CIVIL REVIEW: OBLICON and TORTS by J.

BERSAMIN from 2013-2014

 Comsavings Bank v. Capistrano Cruz-Bay gave various excuses for the delay. By February 1993,
GR 170942 | Aug. 28, 2013 | Bank’s Diligence, Kinds of Damages respondents demanded Cruz-Bay for the completion, to which it replied
Petitioner: Comsavings Bank (now GSIS Family Bank) to further give an amount of P25,000 to finish. Respondents asked for a
Respondent: Spouses Danilo and Estrella Capistrano breakdown of the amount, later getting a reply from GCB Builders’
Facts: counsel demanding for an additional cost of P52,511.
-Respondents are owners of a lot in Cavite wanting to build a house on -NHFMC advised respondents to start paying for their monthly
it. They availed of the UHLP implemented by the National Home amortizations. Estrella went to the construction site to find no
Mortgage Finance Corp. (NHMFC). On May 28, 1992, they executed a doorknobs, a portion of the house floor still being soil, and no plumbing
construction contract with Carmencita Cruz-Bay (proprietor of GCB fixtures in the kitchen sink. Respondents protested to the amortization
Builders) for P265,000 to complete the construction within 75 days. GCB demands of NHMFC, contesting that they didn’t sign any certification of
Builders facilitated a loan application with Comsavings Bank (NHFMC- completion and acceptance, and even if they did it would have been
accredited originator) to finance the project. forged.
-Comsavings Bank informed Estrella that she would need to sign various -Respondents sued GCB Builders and Comsavings Bank for breach of
documents to release the loan, among which was a certificate of house contract and damages, praying that they finish the constructions at the
completion and acceptance. At the same time, Comsavings handed agreed upon price and to pay: P38,450 as equivalent of the mortgage
Estrella a letter addressed to GCB Builders that says respondents have value in the excess of the contract price, P25,000 as actual damages for
complied and are qualified for the P303,450 loan payable within 25 years the expenses incurred by the breach, P200,00 as moral damages,
at 16% annum with the ff conditions: signing of the mortgage P30,000 as attorney’s fees, and P50,000 as exemplary damages. The
documents, 100% completion of the house construction, original complaint was amended to include NHFMC as a defendant, praying to
certificate of occupancy permit and certification of completion, and hold its demand on the amortization payment until the case is adjudged.
submission of house pictures signed at the back by the borrower. Issue: WON petitioner bank should be jointly and severally be liable with
-A total of P265,000 was released by Comsavings Bank to GCB Builders GCB Builders to pay respondents actual, moral and exemplary damages
but without the completion of the house by the end of the year 1992. and attorney’s fees. –YES
 Kinds of Damages
Held: 4. Article 2219 provides that moral damages may be recovered for
Bank’s Diligence the acts referred to in Article 20. Moral damages are meant to
1. The liability of Comsavings Bank towards respondents was based compensate the claimant for any physical suffering, mental
on Article 201 and 11702 of the Civil Code. Comsavings Bank as a anguish, fright, serious anxiety, besmirched reputation,
banking institution is obliged to exercise the highest degree of wounded feelings, moral shock, social humiliation and similar
diligence and high standards of integrity and performance in all injuries unjustly caused. With Danilo working in Saudi Arabia to
its transactions since its business is imbued with public interest. pay the loan and Estrella overseeing the progress alone, the
2. Gross Negligence connotes a want of care in the performance of moral damages for P100,000 is proper.
one’s duties. It is a thoughtless disregard of consequences 5. An award for actual damages is justified when there is
without exerting any effort to avoid them. Comsavings Bank was competent proof of the actual amount of loss usually supported
grossly negligent in this case, failing to desist from presenting to by receipts. With no showing of receipts, the awarding of
respondents the certificate without fulfilling such conditions yet. P25,000 of actual damages is unwarranted.
