TORTS & DAMAGES

1. Definition of Tort

Vinzons-Chato v Fortune, 525 SCRA 11

A public officer who directly or indirectly violates the constitutional rights of another, may
be validly sued for damages under Article 32 of the Civil Code even if his acts were not
so tainted with malice or bad faith; Instances Where a Public Officer May Be Validly
Sued in His/Her Private Capacity for Acts Done in the Course of the Performance of the
Functions of the Office.

Article 32 of the Civil Code specifies in clear and unequivocal terms a particular specie
of an “act” that may give rise to an action for damages against a public officer, and that
is, a tort for impairment of rights and liberties. Indeed, Article 32 is the special provision
that deals specifically with violation of constitutional rights by public officers. All other
actionable acts of public officers are governed by Sections 38 and 39 of the
Administrative Code. While the Civil Code, specifically, the Chapter on Human Relations
is a general law, Article 32 of the same Chapter is a special and specific provision that
holds a public officer liable for and allows redress from a particular class of wrongful acts
that may be committed by public officers. Compared thus with Section 38 of the
Administrative Code, which broadly deals with civil liability arising from errors in the
performance of duties, Article 32 of the Civil Code is the specific provision which must be
applied in the instant case precisely filed to seek damages for violation of constitutional
rights.

2. Elements of Tort

Garcia v Salvador, 518 SCRA 568

Whether a person is negligent or not is a question of fact which we cannot pass upon in
a petition for review on certiorari which is limited to reviewing errors of law. Negligence is
the failure to observe for the protection of the interest of another person that degree of
care, precaution and vigilance which the circumstances justly demand, whereby such
other person suffers injury. For health care providers, the test of the existence of
negligence is: did the health care provider either fail to do something which a reasonably
prudent health care provider would have done, or that he or she did something that a
reasonably prudent health care provider would not have done; and that failure or action
caused injury to the patient; if yes, then he is guilty of negligence. Thus, the elements of
an actionable conduct are: 1) duty, 2) breach, 3) injury, and 4) proximate causation.

Unicapital Inc., et al. vs. Consing, Jr,. G.R. No. 175277, September 11, 2013

Records disclose that Consing, Jr.’s complaint contains allegations, which aim to
demonstrate the abusive manner in which Unicapital and PBI, et al. enforced their
demands against him. Among others, the complaint states that Consing, Jr. “has
constantly been harassed and bothered by Unicapital and PBI, et al. besieged by phone
calls from them has had constant meetings with them variously, and on a continuing
basis, such that he is unable to attend to his work as an investment banker.”

In the same pleading, he also alleged that Unicapital and PBI, et al.’s act of “demanding
a postdated check knowing fully well [that he] does not have the necessary funds to
cover the same, nor is he expecting to have them is equivalent to asking him to commit
a crime under unlawful coercive force.”

Accordingly, these specific allegations, if hypothetically admitted, may result into the
recovery of damages pursuant to Article 19 of the Civil Code which states 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.”

Consing, Jr.’s complaint states a cause of action for damages under Article 26 of the
Civil Code. To add, a violation of Article 26 of the Civil Code may also lead to the
payment of moral damages under Article 2219(10) of the Civil Code.

3. Human Relations

Ardiente v Pastorfide, G.R. No. 161921, July 17, 2013

The exercise of a right must be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh; there must be no intention to
harm another. ―It is true that it is within petitioner’s right to ask and even require the
Spouses Pastorfide to cause the transfer of the former’s account with COWD to the
latter’s name pursuant to their Memorandum of Agreement. However, the remedy to
enforce such right is not to cause the disconnection of the respondent spouses’ water
supply. The exercise of a right must be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh; there must be no intention to
harm another. Otherwise, liability for damages to the injured party will attach. In the
present case, intention to harm was evident on the part of petitioner when she requested
for the disconnection of respondent spouses’ water supply without warning or informing
the latter of such request. Petitioner claims that her request for disconnection was based
on the advise of COWD personnel and that her intention was just to compel the Spouses
Pastorfide to comply with their agreement that petitioner’s account with COWD be
transferred in respondent spouses’ name. If such was petitioner’s only intention, then
she should have advised respondent spouses before or immediately after submitting her
request for disconnection, telling them that her request was simply to force them to
comply with their obligation under their Memorandum of Agreement. But she did not.
What made matters worse is the fact that COWD undertook the disconnection also
without prior notice and even failed to reconnect the Spouses Pastorfide’s water supply
despite payment of their arrears. There was clearly an abuse of right on the part of
petitioner, COWD and Gonzalez. They are guilty of bad faith. [Ardiente vs. Pastorfide,
701 SCRA 389(2013)]

The principle of abuse of rights as enshrined in Article 19 of the 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.

Gonzalo v Tarnate, Jr., G.R. No. 160600, Jan. 15 2014

There is no question that every contractor is prohibited from subcontracting with or

assigning to another person any contract or project that he has with the Department of
Public Works and Highways (DPWH) unless the DPWH Secretary has approved the
subcontracting or assignment. This is pursuant to Section 6 of Presidential Decree No.
1594. Gonzalo, who was the sole contractor of the project in question, subcontracted the
implementation of the project to Tarnate in violation of the statutory prohibition. Their
subcontract was illegal, therefore, because it did not bear the approval of the DPWH
Secretary. Necessarily, the deed of assignment was also illegal, because it sprung from
the subcontract.

Unjust enrichment exists, according to Hulst v. PR Builders, Inc., 532 SCRA 74 (2007),
“when a person unjustly retains a benefit at the loss of another, or when a person retains
money or property of another against the fundamental principles of justice, equity and
good conscience.” The prevention of unjust enrichment is a recognized public policy of
the State, for Article 22 of the Civil Code explicitly provides that “[e]very 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.”

Sesbreno v CA, G.R. No. 160689, March 26, 2014

The concept of abuse of rights prescribes that a person should not use his right unjustly
or in bad faith; otherwise, he may be liable to another who suffers injury.—Clearly,
Sesbreño did not establish his claim for damages if the respondents were not guilty of
abuse of rights.

Article 19 of the Civil Code sets the standards to be observed in the exercise of one’s
rights and in the performance of one’s duties, namely: (a) to act with justice; (b) to give
everyone his due; and (c) to observe honesty and good faith. The law thereby
recognizes the primordial limitation on all rights — that in the exercise of the rights, the
standards under Article 19 must be observed.

