Air France v. Carrascoso, GR No.

L-21438 (1966)

FACTS

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc.,
issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok,
plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to
vacate the "first class" seat that he was occupying because, in the words of the witness Ernesto G.
Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When
asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's
Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said
Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found
out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across
to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12,
Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane.

ISSUE
The trust of the relief petitioner now seeks is that we review "all the findings" of respondent Court of
Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all the
issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to
overturn the appellate court's decision.

RULING

Implicit in that affirmance is a determination by the Court of Appeals that the proceeding in the Court of
First Instance was free from prejudicial error and "all questions raised by the assignments of error and all
questions that might have been raised are to be regarded as finally adjudicated against the appellant".
So also, the judgment affirmed "must be regarded as free from all error". We reached this policy
construction because nothing in the decision of the Court of Appeals on this point would suggest that its
findings of fact are in any way at war with those of the trial court. Nor was said affirmance by the Court
of Appeals upon a ground or grounds different from those which were made the basis of the conclusions
of the trial court.
Guanio vs. Makati Shangri-La Hotel, G.R. No 190601 (2011)

FACTS

For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio
(petitioners) booked at the Shangri-la Hotel Makati (the hotel).

Prior to the event, Makati Shangri-La Hotel & Resort, Inc. (respondent) scheduled an initial food tasting.
Petitioners claim that they requested the hotel to prepare for seven persons ─ the two of them, their
respective parents, and the wedding coordinator. At the scheduled food tasting, however, respondent
prepared for only six.

ISSUE

Upon receiving your comments on our service rendered during your reception here with us, we are in
fact, very distressed. Right from minor issues pappadums served in the soup instead of the creutons, lack
of valet parkers, hard rolls being too hard till a major one – slow service, rude and arrogant waiters, we
have disappointed you in all means.

Indeed, we feel as strongly as you do that the services you received were unacceptable and definitely
not up to our standards. We understand that it is our job to provide excellent service and in this instance,
we have fallen short of your expectations. We ask you please to accept our profound apologies for
causing such discomfort and annoyance.

RULING

The trial court observed that from "the tenor of the letter . . . the defendant[-herein respondent] admits
that the services the plaintiff[-herein petitioners] received were unacceptable and definitely not up to
their standards."

On appeal, the Court of Appeals, by Decision of July 27, 2009,6 reversed the trial court’s decision, it
holding that the proximate cause of petitioners’ injury was an unexpected increase in their guests:

Hence, the alleged damage or injury brought about by the confusion, inconvenience and disarray during
the wedding reception may not be attributed to defendant-appellant Shangri-La.

We find that the said proximate cause, which is entirely attributable to plaintiffs-appellants, set the chain
of events which resulted in the alleged inconveniences, to the plaintiffs-appellants. Given the
circumstances that obtained, only the Sps. Guanio may bear whatever consequential damages that they
may have allegedly suffered.

Petitioners’ motion for reconsideration having been denied by Resolution of November 19, 2009, the
present petition for review was filed.

The Court finds that since petitioners’ complaint arose from a contract, the doctrine of proximate cause
finds no application to it:
Vazques v. Ayala Corporation, G.R. No. 149734 (2004)

FACTS

On April 23, 1981, spouses Daniel Vasquez and Ma. Luisa M. Vasquez (hereafter, Vasquez spouses)
entered into a Memorandum of Agreement (MOA) with Ayala Corporation (hereafter, AYALA) with AYALA
buying from the Vazquez spouses, all of the latter's shares of stock in Conduit Development, Inc.
(hereafter, Conduit). The main asset of Conduit was a 49.9 hectare property in Ayala Alabang,
Muntinlupa, which was then being developed by Conduit under a development plan where the land was
divided into Villages 1, 2 and 3 of the "Don Vicente Village." The development was then being
undertaken for Conduit by G.P. Construction and Development Corp. (hereafter, GP Construction).

