I.

OBLIGATIONS The Court of Appeals affirmed the trial court's decision but modified
General Provisions it to grant petitioners the right of first refusal regardless of the sale
price.
ARTICLE 1156. An obligation is a juridical necessity to give, to do Sale to Buen Realty:
or not to do. (n) acd While the case was pending, the Cu Unjiengs sold the property to
ARTICLE 1157. Obligations arise from: Buen Realty for P15 million on November 15, 1990.
(1) Law; The property's title was transferred to Buen Realty, and petitioners
(2) Contracts; were asked to vacate the premises.
(3) Quasi-contracts; Petitioners filed a motion for execution of the trial court's decision,
(4) Acts or omissions punished by law; and which was granted. The court ordered the Cu Unjiengs to execute a
(5) Quasi-delicts. (1089a) deed of sale in favor of petitioners for P15 million, recognizing their
ARTICLE 1158. Obligations derived from law are not presumed. right of first refusal.
Only those expressly determined in this Code or in special laws are Appellate Court Ruling:
demandable, and shall be regulated by the precepts of the law The Court of Appeals set aside the trial court's orders, ruling that
which establishes them; and as to what has not been foreseen, by the writ of execution varied the terms of the judgment and that
the provisions of this Book. (1090) Buen Realty, not being a party to the case, could not be bound by
ARTICLE 1159. Obligations arising from contracts have the force the writ.
of law between the contracting parties and should be complied with SC RULING:
in good faith. (1091a) - The Supreme Court upheld the decision of the Court of Appeals
ARTICLE 1160. Obligations derived from quasi-contracts shall be and set aside the trial court’s orders. It stated that the right of first
subject to the provisions of Chapter 1, Title XVII, of this Book. (n) refusal is not a perfected contract of sale and thus cannot justify a
ARTICLE 1161. Civil obligations arising from criminal offenses shall writ of execution on the judgment. The potential breach of this right
be governed by the penal laws, subject to the provisions of article could warrant a recovery for damages, but not the execution
2177, and of the pertinent provisions of Chapter 2, Preliminary process to specifically enforce rights yet to be fully materialised.
Title, on Human Relations, and of Title XVIII of this Book, regulating Regarding Buen Realty, the Court pronounced that the company
damages. (1092a) could not be subject to the writ of execution as it was not a party to
ARTICLE 1162. Obligations derived from quasi-delicts shall be the Civil Case No. 87-41058 and had not been given its day in
governed by the provisions of Chapter 2, Title XVII of this Book, and court. Moreover, the judgment did not decree the execution of a
by special laws. (1093a) deed of sale nor the fixing of the sale price, making the court’s
A. General Provisions orders incongruent with the judgment’s terms.
1. Concept, Art. 1156

