G.R. No.

L-13667 April 29, 1960

PRIMITIVO ANSAY, ETC., ET AL., plaintiffs-appellants-petitioner,

vs.
THE BOARD OF DIRECTORS OF THE NATIONAL DEVELOPMENT COMPANY, ET
AL., defendants-appellees-respondent

Celso A. Fernandez for respondent.

Juan C. Jimenez, for petitioner

FACTS: On July 25, 1956, appellants filed against appellees in the Court of First
Instance of Manila a complaint praying for a 20% Christmas bonus for the years
1954 and 1955. The lower court citing article 142 of the Civil Code granted
appellees’ motion to dismiss holding that the grant of a bonus is not a legal duty
but a moral obligation and that the court has no power to compel a party to
comply with a moral obligation.
A motion for reconsideration was denied. Hence this appeal.

Appellants contend that there exists a cause of action in their complaint

because their claim rests on moral grounds or what in brief is defined by law as
a natural obligation.

ISSUE: Whether or not courts may compel performance of natural obligations?

HELD: No. Article 1423 of the New Civil Code classifies obligations into civil or
natural. «Civil obligations are a right of action to compel their
performance. Natural obligations, not being based on positive law but on equity
and natural law, do not grant a right of action to enforce their performanc e, but
after voluntary fulfillment by the obligor, they authorize the retention of what
has been delivered or rendered by reason thereof«.
It is thus readily seen that an element of natural obligation before it can be
cognizable by the court is voluntary fulfillment by the obligor. Certainly retention
can be ordered but only after there has been voluntary performance. But here
there has been no voluntary performance. In fact, the court cannot order the
performance.
From the legal point of view a bonus is not a demandable and enforceable
obligation. It is so when it is made a part of the wage or salary compensation.
(Philippine Education Co. vs. CIR and the Union of Philippine Education Co.,
Employees (NUL) (92 Phil., 381; 48 Off. Gaz., 5278)

PRIMITIVO ANSAY, ETC., ET AL., plaintiffs-appellants, vs. THE BOARD OF

DIRECTORS OF THE NATIONALDEVELOPMENT COMPANY, ET AL., defendants-
appellees.

G.R. No. L-13667 April 29, 1960

EN BANC Appeal

PARAS, C. J.:

Facts: Petitioners was compelling the National Development Company to give

them a Christmas Bonus. But they also acknowledge that since giving bonus is a
moral obligation or natural obligation, respondents are not under legal duty to
give their claimed bonus. The lower court dismissed the action arguing that
giving bonus is an act of liberality, and as moral obligation, it is not enforceable.

Issue: Whether or not giving a Christmas Bonus is demandable and enforceable

Ruling: No. Since giving Christmas Bonus is a natural obligation, it is not a

demandable and enforceable obligation. But the Court can order its retention
after there has been voluntary performance of giving a bonus. But here there has
been no voluntary performance. It is also demandable and enforceable when it
made a part of the wage or salary compensation. But even if a bonus is not
demandable for not forming part of the wage, salary or compensation of an
employee, the same may nevertheless, be granted on equitable consideration as
when it was given in the past, though withheld in succeeding two years from low
salaried employees due to salary increase Premises considered, the order
appealed from is hereby affirmed, without pronouncement as to costs.
G.R. No. L-13667 April 29, 1960

PRIMITIVO ANSAY, ETC., ET AL., plaintiffs-appellants,

vs.
THE BOARD OF DIRECTORS OF THE NATIONAL DEVELOPMENT COMPANY, ET
AL., defendants-appellees.

Celso A. Fernandez for appellants.

Juan C. Jimenez, for appellees.

PARAS, C. J.:

On July 25, 1956, appellants filed against appellees in the Court of First Instance of Manila a
complaint praying for a 20% Christmas bonus for the years 1954 and 1955. The court a quo on
appellees' motion to dismiss, issued the following order:

Considering the motion to dismiss filed on 15 August, 1956, set for this morning; considering
that at the hearing thereof, only respondents appeared thru counsel and there was no
appearance for the plaintiffs although the court waited for sometime for them; considering,
however, that petitioners have submitted an opposition which the court will consider together
with the arguments presented by respondents and the Exhibits marked and presented,
namely, Exhibits 1 to 5, at the hearing of the motion to dismiss; considering that the action in
brief is one to compel respondents to declare a Christmas bonus for petitioners workers in
the National Development Company; considering that the Court does not see how petitioners
may have a cause of action to secure such bonus because:

(a) A bonus is an act of liberality and the court takes it that it is not within its judicial powers
to command respondents to be liberal;

(b) Petitioners admit that respondents are not under legal duty to give such bonus but that
they had only ask that such bonus be given to them because it is a moral obligation of
respondents to give that but as this Court understands, it has no power to compel a party to
comply with a moral obligation (Art. 142, New Civil Code.).

IN VIEW WHEREOF, dismissed. No pronouncement as to costs.

A motion for reconsideration of the afore-quoted order was denied. Hence this appeal.

Appellants contend that there exists a cause of action in their complaint because their claim rests on
moral grounds or what in brief is defined by law as a natural obligation.

Since appellants admit that appellees are not under legal obligation to give such claimed bonus; that
the grant arises only from a moral obligation or the natural obligation that they discussed in their
brief, this Court feels it urgent to reproduce at this point, the definition and meaning of natural
obligation.

Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a
right of action to compel their performance. Natural obligations, not being based on positive law but
on equity and natural law, do not grant a right of action to enforce their performance, but after
voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or
rendered by reason thereof".

It is thus readily seen that an element of natural obligation before it can be cognizable by the court is
voluntary fulfillment by the obligor. Certainly retention can be ordered but only after there has been
voluntary performance. But here there has been no voluntary performance. In fact, the court cannot
order the performance.

At this point, we would like to reiterate what we said in the case of Philippine Education Co. vs. CIR
and the Union of Philippine Education Co., Employees (NUL) (92 Phil., 381; 48 Off. Gaz., 5278) —

xxx xxx xxx

From the legal point of view a bonus is not a demandable and enforceable obligation. It is so
when it is made a part of the wage or salary compensation.