Under the MOA, Ayala was to develop the entire property, less what was defined as the "Retained Area"
consisting of 18,736 square meters. This "Retained Area" was to be retained by the Vazquez spouses. The
area to be developed by Ayala was called the "Remaining Area". In this "Remaining Area" were 4 lots
adjacent to the "Retained Area" and Ayala agreed to offer these lots for sale to the Vazquez spouses at
the prevailing price at the time of purchase.

ISSUE

The presents itself is whether petitioners breached their warranties under the MOA when they failed to
disclose the Lancer claim. The trial court declared they did not; the appellate court found otherwise.

Ayala Corporation summarizes the clauses of the MOA which petitioners allegedly breached when they
failed to disclose the Lancer claim

RULING

The Court has clearly distinguished between an option contract and a right of first refusal. An option is a
preparatory contract in which one party grants to another, for a fixed period and at a determined price,
the privilege to buy or sell, or to decide whether or not to enter into a principal contract. It binds the
party who has given the option not to enter into the principal contract with any other person during the
period designated, and within that period, to enter into such contract with the one to whom the option
was granted, if the latter should decide to use the option. It is a separate and distinct contract from that
which the parties may enter into upon the consummation of the option. It must be supported by
consideration.

In a right of first refusal, on the other hand, while the object might be made determinate, the exercise of
the right would be dependent not only on the grantor's eventual intention to enter into a binding
juridical relation with another but also on terms, including the price, that are yet to be firmed up.
Nogales v. Capitol Medical Center, G.R. no 142625 (2006)

FACTS

Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was under the
exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy
or as early as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted
an increase in her blood pressure and development of leg edema5 indicating preeclampsia,6 which is a
dangerous complication of pregnancy.7

Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting Corazon and
Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada
advised her immediate admission to the Capitol Medical Center ("CMC").

On 26 May 1976, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse noted the written
admission request8 of Dr. Estrada. Upon Corazon's admission at the CMC, Rogelio Nogales ("Rogelio")
executed and signed the "Consent on Admission and Agreement"9 and "Admission Agreement."10
Corazon was then brought to the labor room of the CMC.

Dr. Rosa Uy ("Dr. Uy"), who was then a resident physician of CMC, conducted an internal examination of
Corazon. Dr. Uy then called up Dr. Estrada to notify him of her findings.

ISSUES

The petitioners filed a Manifestation dated 12 April 200221 stating that respondents Dr. Estrada, Dr.
Enriquez, Dr. Villaflor, and Nurse Dumlao "need no longer be notified of the petition because they are
absolutely not involved in the issue raised before the [Court], regarding the liability of [CMC]."22
Petitioners stressed that the subject matter of this petition is the liability of CMC for the negligence of Dr.
Estrada.

RULING

In the present case, petitioners maintain that CMC, in allowing Dr. Estrada to practice and admit patients
at CMC, should be liable for Dr. Estrada's malpractice. Rogelio claims that he knew Dr. Estrada as an
accredited physician of CMC, though he discovered later that Dr. Estrada was not a salaried employee of
the CMC.35 Rogelio further claims that he was dealing with CMC, whose primary concern was the
treatment and management of his wife's condition. Dr. Estrada just happened to be the specific person
he talked to representing CMC.36 Moreover, the fact that CMC made Rogelio sign a Consent on
Admission and Admission Agreement37 and a Consent to Operation printed on the letterhead of CMC
indicates that CMC considered Dr. Estrada as a member of its medical staff.

On the other hand, CMC disclaims liability by asserting that Dr. Estrada was a mere visiting physician and
that it admitted Corazon because her physical condition then was classified an emergency obstetrics
case.38

CMC alleges that Dr. Estrada is an independent contractor "for whose actuation CMC would be a total
stranger." CMC maintains that it had no control or supervision over Dr. Estrada in the exercise of his
medical profession.
Crisostomo v. CA, G.R. no 138334 (2003)

FACTS
In May 1991, petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and
Tours International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour
dubbed "Jewels of Europe". The package tour included the countries of England, Holland, Germany,
Austria, Liechstenstein, Switzerland and France at a total cost of P74,322.70. Petitioner was given a 5%
discount on the amount, which included airfare, and the booking fee was also waived because
petitioner’s niece, Meriam Menor, was respondent company’s ticketing manager.