2. Civil Obligation vs. Natural Obligation 4. General Classifications

The main difference between a civil obligation and a natural i. As to sanction
obligation is that a civil obligation can be enforced by law, while a ii. As to subject matter
natural obligation cannot: iii. As to affirmativeness or negativeness of the obligation
Civil obligation iv. As to persons obliged
A legal tie that gives the party with whom it is contracted the right Obligations can be classified in several ways, including by sanction,
to enforce its performance by law. For example, a person who signs subject matter, affirmativeness or negativeness, and persons
a contract to pay rent for an apartment has a civil obligation to pay obliged:
the agreed-upon amount each month. Sanction
Natural obligation Obligations can be civil, natural, or moral, depending on the
A moral duty that is not legally enforceable, but is binding on the sanction. For example, a civil obligation is based on law and is
party who makes it. For example, if a person borrows money from a enforced in court if not fulfilled. A natural obligation is a special
friend and promises to pay it back, but there is no written type of obligation that cannot be enforced in court. A moral
agreement, it is a natural obligation. obligation is sanctioned by conscience, morality, or the law of the
church.
Subject matter
3. Requisites or Elements of an Obligation Obligations can be real or personal, depending on the subject
i. Requisites matter. A real obligation is the obligation to give, while a personal
ii. Case obligation is the obligation to do or not to do.
1. Ang Yu Asuncion vs. CA, G.R. No. 109125, Dec. 2, 1994, Affirmativeness or negativeness
57 SCAD 163, 238 SCRA 602 (revisit this in Contracts) Obligations can be positive or negative, depending on whether they
Facts: are to give or do, or to not do.
Petitioners: Ang Yu Asuncion, Arthur Go, and Keh Tiong (lessees of Persons obliged
the property). Obligations involve an active subject (creditor or obligee) and a
Respondents: Bobby Cu Unjieng, Rose Cu Unjieng, Jose Tan (original passive subject (debtor or obligor). The active subject demands the
owners), and Buen Realty Development Corporation (purchaser of performance of the obligation, while the passive subject is
the property). obligated to perform it.
Property: Residential and commercial spaces at Nos. 630-638 Other types of obligations include pure and conditional, obligations
Ongpin Street, Binondo, Manila, occupied by petitioners since 1935. with a period, alternative obligations, and joint and solidary
Offer to Sell: obligations.
In 1986, the Cu Unjiengs offered to sell the property to petitioners 5. Obligation distinguished from cause of action; Subject Matter
for P6 million. Petitioners countered with P5 million. Obligation
The Cu Unjiengs agreed to put the offer in writing but failed to The law that makes an agreement binding on the parties.
specify the terms and conditions despite petitioners' follow-up Cause of action
letters. The act or omission that violates another party's rights.
Petitioners filed a Second Amended Complaint for Specific Subject matter
Performance on July 29, 1987, seeking to compel the Cu Unjiengs to The physical facts, such as money, lands, or chattels, are the
sell the property to them. subject of a lawsuit. Source of the controversy.
The trial court granted summary judgment in favor of the Cu
Unjiengs, ruling that no contract of sale was perfected due to the i. De la Rama vs. Mendiola, 401 SCRA 704 (2003)
lack of agreement on terms and conditions. - The case traces back to December 1, 1978, when petitioner Jose
However, the court granted petitioners a right of first refusal if the V. Dela Rama sold a parcelof land to the government for the EDSA
property was sold for P11 million or less. Extension Project, with an agreement for reconveyance of any
unused portion. In 1988, a “Contract to Sell” for an adjacent land
was entered into between Dela Rama and Titan Construction DENY the petition for review and, consequently, AFFIRM the Court
Corporation which ended in a compromise agreement approved by of Appeals’ Resolutions. The petition is devoid of merit. Under Rule
the Pasay City RTC in 1989. Dela Rama also entered into an
50, Section 1(e) of the Rules of Court, the CA has the discretion to
Agreement to Sell and Buy with Titan, granting them an option to