In order that liability may attach under the concept of abuse of rights, the following
elements must be present, to wit: (a) the existence of a legal right or duty, (b) which is
exercised in bad faith, and (c) for the sole intent of prejudicing or injuring another

Loria vs. Munoz, G.R. No. 187240, October 15, 2014

Under Article 22 of the Civil Code of the Philippines, “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.” There is unjust enrichment “when a person unjustly retains a benefit to the loss
of another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience.” The principle of unjust
enrichment has two conditions. First, a person must have been benefited without a real
or valid basis or justification.Second, the benefit was derived at another person’s
expense or damage.
4. Tort/Quasi-Delict

Coca Cola Bottlers v CA, 227 SCRA 292

The public respondent’s conclusion that the cause of action in Civil Case No. D-9629 is
founded on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it
prescribes in four (4) years is supported by the allegations in the complaint, more
particularly paragraph 12 thereof, which makes reference to the reckless and negligent
manufacture of “adulterated food items intended to be sold for public consumption.”

The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code,
and an action based thereon may be brought by the vendee. While it may be true that
the pre-existing contract between the parties may, as a general rule, bar the applicability
of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict,
i.e., the act which breaks the contract may also be a quasi-delict.

Liability for quasi-delict may still exist despite the presence of contractual relations.

5. Doctrine of Proximate Cause

Mamaril v Boy Scouts, G.R. No. 179382, January 14, 2013

Article 20 of the Civil Code provides that every person, who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the latter for the same. Similarly,
Article 2176 of the Civil Code states:

Art. 2176. 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 preexisting contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.

In this case, it is undisputed that the proximate cause of the loss of Sps. Mamaril's
vehicle was the negligent act of security guards Peña and Gaddi in allowing an
unidentified person to drive out the subject vehicle. Proximate cause has been defined
as that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury or loss, and without which the result would not
have occurred.

Cagayan II Electric Cooperative, Inc. vs. Rapanan, G.R. No. 199886, December 3,
2014

Negligence is defined as the failure to observe for the protection of the interest of
another person that degree of care, precaution, and vigilance which the circumstances
justly demand, whereby such other person suffers injury. Article 2176 of the Civil Code
provides that “[w]hoever 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 preexisting contractual relation between the parties, is a quasi-delict.” Under this
provision, the elements necessary to establish a quasi-delict case are: (1) damages to
the plaintiff; (2) negligence, by act or omission, of the defendant or by some person for
whose acts the defendant must respond, was guilty; and (3) the connection of cause and
effect between such negligence and the damages.
Ruks Konsult and Construction vs. Adworld Sign and Advertising Corporation,
G.R. No. 204866, January 21, 2015

Jurisprudence defines negligence as the omission to do something which a reasonable

man, guided by those considerations which ordinarily regulate the conduct of human
affairs, would do, or the doing of something which a prudent and reasonable man would
not do. It is the failure to observe for the protection of the interest of another person that
degree of care, precaution, and vigilance which the circumstances justly demand,
whereby such other person suffers injury.

Both Transworld and Ruks were fully aware that the foundation for the former’s billboard
was weak; yet, neither of them took any positive step to reinforce the same. They merely
relied on each other’s word that repairs would be done to such foundation, but none was
done at all. Clearly, the foregoing circumstances show that both Transworld and Ruks
are guilty of negligence in the construction of the former’s billboard, and perforce, should
be held liable for its collapse and the resulting damage to Adworld’s billboard structure.
As joint tortfeasors, therefore, they are solidarily liable to Adworld. Verily, “joint
tortfeasors are those who command, instigate, promote, encourage, advise,
countenance, cooperate in, aid or abet the commission of a tort, or approve of it after it is
done, if done for their benefit. They are also referred to as those who act together in
committing wrong or whose acts, if independent of each other, unite in causing a single
injury. Under Article 2194 of the Civil Code, joint tortfeasors are solidarily liable for the
resulting damage. In other words, joint tortfeasors are each liable as principals, to the
same extent and in the same manner as if they had performed the wrongful act
themselves.”

6. Negligence

PNR v Brunty, 506 SCRA 685

Negligence is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do.

Requisites to Sustain a Claim Based on Quasi-Delict: (1) damage to plaintiff; (2)

negligence, by act or omission, of which defendant, or some person for whose acts he
must respond was guilty; and (3) connection of cause and effect between such
negligence and damage.

PNR v CA, G.R. No. 157658, October 15, 2007

Negligence is the failure to observe for the protection of the interests of another person
that degree of care, precaution, and vigilance which the circumstances justly demand,
whereby such other person suffers injury—all that the law requires is that it is perpetually
compelling upon a person to use that care and diligence expected of sensible men under
comparable circumstances.

Professional Services v Agana cases, 2007, 2008, and 2010

2007: This is a clear case of medical malpractice or more appropriately, medical

negligence. To successfully pursue this kind of case, a patient must only prove that a
health care provider either failed to do something which a reasonably prudent health
care provider would have done, or that he did something that a reasonably prudent
provider would not have done; and that failure or action caused injury to the patient.

Simply put, the elements are duty, breach, injury and proximate causation. Dr, Ampil, as
the lead surgeon, had the duty to remove all foreign objects, such as gauzes, from
Natividad’s body before closure of the incision. When he failed to do so, it was his duty
to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused injury
to Natividad, necessitating her further examination by American doctors and another
surgery.

The Court held that PSI is directly liable for such breach of duty. It was duly established
that PSI operates the Medical City Hospital for the purpose and under the concept of
providing comprehensive medical services to the public. Accordingly, it has the duty to
exercise reasonable care to protect from harm all patients admitted into its facility for
medical treatment. Unfortunately, PSI failed to perform such duty.

2008 (MR): It must be stressed that under the doctrine of apparent authority, the
question in every case is whether the principal has by his voluntary act placed the agent
in such a situation that a person of ordinary prudence, conversant with business usages
and the nature of the particular business, is justified in presuming that such agent has
authority to perform the particular act in question. In these cases, the circumstances
yield a positive answer to the question.

The duty of providing quality medical service is no longer the sole prerogative and
responsibility of the physician. Such responsibility includes the proper supervision of the
members of its medical staff. Accordingly, the hospital has the duty to make a
reasonable effort to monitor and oversee the treatment prescribed and administered by
the physicians practicing in its premises.