Pursuant to said contract, Menor went to her aunt’s residence on June 12, 1991 – a Wednesday – to
deliver petitioner’s travel documents and plane tickets. Petitioner, in turn, gave Menor the full payment
for the package tour. Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on
Saturday, two hours before her flight on board British Airways.

Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the
flight for the first leg of her journey from Manila to Hongkong. To petitioner’s dismay, she discovered
that the flight she was supposed to take had already departed the previous day. She learned that her
plane ticket was for the flight scheduled on June 14, 1991. She thus called up Menor to complain.

ISSUE

Petitioner contends that respondent did not observe the standard of care required of a common carrier
when it informed her wrongly of the flight schedule. She could not be deemed more negligent than
respondent since the latter is required by law to exercise extraordinary diligence in the fulfillment of its
obligation. If she were negligent at all, the same is merely contributory and not the proximate cause of
the damage she suffered. Her loss could only be attributed to respondent as it was the direct
consequence of its employee’s gross negligence.

RULING

The lower court declared that respondent’s employee was negligent. This factual finding, however, is not
supported by the evidence on record. While factual findings below are generally conclusive upon this
court, the rule is subject to certain exceptions, as when the trial court overlooked, misunderstood, or
misapplied some facts or circumstances of weight and substance which will affect the result of the case.

In the case at bar, the evidence on record shows that respondent company performed its duty diligently
and did not commit any contractual breach. Hence, petitioner cannot recover and must bear her own
damage.

WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-
G.R. CV No. 51932 is AFFIRMED. Accordingly, petitioner is ordered to pay respondent the amount of
P12,901.00 representing the balance of the price of the British Pageant Package Tour, with legal interest
thereon at the rate of 6% per annum, to be computed from the time the counterclaim was filed until the
finality of this Decision. After this Decision becomes final and executory, the rate of 12% per annum shall
be imposed until the obligation is fully settled, this interim period being deemed to be by then an
equivalent to a forbearance of credit.
Eastern Shipping Lines v. CA, G.R. No. 97412 (1994)

FACTS
On December 4, 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan for delivery vessel "SS
EASTERN COMET" owned by defendant Eastern Shipping Lines under Bill of Lading

No. YMA-8 (Exh. B). The shipment was insured under plaintiff's Marine Insurance Policy No. 81/01177 for
P36,382,466.38.

Upon arrival of the shipment in Manila on December 12, 1981, it was discharged unto the custody of defendant
Metro Port Service, Inc. The latter excepted to one drum, said to be in bad order, which damage was unknown to
plaintiff.

On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro Port
Service, Inc., one drum opened and without seal (per "Request for Bad Order Survey." Exh. D).

On January 8 and 14, 1982, defendant Allied Brokerage Corporation made deliveries of the shipment to the
consignee's warehouse. The latter excepted to one drum which contained spillages, while the rest of the contents
was adulterated/fake (per "Bad Order Waybill" No. 10649, Exh. E).

Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered losses totaling
P19,032.95, due to the fault and negligence of defendants. Claims were presented against defendants who failed
and refused to pay the same (Exhs. H, I, J, K, L).

As a consequence of the losses sustained, plaintiff was compelled to pay the consignee P19,032.95 under the
aforestated marine insurance policy, so that it became subrogated to all the rights of action of said consignee
against defendants (per "Form of Subrogation", "Release" and Philbanking check, Exhs. M, N, and O). (pp. 85-86,
Rollo.)

