digests 1.15.16

1. Chaves v. Gonzales, 32 SCRA 547 2. Abaya v. Standard Vacuum Oil, 101 Phil 1262* The errors assigned boils down to the singles question of whether or not the appellant is entitled to the damages, compensatory as well as moral and exemplary, supposedly sustained as a consequences of appellees  refusal to appoint him operator of the station in controversy. The trial court correctly termed the stipulation of appointing the appellant as operator subject to the condition of the operator s agreement as a reciprocal obligation. In reciprocal obligations, the performance of one is conditioned on the simultaneous fulfillment of the other. When one party to the reciprocal obligation refuses to assume and perform the obligation imposed on him, the other party does not incur in delay, Article 119 of the Civil Code provides that the power to rescind obligation is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him . There is no reason here to sustain the contention that in the circumstances fulfillment of the obligation was impossible. ’

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3. Agcaoili v. GSIS, 165 SCRA 1 Facts: In this case, appellant GSIS approved an application of the appellee Agcaoli for the purchase of a house and lot in the GSIS Housing Project at Nangka, Marikina, subject to the condition that the latter should forthwith occupy the house, a condition that Agcaoli tried to fulfill but could not because the house was absolutely uninhabitable. However, Agcaoli ask a homeless friend, a certain Villanueva, to stay in the premises as some sort of watchman, pending completion of the construction of the house.  Agcaoli after paying the first installment and other fees, having thereafter refused to make further payment of other stipulated installments until GSIS had made the house habitable; and appellant having refused to do so, opting instead to cancel the award and demanded the vacation by Agcaoli of the premises; and the latter having sued the GSIS in the Court of First Instance of Manila for specific performance with damages and having obtained a favorable judgment, the cases was appealed by the GSIS. Issue: Whether or not Agcaoli is entitled for specific performance with damages. Held: Appeal of GSIS must fail. There was then a perfected contract of sale between the parties; there had been a meeting of minds upon the purchase by Agcaoli of a determinate house and lot from GSIS at a definite price which is payable in amortizations and from that moment the parties acquired the right to reciprocally demand performance. It was, to be sure, the duty of the GSIS, as seller, to deliver the thing soled in acondition suitable for its enjoyment by the buyer, in other words to deliver the house subject of the contract in a reasonably livable state. This it failed to do. Since GSIS failed to fulfill its obligation, and was not willing to put the house in a habitable state, it cannot invoke Agcaoli s suspension of payment as cause to cancel the contract between them. In recipient obligation, neither party incur in delay of the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. Nor may the GSIS succeed in justifying its cancellation of the award by the claim tha Agcaoli had not complied with the condition of occupying the house within three (3) days. The record shows that Agcaoli did try to fulfill the condition. Finally appellant having caused the ambiguity as the exact prestation of the agreement, the question of interpretation arising therefrom, should be resolved against it. ’

4. Culion Ice Fish & Elective Co. v. Phil. Motors, 55 Phil 129 FACTS: The Culion Ice, Fish & Electric Co Inc (CIFECI) and Philippine Motors Corporation (PMC) are domestic corporations. Cranston was the representative of CIFECI in the City of Manila and the latter was the registered owner of the motor schooner Gwendoline, which was used in the fishing trade in the Philippine Islands. Cranston decided to have the engine on the Gwendoline changed from a gasoline consumer to a crude oil burner. He accordingly repaired to the office of the PMC and had a conference with Quest, its manager, who agreed to do the job. As a result of the aforesaid interview, Quest, in company with Cranston, visited the Gwendoline while it lay at anchor in the Pasig River, and the work of effecting the change in the engine was begun and conducted under the supervision of Quest. Upon preliminary inspection of the engine, Quest came to the conclusion that the principal thing necessary to accomplish the end in view was to install a new carburetor. After this appliance had been installed, the engine was tried with gasoline as a fuel. The next problem was to introduce into the carburetor the baser fuel, consisting of a low grade of oil mixed with distillate. For this purpose a temporary tank to contain the mixture was placed on deck above and at a short distance from the compartment covering the engine. This tank was connected with the carburetor by a piece of tubing, which was apparently not well fitted at the point where it was connected with the tank. Owing to this fact the fuel mixture leaked from the tank and dripped sown into the engine compartment. In the course of the preliminary work upon the carburetor and its connections, it was observed that the carburetor was flooding, and that the gasoline, or other fuel, was trickling freely from the lower part to the carburetor to the floor. This fact was called to Quest s attention, but he appeared to think lightly of the matter.  After preliminary experiments and adjustments had been made the bo at was taken out into the bay for a trial run. As the boat was coming in from this run, the engine stopped, and connection again had to be made with the gasoline line to get a new start. A moment later a back fire occurred in the cylinder chamber. This caused a flame to shoot back into the carburetor, and instantly the carburetor and adjacent parts were covered with a mass of flames, which the members of the crew were unable to subdue. They were therefore compelled, as the fire spread, to take to a boat, and their escape was safely effected, but the Gwendoline was reduced to a mere hulk.  An action was instituted in the CFI of Manila by CIFECI for the purpose of recovering fr om the PMC the sum of P11,350, with interest and costs. Upon hearing the cause the trial court gave judgment in favor of CIFECI to recover the sum of P9,850, with interest.. From this judgment PMC appealed. ISSUE: 1 WON the lower court erred in its decision 2 WON the action should be considered stale HELD: The judgment appealed from, awarding damages to CIFECI must be affirmed 1. NO. A study of the testimony lead us to the conclusion that the loss of this boat was chargeable to the negligence and lack of skill of Quest. The back fire may have been due either to the fact that the spark was too advanced or the fuel improperly mixed. In this connection it must be remembered that when a person holds himself out as being competent to do things requiring professional skill, he will be held liable for negligence if he fails to exhibit the care and skill of one ordinarily skilled in the particular work which he attempts to do. The proof shows that Quest had had ample experience in fixing the engines of automobiles and tractors, but it does not appear that he was experienced in the doing of similar work on boats. For this reason, possibly the dripping of the mixture form the tank on deck and the flooding of the carburetor did not convey to his mind an adequate impression of the danger of fire. But a person skilled in that particular sort of work would, we think have been sufficiently warned from those circumstances to cause him to take greater and adequate precautions against the danger. In other words Quest did not use the skill that would have been exhibited by one ordinarily expert in repairing gasoline engines on boats. There was here, in our opinion, on the part of Quest, a blameworthy antecedent inadvertence to possible harm, and this constitutes negligence. The burning of the Gwendoline may be said to have resulted from accident, but this accident was in no sense an unavoidable accident. It would not have occured but for Quest s carelessness or lack of skill. The test of liability is not whether the injury was accidental in a sense, but whether Quest was free from blame. ’