Its act was irregular being a contravention of the purpose of the 6. Article 2224 allows the recovery of temperate damages when
certificate. the court finds that some pecuniary loss was suffered but its
3. Contrary to the claim of the bank, there is no showing that amount not being proved with certainty. In lieu of the actual
respondents were given an option to pre-sign the certificate, damages, a P25,000 temperate damage was awarded.
and that they were assured that the certificate would only be 7. Article 2208 allows the recovery of attorney’s fees when
given to NHFMC only after the completion of the house. exemplary damages are awarded or where the plaintiff has
Furthermore, without checking for respondents’ signatures on incurred expenses to protect his interest by reason of
the picture (of a different house) submitted by GCB Builders, the defendant’s act or omission. The P30,000 attorney’s fees in this
bank was grossly negligent in releasing the loan. case is appropriate and reasonable.

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Article 20. Every person who, contrary to law, willfully or negligently causes Article 1170. Those in performance of their obligations are guilty of fraud,
damage to another, shall indemnify the latter for the same. negligence, or delay, and those who in any manner contravene the tenor
thereof, are liable for damages.
 2. Contrary to the contention of Degaños in accordance with
 Degaños v. People Article 14583 of the Civil Code, there is no sale on credit to
GR 162826 | Oct. 14, 2013 | Contract of Sale, Novation accused since ownership of the items did not pass to him.
Petitioner: Narciso Degaños | Respondent: People of the Philippines 3. Novation is the extinguishment of an obligation by the
Facts: substitution or change of the obligation by a subsequent one
Brigida Luz and Narciso Degaños were charged for estafa under Article that terminates the first, either by (a) changing the object or
315 paragraph 1(b) of the RPC. They received gold and pieces of jewelry principal conditions; or (b) substituting the person of the debtor;
worth P438,702 from spouses Atty. Jose Bordador and Lydia Bordador, or (c) subrogating a 3rd person in the rights of the creditor.
with an express obligation to sell the same on commission and remit the 4. Degaños’s claim that the partial payments he made and his
proceeds thereof or return the unsold items. agreement to pay the remaining obligation didn’t equate to a
Issues: novation of the original contractual relationship of agency to
1. WON the agreement between private complainant Lydia one of sale. The old obligation still prevails.
Bordador and accused is one of sale on credit. –NO, it was an 5. Novation is not a ground under the law to extinguish criminal
agency transaction. liability. Article 894 and 945 of the RPC doesn’t include novation
2. WON the novation had converted the criminal liability of the in the list. Novation is limited to its effect in civil aspects and isn’t
accused into a civil one. –NO an efficient defense in estafa. Only the State may validly waive
Held: the criminal action against accused. Role of novation may only
1. The transaction was a consignment under the obligation to be to prevent the rise of criminal liability or to cast doubt on the
account for the proceeds of sale, or to return the unsold items. true nature of the original transaction (i.e. whether the breach
Accused was the agent of the complainants in the sale to others gives rise to a penal responsibility).
of the items listed in the Kasunduan at Katibayan.

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Par 1: one of the contracting parties in a contract of sale obligates himself to Total extinguishment of criminal liability
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transfer the ownership of and to deliver to pay therefor a price certain in Partial extinguishment of criminal liability
money or its equivalent
  Spouses Dela Cruz v. Planters Products, Inc. 2. WON the CA committed an error in affirming the RTC in
GR 158649 | Feb. 18, 2013 | Contract of Adhesion awarding PPI P240,335 plus 16% interest per annum. –Partly, it
Petitioner: Spouses Quirino and Gloria Dela Cruz was a valid judgment for the amount based on the statement of
Respondent: Planters Products, Inc. account not being hearsay evidence, but the interest being
Facts: usurious must be changed to 12%.
-Spouses Quirino and Gloria Dela Cruz operated an agricultural supply Held:
store named Barangay Agricultural Supply, engaged in the distribution 1. Parties entered into a creditor-debtor relationship, resolvable
and sale or fertilizers and agricultural chemical products. Quirino was a by the examination of the contractual documents signed. The
lawyer and the Municipal Mayor of Aliaga, Nueva Ecija. intention of the parties may be determined by their
-Planters Products, Inc. granted Gloria a regular credit line of P200,000 contemporaneous and subsequent acts. In this case, Gloria
for a 60-day term, with trust receipts as collaterals. After submitting a doing the ff acts shows just that: signing the application of credit
list of their assets to support her credit application, Gloria signed in the facilities that indicated a trust receipt would serve as collateral
presence of PPI sales representative 2 documents labeled Trust for the credit line, signing the list of assets tendered to
Receipt/Special Credit Scheme, executing 4 more related documents a respondents by PPI “to support the credit application in
month after. connection with the participation to the Special Credit Scheme”,
-Gloria failed to pay her obligation after the 60-day credit term lapsed, and further signing other trust receipts and invoices indicating
so PPI wrote collection letter to her with no response. After follow-up the products she received from PPI on various dates.