ISSUE
Albeit not completely novel, are: whether or not a claim for damage sustained on a shipment of goods
can be a solidary, or joint and several, liability of the common carrier, the arrastre operator and the
customs broker; whether the payment of legal interest on an award for loss or damage is to be
computed from the time the complaint is filed or from the date the decision appealed from is rendered;
and whether the applicable rate of interest, referred to above, is twelve percent (12%) or six percent
(6%).

RULING
The subsequent case of American Express International, Inc., vs. Intermediate Appellate Court11 was a
petition for review on certiorari from the decision, dated 27 February 1985, of the then Intermediate
Appellate Court reducing the amount of moral and exemplary damages awarded by the trial court, to
P240,000.00 and P100,000.00, respectively, and its resolution, dated 29 April 1985, restoring the amount
of damages awarded by the trial court, i.e., P2,000,000.00 as moral damages and P400,000.00 as
exemplary damages with interest thereon at 12% per annum from notice of judgment, plus costs of suit.
In a decision of 09 November 1988, this Court, while recognizing the right of the private respondent to
recover damages, held the award, however, for moral damages by the trial court, later sustained by the
IAC, to be inconceivably large. The Court12 thus set aside the decision of the appellate court and
rendered a new one, "ordering the petitioner to pay private respondent the sum of One Hundred
Thousand (P100,000.00) Pesos as moral damages, with six (6%) percent interest thereon computed from
the finality of this decision until paid.
California Bus Lines v. State Investment House, G.R. No 147950 (2003)

FACTS

In this case, the attendant facts do not make out a case of novation. The restructuring agreement
between Delta and CBLI executed on October 7, 1981, shows that the parties did not expressly stipulate
that the restructuring agreement novated the promissory notes. Absent an unequivocal declaration of
extinguishment of the pre-existing obligation, only a showing of complete incompatibility between the
old and the new obligation would sustain a finding of novation by implication. However, our review of its
terms yields no incompatibility between the promissory notes and the restructuring agreement.

ISSUE
The Restructuring Agreement dated October 7, 1981, between petitioner CBLI and Delta Motors, Corp.
novated the five promissory notes Delta Motors, Corp. assigned to respondent SIHI, and (2) whether the
compromise agreement in Civil Case No. 0023-P superseded and/or discharged the subject five
promissory notes.

RULING

The trial court held that the restructuring agreement dated October 7, 1981, between Delta and CBLI
novated the five promissory notes; hence, at the time Delta assigned the five promissory notes to SIHI,
the notes were already merged in the restructuring agreement and cannot be enforced against CBLI.

SIHI appealed the decision to the Court of Appeals. The case was docketed as CA-G.R. CV No. 52667. On
April 17, 2001, the Court of Appeals decided CA-G.R. CV No. 52667 in this manner:

WHEREFORE, based on the foregoing premises and finding the appeal to be meritorious, We find
defendant-appellee CBLI liable for the value of the five (5) promissory notes subject of the complaint a
quo less the proceeds from the attached sixteen (16) buses. The award of attorney’s fees and costs is
eliminated. The appealed decision is hereby REVERSED. No costs.
Garcia v. Llamas, G.R. No. 154127 (2003)

FACTS

This case started out as a complaint for sum of money and damages by respondent Dionisio Llamas
against petitioner Romeo Garcia and Eduardo de Jesus. Docketed as Civil Case No. Q97-32-873, the
complaint alleged that on 23 December 1996, petitioner and de Jesus borrowed ₱400,000.00 from
respondent that, on the same day, They executed a promissory note wherein they bound themselves
jointly and severally to pay the loan on or before 23 January 1997 with a 5% interest per month; that the
loan has long been overdue and, despite repeated demands, Petitioner and de Jesus have failed and
refused to pay it; and that, by reason of the unjustified refusal, respondent was compelled to engage the
services of counsel to whom he agreed to pay 25% of the sum to be recovered from petitioner and de
Jesus, plus ₱2,000.00 for every appearance in court. Annexed to the complaint were the promissory note
above-mentioned and a demand letter, dated 02 May 1997, by respondent addressed to petitioner and
de Jesus.