2010: [En Banc]

Issue: whether a hospital may be held liable for the negligence of physicians-consultants
allowed to practice in its premises

PSI is liable to the Aganas, not under the principle of respondeat superior for lack of
evidence of an employment relationship with Dr. Ampil but under the principle of
ostensible agency for the negligence of Dr. Ampil and, pro hac vice, under the principle
of corporate negligence for its failure to perform its duties as a hospital.

While in theory a hospital as a juridical entity cannot practice medicine, in reality it

utilizes doctors, surgeons and medical practitioners in the conduct of its business of
facilitating medical and surgical treatment. Within that reality, three legal relationships
crisscross: (1) between the hospital and the doctor practicing within its premises; (2)
between the hospital and the patient being treated or examined within its premises and
(3) between the patient and the doctor. The exact nature of each relationship determines
the basis and extent of the liability of the hospital for the negligence of the doctor.

Where an employment relationship exists, the hospital may be held vicariously liable
under Article 2176 in relation to Article 2180 of the Civil Code or the principle of
respondeat superior. Even when no employment relationship exists but it is shown that
the hospital holds out to the patient that the doctor is its agent, the hospital may still be
vicariously liable under Article 2176 in relation to Article 1431 and Article 1869 of the
Civil Code or the principle of apparent authority. Moreover, regardless of its relationship
with the doctor, the hospital may be held directly liable to the patient for its own
negligence or failure to follow established standard of conduct to which it should conform
as a corporation. Thus, this Court must maintain the ruling that PSI is vicariously liable
for the negligence of Dr. Ampil as its ostensible agent.

Perena v Zarate, G.R. No. 157917, August 29, 2012

The common carrier’s standard of care and vigilance as to the safety of the passengers
is defined by law. Given the nature of the business and for reasons of public policy, the
common carrier is bound "to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them, according to all the
circumstances of each case." Article 1755 of the Civil Code specifies that the common
carrier should "carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances." To successfully fend off liability in an action upon the death or injury to a
passenger, the common carrier must prove his or its observance of that extraordinary
diligence; otherwise, the legal presumption that he or it was at fault or acted negligently
would stand. No device, whether by stipulation, posting of notices, statements on tickets,
or otherwise, may dispense with or lessen the responsibility of the common carrier as
defined under Article 1755 of the Civil Code.

As earlier stated, the Pereñas, acting as a common carrier, were already presumed to
be negligent at the time of the accident because death had occurred to their passenger.
The presumption of negligence, being a presumption of law, laid the burden of evidence
on their shoulders to establish that they had not been negligent. It was the law no less
that required them to prove their observance of extraordinary diligence in seeing to the
safe and secure carriage of the passengers to their destination. Until they did so in a
credible manner, they stood to be held legally responsible for the death of Aaron and
thus to be held liable for all the natural consequences of such death.

The test by which to determine the existence of negligence in a particular case may be
stated as follows: 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.

MMTC v. Cuevas, G.R. No. 167797, June 15, 2015

The registered owner of a motor vehicle whose operation causes injury to another is
legally liable to the latter. But it is error not to allow the registered owner to recover
reimbursement from the actual and present owner by way of its cross-claim.

It is well settled that in case of motor vehicle mishaps, the registered owner of the
motor vehicle is considered as the employer of the tortfeasor-driver, and is made
primarily liable for the tort committed by the latter under Article 2176, in relation with
Article 2180, of the Civil Code.

7. Degrees of Negligence
Ilao-Oreta v Ronquillo, 535 SCRA 633

“Gross negligence” implies a want or absence of or failure to exercise slight care or

diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. It is characterized by want of
even slight care, acting or omitting to act in a situation where there is a duty to act, not
inadvertently but willfully and intentionally with a conscious indifference to consequences
in so far as other persons may be affected.

DBP v. Guariña Agricultural, G.R. No. 160758, January 15, 2014

Being a banking institution, DBP owed it to Guariña Corporation to exercise the highest
degree of diligence, as well as to observe the high standards of integrity and
performance in all its transactions because its business was imbued with public interest.

“The stability of banks largely depends on the confidence of the people in the honesty
and efficiency of banks.” Thus, DBP had to act with great care in applying the
stipulations of its agreement with Guariña Corporation, lest it erodes such public
confidence. Yet, DBP failed in its duty to exercise the highest degree of diligence by
prematurely foreclosing the mortgages and unwarrantedly causing the foreclosure sale
of the mortgaged properties despite Guariña Corporation not being yet in default.

Solidum v. People, G.R. No. 192123, March 10, 2014

Negligence is defined as the failure to observe for the protection of the interests of
another person that degree of care, precaution, and vigilance that the circumstances
justly demand, whereby such other person suffers injury.

An action upon medical negligence — whether criminal, civil or administrative — calls for
the plaintiff to prove by competent evidence each of the following four elements, namely:
(a) the duty owed by the physician to the patient, as created by the physician-patient
relationship, to act in accordance with the specific norms or standards established by his
profession; (b) the breach of the duty by the physician’s failing to act in accordance with
the applicable standard of care; (3) the causation,i.e., there must be a reasonably close
and causal connection between the negligent act or omission and the resulting injury;
and (4) the damages suffered by the patient.

G.V. Florida Transport, INC. v Heirs of Battung, G.R. No. 208802, October 14, 2015
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the
part of the common carrier when its passenger is injured, merely relieves the latter, for
the time being, from introducing evidence to fasten the negligence on the former,
because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised
extraordinary diligence as required by law in the performance of its contractual
obligation, or that the injury suffered by the passenger was solely due to a fortuitous
event.
8. Standard of Conduct

Arguelles v. Malarayat Rural Bank, Inc., G.R. No. 200468, March 19, 2014

The Supreme Court has consistently enjoined banks to exert a higher degree of
diligence, care, and prudence than individuals in handling real estate transactions.

BJDC Construction v. Lanuzo, et al., G.R. No. 161151, March 24, 2014

In order that a party may be held liable for damages for any injury brought about by the
negligence of another, the claimant must prove that the negligence was the immediate
and proximate cause of the injury.

Casumpang v. Cortejo, G.R. No. 171127, March 11, 2015

The elements of medical negligence are: (1) duty; (2) breach; (3) injury; and (4)
proximate causation.

Whether or not Dr. Casumpang and Dr. Miranda committed a breach of duty is to be
measured by the yardstick of professional standards observed by the other members of
the medical profession in good standing under similar circumstances. It is in this aspect
of medical malpractice that expert testimony is essential to establish not only the
professional standards observed in the medical community, but also that the physician's
conduct in the treatment of care falls below such standard.