And while it is true that the subsequent case of H. E. Heacock vs. National Labor Union, et al., 95
Phil., 553; 50 Off. Gaz., 4253, we stated that:

Even if a bonus is not demandable for not forming part of the wage, salary or compensation
of an employee, the same may nevertheless, be granted on equitable consideration as when
it was given in the past, though withheld in succeeding two years from low salaried
employees due to salary increases.

still the facts in said Heacock case are not the same as in the instant one, and hence the ruling
applied in said case cannot be considered in the present action.

Premises considered, the order appealed from is hereby affirmed, without pronouncement as to
costs.

Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia Barrera and
Gutierrez David, JJ., concur.
GLORIA S. DY, petitioner, v. PEOPLE, respondent.

GR No. 189081, 2016-08-10

Facts:

Petitioner was the former General Manager of MCCI (Mandy Commodities Company, Inc.) In the
course of her employment, petitioner assisted MCCI in its business involving several properties. One
such business pertained to the construction of warehouses over a property (Numancia Property) that
MCCI leased from the Philippine National Bank (PNB). Sometime in May 1996, in pursuit of MCCI's
business, petitioner proposed to William Mandy (Mandy), President of MCCI, the purchase of a
property owned by Pantranco. As the transaction involved a large amount of money, Mandy agreed
to obtain a loan from the International China Bank of Commerce (ICBC). Petitioner represented that
she could facilitate the approval of the loan. True enough, ICBC granted a loan to MCCI in the
amount of P20,000,000.00, evidenced by a promissory note. As security, MCCI also executed a
chattel mortgage over the warehouses in the Numancia Property. Mandy entrusted petitioner with
the obligation to manage the payment of the loan.[4]

In February 1999, MCCI received a notice of foreclosure over the mortgaged property due to its
default in paying the loan obligation.[5] In order to prevent the foreclosure, Mandy instructed
petitioner to facilitate the payment of the loan. MCCI, through Mandy, issued 13 Allied Bank checks
and 12 Asia Trust Bank checks in varying amounts and in different dates covering the period from
May 18, 1999 to April 4, 2000.[6] The total amount of the checks, which were all payable to cash,
was P21,706,281.00. Mandy delivered the checks to petitioner. Mandy claims that he delivered the
checks with the instruction that petitioner use the checks to pay the loan.[7] Petitioner, on the other
hand, testified that she encashed the checks and returned the money to Mandy.[8] ICBC eventually
foreclosed the mortgaged property as MCCI continued to default in its obligation to pay. Mandy
claims that it was only at this point in time that he discovered that not a check was paid to ICBC.[9]

Thus, on October 7, 2002, MCCI, represented by Mandy, filed a Complaint-Affidavit for Estafa[10]
before the Office of the City Prosecutor of Manila. On March 3, 2004, an Information [11] was filed
against petitioner before the Regional Trial Court (RTC) Manila.

After a full-blown trial, the RTC Manila rendered a decision [12] dated November 11, 2005 (RTC
Decision) acquitting petitioner. The RTC Manila found that while petitioner admitted that she
received the checks, the prosecution failed to establish that she was under any obligation to deliver
them to ICBC in payment of MCCFs loan. The trial court made this finding on the strength of
Mandy's admission that he gave the checks to petitioner with the agreement that she would encash
them. Petitioner would then pay ICBC using her own checks. The trial court further made a finding
that Mandy and petitioner entered into a contract of loan.[13] Thus, it held that the prosecution failed
to establish an important element of the crime of estafa—misappropriation or conversion. However,
while the RTC Manila acquitted petitioner, it ordered her to pay the amount of the checks. The
dispositive portion of the RTC Decision states —WHEREFORE, the prosecution having failed to
establish the guilt of the accused beyond reasonable doubt, judgment is hereby rendered
ACQUITTING the accused of the offense charged. With costs de officio. The accused is however
civilly liable to the complainant for the amount of P21,706,281.00.

Petitioner filed an appeal [15] of the civil aspect of the RTC Decision with the CA. In the Assailed
Decision, [16] the CA found the appeal without merit. It held that the acquittal of petitioner does not
necessarily absolve her of civil liability. The CA said that it is settled that when an accused is
acquitted on the basis of reasonable doubt, courts may still find him or her civilly liable if the
evidence so warrant. The CA explained that the evidence on record adequately prove that petitioner
received the checks as a loan from MCCI. Thus, preventing the latter from recovering the amount of
the checks would constitute unjust enrichment. Hence, the Assailed Decision ruled

WHEREFORE, in view of the foregoing, the appeal is DENIED. The Decision dated November 11,
2005 of the Regional Trial Court, Manila, Branch 33 in Criminal Case No. 04-224294 which found
Gloria Dy civilly liable to William Mandy is AFFIRMED.

The CA also denied petitioner's motion for reconsideration in a resolution [18] dated August 3,
2009.Hence, this Petition for Review on Certiorari (Petition). Petitioner argues that since she was
acquitted for failure of the prosecution to prove all the elements of the crime charged, there was
therefore no crime committed.[19] As there was no crime, any civil liability ex delicto cannot be
awarded. In this case, the RTC Manila acquitted petitioner because the prosecution failed to
establish by sufficient evidence the element of misappropriation or conversion. There was no
adequate evidence to prove that Mandy gave the checks to petitioner with the instruction that
she will use them to pay the ICBC loan. Citing Mandy's own testimony in open court, the RTC
Manila held that when Mandy delivered the checks to petitioner, their agreement was that it was a
"sort of loan."[36] In the dispositive portion of the RTC Decision, the RTC Manila ruled that the
prosecution "failed to establish the guilt of the accused beyond reasonable doubt."[37] It then
proceeded to order petitioner to pay the amount of the loan. The ruling of the RTC Manila was
affirmed by the CA. It said that "[t]he acquittal of Gloria Dy is anchored on the ground that her guilt
was not proved beyond reasonable doubt - not because she is not the author of the act or omission
complained of. x x x The trial court found no trickery nor deceit in obtaining money from the private
complainant; instead, it concluded that the money obtained was undoubtedly a loan."[38]

Issues:

The central issue is the propriety of making a finding of civil liability in a criminal case for estafa
when the accused is acquitted for failure of the prosecution to prove all the elements of the crime
charged.