dismiss an appeal for failure to file the required brief. This
buy reconveyed land at a set price, which Titan prepaid P200,000
discretion must be exercised with fairness and justice, considering
for.
the circumstances of the case. The petitioner's failure to file the
When the government reconveyed 303 square meters to Dela
brief was due to the negligence of its former handling lawyer and
Rama in 1996, Titan sought to void the reconveyance via a Petition
the law firm, which failed to ensure proper turnover of cases. This
for Declaratory Relief in Pasay City RTC, which was dismissed. They
negligence was inexcusable. The petitioner's delay in rectifying the
then filed a petition for certiorari with the Supreme Court, referred
mistake (failing to file the brief for seven months) further justified
to the Court of Appeals, and simultaneously filed an action for
the CA's dismissal of the appeal.
specific performance in a different branch of Pasay City RTC. Dela
Rama filed motions for direct contempt and dismissal based
B. Sources of Obligations, Art. 1157-1162
on forum shopping, which were denied, leading to this petition.
1. Law
Issues:
i. Article 1157; Article 1158
1. Whether the action for specific performance (Civil Case No. 97-
ii. Cases
0734) is barred by the petition for declaratory relief case (Civil Case
1. Pelayo vs. Lauron, 12 Phil. 453
No. 96-1725 and CA-G.R. SP No. 44094) based on res judicata.
FACTS:
2. Whether the Regional Trial Court committed grave abuse of
- Facts:
discretion in denying petitioner’s motions.
On November 23, 1900, Arturo Pelayo, a physician residing in Cebu,
Court’s Decision:
filed a complaint against Marcelo Lauron and Juana Abella.
The Supreme Court found that all elements of res judicata were
Pelayo alleged that on October 13, 1900, he was called to the
present: a final judgment in the declaratory relief case that had
defendants' house in San Nicolas to provide medical assistance to
been dismissed with finality; a competent court; resolution on the
their daughter-in-law, who was experiencing a difficult childbirth.
merits; and substantial identity in parties, subject matters, and
Pelayo performed a forceps delivery and provided post-natal care,
causes of action across both cases. The Court held that the
claiming his services were worth P500, which the defendants
differences in case nature were immaterial—the issue central to
refused to pay.
both cases was the respondent’s entitlement to the reconveyed
Defendants' Defense:
property under the same Agreement to Sell and Buy. Thus, the
The defendants denied Pelayo's allegations and argued that their
specific performance action should have been dismissed on
daughter-in-law had died due to childbirth.
grounds of res judicata. The Court also noted that any violations of
They claimed that their daughter-in-law lived independently with
the compromise agreement should be pursued via motion for its
her husband and was only at their house by accident during the
execution, not a separate action.
childbirth.
They requested the dismissal of the complaint.
ii. Bachrach Corporation vs. CA, 296 SCRA 487 (1998)
Procedural History:
- A 99-year lease dispute between Bachrach Corp. and PPA over
The trial court sustained Pelayo's demurrer to the defendants' initial
multiple properties led to failed compromise agreements, legal
answer, requiring the defendants to amend their response.
battles, and appeal dismissal due to procedural negligence.
After the amended answer, the court absolved the defendants due
Facts:
to insufficient evidence, prompting Pelayo to appeal.
Lease Agreements and Disputes
RULING:
The respondent, Philippine Ports Authority (PPA), entered into a 99-
The Supreme Court affirmed the lower court's decision, holding that
year lease agreement with the petitioner, Bachrach Corporation,
the defendants were not liable for Pelayo's medical fees. The
over properties known as Blocks 180 and 185. The lease was set to
obligation to pay for the medical services rendered during childbirth
expire in 2017 and 2018, respectively. PPA imposed rental rate
rested solely with the husband of the patient, not the parents-in-
increases due to outdated rates.
Separately, PPA owned Lot 8, Block 101, which was leased to law. The defendants did not enter into any contract with Pelayo to
Bachrach under a contract that expired in 1992. Bachrach refused pay for the medical services. The fact that they called Pelayo to