In the present case, expert testimony is crucial in determining first, the standard medical
examinations, tests, and procedures that the attending physicians should have
undertaken in the diagnosis and treatment of dengue fever; and second, the dengue
fever signs and symptoms that the attending physicians should have noticed and
considered.

9. Special Circumstances
Heirs of Completo v Albayda, G.R. No. 172200, July 6, 2010

It was proven by a preponderance of evidence that Completo failed to exercise

reasonable diligence in driving the taxicab because he was over-speeding at the time he
hit the bicycle ridden by Albayda. Such negligence was the sole and proximate cause of
the serious physical injuries sustained by Albayda. Completo did not slow down even
when he approached the intersection of 8th and 11th Streets of VAB. It was also proven
that Albayda had the right of way, considering that he reached the intersection ahead of
Completo.

The bicycle occupies a legal position that is at least equal to that of other vehicles
lawfully on the highway, and it is fortified by the fact that usually more will be required of
a motorist than a bicyclist in discharging his duty of care to the other because of the
physical advantages the automobile has over the bicycle. At the slow speed of ten miles
per hour, a bicyclist travels almost fifteen feet per second, while a car traveling at only
twenty-five miles per hour covers almost thirty-seven feet per second, and split-second
action may be insufficient to avoid an accident. It is obvious that a motor vehicle poses a
greater danger of harm to a bicyclist than vice versa.
Accordingly, while the duty of using reasonable care falls alike on a motorist and a
bicyclist, due to the inherent differences in the two vehicles, more care is required from
the motorist to fully discharge the duty than from the bicyclist. Simply stated, the
physical advantages that the motor vehicle has over the bicycle make it more dangerous
to the bicyclist than vice versa.
Pacis v Morales, G.R. No. 169467, February 25, 2010

This case involves the accidental discharge of a firearm inside a gun store. Under PNP
Circular No. 9, entitled the "Policy on Firearms and Ammunition Dealership/Repair," a
person who is in the business of purchasing and selling of firearms and ammunition
must maintain basic security and safety requirements of a gun dealer, otherwise his
License to Operate Dealership will be suspended or canceled.

Indeed, a higher degree of care is required of someone who has in his possession or
under his control an instrumentality extremely dangerous in character, such as
dangerous weapons or substances. Such person in possession or control of dangerous
instrumentalities has the duty to take exceptional precautions to prevent any injury being
done thereby. Unlike the ordinary affairs of life or business which involve little or no risk,
a business dealing with dangerous weapons requires the exercise of a higher degree of
care.

Respondent was clearly negligent when he accepted the gun for repair and placed it
inside the drawer without ensuring first that it was not loaded. In the first place, the
defective gun should have been stored in a vault. Before accepting the defective gun for
repair, respondent should have made sure that it was not loaded to prevent any
untoward accident. Indeed, respondent should never accept a firearm from another
person, until the cylinder or action is open and he has personally checked that the
weapon is completely unloaded. For failing to insure that the gun was not loaded,
respondent himself was negligent. Furthermore, it was not shown in this case whether
respondent had a License to Repair which authorizes him to repair defective firearms to
restore its original composition or enhance or upgrade firearms.

10. Res Ipsa Loquitur

Cruz v. Agas, June 15, 2015

Literally, res ipsa loquitur means the thing speaks for itself. It is the rule that the fact of
the occurrence of an injury, taken with the surrounding circumstances, may permit an
inference or raise a presumption of negligence, or make out a plaintiff's prima facie case,
and present a question of fact for defendant to meet with an explanation.

The requisites for the applicability of the doctrine of res ipsa loquitur are: (1) the
occurrence of an injury; (2) the thing which caused the injury was under the control and
management of the defendant; (3) the occurrence was such that in the ordinary course
of things, would not have happened if those who had control or management used
proper care; and (4) the absence of explanation by the defendant. Of the foregoing
requisites, the most instrumental is the control and management of the thing which
caused the injury.
In this case, the Court agrees with Dr. Agas that his purported negligence in performing
the colonoscopy on Dr. Cruz was not immediately apparent to a layman to justify the
application of res ipsa loquitur doctrine. Dr. Agas was able to establish that the internal
bleeding sustained by Dr. Cruz was due to the abnormal condition and
configuration of his sigmoid colon, which was beyond his control considering that
the said condition could not be detected before a colonoscopic procedure. Dr. Agas
adequately explained that no clinical findings, laboratory tests, or diagnostic imaging,
such as x-rays, ultrasound or computed tomography (CT) scan of the abdomen, could
have detected this condition prior to an endoscopic procedure

11. Contributory Negligence of Plaintiff

Spouses Vergara v. Sonkin, June 15 2015

Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is
required to conform for his own protection.

In the case at bar, it is undisputed that the Sonkin property is lower in elevation than the
Vergara property, and thus, it is legally obliged to receive the waters that flow from the
latter, pursuant to Article 637 of the Civil Code. This provision refers to the legal
easement pertaining to the natural drainage of lands, which obliges lower estates to
receive from the higher estates water which naturally and without the intervention of man
descends from the latter, i.e., not those collected artificially in reservoirs, etc., and the
stones and earth carried by the waters.

In this light, Sps. Sonkin should have been aware of such circumstance and,
accordingly, made the necessary adjustments to their property so as to minimize the
burden created by such legal easement. Instead of doing so, they disregarded the
easement and constructed their house directly against the perimeter wall, which adjoins
the Vergara property, thereby violating the National Building Code in the process. In
view of Sps. Sonkin's contributory negligence, the Court deems it appropriate to delete
the award of moral damages in their favor.
12. Fortuitous Event