Ruling:

We apply this doctrine to the facts of this case. Petitioner was acquitted by the RTC Manila because
of the absence of the element of misappropriation or conversion. The RTC Manila, as affirmed by
the CA, found that Mandy delivered the checks to petitioner pursuant to a loan agreement. Clearly,
there is no crime of estafa. There is no proof of the presence of any act or omission constituting
criminal fraud. Thus, civil liability ex delicto cannot be awarded because there is no act or omission
punished by law which can serve as the source of obligation. Any civil liability arising from the loan
takes the nature of a civil liability ex contractu. It does not pertain to the civil action deemed instituted
with the criminal case.

In Manantan, this Court explained the effects of this result on the civil liability deemed instituted with
the criminal case. At the risk of repetition, Manantan held that when there is no delict, "civil liability ex
delicto is out of the question, and the civil action, if any, which may be instituted must be based on
grounds other than the delict complained of."[51] In Dy's case, the civil liability arises out of contract
—a different source of obligation apart from an act or omission punished by law—and must be
claimed in a separate civil action.

WHEREFORE, in view of the foregoing, the Petition is GRANTED. The Decision of the CA dated
February 25, 2009 is REVERSED. This is however, without prejudice to any civil action which may
be filed to claim civil liability arising from the contract.
G.R. No. 97995 January 21, 1993

PHILIPPINE NATIONAL BANK, petitioner,

vs.
COURT OF APPEALS AND B.P. MATA AND CO., INC., respondents.

Roland A. Niedo for petitioner.

Benjamin C. Santos Law Office for respondent.

FACTS:
B. P. Mata & Co. Inc. (Mata), is a private corporation engaged in providing goods and services
to Star Kist Foods, Inc. As part of their agreement, Mata makes advances for the crew’s
expenses, which Star Kist reimburses by telegraphic transfer through banks.

On Feb 21, 1976, SEPAC of Los Angeles, which had an arrangement with PNB, transmitted a
cable message to PNB to pay $14,000 (P97,878.60) to Mata’s account with Insular Bank of Asia
and America. PNB noticed an error, informed SEPAC Bank, who replied with the correction that
the $14,000 is actually only for $1,400 (P9,772.95).

On the basis of this message, a cable check worth $1,400 was issued to Mata, from Star-Kist.
However, 14 days after, PNB issued another check to Star Kist in the amount of$14,000.

Six years later, PNB requested Mata for a refund of the erroneous $14,000 check. Thereafter, it
filed a civil case for collection and refund of $14,000 arguing that based on constructive trust
under Art. 1456 of the Civil Code, it has the right to recover the amount erroneously credited to
Mata.

RTC Manila dismissed the complaint, ruling that the case falls under Art. 2154 on solution
indebiti, and NOT under Art. 1456 on constructive trust. CA affirmed, but concluded that the
action for recovery has already prescribed under Art. 1145(2). Hence, this petition for certiorari.
Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes.
Article 2154. If something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises. (1895)

ISSUE:
Whether or not the basis of Mata’s obligation to return $14,000 is governed by Article1456 on
constructive trust, or Art. 2154 of the Civil Code? Whether or not the action has prescribed?

RULING:
The basis of obligation is governed by Art. 1456 on constructive trust. However, the action to
recover damages has already prescribed due to laches.

A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a
typical trust, confidence is reposed in one person who is named a trustee for the benefit of
another who is called the cestui que trust, respecting property which is held by the trustee for
the benefit of the cestui que trust. A constructive trust, unlike an express trust, does not
emanate from, or generate a fiduciary relation. While in an express trust, a beneficiary and a
trustee are linked by confidential or fiduciary relations, in a constructive trust, there is neither a
promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust
nor intends holding the property for the beneficiary.
In the case at bar, Mata, in receiving the US$14,000 in its account through IBAA, had no intent
of holding the same for a supposed beneficiary or cestui que trust, namely PNB. But under
Article 1456, the law construes a trust, namely a constructive trust, for the benefit of the person
from whom the property comes, in this case PNB, for reasons of justice and equity. While
petitioner may indeed opt to avail of an action to enforce a constructive trust or the quasi-
contract of solutio indebiti, it has been deprived of a choice, for prescription has effectively
blocked quasi-contract as an alternative, leaving only constructive trust as the feasible option.

Proceeding now to the issue of whether or not petitioner may still claim the US$14,000 it
erroneously paid private respondent under a constructive trust, we rule in the negative. Although
we are aware that only seven (7) years lapsed after petitioner erroneously credited private
respondent with the said amount and that under Article 1144, petitioner is well within the
prescriptive period for the enforcement of a constructive or implied trust, we rule that petitioner’s
claim cannot prosper since it is already barred by laches. It is a well-settled rule now that an
action to enforce an implied trust, whether resulting or constructive, may be barred not only by
prescription but also by laches. While prescription is concerned with the fact of delay, laches
deals with the effect of unreasonable delay.

It is unbelievable for a bank, and a government bank at that, which regularly publishes its
balanced financial statements annually or more frequently, by the quarter, to notice its error only
seven years later. As a universal bank with worldwide operations, PNB cannot afford to commit
such costly mistakes. Moreover, as between parties where negligence is imputable to one and
not to the other, the former must perforce bear the consequences of its neglect. Hence,
petitioner should bear the cost of its own negligence.

WHEREFORE, the decision of the Court of Appeals dismissing petitioner's claim against private
respondent is AFFIRMED.

Costs against petitioner.

G.R. No. 210641, March 27, 2019

DOMESTIC PETROLEUM RETAILER CORPORATION, PETITIONER,

v.

MANILA INTERNATIONAL AIRPORT AUTHORITY, RESPONDENT.

FACTS:

The parties entered into a Contract of Lease whereby DPRC (petitioner) was obliged
to pay. Monthly rentals of P75,357.74 for the land and P33,310.46 for the building. In
1998, MIAA passed Resolution No. 98-30 which increased the rentals. DPRC
protested in writing to [respondent MIAA] the increased rentals and the computation
on the ground that it was decreed without prior notice. However, it also signified its
intention to comply in good faith with the terms and conditions of the lease contract by
paying the amount charged.