to vacate the premises, leading PPA to file and win an ejectment assist their daughter-in-law does not create a legal obligation to
case. pay his fees. The defendants, as parents-in-law, are considered
Compromise Agreement strangers to the obligation of providing medical support to their
The parties attempted to settle their disputes through a daughter-in-law.The obligation to pay for medical assistance lies
Compromise Agreement in 1994. However, only Bachrach, its solely with the husband of the patient.
counsel, and PPA's counsel signed the agreement. PPA's Board of 2. De la Cruz vs. Northern Theatrical Enterprises
Directors rejected the terms, rendering the agreement unexecuted. - Employee shot intruder in self-defense, incurred legal expenses;
Legal Proceedings employer not legally obligated to reimburse, as no principal-agent
Bachrach filed a complaint for specific performance (Civil Case No. relationship existed.
95-73399) to enforce the Compromise Agreement, covering only FACTS:
Blocks 180 and 185. Bachrach later sought to include Lot 8, Block - Employment Context:
101 in the complaint, but the trial court denied the motion, stating In 1941, Domingo De la Cruz was employed as a special guard by
that the Compromise Agreement did not cover Lot 8. Northern Theatrical Enterprises Inc., a domestic corporation
Bachrach filed a separate complaint for specific performance (Civil operating a movie house in Laoag, Ilocos Norte.
Case No. 00-99431) involving Lot 8, Block 101, and sought His duties included guarding the main entrance, maintaining peace
consolidation with the earlier case. The trial court dismissed the and order, and reporting disorders within the premises. He carried a
complaint on grounds of res judicata, forum shopping, and failure to revolver as part of his duties.
state a cause of action. Incident Leading to the Case:
Appeal to the Court of Appeals On July 4, 1941, Benjamin Martin attempted to enter the movie
Bachrach appealed the dismissal to the Court of Appeals (CA). The house without a ticket. When De la Cruz refused him entry, Martin
CA required Bachrach to file an appeal brief within 45 days. attacked him with a bolo.
Bachrach requested and was granted a 45-day extension but failed In self-defense, De la Cruz shot and killed Martin.
to file the brief within the extended period. Criminal Proceedings:
The CA dismissed the appeal for failure to file the brief. Bachrach De la Cruz was charged with homicide in Criminal Case No. 8449.
filed a motion for reconsideration, attaching the belatedly filed After a re-investigation, the Provincial Fiscal moved to dismiss the
brief, but the CA denied the motion. case, which was granted in January 1943.
ISSUES: On July 8, 1947, De la Cruz was again charged with homicide in
Criminal Case No. 431. After trial, he was acquitted on January 31,
RULING: 1948.
De la Cruz incurred legal expenses in both cases, hiring a lawyer to He argued that Lazaro's absence and failure to fulfill his duties
defend himself. constituted a serious breach, justifying non-payment of the
Civil Action: remaining compensation.
De la Cruz demanded reimbursement from his former employer for Manzano also claimed that Lazaro misrepresented his
his legal expenses and moral damages, totaling P15,000. qualifications, which vitiated his consent to the contract.
The employer refused, leading De la Cruz to file a civil action Supreme Court's Ruling
against the corporation and its board of directors. The Supreme Court found no merit in Manzano's petition,
Trial Court Decision: emphasizing that the arguments raised were factual in nature and
The Court of First Instance of Ilocos Norte dismissed the complaint, not legal questions suitable for review.
ruling that De la Cruz had no cause of action. The court rejected the The Court upheld the findings of the RTC and CA, which determined
argument that De la Cruz was an agent entitled to reimbursement that Lazaro had sufficiently performed his obligations under the
under the old Civil Code. contract.
RULING:
Agency Relationship: The relationship between an employer and an 2. William Golangco Construction Corporation vs. PCIB
employee is distinct from that of a principal and agent. An agent Factual Background
represents the principal in dealings with third parties, while an WGCC and PCIB entered into a construction contract on October 20,