Southeastern College v. CA
In order that a fortuitous event may exempt a person from liability, it is necessary that he
be free from any previous negligence or misconduct by reason of which the loss may
have been occasioned. An act of God cannot be invoked for the protection of a person
who has been guilty of gross negligence in not trying to forestall its possible adverse
consequences. When a person’s negligence concurs with an act of God in producing
damage or injury to another, such person is not exempt from liability by showing that the
immediate or proximate cause of the damage or injury was a fortuitous event. When the
effect is found to be partly the result of the participation of man whether it be from active
intervention, or neglect, or failure to act the whole occurrence is hereby humanized, and
removed from the rules applicable to acts of God.
In the present case, other than the said ocular inspection, no investigation was
conducted to determine the real cause of the partial unroofing of petitioners school
building. Private respondents did not even show that the plans, specifications and design
of said school building were deficient and defective. Neither did they prove any
substantial deviation from the approved plans and specifications. Nor did they
conclusively establish that the construction of such building was basically flawed.
On the other hand, petitioner elicited from one of the witnesses of private respondents,
city building official Jesus Reyna, that the original plans and design of petitioners school
building were approved prior to its construction. Engr. Reyna admitted that it was a legal
requirement before the construction of any building to obtain a permit from the city
building official (city engineer, prior to the passage of the Building Act of 1977). In like
manner, after construction of the building, a certification must be secured from the same
official attesting to the readiness for occupancy of the edifice. Having obtained both
building permit and certificate of occupancy, these are, at the very least, prima
facie evidence of the regular and proper construction of subject school building.
Furthermore, when part of its roof needed repairs of the damage inflicted by typhoon
Saling, the same city official gave the go-signal for such repairs without any deviation
from the original design and subsequently, authorized the use of the entire fourth floor of
the same building. These only prove that subject building suffers from no structural
defect, contrary to the report that its U-shaped form was structurally defective. Having
given his unqualified imprimatur, the city building official is presumed to have properly
performed his duties in connection therewith.
In addition, petitioner presented its vice president for finance and administration who
testified that an annual maintenance inspection and repair of subject school building
were regularly undertaken. Petitioner was even willing to present its maintenance
supervisor to attest to the extent of such regular inspection but private respondents
agreed to dispense with his testimony and simply stipulated that it would be
corroborative of the vice presidents narration.
Moreover, the city building official, who has been in the city government service since
1974, admitted in open court that no complaint regarding any defect on the same
structure has ever been lodged before his office prior to the institution of the case at
bench. It is a matter of judicial notice that typhoons are common occurrences in this
country. If subject school buildings roofing was not firmly anchored to its trusses,
obviously, it could not have withstood long years and several typhoons even stronger
than Saling.
We thus hold that petitioner has not been shown negligent or at fault regarding the
construction and maintenance of its school building in question and that typhoon
Saling was the proximate cause of the damage suffered by private respondents house.

Metro Concast Steel v. Allied Bank

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. To constitute
a fortuitous event, the following elements must concur: (a) the cause of the unforeseen
and unexpected occurrence or of the failure of the debtor to comply with obligations
must be independent of human will; (b) it must be impossible to foresee the event that
constitutes the caso fortuito or, if it can be foreseen, it must be impossible to avoid;
(c) the occurrence must be such as to render it impossible for the debtor to fulfill
obligations in a normal manner; and (d) the obligor must be free from any participation
in the aggravation of the injury or loss.

While it may be argued that Peakstar’s breach of the MoA was unforseen by petitioners,
the same us clearly not "impossible"to foresee or even an event which is independent of
human will." Neither has it been shown that said occurrence rendered it impossible for
petitioners to pay their loan obligations to Allied Bank and thus, negates the
former’s force majeure theory altogether. In any case, as earlier stated, the
performance or breach of the MoA bears no relation to the performance or breach
of the subject loan transactions, they being separate and distinct sources of
obligations. The fact of the matter is that petitioners’ loan obligations to Allied Bank
remain subsisting for the basic reason that the former has not been able to prove that
the same had already been paid or, in any way, extinguished. In this regard, petitioners’
liability, as adjudged by the CA, must perforce stand. Considering, however, that Allied
Bank’s extra-judicial demand on petitioners appears to have been made only on
December 10, 1998, the computation of the applicable interests and penalty charges
should be reckoned only from such date.

13. Plaintiff’s assumption of risk/volenti non fit injuria

Far East Bank v. Tentmakers

Evidently, this is a case where the respondents are being used as a "scapegoat" to
answer for the damage and prejudice brought about by the negligence of FEBTC’s own
employees. The branch manager should have appeared and explained the
circumstances. Thus, the CA cannot be faulted for making such a ruling.

The bottom line is that FEBTC miserably failed to present any document that would
serve as basis for its claim that the proceeds of the three promissory notes were indeed
credited to the account of the respondents. Indeed, the Court finds no evidentiary basis
to sustain the RTC’s finding of actual receipt by TGI of the amounts stated in the
promissory notes.

On a final note, FEBTC should have been more circumspect in dealing with its clients. It
cannot be over emphasized that the banking business is impressed with public interest.
Of paramount importance is the trust and confidence of the public in general in the
banking industry. Consequently, the diligence required of banks is more than that of a
Roman pater familias or a good father of a family. The highest degree of diligence is
expected. In handling loan transactions, banks are under obligation to ensure
compliance by the clients with all the documentary requirements pertaining to the
approval and release of the loan applications. For failure of its branch manager to
exercise the requisite diligence in abiding by the MORB and the banking rules and
practices, FEBTC was negligent in the selection and supervision of its employees.

For the loss suffered by FEBTC due to its laxity and carelessness to police its own
personnel, the bank has no one to blame but itself. As correctly concluded by the CA,
this situation partakes of the nature of damnum absque injuria.
14. Tests to determine proximate cause

Lapanday v Angala, 525 SCRA 229

We rule that both parties were negligent in this case. Borres was at the outer lane
when he executed a U-turn. Following Section 45(b) of RA 4136, Borres should have
stayed at the inner lane, which is the lane nearest to the center of the highway.
However, Deocampo was equally negligent. Borres slowed down the pick-up
preparatory to executing the U-turn. Deocampo should have also slowed down when the
pick-up slowed down. Deocampo admitted that he noticed the pick-up when it was still
about 20 meters away from him. Vehicular traffic was light at the time of the incident.
The pick-up and the crewcab were the only vehicles on the road. Deocampo could have
avoided the crewcab if he was not driving very fast before the collision, as found by both
the trial court and the Court of Appeals. We sustain this finding since factual findings of
the Court of Appeals affirming those of the trial court are conclusive and binding on this
Court. Further, the crewcab stopped 21 meters from the point of impact. It would not
have happened if Deocampo was not driving very fast.

Since both parties are at fault in this case, the doctrine of last clear chance applies.