DPRC stopped paying the increased rental rate but continued paying the original
rental rate prescribed in the lease contract. The decision to stop paying the increased
rental rate was based on the [Court's] Decision in the case of Manila International
Airport Authority vs. Air span Corporation (Petitioner-MIAA has no authority to
increase its fees, charges, or rates as the power to do so is vested solely in the DOTC
Secretary). DPRC demanded for a refund of its overpayment in the amount of
P9,593,179.87. In 2008, DPRC filed a Complaint for "Collection of Sums of Money"

RTC decided in favor of petitioner DPRC ordering for the payment of the principal
amount plus 12% per annum legal interest computed from the time of the extrajudicial
demand.

The CA affirmed the RTC's Decision but with a modification as to the amount. The CA
found that the liability of respondent MIAA to petitioner DPRC for overpaid monthly
rentals was in the nature of a quasi-contract of solutio indebiti, The CA held that by
reason of the six (6) years prescriptive period, DPRC lost its right to recover the
amount of P5,753,536.82 paid during the period from December 11, 1998 to
December 5, 2002. As already stated, the claim for refund must be made within six (6)
years from date of payment. Since [petitioner] DPRC demanded the refund of the
increase in monthly rentals mistakenly paid only on July 27, 2006 and filed this
case before the [RTC] only on December 23, 2008, it can recover only those paid
during the period from January 9,2003 to December 5, 2005[,] or a total amount
of ₱3,839,643.05

ISSUE:

Whether the modification of MIAA's liability from the full amount of P9,593,179.87 to
just P3,839,643.05 plus legal interest on the ground of application of the six-year
prescriptive period governing the quasi- contract of solutio indebiti is correct.

HELD:

NO. In order to establish the application of solutio indebiti in a given situation, two
conditions must concur: (1) a payment is made when there exists no binding relation
between the payor who has no duty to pay, and the person who received the payment,
and (2) the payment is made through mistake, and not through liberality or some
other cause. The Court finds that the essential requisites of solutio indebiti are not
present there exists a binding relation between petitioner DPRC and respondent
MIAA. The parties are mutually bound to each other under a Contract of Lease, hence,
having the juridical relationship of a lessor- lessee, it cannot be said that the
overpayment of monthly rentals was made when there existed no binding juridical tie
or relation.

For the concept of solutio indebiti to apply. The undue payment must have been
made by reason of either an essential mistake of fact or a mistake in the
construction or application of a doubtful or difficult question of law. DPRC deliberately
made the payments in accordance with respondent MIAA's Resolution No. 98-
30, albeit under protest. Considering that petitioner DPRC's cause of action is not
based on a quasi-contract and is instead founded on the enforcement of a contract,
the CA erred in applying Article 1145(2) of the Civil Code in the instant case. Instead
of the prescriptive period of six years for quasi-contracts, it is Article 1144 of the Civil
Code that finds application in the instant case. This Article provides that an action on a
written contract must be brought within 10 years from the time the right of based
action accrues.
 PAOLO ANTHONY C. DE JESUS, PETITIONER, VS. DR. ROMEO F. UYLOAN, SUBSTITUTED
BY HIS WIFE SALVACION UYLOAN, ASIAN HOSPITAL AND MEDICAL CENTER AND DR.
JOHN FRANCOIS OJEDA, RESPONDENTS.

DECISION

GESMUNDO, C.J.:

This resolves the petition for review on certiorari under Rule 45 of the Rules of Court to reverse
and set aside the June 16, 2017 Decision1 and October 11, 2017 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 148192. The CA reversed the May 6, 2016 and August 26, 2016
Joint Orders3 of the Regional Trial Court of Las Piñas City, Branch 198 (RTC), in Civil Case No. LP-
15-0091 denying motions to dismiss based on prescription, among other grounds.

Antecedents

On November 10, 2015, Paolo Anthony De Jesus (petitioner) filed a Complaint4 "For Damages
under Articles 11705 and 11736 of the New Civil Code of the Philippines" against Dr. Romeo F.
Uyloan (Dr. Uyloan), Dr. John Francois Ojeda (Dr. Ojeda) and the Asian Hospital and Medical
Center (AHMC).

On September 13, 2010, petitioner underwent an abdomino-pelvic sonogram. Dr. Uyloan

diagnosed petitioner with Cholelithiasis, a condition where there is a presence of stones in the gall
bladder. Dr. Uyloan advised petitioner to undergo laparoscopic cholecystectomy to remove the
gallstones. Petitioner agreed to have the operation at the AHMC. The operation was done on
September 15, 2010, with Dr. Uyloan as attending physician and principal surgeon, and Dr. Ojeda as
assisting surgeon.7

Petitioner expected that the procedure would consist of just four small incisions around his
umbilical area. Instead, Dr. Uyloan and Dr. Ojeda performed an open cholecystectomy on petitioner
without his approval or consent. During the operation in which his abdomen was opened up, he lost
a lot of blood, which necessitated blood transfusion. Dr. Uyloan explained to him that the
conversion of the operation from laparoscopic cholecystectomy to open cholecystectomy was a
result of a "punctured cystic artery."