employee performs specific tasks assigned by the employer. 1989, for the extension of PCIB Tower II, which included a granite
Legal Obligation of Employers: Employers are not legally obligated wash-out finish.
to reimburse employees for expenses incurred due to acts PCIB accepted the completed work on June 1, 1992, and WGCC
performed in the line of duty but caused by third parties. Such provided a guarantee bond for defects arising within one year.
obligations, if any, are moral rather than legal. In 1993, defects appeared in the granite finish, leading to minor
Proximate Cause of Damages: The damages suffered by De la Cruz repairs by WGCC and a subsequent contract with another
(legal expenses) were not the proximate result of his performance contractor for complete rework in 1994.
of duties but were caused by the filing of criminal charges, an PCIB incurred expenses of P11,665,000.00 for repairs and sought
intervening act by third parties. reimbursement through arbitration, while WGCC counterclaimed for
Absence of Legal Basis: In the absence of specific laws or judicial P5,777,157.84.
precedents, the court cannot impose liability on the employer for CIAC Decision and Subsequent Appeals
such damages. The CIAC ruled on June 21, 1996, awarding PCIB P9,741,829.00 for
2. Contracts i. Art. 1157; Art. 1159 repairs and granting WGCC's counterclaim of P5,777,157.84.
ii. Cases The net award resulted in PCIB being owed P3,964,671.16, with
1. Eduardo B. Manzano vs. Antonio B. Lazaro legal interest of 6% from the date of the CIAC Decision.
Background of the Case WGCC appealed the CIAC Decision regarding liability for
Petitioner Eduardo B. Manzano and respondent Antonio B. Lazaro construction defects, which the Supreme Court upheld, making the
entered into a Professional Services Contract on February 16, 1998, decision final on April 27, 2006.
regarding Manzano's candidacy for Vice Mayor of Makati City. PCIB also appealed the CIAC Decision but was ruled against in a
The contract was effective from February 16, 1998, to May 15, separate Supreme Court case.
1998, outlining the roles and responsibilities of both parties. Execution of CIAC Decision
Lazaro was responsible for managing the campaign, including WGCC filed a Motion for Execution of the CIAC Decision, seeking
hiring personnel, authorizing expenditures, and developing legal interest from June 21, 1996.
programs to ensure the candidate's winnability. The CIAC issued a Writ of Execution on January 22, 2007, for the
Manzano was to provide financial resources and compensate Lazaro principal amount but did not include legal interest.
with a monthly rate of PHP 70,000 and a bonus of PHP 200,000 if he WGCC's motion to amend the writ to include legal interest was
won the election. granted by the CIAC on May 25, 2007, but PCIB contested the
Election Outcome and Payment Dispute interest's commencement date.
Manzano won the Vice-Mayoralty election, but Lazaro later received CIAC's Rulings on Interest
only PHP 15,000 from his compensation, with a balance of PHP The CIAC later amended its order to set the interest at 12% from
20,000 pending until he submitted an inventory of campaign April 27, 2006, until full payment.
materials. WGCC filed a motion for clarification, which the CIAC denied,
Lazaro demanded the remaining balance and the bonus, asserting maintaining that interest should only accrue from April 27, 2006,
he had fulfilled his obligations by turning over the campaign due to PCIB's lack of fault in the delay.
equipment. Court of Appeals Proceedings
Manzano acknowledged the demand but insisted on receiving a WGCC petitioned the CA, arguing for 6% interest from June 21,
liquidation of campaign expenses before making further payments. 1996, and 12% from April 27, 2006.
Legal Proceedings Initiated by Lazaro PCIB opposed, asserting that the 6% interest applies only to
Lazaro filed a case in the Regional Trial Court (RTC) for collection of breaches not involving loans or forbearance of money.
the unpaid amounts. The CA granted WGCC's petition in part, awarding 6% interest from
Manzano defended himself by claiming Lazaro's lack of expertise June 21, 1996, and denying WGCC's request for 12% interest on the
and absence during critical campaign activities, arguing that entire award.
Lazaro's performance did not warrant the bonus. Supreme Court's Ruling on Interest
RTC Decision The Supreme Court affirmed the CA's decision, clarifying the