letters were sent, PPI filed a complaint for the recovery of a sum of 2. Contrary to the label, it was not a trust receipt transaction as
money with the CFI. Gloria alleged that she was only a marketing outlet defined under Section 4 of the Trust Receipts Law and that a
of PPI, not a dealer who’s obligated to PPI. breach would entail estafa, but it was a mere loan where the
Issue: borrower is obligated to pay back the amount spent for the
1. Whether the relationship of Gloria and PPI established is a trust. purchases of the goods. The trust receipts were only collaterals
–No, it’s a creditor-debtor relationship in a contract of adhesion. for the credit line. It was a contract of adhesion, allowing the
signatory to study the document before signing. With both
 respondents (Quirino as a lawyer) signing the document, too low compared to existing valuations of agricultural lands, they
presumably they understood its contents. commenced with an action for just compensation.
3. Once judicial demand for payment has been made, Article 2212 -Land Bank submitted to the SC a Joint Manifestation and Motion stating
of the Civil Code provides that “interest due shall earn legal the revaluation of the properties pursuant to the DAR Administrative
interest from the time it is judicially demanded, although the Order No. 1 as: P2,490,525 as the total amount to be paid for the 2 lands
obligation may be silent upon this point.” As provided in the communicated to the respondents for their unconditional acceptance.
Eastern Shipping Lines, Inc. v. Court of Appeals case, the formula Land Bank prays for the approval of the agreement after both parties
for computing legal interest is: agreed to it.
TOTAL AMOUNT DUE = [principal – partial payments made] + [interest + Issue: WON the agreement made after Land Bank appealed the CA
interest on interest], where Interest = remaining balance x 12% per decision to the SC is valid judicial compromise. –YES
annum x no. of years from due date until date of sale to a third party Held:
(payment). Interest on interest = interest computed as of the filing of the 1. Article 2028 of the Civil Code provides that a compromise is a
complaint x no. of years until date of sale to a third party (payment) contract whereby the parties, by making reciprocal concessions,
avoid a litigation or put an end to one already commenced. A
 Land Bank v. Heirs of Soriano compromise is either a judicial, if the objective is to put an end
GR 78312 | Jan. 30, 2013 | Judicial Compromise Agreement to a pending litigation, or extrajudicial, if the objective is to avoid
Petitioner: Land Bank of the Philippines a litigation. It is perfected by mutual consent as a contract.
Respondent: Heirs of Spouses Jorja Rigor-Soriano and Magin Soriano, 2. A judicial compromise, while immediately binding between the
namely Marivel Carandang and Joseph Soriano parties upon its execution is not executory until it is approved
Facts: by the court and reduced to a judgment. Its validity is dependent
-Respondents were children of Spouses Jorja Rigor-Soriano and Magin upon its compliance with the requisites and principles of
Soriano. The spouses owned 2 parcels of land in Nueva Ecija that became contracts dictated by law. Terms and conditions must not be
subject to Operation Land Transfer and were valued by the Land Bank contrary to law, morals, good customs, public policy and order.
and DAR at P10,000/hectare. Respondents contend this valuation to be
 3. With respondents signifying their “unconditional acceptance -After Atty. Luna’s death, Gregorio Luna leased out the 25/100 portion
and full receipt of the foregoing amounts as just compensation to Atty. Renato Dela Cruz, the partner of Atty. Luna in the new law firm
for the subject properties”, the ultimate objective of the action before the latter died. Soledad filed a complaint against the heirs for the
to determine just compensation for the landowners was subject properties obtained though their joint efforts, and with no
achieved. children claims to be the co-owner of the properties in ¾ pro indiviso
share (½ of the properties + ½ share of the net estate as stated in the
 Lavadia v. Heirs of Luna deceased’s will).