Petitioner further alleged that upon his discharge from the AHMC on September 19, 2010,
the release forms stated that he was in "good condition" and "recovered." However, he
experienced vomiting and unbearable pain in his abdominal area, and there was continuous bile
leak in his colostomy bag even after three days from discharge. During his follow-up checkup, Dr.
Uyloan told him that the abdominal pains and bile leak were "part of it" and advised him to undergo
magnetic resonance cholangio-pancreatography.9

Dissatisfied with Dr. Uyloan's response, petitioner went to another hospital for a series of
medical tests, the results of which disclosed that instead of the cystic duct that joins the gall bladder
to the common bile duct, it was the common bile duct that was cut and clipped. The transection of
the common bile duct caused bile to leak out and accumulate around his liver, kidney spleen, the
spaces between the colon and abdominal wall, as well as in his abdomen and lower limbs. He had to
undergo another operation on November 19, 2010, to rectify the first operation performed by Dr.
Uyloan and Dr. Ojeda.10
 For the negligent acts of Dr. Uyloan and Dr. Ojeda, who allegedly breached their professional
duties under their "medical contract" with petitioner, the latter sought to hold the former liable for
actual damages, moral and exemplary damages, attorney's fees and litigation costs. Petitioner
also sought to enforce solidary liability on the part of the AHMC in failing to supervise its
doctors under the doctrine of corporate responsibility. 1a⍵⍴h!1

Dr. Uyloan filed a Motion to Dismiss11 anchored on grounds of prescription, forum

shopping, and lack of jurisdiction. Citing Art. 114612 of the Civil Code, he argued that petitioner's
action based on quasi-delict is already barred, having been filed beyond the four-year prescriptive
period. As to forum shopping, he claimed that petitioner had filed criminal and administrative cases
against him way back in 2011, which was not mentioned in the certification on non-forum shopping
attached to the complaint.

The AHMC and Dr. Ojeda also moved to dismiss the case based, among others, on prescription
contending that it was readily apparent on the face of the complaint that petitioner's cause of action
was premised on quasi-delict, arising from the cutting and clipping of his bile duct due to an alleged
"misidentification of an anatomy." Such action should have been commenced within four years from
September 15, 2010, the date he underwent the cholecystectomy at the AHMC.13

The RTC Ruling

In its Joint Order dated May 6, 2016, the trial court denied both motions and held that the
defense of prescription is evidentiary in nature which may not be established by mere
allegations in the pleadings and cannot be resolved in a motion to dismiss. It also found that
no forum shopping was committed by the petitioner considering that the criminal and administrative
cases, and the present civil action, involve different causes of action.

Petitioner, the AHMC, and Dr. Ojeda filed separate motions for reconsideration.

On August 26, 2016, the trial court issued a joint order denying the motions for
reconsideration. It declared that the complaint sufficiently alleges ultimate facts constituting
petitioner's cause of action for damages. Accordingly, Dr. Uyloan, the AHMC, and Dr. Ojeda were
directed to file their answer.

Undaunted, Dr. Uyloan filed a petition for certiorari before the CA ascribing grave abuse of
discretion on the part of the RTC in issuing the aforesaid orders.

The CA Ruling

In its assailed decision, the CA reversed the RTC and ordered the dismissal of the
complaint. It held that petitioner's cause of action is indisputably based on medical negligence
for which the applicable period of prescription is four years, pursuant to Art. 1146 of the Civil
Code. However, the complaint was filed only on November 10, 2015, which is more than five years
from the date the cause of action accrued, on September 15, 2010, when Dr. Uyloan and Dr. Ojeda
performed the botched operation on his gallbladder. Hence, the trial court gravely abused its
discretion in not ruling that petitioner's action was already time-barred.

Petitioner's motion for reconsideration was likewise denied.

ISSUE
 The lone issue that begs to be resolved by the Court is whether or not the CA committed
reversible error when it ruled that the trial court gravely abused its discretion in denying the motions
to dismiss.

Petitioner's Arguments

Petitioner argues that he is suing under the theory of breach of contract considering that the
relationship between him as patient, and Dr. Uyloan and Dr. Ojeda as physicians, was contractual in
nature. He stresses that the patient-physician relationship is basically a contract involving the
exchange of money for services with all the elements of a valid contract (consent, determinate
subject matter and consideration or price). Invoking the pronouncements in citing Sullivan v.
O'Connor14 and Colvin v. Smith,15 decided by American courts, petitioner states that medical
malpractice actions based on contract are not unheard of and permissible in this jurisdiction even if
the cases that has reached this Court were brought under the theory of quasi-delict. He submits that
it is already settled doctrine that liability for quasi-delict may co-exist in the presence of contractual
relations.

As to the AHMC, petitioner contends that the recognition of the contractual relation between
patient and hospital may be inferred from the Court's decision in Professional Services, Inc. v. Court
of Appeals16 which recognized the fact that the manner of operation of present-day hospitals has
gone beyond mere furnishing of facilities for treatment; and that persons availing of facilities expect
that the hospital will attempt to cure them.

Petitioner asserts that in the absence of a special law or jurisprudence, the physician-patient and
patient-hospital relationships, just like other transactions involving exchange of money for services,
are governed by the provisions of the Civil Code. Thus, under Art. 1173, a contract can be breached
through omission of the diligence required by the nature of obligation, or of such diligence agreed
upon by the parties in a contract.

Petitioner reiterates that a reading of his complaint plainly shows that his cause of action is
based on contract. Hence, the CA clearly erred in holding that the applicable prescriptive period is
four years, and not six or ten years, in accordance with Art. 1145 and 1144 of the Civil Code,
respectively. Moreover, the issue of whether Dr. Uyloan, Dr. Ojeda, and the AHMC breached their
contract with him deserves a full blown trial, and is not appropriate for resolution in a motion to
dismiss.

Respondent's Arguments

Dr. Uyloan maintains that the Court has uniformly treated medical malpractice cases as a
distinct type of tort, which has four elements as with quasi-delicts in general: duty, breach, injury,
and causation. While, concededly, there is no specific law and categorical judicial pronouncement in
this jurisdiction on medical malpractice suits being limited to Art. 2176 of the Civil Code, he
disagrees with petitioner's posture that his action is essentially based on contract. He points out that
the foreign jurisprudence cited by the petitioner even shows that petitioner's complaint states a
cause of action in tort and not in contract. In those cited cases, there was a special contract created
between the physician and the patient, which is not the same as any other physician-patient
relationship. Such a special contract is based on an express agreement between the physician and
the patient to achieve a specific result. In this case, the allegations in petitioner's complaint simply do
not support his theory of a medical malpractice action based on contract.

The Court's Ruling

 The petition has no merit.

The basic rule is that the Court's jurisdiction in a petition for review on certiorari under Rule 45 of
the Rules of Court is limited only to the review of pure questions of law.