ISSUE

Whether or not the Honorable Court of Appeals gravely erred in not holding that novation applies in the
instant case as Eduardo de Jesus had expressly assumed sole and exclusive liability for the loan obligation
he obtained from respondent Dionisio Llamas.

RULING

Petitioner seeks to extricate himself from his obligation as joint and solidary debtor by insisting that
novation took place, either through the substitution of De Jesus as sole debtor or the replacement of the
promissory note by the check. Alternatively, the former argues that the original obligation was
extinguished when the latter, who was his co-obligor, "paid" the loan with the check.

The fallacy of the second alternative argument is all too apparent. The check could not have extinguished
the obligation, because it bounced upon presentment. By law,9 the delivery of a check produces the
effect of payment only when it is encashed.
Malbarosa v. CA, G.R. No. 125761 (2003)

FACTS

On March 14, 1990, the respondent, through Senen Valero, signed a letter-offer addressed to the
petitioner3 stating therein that petitioner's resignation from all the positions in the SEADC group of
companies had been accepted by the respondent, and that he was entitled to an incentive
compensation in the amount of P251,057.67, and proposing that the amount be satisfied, thus:

- The 1982 Mitsubishi Super saloon car assigned to you by the company shall be transferred to you at a
value of P220,000.00. (Although you have indicated a value of P180,000.00, our survey in the market
indicates that P220,000.00 is a reasonable reflection of the value of the car.)

- The membership share of our subsidiary, Tradestar International, Inc. in the Architectural Center, Inc.
will be transferred to you. (Although we do not as yet have full information as to the value of these
shares, we have been informed that the shares have traded recently in the vicinity of P60,000.00.)

ISSUE

With the refusal of the petitioner to return the vehicle, the respondent, as plaintiff, filed a complaint
against the petitioner, as defendant, for recovery of personal property with replevin with damages and
attorney's fees.

RULING

The petitioner adduced evidence that on March 9, 1990, he had written Senen Valero that he was
agreeable to an incentive compensation of P218,000 to be settled by the respondent by transferring the
car to the petitioner valued at P180,000 and P38,000 worth of shares of the Architectural Center, Inc. on
the claim of Da Costa that respondent was almost bankrupt. However, the petitioner learned that the
respondent was financially sound; hence, he had decided to receive his incentive compensation of
P395,000 in cash. On March 29, 1990, the petitioner called up the office of Louis Da Costa to inform the
latter of his acceptance of the letter-offer of the respondent. However, the petitioner was told by
Liwayway Dinglasan, the telephone receptionist of Commonwealth Insurance Co., that Da Costa was out
of the office. The petitioner asked Liwayway to inform Da Costa that he had called him up and that he
had already accepted the letter-offer. Liwayway promised to relay the message to Da Costa. Liwayway
testified that she had relayed the petitioner's message to Da Costa and that the latter merely nodded his
head.

On February 8, 1996, the Court of Appeals rendered its Decision, affirming the decision of the trial court.
The dispositive portion of the decision reads:

WHEREFORE, the Decision dated July 28, 1992 and the Order dated October 10, 1992 of the Regional
Trial Court of Pasig (Branch 158) are hereby AFFIRMED with the MODIFICATION that the period of
payment of rentals at the rate of P1,000.00 per day shall be from the time this decision becomes final
until actual delivery of the motor vehicle to plaintiff-appellee is made.

Costs against the defendant-appellant.

JLT Agro, Inc v. Balansag, G.R No. 141882 (2005)

FACTS
Pryce Corporation v. PAGCOR, G.R. No 156480 (2005)
Katipunan v. Katipunan, G.R. No. 132415 (2002)
Frenzel v. Catito, G.R No. 143958 (2003)