The RTC ruled in favor of Lazaro, ordering Manzano to pay PHP distinction between monetary and compensatory interest.
220,000, which included the unpaid balance and the bonus, plus It cited relevant provisions of the Civil Code regarding the
legal interest and attorney's fees. stipulation of interest and the conditions under which it may be
The RTC found that Manzano's claims of Lazaro's breach of contract awarded.
were unsubstantiated and that the contract remained enforceable. The Court ruled that WGCC is entitled to compensatory interest
Appeal to the Court of Appeals from the CIAC Decision date, as the principal award arose from
Manzano appealed the RTC decision to the Court of Appeals (CA), PCIB's breach of contract.
which affirmed the RTC's ruling.
The CA dismissed Manzano's arguments regarding Lazaro's alleged 3. Dio vs. St. Ferdinand Memorial Park, Inc
breach of contract and misrepresentation, stating that these issues Background of the Case
were not adequately addressed in the appeal. Teresita Dio entered into a Pre-Need Purchase Agreement with St.
Petitioner’s Arguments in the Supreme Court Ferdinand Memorial Park, Inc. (SFMPI) on December 11, 1973, to
Manzano contended that the CA erred by not addressing the buy a 36-square-meter memorial lot.
material breach of contract and Lazaro's entitlement to the bonus. The purchase was subject to SFMPI's rules and regulations,
including Rule 69, which mandated that mausoleums be
constructed by SFMPI or its agents.
Dio interred the remains of her family members in the lot without 448provides: “ The owner of the land in which anything has been
SFMPI's knowledge and engaged a private contractor for built, sown or planted in good faith, shall have the right to
improvements. appropriate as his own the works, sowing or planting, after
Dispute Over Construction of Mausoleum payment of the indemnity provided for in articles 546 and 548, or
In 1986, Dio sought to build a mausoleum and submitted plans to to oblige the one who built or planted to pay the price of the land,
SFMPI, which were initially approved. and the one who sowed, the proper rent. However, the builder or
SFMPI insisted that the mausoleum be constructed by them at a planter cannot be obliged to buy the land and if its value is
minimum cost of P100,000, which Dio found excessive. considerably more than that of the building or trees. In such case,
Dio's counsel demanded permission to construct the mausoleum he shall pay reasonable rent, if the owner of the land does not
within ten days, threatening legal action if denied. choose to appropriate the building or trees after proper indemnity.
Legal Proceedings Initiated by Dio The parties shall agree, on case of disagreement, court shall fix.
Dio filed a Complaint for Injunction with Damages against SFMPI 5. Tiu Peck vs. CA vs. CA 221 SCRA 618 (1993)
and its president, Mildred F. Tantoco, claiming ignorance of Rule 69
and arguing that the construction cost was unconscionable.
The trial court issued a cease and desist order against SFMPI, which
led to a counterclaim from SFMPI asserting the validity of Rule 69.
Trial Court's Findings
The trial court ruled in favor of SFMPI, stating that Dio was aware of
the rules and regulations when she purchased the lot.
The court found that Dio's actions indicated her knowledge of the
rules, as she sought permission to build the mausoleum.
Court of Appeals Decision
The Court of Appeals affirmed the trial court's decision,
emphasizing that Dio agreed to be bound by existing and future
rules when she executed the purchase agreement.
The appellate court rejected Dio's claims regarding the validity of
Rule 69 and her alleged lack of knowledge.
Petitioner’s Arguments
Dio contended that SFMPI failed to prove the adoption of Rule 69
prior to her purchase and that the rule was unreasonable and
oppressive.
She argued that she was not in estoppel as she did not consent to
the rules and that the contracts were adhesion contracts.
Respondents’ Counterarguments
SFMPI argued that Dio's construction of the mausoleum rendered
her plea for injunction moot.They maintained that the contracts
were not adhesion contracts and that Rule 69 was reasonable and
within SFMPI's rights to impose.
Supreme Court's Ruling
The Supreme Court denied Dio's petition, affirming the findings of
the lower courts.The Court emphasized that factual findings of
lower courts are conclusive