In Crisostomo v. Garcia,17 We ruled that prescription may either be a question of law or fact.
Prescription is a question of fact when the doubt or difference arises as to the truth or falsity of an
allegation of fact; it is a question of law when there is doubt or controversy as to what the law is on a
given state of facts. The test of whether a question is one of law or of fact is not the appellation given
to such question by the party raising the same; rather, it is whether the appellate court can
determine the issue raised without reviewing or evaluating the evidence. Evidently, prescription is a
question of fact where there is a need to determine the veracity of factual matters such as the date
when the period to bring the action commenced to run.18

It is likewise settled that while trial courts have authority and discretion to dismiss an action on
the ground of prescription, it may only do so when the parties' pleadings or other facts on record
show it to be indeed time-barred.19 Thus, in Macababbad, Jr. v. Masirag,20 We held that "[a] ruling
on prescription necessarily requires an analysis of the plaintiff's cause of action based on the
allegations of the complaint and the documents attached as its integral parts." A motion to dismiss
based on prescription hypothetically admits the allegations relevant and material to the resolution of
this issue, but not the other facts of the case.21

Here, the complaint prayed for damages resulting from the negligence of defendant doctors
under the provisions of the Civil Code on contracts and quasi-delicts. However, petitioner explicitly
anchors his action on the implied contract for medical treatment with Dr. Uyloan, Dr. Ojeda and the
AHMC. It is the position of petitioner that an action alleging medical negligence may be brought at
the same time under the contract theory. Since he has also alleged the contractual relation of
physician and patient, petitioner argues that the prescriptive period of actions based on quasi-delict
under Art. 1146 of the Civil Code should not apply. Instead, Arts. 114422 and 114523 on prescription
of contracts should govern this case.

Considering that the dispute lies in the applicable provision on prescription of actions under the
Civil Code, the issue of prescription in this case is one of law. Resolution of this question therefore
requires a determination of petitioner's cause of action based on the allegations in the complaint and
its annexes.

When a patient engages the services of a physician, a physician-patient relationship is

generated. The type of lawsuit which has been called medical malpractice or, more appropriately,
medical negligence, is that type of claim which a victim (patient) has available to him or her to
redress a wrong committed by a medical professional which has caused bodily harm.24 For lack of a
specific law geared towards the type of negligence committed by members of the medical profession
in this jurisdiction, such claim for damages is almost always anchored on the alleged violation of Art.
2176 of the Civil Code, which states that:

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

Medical malpractice is a particular form of negligence which consists in the failure of a

physician or surgeon to apply to his practice of medicine that degree of care and skill which
is ordinarily employed by the profession generally, under similar conditions, and in like
surrounding circumstances.25 In order to successfully pursue such a claim, a patient must
prove that the physician or surgeon either failed to do something which a reasonably prudent
physician or surgeon would have done, or that he or she did something that a reasonably
prudent physician or surgeon would not have done, and that the failure or action caused
injury to the patient.26 There are thus four elements involved in medical negligence cases,
namely: duty, breach, injury, and proximate causation.

In Lucas v. Tuaño,27 this Court explains:

When a patient engages the services of a physician, a physician-patient

relationship is generated. And in accepting a case, the physician, for all intents and
purposes, represents that he has the needed training and skill possessed by
physicians and surgeons practicing in the same field; and that he will employ such
training, care, and skill in the treatment of the patient. Thus, in treating his patient, a
physician is under a duty [to the former] to exercise that degree of care, skill and
diligence which physicians in the same general neighborhood and in the same
general line of practice ordinarily possess and exercise in like cases. Stated
otherwise, the physician has the duty to use at least the same level of care that any
other reasonably competent physician would use to treat the condition under similar
circumstances.28 (emphasis supplied)

Thus, where the complaint contains averments of the foregoing elements and the defendant
doctor failed to observe such degree of care which caused damage or harm to the plaintiff patient,
the cause of action is one for medical negligence under the law on torts rather than contract.

The petitioner states his cause of action in the complaint thus:

CAUSE OF ACTION AGAINST THE DOCTORS

xxxx

29. A physician-patient relationship is created when the professional services are rendered to
and accepted by another for purposes of medical or surgical treatment. As such, it arises from the
moment a physician gives advice to a patient.

30. The physician-patient relationship is basically a contractual relationship.

Independently, liability may also arise ex contractu because of the contract between the
doctor and the patient.

31. In this case, a doctor-patient relationship was created when the Plaintiff sought the medical
services of the Defendants and the latter rendered medical services to the former.

31.1 Defendant Uyloan diagnosed Plaintiff with chlolethesis and advised him to undergo
Laparoscopic Cholelystectomy.

31.2 Defendant Uyloan performed the First Operation of Plaintiff as the principal surgeon with
Defendant Ojeda as the assisting surgeon.

32. Undeniably, a medical contract existed between the Plaintiff and Defendants Uyloan
and Ojeda.
 xxxx

35. The primary duty of the Defendant Doctors is to perform the First Operation with the same
level of care that any other competent physician would exercise under the circumstances to ensure
the successful removal of the Plaintiff's gallstones without detriment to his health.

36. Defendant Doctors also have the duty to secure the voluntary informed consent of a patient
or his relatives regarding the status of the operation, changes in the procedure and the mode of
treatment effected because the patient has the right to refuse the medical treatment.

xxxx

38. Defendant Doctors also have the obligation to perform a post-operation procedure for the
purpose of ensuring the success of the medical operation and to immediately rectify any damage or
prevent adverse side effects. Such duty is even more required in this kind of operation because of
the 'potential injury to the common bile duct, which connects the cystic and common hepatic ducts to
the duodenum.' An injured bile duct can leak and cause a painful and potentially dangerous
infection. Many cases of minor injury to the common bile duct can be managed non-surgically. Major
injury to the bile duct, however, is a very serious problem and may require corrective surgery.