GR 171914 | July 23, 2014 | Conflict of Laws on Nationality Rule, Issue:
Marriage and Property Relations 1. WON the agreement for separation and property settlement
Petitioner: Soledad Lavadia | Respondent: Heirs of Juan Luces Luna executed by Atty. Luna and Eugenia is enforceable. –No, it’s
represented by Gregorio Luna and Eugenia Zaballero-Luna unenforceable.
Facts: 2. Whether the rule governed over the properties acquired during
-Petitioner is the 2nd wife of the late Atty. Juan Luces Luna. He was the marriage of Atty. Luna and Soledad is co-ownership –Yes, as
initially married in a civil ceremony with Eugenia Zaballero-Luna that provided in Article 144 of the Civil Code.
bore them 7 children. After 20 years of marriage, Atty. Luna and Eugenia Held:
agreed to live apart along with a separation of their property. 1. The Civil Code follows the Nationality Rule to the effects of
-Atty. Luna obtained a divorce decree of his 1st marriage from Dominican Philippine laws relating to family rights and duties, or to the
Republic. In the same day, he married Soledad Lavadia and they both status, condition and legal capacity of persons binding upon
returned to the Philippines. citizens of the Philippines although living abroad. The non-
-Organizing a new law firm LUPSICON, Atty. Luna was a managing recognition of divorce between Filipinos has remained under the
partner and through the company purchased a condominium in Makati Family Code even if either or both spouses are residing abroad.
used as the law office. Its registry bared the name of Atty. Luna married 2. Considering that Atty. Luna and Eugenia didn’t enter into any
to Soledad Luna. After LUPSICON was dissolved, the interest of Atty. marriage settlement prior to the marriage in 1947, conjugal
Luna was computed to be 25/100 share. partnership of gains governed their property relations. Since the
 2nd marriage with Soledad is void for being bigamous, the released to MFI even before signing the mortgage and loan documents.
properties acquired during the bigamous marriage governed by In exchange for the early release of the loan, Enrique entrusted Domingo
the rules on co-ownership conformably with Article 144 of the and Caleb 7 titles, leaving the latter to choose which would be sufficient
Civil Code. Soledad’s allegation of co-ownership without to secure the loan and returning the remaining to Enrique.
sufficient and competent evidence would warrant no relief. -Vicky delivered to PCRI 24 checks bearing no dates and amounts to
cover the amortization payments signed in blank by Enrique. It was
 Metropolitan Fabrics, Inc. v. Prosperity Credit Resources, Inc. discovered that the checks were filled with the amount reflecting 35%
GR 154390 | March 17, 2014 | Fraud in Entering Contracts, interest per annum in a 10-year repayment period instead of 24% in a 2
Voidable Contracts year period. Vicky also asked for the offsetting of the loan using the
Petitioner: Metropolitan Fabrics, Inc., Enrique Ang properties, but Caleb claims that the 7 titles were only for the P3.5
Respondent: Prosperity Credit Resources, Inc., Domingo Ang, Caleb Ang million loan (even though 4 out of these are already worth P6.5 million).
Facts: -Domingo and Caleb assures Enrique and Vicky that they’ll return the
-Metropolitan Fabrics, Inc. is a family corporation owning an industrial titles. However, Vicky receives an auction notice for the 7 titles to pay
compound. MFI sought a loan from PCRI, the latter a family-owned for a P10.5 million due without receiving any prior demand letter.
corporation engaged in money lending, for the amount of P3,443,330 Issue: Whether the agreement for the 7 titles was void for absence of
(the cost of its boiler machine to prevent its repossession by the seller). consent or voidable for vitiated consent. –Vitiated consent through
PCRI president Domingo Ang and VP son Caleb Ang belonged to the same fraud.
family association as the MFI President Enrique, the Lioc Kui Tong Held:
Fraternity. 1. Under Article 1388 of the Civil Code, there is fraud when one of
-Caleb recommended the approval of the P3.44 million based solely on the contracting parties through insidious words or
his interview with Enrique and information from his father Domingo, machinations, induces the other to enter into the contract that,
without further checking on Enrique’s background and his business and without inducement, he would not have agreed to. It must be
requiring him to submit a company profile along with a feasibility study causal fraud defined as a deception employed by one party prior
of MFI. Enrique’s daughter Vicky testified that the P3.5 million loan was to or simultaneous to the contract in order to secure the consent
 of the other. Fraud must be proved by clear and convincing later found out that Harvel is not licensed to deploy workers for overseas
evidence and not presumed. employment. Inovero is said to conduct the orientation for the recruits.