4. NHA vs. CA, G.R. No. 156437, March 1, 2004

NATIONAL HOUSING AUTHORITY vs. GRACE BAPTIST CHURCH and
COURT OF APPEALS FACTS: On June 13, 1986, Respondent Grace
Baptist Church wrote a letter to NHA manifesting intent to purchase
Lot 4 and 17 of the General Mariano Alvarez Resettlement Project in
Cavite. The latter granted request hence respondent entered into
possession of the lots and introduced improvements thereon. On
February 22, 1991, NHA passed are solution approving the sale of
the subject lots to respondent Church for 700 per square meter, a
total of P430,500. Respondents were duly informed. On April 8,
1991, respondent church tendered a check amounting to P55,350
contending that this was the agreed price. NHA avers stating that
the price now (1991) is different from before (1986).The trial court
rendered a decision in favour of NHA stating that there was no 3. Quasi-Contractsi. Art. 1157; Art. 1160
contract of sale, ordering to return the said lots to NHA and to pay - A quasi contract is a legal obligation that a court can impose to
NHA rent of 200 pesos from the time it took possession of the lot. prevent one party from unjustly benefiting at the expense of
Respondent Church appealed to the CA which affirms the decision another. It's also known as a constructive contract or an implied
of RTC regarding “no contract of sale” but modifying it by ordering contract.
NHA to execute the sale of the said lots to Church for 700 per A quasi contract can be imposed when:
square, with 6% interest per annum from March1991. Petitioner There is no written contract
NHA filed a motion for reconsiderat ion which was denied. Hence One party receives a benefit from another without making an effort
this petition for review on certiorari. to compensate them
ISSUE: WON NHA can be compelled to sell the lots under market A party accepts goods or services that they didn't request
value? A court can impose a quasi contract even if the parties didn't intend
HELD: No, because the contract has not been perfected. The to create a contract, and mutual assent isn't required. The remedy
Church despite knowledge that its intended contract of sale with for a quasi contract is usually restitution or recovery under
the NHA had not been perfected proceeded to introduce
improvements on the land. On the other hand, NHA knowingly
granted the Church temporary use of the subject properties and did
not prevent the Church from making improvements thereon. Thus
the Church and NHA, who both acted in bad faith, shall be treated
as if they were both in good faith. In this connection Art
quantum meruit.

1. BPI vs. Sarmiento, 484 SCRA 261

3. Reyes vs. Lim, 408 SCRA 560 (2003)

2. Perez vs. Pomar, 2 Phil. 682

4. Rodzssen Supply, Inc. vs. Far East Bank & Trust Co.,
 1. Air France vs. Carrascoso, 18 SCRA 155
Rafael Carrascoso, a civil engineer, was part of a group of 48
Filipino pilgrims traveling from Manila to Lourdes on March 30,
1958. Air France, through its agent Philippine Air Lines, issued
Carrascoso a first-class round-trip ticket from Manila to Rome.
Carrascoso traveled in first class from Manila to Bangkok without
issues.
Incident at Bangkok:
At Bangkok, the manager of Air France forced Carrascoso to vacate
his first-class seat, claiming a "white man" had a "better right" to
the seat. Carrascoso initially refused, stating the seat would be
taken over his dead body, but eventually relented after other
passengers intervened. Carrascoso was moved to the tourist class,
causing him humiliation and distress.
Legal Proceedings:
Carrascoso filed a complaint against Air France for breach of
contract, seeking moral and exemplary damages, refund of the fare
difference, and attorney’s fees.
The Court of First Instance of Manila ruled in favor of Carrascoso,
awarding him P25,000 in moral damages, P10,000 in exemplary
damages, P393.20 for the fare difference, and P3,000 in attorney’s
fees. The Court of Appeals affirmed the decision but slightly
reduced the fare difference refund to P383.10.
Issues:
4. Delicti. Art. 1161, Revised Penal Code Art. 100 1. Did the Court of Appeals err in not making complete findings of
ii. Case fact, particularly regarding Air France’s contention that although a
1. People vs. Catubig first-class ticket was issued, it was subject to confirmation, and
Carrascoso knew he was not confirmed for the first class on any
specific flight?
2. Did respondent court err in awarding moral and exemplary
damages to Carrascoso despite absence of explicit finding of bad
faith by Air France?
Court’s Decision:
The Supreme Court detailed issue per issue:
1. On the first-class seat entitlement, the SC upheld the findings of
the Court of Appeals, ruling that Carrascoso rightfully held a
confirmed first-class ticket and dismissed Air France’s argument
that it did not guarantee a first-class seat, as the ticket lacked
confirmation. The SC disapproved of the idea that an airline could
issue tickets it had no intention to honor.
2. Regarding the award of damages, SC ruled that Air France had
acted in bad faith based on evidence presented, which included
forceful ousting and public humiliation of Carrascoso to
accommodate another passenger without a prior and better claim
to the seat.