39. The breach of these professional duties of skill and care, or their improper
performance by a physician surgeon, whereby the patient is injured in body or in health,
constitutes actionable malpractice.

xxxx

44. In this case, Defendant Doctors committed the following acts in the course of the First
Operation, which are in breach of their obligations to the Plaintiff:

43.1[[sic] The negligent cutting and clipping of Plaintiff's common bile duct
during the operation instead of the cystic duct. Consequently, the unbearable
and incessant pain suffered by the Plaintiff after his discharge is attributed to the
Defendant Doctors' negligent acts.

43.2[[sic] The defendant failed to immediately explain to the Plaintiff the

reason for the conversion of the procedure. He, however, offered no explanation.

45.3[[sic] Dr. Uyloan did not perform the required post operation procedure
despite the concomitant risks in the operation. Had the post operation procedure
been done, they should have seen the damage done to the common bile duct and
could have remedied it immediately.

45.4[[sic] Dr. Uyloan issued a "Clinical Summary Form" to the Plaintiff without
ascertaining the true condition of his health after the operation. Worse, it was
marked as "Good" and "Recovered" even without the proper post operation
assessment. 1âшphi1

45. Due to the breach of their obligations, the Plaintiff suffered abdominal pains and had
continued bile leak. Thus, the Plaintiff was constrained to undergo several other tests and
procedures and incurred expenses amounting to TWO MILLION SIX HUNDRED THOUSAND
PESOS (PHP 2,600,000.00).
 46. The negligent acts of the Defendant Doctors were the proximate cause of Plaintiff's
injury. This was confirmed by the tests which show that the transection of the common bile duct was
a result of previous misidentification of an anatomy and that there was an obstruction to the flow of
bile coming from the liver that passes through the common hepatic into the common bile
duct.29 (emphases supplied)

The above complaint indeed states a categorical declaration of the case being brought on the
basis of a "medical contract between the Plaintiffs and Defendants Uyloan and Ojeda" under the
statement of cause of action against said doctors.30 However, the rest of the allegations and
arguments unmistakably show that the cause of action is premised upon the law and jurisprudence
on damages in general and medical negligence under the Civil Code provisions on quasi-delict.
There is no mention at all of any express promise on the part of the defendant doctors to provide
medical treatment or achieve a specific result. The absence of an express agreement as basis for
contractual liability is evident from a plain invocation of an implied contract between the parties.

In Casumpang v. Cortejo,31 We expounded on the establishment of a physician-patient

relationship, as follows:

A physician-patient relationship is created when a patient engages the services

of a physician, and the latter accepts or agrees to provide care to the patient. The
establishment of this relationship is consensual, and the acceptance by the
physician essential. The mere fact that an individual approaches a physician and
seeks diagnosis, advice or treatment does not create the duty of care unless the
physician agrees.

The consent needed to create the relationship does not always need to be
express. In the absence of an express agreement, a physician-patient relationship
may be implied from the physician's affirmative action to diagnose and/or treat a
patient, or in his participation in such diagnosis and/or treatment. The usual
illustration would be the case of a patient who goes to a hospital or a clinic, and is
examined and treated by the doctor. In this case, we can infer, based on the
established and customary practice in the medical community that a patient-
physician relationship exists.32 (citations omitted, emphases supplied)

The fact that the physician-patient relationship is consensual does not necessarily mean it is a
contractual relation, in the sense in which petitioner employs this term by equating it with any other
transaction involving exchange of money for services. Indeed, the medical profession is affected with
public interest.33 Once a physician-patient relationship is established, the legal duty of care follows.
The doctor accordingly becomes duty-bound to use at least the same standard of care that a
reasonably competent doctor would use to treat a medical condition under similar
circumstances.34 Breach of duty occurs when the doctor fails to comply with, or improperly performs
his duties under professional standards. This determination is both factual and legal, and is specific
to each individual case.35 If the patient, as a result of the breach of duty, is injured in body or in
health, actionable malpractice is committed, entitling the patient to damages.36

In the light of the foregoing, We hold that a mere reference to an implied contract between the
physician and the patient in general is insufficient for pleading a cause of action under the contract
theory of professional malpractice. An action for medical malpractice based on contract must allege
an express promise to provide medical treatment or achieve a specific result. The following
discussion of established rules on medical malpractice culled from fairly recent American
jurisprudence highlights this point, viz.:
 Absent an express contract, a physician does not impliedly warrant the success
of his or her treatment but only that he or she will adhere to the applicable standard
of care. Thus, there is no cause of action for breach of implied contract or
implied warranty arising from an alleged failure to provide adequate medical
treatment. This allegation clearly sounds in tort, not in contract; therefore, the
plaintiff's remedy is an action for malpractice, not breach of contract. A breach of
contract complaint fails to state a cause of action if there is no allegation of
any express promise to cure or to achieve a specific result. A physician's
statements of opinion regarding the likely result of a medical procedure are
insufficient to impose contractual liability, even if they ultimately prove
incorrect.37 (emphases supplied)

Clearly, the cause of action in this case is one for medical malpractice or medical negligence
premised on the "breach of [the defendant doctors'] professional duties of skill and care, or their
improper performance by a physician surgeon,"38 whereby the plaintiff suffered injury and damages.
Petitioner's attempt to present a hybrid tort and contract claim arising from the negligent acts of his
physicians thus fails. Apparently, inclusion of the contract approach to seek damages from the
defendant physicians was an afterthought intended to revive a stale claim.

From the recitals of the complaint, petitioner's cause of action accrued on September 15, 2010,
the day Dr. Uyloan and Dr. Ojeda performed the operation on his gallbladder. Clearly, the filing of
the case against said physicians on November 10, 2015, is already barred by prescription.

WHEREFORE, the petition is DENIED. The June 16, 2017 Decision and
October 11, 2017 Resolution of the Court of Appeals in CA-G.R. SP No. 148192 are
hereby AFFIRMED.

SO ORDERED.
G.R. No. 160110 June 18, 2014

MARIANO C. MENDOZA and ELVIRA LIM, Petitioners,

vs.
SPOUSES LEONORA J. GOMEZ and GABRIEL V. GOMEZ, Respondents.

