, the present petition for review Agcaoili vs. GSIS, 165 SCRA 1 Facts: In this case, appellant GSIS approved an application of the appellee Agcaoli for the purchase of a house and lot in the GSIS Housing Project at Nangka, Marikina, subject to the condition that the latter should forthwith occupy the house, a condition that Agcaoli tried to fulfill but could not because the house was absolutely uninhabitable. However, Agcaoli ask a homeless friend, a certain Villanueva, to stay in the premises as some sort of watchman, pending completion of the construction of the house. Agcaoli after paying the first installment and other fees, having thereafter refused to make further payment of other stipulated installments until GSIS had made the house habitable; and appellant having refused to do so, opting instead to cancel the award and demanded the vacation by Agcaoli of the premises; and the latter having sued the GSIS in the Court of First Instance of Manila for specific performance with damages and having obtained a favorable judgment, the cases was appealed by the GSIS. Issue: Whether or not Agcaoli is entitled for specific performance with damages. Held: Appeal of GSIS must fail. There was then a perfected contract of sale between the parties; there had been a meeting of minds upon the purchase by Agcaoli of a determinate house and lot from GSIS at a definite price which is payable in amortizations and from that moment the parties acquired the right to reciprocally demand performance. It was, to be sure, the duty of the GSIS, as seller, to deliver the thing soled in acondition suitable for its enjoyment by the buyer, in other words to deliver the house subject of the contract in a reasonably livable state. This it failed to do. Since GSIS failed to fulfill its obligation, and was not willing to put the house in a habitable state, it cannot invoke Agcaolis suspension of payment as cause to cancel the contract between them. In recipient obligation, neither party incur in delay of the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. Nor may the GSIS succeed in justifying its cancellation of the award by the claim tha Agcaoli had not complied with the condition of occupying the house within three (3) days. The record shows that Agcaoli did try to fulfill the condition. Finally appellant having caused the ambiguity as the exact prestation of the agreement, the question of interpretation arising therefrom, should be resolved against it. ARRIETA VS. NARIC FACTS: Paz Arrieta was awarded by NARIC the contract of delivery of 20,000 metric tons of Burmese rice at $203 per metric ton. On the other hand, the corporation committed itself to pay for the imported rice by means of an irrevocable, confimed, and assignable letter of credit in US currency in favor of Arrieta or supplier in Burma immediately. However, the corporation took the first step to open a letter of credit a full month from the execution of the contract only July 30, 1952. On the same day, Arrieta advised the corporation of the

extreme necessity for the immediate opening of the letter of credit since she had by then made a tender to her supplier in Ragoon Burma. Consequently, the credit instrument applied for was opened only on September 8, 1952, since the corporation was not in financial capacity to pay the 50% marginal cash deposit when the credit instrument was approved on August 4, 1952. As a result of the delay, the allocation of Arrieta was cancelled and the 5% deposit, approximately Php 200,000, was forfeited. Arrieta tried to restore the cancelled Burmese rice allocation, but failed. Arrieta then instead offered to substitute Thailand rice to NARIC, communicating that such was a solution which should be beneficial for both parties. However, the corporation rejected the substitution. Hence, Arrieta sent a letter to the corporation, demanding for the compensation for the damages caused her. ISSUE: 1. Was the failure to open immediately the letter of credit in dispute amounted to a breach of the contract for which the corporation should be held liable? 2. Was there any waiver on the part of Arrieta? RULING: 1. Yes. It was clear from the records that the sole and principal reason for the cancellation of the allocation contracted by Arrieta in Ragoon, Burma was the failure of the letter of credit to be opened. The failure, therefore, was the immediate cause for the consequent damage which resulted. It was clear from the records that the delay in the opening of the letter of credit was due to the inability of the corporation to meet the condition imposed by the bank for the granting the same. Furthermore, the liability of the corporation stemmed not alone from failure or inability to satisfy the requirements of the bank, but its culpability arose from is willful and deliberate assumption of contractual obligations even as it was well aware of its financial incapacity to undertake the prestation. Under Article 1170, those who in the performance of their obligation are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable in damages. The terms in any manner contravene the tenor thereof includes any illicit act which impairs the strict and faithful fulfillment of the obligation, or every kind or defective performance. In general also, every debtor who fails in the performance of his obligation is bound to indemnify for the losses and damages caused thereby. The payment for damages or the award to be given should be converted into the Philippine peso at the rate of exchange prevailing at the time the obligation was incurred pursuant to RA 527. 2. No. The subsequent offer to substitute the Thailand rice for the originally contracted Burmese did not constitute a waiver. Waivers are not presumed. It must be clearly and convincingly shown either by express stipulations or acts admitting no other reasonable explanation. In this case, no such intent to waive had been established. Nakpil & Sons et. al. vs. Court of Appeals Facts: In the RTC of Manila, PBA filed a complaint for damages and thus was appealed to the CA where judgment was modified as what the RTC rendered in favor of the plaintiff. PBA constructed a building whereby the construction was undertaken by United Construction Inc, (UCI). Approved by the president of PBA, the plans and specification were prepared by Nakpil & Sons. August 2, 1968, earthquake hit Manila and thus damaging properties where the building of PBA was one of which. November 29 of that same year, plaintiff PBA filed suit for recovery of damages against the UCI. The UCI in turned filed suit against Nakpil & Sons, by which in March 3, 1969 filed their written stipulation. In the RTC, technical issues were submitted to Commissioner Hizon and as for other issues the Court resolved. Commissioner sustained that the building was caused directly by the earthquake and maintained that the specification were not followed. Issue(SC issue): Whether or not an Act of God-fortuitous event, exempts liability from parties who are otherwise liable because of their negligence? Held: 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.