2. Where the consent given was through fraud, the contract is Issue: WON Inovero may be held liable for the crimes charged since she
voidable. This may be annulled within 4 years provided by Article could only be associated with the illegal recruitment and that her lack of
1390 in relation to 1391 of the Civil Code. Petitioners really certification is no positive proof that she engaged in the illegal
agreed to mortgage their properties to secure their loan. The recruitment. –Yes, as a co-conspirator she may be held liable.
action has prescribed counting the discovery to reckon from the Held:
time the document was registered in the Register of Deeds. 1. The nature of the obligation of the co-conspirators in the
commission of the crime requires solidarity, and each debtor
 People v. Velasco may be compelled to pay the entire obligation. Joint tortfeasors
GR 195668 | June 25, 2014 | Solidary Obligation in Conspiracy, are solidarily liable for the resulting damage as provided in
Joint Tortfeasors Article 2194 of the Civil Code and not liable pro rata. They are
Petitioner: People of the Philippines | Respondent: Ma. Harleta Velasco jointly and severally liable for the whole amount.
y Briones, Maricar Inovero, Marissa Diala, Berna Paulino 2. Inovero’s civil liability was similar to that of a joint tortfeasor
Facts: under the rules of the civil law. Joint tortfeasors are those who
-Respondents were charged for illegal recruitment under Section 6 of RA command, instigate, promote, encourage, advise, countenance,
8042 or the Migrant Worker’s Act of 1995 and estafa under Article 315, cooperate in, aid or abet the commission of a tort, or who
paragraph 2(a) of the RPC. approve of it after it is done, if done for their benefit. Inovero’s
-Harvel International Talent Management and Promotion in Makati liability towards the victims of their illegal recruitment was
provides recruitment for caregivers to Japan. Complainant Baful was solidary, regardless of whether she actually received the
directed to pay P2,500 as training fee and P30,000 as placement and amounts paid or not, and notwithstanding that her co-accused,
processing fees. After paying P28,000 Baful was promised to be having escaped arrest until now, have remained untried.
deployed within 2-3 months. However, she was never deployed. She
  Vector Shipping Corp. v. American Home Assurance Co. obligation created by law; and (3) upon a judgment. The present
GR 159213 | July 3, 2014 | Prescription, Right of Subrogation action is upon an obligation created by law. The subrogation of
Petitioner: Vector Shipping Corporation, Francisco Soriano respondent to the rights of Caltex as the insured was by virtue
Respondent: American Home Assurance Company, Sulpicio Lines, Inc. of the express provision of law embodied in Article 2207 of the
Facts: Civil Code.
-Vector was the operator of the motor tanker M/T Vector, while Soriano 2. The right of subrogation is not dependent upon, nor does it grow
was the registered owner. Respondent is a domestic insurance corp. out of, any privity of contract or upon written assignment of
-Caltex entered into a contract of affreightment with Vector for the claim. It accrues simply upon payment of the insurance claim by
transport of Caltex’s petroleum cargo. Caltex insured this cargo with the insurer. Payment by the insurer to the assured operates as
respondent. M/T Vector collided with M/V Doña Paz, the latter a vessel an equitable assignment to the former of all remedies which the
owned and operated by Sulpicio Lines, Inc. This led to both vessels latter may have against the 3rd party whose negligence or
sinking. Respondent indemnified Caltex for the loss of the petroleum wrongful act caused the loss.
cargo in the full amount of P7,455,421.
-Respondent filed a complainant against Vector, Soriano and Sulpicio to
recover the full amount insured.
Issue:
1. WON the action by respondent was barred by prescription by
bringing it only in 1992 when it prescribes by 1991 (after 4
years). –No, the action only prescribes after 10 years.
2. Whether the nature of the cause of action arises from a quasi-
delict or a breach of contract. –Arises from a breach of contract
Held:
1. The ff actions must be brought within 10 years from the time the
cause of actios accrues: (1) upon a written contract; (2) upon an