Facts:

On 7 March 1997, an Isuzu Elf truck (Isuzu truck) with plate number UAW582, owned by
respondent Leonora J. Gomez (Leonora) and driven by Antenojenes Perez (Perez), was hit
by a Mayamy Transportation bus (Mayamy bus) with temporary plate number 1376-1280,
registered under the name of petitioner Elvira Lim (Lim) 7 and driven by petitioner Mariano
C. Mendoza (Mendoza). Owing to the incident, an Information for reckless imprudence
resulting in damage to property and multiple physical injuries was filed against
Mendoza. 9 Mendoza, however, eluded arrest, thus, respondents filed a separate complaint
for damages against Mendoza and Lim, seeking actual damages, compensation for lost
income, moral damages, exemplary damages, attorney’s fees and costs of the suit.

As a result of the incident, Perez, as well as the helpers on board the Isuzu truck, namely
Melchor V. Anla (Anla), Romeo J. Banca (Banca), and Jimmy Repisada (Repisada),
sustained injuries necessitating medical treatment amounting to P11,267.35, which amount
was shouldered by respondents. Moreover, the Isuzu truck sustained extensive damages on
its cowl, chassis, lights and steering wheel, amounting to P142,757.40.

Additionally, respondents averred that the mishap deprived them of a daily income of
P1,000.00. Engaged in the business of buying plastic scraps and delivering them to
recycling plants, respondents claimed that the Isuzu truck was vital in the furtherance of their
business.

For their part, petitioners capitalized on the issue of ownership of the bus in question.
Respondents argued that although the registered owner was Lim, the actual owner of the
bus was SPO1 Cirilo Enriquez (Enriquez), who had the bus attached with Mayamy
Transportation Company (Mayamy Transport) under the so-called "kabit system."
Respondents then impleaded both Lim and Enriquez.

Thus, the RTC disposed of the case as follows: WHEREFORE, judgment is hereby rendered
in favor of the [respondents] and against the [petitioners]: Displeased, petitioners appealed
to the CA. After evaluating the damages awarded by the RTC, such were affirmed by the CA
with the exception of the award of unrealized income which the CA ordered deleted.
Unsatisfied with the CA ruling, petitioners filed an appeal by certiorari before the Court.

Issue:

In the case at bar, who is deemed as Mendoza’s employer? Is it Enriquez, the actual
owner of the bus or Lim, the registered owner of the bus?

Unsatisfied with the CA ruling, petitioners filed an appeal by certiorari before the Court,
raising the following issues:
1. The court a quo has decided questions of substance in a way not in accord with law or
with the applicable decisions of the Supreme Court when it awarded:

a. Moral damages in spite of the fact that the [respondents’] cause of action is clearly based
on quasi-delict and [respondents] did not sustain physical injuries to be entitled thereto

b. Exemplary damages in spite of the fact that there is no finding that the vehicular accident
was due to petitioner-driver’s gross negligence to be entitled thereto

c. Attorney’s fees

Ruling:

The petition is partially meritorious. Respondents anchor their claim for damages on
Mendoza’s negligence, banking on Article 2176 of the Civil Code, to wit: Whoever by act or
omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this
Chapter.

As found by the RTC, and affirmed by the CA, Mendoza was negligent in driving the subject
Mayamy bus, as demonstrated by the fact that, at the time of the collision, the bus intruded
on the lane intended for the Isuzu truck. Employers shall be liable for the damages caused
by their employees and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business of industry.

WHEREFORE, premises considered, the Court Resolves to PARTIALLY GRANT the appeal
by certiorari

---

In impleading Lim, on the other hand, respondents invoke the latter’s vicarious liability as
espoused in Article 2180 of the same Code: The obligation imposed by Article 2176 is
demandable not only for one’s own acts or omissions, but also for those of persons for
whom one is responsible. Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business of industry.

Mendoza’s employer may also be held liable under the doctrine of vicarious liability or
imputed negligence. Under such doctrine, a person who has not committed the act or
omission which caused damage or injury to another may nevertheless be held civilly liable to
the latter either directly or subsidiarily under certain circumstances. 25 In our jurisdiction,
vicarious liability or imputed negligence is embodied in Article 2180 of the Civil Code and the
basis for damages in the action under said article is the direct and primary negligence of the
employer in the selection or supervision, or both, of his employee.

Generally, when an injury is caused by the negligence of a servant or employee, there

instantly arises a presumption of law that there was negligence on the part of the master or
employer either in the selection of the servant or employee (culpa ineligiendo) or in the
supervision over him after the selection (culpa vigilando), or both. The presumption is juris
tantum and not juris et de jure; consequently, it may be rebutted. Accordingly, the general
rule is that if the employer shows to the satisfaction of the court that in the selection and
supervision of his employee he has exercised the care and diligence of a good father of a
family, the presumption is overcome and he is relieved of liability. 32 However, with the
enactment of the motor vehicle registration law, the defenses available under Article 2180 of
the Civil Code - that the employee acts beyond the scope of his assigned task or that it
exercised the due diligence of a godfather of a family to prevent damage – are no longer
available to the registered owner of the motor vehicle, because the motor vehicle registration
law, to a certain extent, modified Article 2180.

As such, there can be no other conclusion but to hold Lim vicariously liable with Mendoza.

Vicarious Liability

QUESTION: A bus owned and registered under the name of Bea Locsin and driven by Phil
Manzano hit the car of Angelica Ramsay due to the negligent driving and for violation of
traffic regulations of Phil. An information was filed against the driver, Phil Manzano, for
reckless imprudence resulting in damage to property and multiple physical injuries, however,
he eluded arrest, thus, Angelica filed a separate complaint for damages against Bea. Bea,
on the other hand contended that she is exempted from any liabilities for the acts done by
his employee. Can a separate claim for damages be instituted against Bea?

ANSWER: Yes, a separate claim for damages may be instituted against Bea under the
doctrine of vicarious liability or imputed negligence. Under such doctrine, a person who has
not committed the act or omission which caused damage or injury to another may
nevertheless be held civilly liable to the latter either directly or subsidiarily under certain
circumstances. In our jurisdiction, vicarious liability or imputed negligence is embodied in
Article 2180 of the Civil Code and the basis for damages in the action under said article is
the direct and primary negligence of the employer in the selection or supervision, or both, of
his employee.