The doctrine of last clear chance states that where both parties are negligent but the
negligent act of one is appreciably later than that of the other, or where it is impossible to
determine whose fault or negligence caused the loss, the one who had the last clear
opportunity to avoid the loss but failed to do so is chargeable with the loss. In this case,
Deocampo had the last clear chance to avoid the collision. Since Deocampo was
driving the rear vehicle, he had full control of the situation since he was in a position to
observe the vehicle in front of him. Deocampo had the responsibility of avoiding bumping
the vehicle in front of him. A U-turn is done at a much slower speed to avoid skidding
and overturning, compared to running straight ahead. Deocampo could have avoided the
vehicle if he was not driving very fast while following the pick-up. Deocampo was not
only driving fast, he also admitted that he did not step on the brakes even upon seeing
the pick-up. He only stepped on the brakes after the collision.

15. Vicarious Liability

a. Parents/Guardians
Libi v. IAC
Now, we do not have any objection to the doctrinal rule holding, the parents liable, but
the categorization of their liability as being subsidiary, and not primary, in nature requires
a hard second look considering previous decisions of this court on the matter which
warrant comparative analyses. Our concern stems from our readings that if the liability of
the parents for crimes or quasi-delicts of their minor children is subsidiary, then the
parents can neither invoke nor be absolved of civil liability on the defense that they acted
with the diligence of a good father of a family to prevent damages. On the other hand, if
such liability imputed to the parents is considered direct and primary, that diligence
would constitute a valid and substantial defense.

We believe that the civil liability of parents for quasi-delicts of their minor children, as
contemplated in Article 2180 of the Civil Code, is primary and not subsidiary. In fact, if
we apply Article 2194 of said code which provides for solidary liability of joint tortfeasors,
the persons responsible for the act or omission, in this case the minor and the father
and, in case of his death of incapacity, the mother, are solidarily liable. Accordingly, such
parental liability is primary and not subsidiary, hence the last paragraph of Article 2180
provides that" (t)he responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father of a family
to prevent damages."

b. Teachers

Rosaldes vs. People of the Philippines, G.R. No. 173988, October 9, 2014

Although the petitioner, as a school teacher, could duly discipline Michael Ryan as her
pupil, her infliction of the physical injuries on him was unnecessary, violent and
excessive. The boy even fainted from the violence suffered at her hands. She could not
justifiably claim that she acted only for the sake of disciplining him. Her physical
maltreatment of him was precisely prohibited by no less than the Family Code, which
has expressly banned the infliction of corporal punishmentby a school administrator,
teacher or individual engaged in child care exercising special parental authority (i.e., in
loco parentis).

In the crime charged against the petitioner, therefore, the maltreatment may consist of
an act by deeds or by words that debases, degrades or demeans the intrinsic worth and
dignity of a child as a human being. The act need not be habitual. Moreover, several
circumstances proved beyond reasonable doubt thatthe petitioner was guilty of child
abuse by deeds that degraded and demeaned the intrinsic worth and dignity of Michael
Ryan as a human being. It was also shown that Michael Ryan’s physical maltreatment
by the petitioner was neither her first or only maltreatment of a child. Prosecution witness
Louella Loredo revealed on cross examination that she had also experienced the
petitioner’s cruelty.

c. Owners/Managers of Establishments/ Employers

Davao Holiday Transport Services Corporation vs. Emphasis, G.R. No. 211424,
November 26, 2014

Article 2180 of the New Civil Code provides that an obligation for damages is
demandable not only for one’s own acts or omissions, but also for those of persons for
whom he is responsible. Employers, in particular, shall be liable for the damages caused
by their employees acting within the scope of their assigned tasks. The responsibility of
employers shall only cease upon proof that they observed all the diligence of the good
father of a family to prevent damage.

The CA correctly held that the petitioner, being Tungal’s employer, was
presumed liable to the heirs of Christian after a finding that it was Tungal who should be
faulted for the accident that caused the death of the child. In Cang v. Cullen, the Court
emphasized that when an employee causes damage due to his own negligence while
performing his own duties, there arises the juris tantum presumption that his employer is
negligent, rebuttable only by proof of observance of the diligence of a good father of a
family. In the selection of prospective employees, employers are required to examine
them as to their qualifications, experience and service records. With respect to the
supervision of employees, employers must formulate standard operating procedures,
monitor their implementation and impose disciplinary measures for breaches thereof.
These facts must be shown by concrete proof, including documentary evidence.

The petitioner failed in this aspect. There then appears no cogent reason for the
Court to depart from the RTC’s and CA’s observation that the petitioner failed to
establish the modes and measures it adopted to ensure the proper selection and
supervision of Tungal. This makes proper the order upon the petitioner to compensate
the spouses Emphasis for damages. We uphold the court a quo’s finding that Holiday
had been negligent in the selection and supervision of its driver Tungal
R Transport vs. Yu, G.R. No. 174161, February 18, 2015

Under Article 2180 of the New Civil Code, employers are liable for the damages
caused by their employees acting within the scope of their assigned tasks. Once
negligence on the part of the employee is established, a presumption instantly arises
that the employer was remiss in the selection and/or supervision of the negligent
employee. To avoid liability for the quasi-delict committed by its employee, it is
incumbent upon the employer to rebut this presumption by presenting adequate and
convincing proof that it exercised the care and diligence of a good father of a family in
the selection and supervision of its employees.

Unfortunately, however, the records of this case are bereft of any proof showing
the exercise by petitioner of the required diligence. As aptly observed by the CA, no
evidence of whatever nature was ever presented depicting petitioner’s due diligence in
the selection and supervision of its driver, Gimena, despite several opportunities to do
so. In fact, in its petition, apart from denying the negligence of its employee and imputing
the same to the bus from which the victim alighted, petitioner merely reiterates its
argument that since it is not the registered owner of the bus which bumped the victim, it
cannot be held liable for the damage caused by the same. Nowhere was it even
remotely alleged that petitioner had exercised the required diligence in the selection and
supervision of its employee. Because of this failure, petitioner cannot now avoid liability
for the quasi-delict committed by its negligent employee.

Metro Manila Transit vs. Cuevas, G.R. No. 167797 June 15, 2015

In view of MMTC's admission in its pleadings that it had remained the registered
owner of the bus at the time of the incident, it could not escape liability for the personal
injuries and property damage suffered by the Cuevases. This is because of the
registered-owner rule, whereby the registered owner of the motor vehicle involved in a
vehicular accident could be held liable for the consequences. The registered-owner rule
has remained good law in this jurisdiction considering its impeccable and timeless
rationale.
16. Interference with contractual relations

Malvar v Kraft Food, G.R. No. 183952, September 9, 2013

The respondents would be liable if they were shown to have connived with Malvar in the
execution of the compromise agreement, with the intention of depriving the Intervenor of
its attorney’s fees. Thereby, they would be solidarily liable with her for the attorney’s fees
as stipulated in the written agreement under the theory that they unfairly and unjustly
interfered with the Intervenor’s professional relationship with Malvar.