6. Enumeration by law is exclusive

Yes, enumeration by law is exclusive, meaning that the express
mention of one thing, person, act, or consequence excludes all
others. This is known as the maxim "expressio unius est exclusio
alterius". In law, the term "enumerated" means "mentioned
specifically," "designated," or "expressly named or granted". For
5. Quasi-delict example, you might speak of "enumerated" governmental powers,
items of property, or articles in a tariff schedule.
The rule of exclusive enumeration is based on the premise that the
legislature would not have made specified enumerations in a
statute if they did not intend to restrict its meaning.

1. Makati Stock Exchange vs. Campos

Background of the Case:

The case originated from SEC Case No. 02-94-4678, filed by
respondent Miguel V. Campos against petitioners Makati Stock
Exchange, Inc. (MKSE) and its directors.
Campos sought: (1) nullification of the MKSE Board Resolution
dated 3 June 1993, which allegedly deprived him of his right to
participate equally in Initial Public Offering (IPO) allocations; (2)
delivery of IPO shares he was deprived of; and (3) payment of
damages and attorney’s fees.
Procedural History:

On 14 February 1994, the Securities Investigation and Clearing

Department (SICD) of the SEC issued a Temporary Restraining
Order (TRO) to enjoin the implementation of the 3 June 1993
Resolution.
On 10 March 1994, the SICD granted a Writ of Preliminary
Injunction, continuing the TRO during the pendency of the case.
Petitioners filed a Motion to Dismiss on 11 March 1994, arguing: (1)
the case was moot due to MKSE’s license cancellation; (2) the SICD
lacked jurisdiction; and (3) the Petition failed to state a cause of
action.
The SICD denied the Motion to Dismiss on 4 May 1994, prompting
petitioners to file a Petition for Certiorari before the SEC en banc
(SEC-EB No. 393 and SEC-EB No. 403).
On 31 May 1995, the SEC en banc nullified the SICD’s Writ of
Preliminary Injunction. On 14 August 1995, it annulled the SICD’s
denial of the Motion to Dismiss and dismissed Campos’ Petition.
Campos filed a Petition for Certiorari with the Court of Appeals (CA-
G.R. SP No. 38455), which on 11 February 1997, granted his
Petition, nullifying the SEC en banc’s Orders.
Petitioners’ Motion for Reconsideration was denied by the Court of
Appeals on 18 May 1999, leading to the present Petition for Review
before the Supreme Court.
Substitution of Parties:
Respondent Miguel V. Campos died on 7 May 2001, and his
surviving spouse, Julia Ortigas Vda. de Campos, was substituted as
respondent.
ISSUES:
Whether or not SEC Case No. 02-94-4678 sufficiently states a cause
of action.
RULING:
The Supreme Court emphasized that pleadings must state ultimate
facts, not mere conclusions, to establish a cause of action. Campos’
failure to do so justified the dismissal of his Petition.
The petition filed by Campos should be dismissed for failure to state
a cause of action. A cause of action is the act or omission by which
a party violates a right of another. A complaint states a cause of
action where it contains three essential elements of a cause of
action, namely: (1) the legal right of the plaintiff, (2) the correlative
obligation of the defendant, and (3) the act or omission of the
defendant in violation of said legal right. If these elements are
absent, the complaint becomes vulnerable to dismissal on the
ground of failure to state a cause of action.