The respondents were complicit in Malvar’s move to deprive the Intervenor of its duly
earned contingent fees. At this juncture, the Court notes that the compromise agreement
would have Malvar waive even the substantial stock options already awarded by the
NLRC’s decision, which ordered the respondents to pay to her, among others, the value
of the stock options and all other bonuses she was entitled to or would have been
entitled to had she not been illegally dismissed from her employment. This ruling was
affirmed by the CA. But the waiver could not negate the Intervenor’s right to 10% of the
value of the stock options she was legally entitled to under the decisions of the NLRC
and the CA, for that right was expressly stated in the written agreement between her and
the Intervenor. Thus, the Intervenor should be declared entitled to recover full
compensation in accordance with the written agreement because it did not assent to the
waiver of the stock options, and did not waive its right to that part of its compensation.

These circumstances show that Malvar and the respondents needed an escape from
greater liability towards the Intervenor, and from the possible obstacle to their plan to
settle to pay. It cannot be simply assumed that only Malvar would be liable towards the
Intervenor at that point, considering that the Intervenor, had it joined the negotiations as
her lawyer, would have tenaciously fought all the way for her to receive literally
everything that she was entitled to, especially the benefits from the stock option. Her
rush to settle because of her financial concerns could have led her to accept the
respondents’ offer, which offer could be further reduced by the Intervenor’s expected
demand for compensation. Thereby, she and the respondents became joint tort-feasors
who acted adversely against the interests of the Intervenor. Joint tort-feasors are those
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 also referred to as those who act together in committing wrong or whose acts,
if independent of each other, unite in causing a single injury. Under Article 2194 of the
Civil Code, joint tort-feasors are solidarily liable for the resulting damage
17. Damages, NCC 2195-2196, 2198

BPI Express v. Armovit

The relationship between the credit card issuer and the credit card holder is a
contractual one that isgoverned by the terms and conditions found in the card
membership agreement. Such terms and conditions constitute the law between the
parties. In case of their breach, moral damages may be recovered where the defendant
is shown to have acted fraudulently or in bad faith. Malice or bad faith implies a
conscious and intentional design to do a wrongful actfor a dishonest purpose or moral
obliquity. However, a conscious or intentional design need not always be present
because negligence may occasionally be so gross as to amount to malice or bad
faith. Hence, bad faith in the context of Article 2220 of the Civil Code includes gross
negligence.

BPI Express Credit contends thatit was not grossly negligent in refusing to lift the
suspension of Armovit’s credit card privileges inasmuch as she had not complied with
the requisite submission of a new application form; and that under the circumstances its
negligence, if any, was not so gross as to amount to malice or bad faith following the
ruling in Far East Bank and Trust Company v. Court of Appeals.

The Court disagrees with the contentions of BPI Express Credit. The Terms and
Conditions Governing the Issuance and Use of the BPI Express Credit Card printed on
the credit card application form spelled out the terms and conditions of the contract
between BPI Express Credit and its card holders, including Armovit. Such terms and
conditions determined the rights and obligations of the parties. Yet, a review of such
terms and conditions did not reveal that Armovit needed to submit her new application
as the antecedent condition for her credit card to be taken out of the list of suspended
cards.

18. Actual or compensatory, NCC 2199

Loadstar Shipping Company vs. Malayan Insurance, G.R. No. 185565 November
26, 2014

As regards the determination of actual damages, "[i]t is axiomatic that actual

damages must be proved with reasonable degree of certainty and a party is entitled only
to such compensation for the pecuniary loss that was duly proven." Article 2199 of the
New Civil Code speaks of how actual damages are awarded:

Art. 2199. Except as provided by law or by stipulation, one is entitled to an

adequate compensation only for such pecuniary loss suffered by him as he
has duly proved. Such compensation is referred to as actual or
compensatory damages.

Whereas the CA modified its Decision dated April 14, 2008 by deducting the
amount of US$90,000.00 fromthe award, the same is still iniquitous for the petitioners
because PASAR and Malayan never proved the actual damages sustained by PASAR. It
is a flawed notion to merely accept that the salvage value of the goods is US$90,000.00,
since the price was arbitrarily fixed between PASAR and Malayan. Actual damages to
PASAR, for example, could include the diminution in value as appraised by experts or
the expenses which PASAR incurred for the restoration of the copper concentrates to its
former condition, if there is damage and rectification is still possible.

It is also note worthy that when the expert witness for the petitioners, Engineer
Francisco Esguerra (Esguerra), testified as regards the lack of any adverse effect of
seawater on copper concentrates, Malayan never presented evidence of its own in
refutation to Esguerra’s testimony. And, even if the Court will disregard the entirety of his
testimony, the effect on Malayan’s cause of action is nil. As Malayan is claiming for
actual damages, it bears the burden of proof to substantiate its claim.

"The burden of proof is on the party who would be defeated if no evidence

would be presented on either side. The burden is to establish one’s case by
a preponderance of evidence which means that the evidence, as a whole,
adduced by one side, is superior tothat of the other. Actual damages are
not presumed. The claimant must prove the actual amount of loss with a
reasonable degree of certainty premised upon competent proof and on the
best evidence obtainable. Specific facts that could afford a basis for
measuring whatever compensatory or actual damages are borne must be
pointed out. Actual damages cannot be anchored on mere surmises,
speculations or conjectures."

Having ruled that Malayan did not adduce proof of pecuniary loss to PASAR for which
the latter was questionably indemnified, there is no necessity to expound further on the
other issues raised by the petitioners and Malayan in this case.

Now Mountain Dairy Corporation vs. GMA Veterans Force, G.R. No. 192446,
November 19, 2014

Art. 2199 of the Civil Code provides:

Art. 2199. Except as provided by law or by stipulation, one is entitled to an

adequate compensation only for such pecuniary loss suffered by him as he
has duly proved. Such compensation is referred to as actual or
compensatory damages.

Thus, actual or compensatory damages are those awarded in satisfaction of, or in

recompense for, loss or injury sustained. They proceed from a sense of natural justice
and are designed to repair the wrong that has been done, to compensate for the injury
inflicted and not to impose a penalty. The burden is to establish one's case by a
preponderance of evidence which means that the evidence, as a whole, adduced by one
side, is superior to that of the other. Actual damages are not presumed. The claimant
must prove the actual amount of loss with a reasonable degree of certainty premised
upon competent proof and on the best evidence obtainable. Specific facts that could
afford a basis for measuring whatever compensatory or actual damages are borne must
be pointed out. The award of actual damages cannot be simply based on the
mereallegation of a witness without any tangible claim, such as receipts or other
documentary proofs to support such claim.
 The RTC awarded P952,833.50 actual or compensatory damages representing
the unserved portion of the contract. The CA affirmed such award saying that it
represented that which respondent failed to receive as benefit which would have
pertained to it had the service contract not been pre-terminated illegally by petitioner.
Notably, the amount awarded was based on the contracted amount of P16,014.00 per
security guard per month, multiplied by 7 security guards and multiplied by the unserved
portion of the contract. However, the contracted amount of P16,014,00 per guard would
not totally pertain to respondent as the same would cover the wage of the security guard
and only the remaining portion of the contracted amount, i.e., after deducting the guard's
salary, would go to respondent. In this case, respondent had not shown that the security
guards were not assigned to another employer, and that it was compelled to pay the
guards despite the pre-termination of the security agreement to be entitled to the amount
of P16,014.00 per month. Indeed, no evidence was presented by respondent
establishing the actual amount of loss suffered by reason of the pretermination. It
is elementary that to recover damages, there must be pleading and proof of actual
damages suffered.

19. Death by crime or quasi-delict, NCC 2206

Gonzaga vs. People of the Philippines, G.R. No. 195671, January 21, 2015

As a final note, the Court clarifies that the order for the payment of “moral
damages” in the amount of P50,000.00 for the death of Dionesio, Sr. should be,
properly speaking, denominated as one for the payment of “civil indemnity” as
they were not awarded under the parameters of the Civil Code relevant thereto, but was
one “given without need of proof other than the fact of death as a result of the crime and
proof of [the accused’s] responsibility for it.” This is a palpable legal error which the Court
should correct if only for terminological propriety. With the private complainant not herein
impleaded, the rest of the RTC’s July 31, 2006 Decision with respect to the civil liabilities
awarded should remain undisturbed. Note that, in line with existing jurisprudence,
interest at the rate of six percent (6) per annum shall be imposed on all damages
awarded from the date of finality of judgment until fully paid.

20. Attorney’s fees, NCC 2208

Lim v. Security Bank Corporation, G.R. No. 188539, March 12, 2014

With regard to the award of attorney's fees, it should be noted that Article 2208 of
the Civil Code does not prohibit recovery of attorney's fees if there is a stipulation in the
contract for payment of the same.

The law allows a party to recover attorney's fees under a written agreement. In
Barons Marketing Corporation v. Court of Appeals, the Court ruled that:

[T]he attorney's fees here are in the nature of liquidated damages

and the stipulation therefor is aptly called a penal clause. It has been said
that so long as such stipulation does not contravene law, morals, or public
order, it is strictly binding upon defendant. The attorney's fees so provided
are awarded in favor of the litigant, not his counsel.
 On the other hand, the law also allows parties to a contract to stipulate on
liquidated damages to be paid in case of breach. A stipulation on liquidated damages is
a penalty clause where the obligor assumes a greater liability in case of breach of an
obligation. The obligor is bound to pay the stipulated amount without need for proof on
the existence and on the measure of damages caused by the breach.

However, even if such attorney's fees are allowed by law, the courts still have the
power to reduce the same if it is unreasonable. In Trade & Investment Corporation of the
Philippines v. Roblett Industrial Construction Corp., the Court equitably reduced the
amount of attorney's fees to be paid since interests and penalties had ballooned to thrice
as much as the principal debt. That is also the case here. The award of attorney's fees
amounting to ten percent (10%) of the principal debt, plus interest and penalty charges,
would definitely exceed the principal amount; thus, making the attorney's fees manifestly
exorbitant. Hence, we reduce the amount of attorney's fees to ten percent (10%) of the
principal debt only.

ICTSI v. Chua, G.R. No. 195031, March 26, 2014

An award of attorney’s fees has always been the exception rather than the rule
and there must be some compelling legal reason to bring the case within the exception
and justify the award. In this case, none of the exceptions applies. “Attorney’s fees are
not awarded every time a party prevails in a suit. The policy of the Court is that no
premium should be placed on the right to litigate.” “Even when a claimant is compelled to
litigate with third persons or to incur expenses to protect his rights, still, attorney’s fees
may not be awarded where no sufficient showing of bad faith could be reflected in a
party’s persistence in a case other than an erroneous conviction of the righteousness of
his cause.”

The trial court refused to award exemplary damages and denied respondent’s
claim therefore. It was, therefore, error for it and the Court of Appeals to award
attorney’s fees after rejecting respondent’s prayer for exemplary damages as the latter
might have served as basis for awarding attorney’s fees.

Moreover, contrary to the findings of the trial court and the Court of Appeals,
petitioner did not outrightly deny and unjustly refuse the claim of respondent for
reimbursement of the value of her cargo that was lost in the fire. The records of this case
disclose that respondent sent a letter, dated 31 May 1997, to the Legal and Claims
Department of petitioner demanding the payment of US$87,667.00 – the alleged value
of her shipment. Petitioner responded to this communication by sending a letter, dated
25 June 1997, addressed to respondent’s broker, requesting the submission of
documents, such as the itemized list of the damaged goods, packing list and commercial
invoices, in support of the claim of US$87,667.00. The claim of respondent was
eventually denied through a letter dated 25 March 1999 prepared by petitioner’s counsel
and coursed through respondent’s counsel. The letter outlined the reasons for the denial
of respondent’s claim.

Under the foregoing circumstances, it cannot be said that petitioner unjustly

refused to heed respondent’s claim for damages. Petitioner immediately responded to
the initial demand for reimbursement and it subsequently denied the claim after
evaluation thereof. Petitioner clearly did not act in bad faith, especially since it explained
to respondent the reasons for the denial of her claim. The lower courts, therefore, erred
in finding that petitioner acted in bad faith, thereby further negating the wisdom of
awarding moral damages and attorney’s fees to respondent.