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2. NO. This action was instituted about two years after the accident in question had occured, and after Quest had ceased to be manager of the defendant corporation and had gone back to the United States. Upon these facts, the defendant bases the contention that the action should be considered stale. It is sufficient reply to say that the action was brought within the period limited by the statute of limitations and the situation is not one where the defense of laches can be properly invoked.

5. Syquia v. CA, 217 SCRA 624 FACTS: Pursuant to a Deed of Sale and an Interment Order executed between plaintiff and defendant, Juan J. Syquia (father of deceased Vicente Syquia) authorized and instructed defendant to inter the remains of the deceased in the Manila Memorial Park Cemetery conformably and in accordance with defendant s interment procedures.  After a few months, preparatory to transferring the said rem ains to a newly purchased family plot also at the Manila Memorial Park Cemetery, the concrete vault encasing the coffin of the deceased was removed from its niche underground with the assistance of certain employees of defendant. As the concrete vault was being raised to the surface, plaintiffs discovered that the concrete vault had a hole approximately 3 inches in diameter near the bottom of one of the walls closing out the width of the vault on one end and that for a certain length of time, water drained out of the hole. Pursuant to an authority granted by the MTC, plaintiffs, with the assistance of licensed morticians and certain personnel of defendant, caused the opening of the concrete vault. Upon opening the vault, the following became apparent: (a) the interior walls of the concrete vault showed evidence of total flooding; (b) the coffin was entirely damaged by water, filth and silt causing the wooden parts to warp and separate and to crack the viewing glass panel located directly above the head and torso of the deceased; (c) the entire lining of the coffin, the clothing of the deceased, and the exposed parts of the deceased s remains were damaged and soiled by the action of the water and silt and were also coated with filth. Plaintiffs filed a case for damages, based on the alleged unlawful and malicious breach by the defendant of its obligation to deliver a defect-free concrete vault designed to protect the remains of the deceased and the coffin against the elements which resulted in the desecration of deceased's grave and in the alternative, because of defendant-appellee's gross negligence conformably to Article 2176 of the New Civil Code in failing to seal the concrete vault. ’

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ISSUE: WON DEFENDANT IS LIABLE FOR QUASI-DELICT? HELD: NO, there was no fault or negligence on the part of the defendant that would render him liable for quasi-delict. Although a pre-existing contractual relation between the parties does not preclude the existence of a culpa aquiliana, we find no reason to disregard the respondent's Court finding that there was no negligence. In this case, it has been established that the Syquias and the Manila Memorial Park Cemetery, Inc., entered into a contract entitled "Deed of Sale and Certificate of Perpetual Care." That agreement governed the relations of the parties and defined their respective rights and obligations. Hence, had there been actual negligence on the part of the Manila Memorial Park Cemetery, Inc., it would be held liable not for a quasi-delict or culpa aquiliana, but for culpa contractual as provided by Article 1170 of the Civil Code. The Manila Memorial Park Cemetery, Inc. bound itself to provide the concrete box to be sent in the interment. Rule 17 of the Rules and Regulations of private respondent provides that: Rule 17. Every earth interment shall be made enclosed in a concrete box, or in an outer wall of stone, brick or concrete, the actual installment of which shall be made by the employees of the Association. Pursuant to this abovementioned Rule, a concrete vault was provided the day before the interment, and was, on the same day, installed by private respondent's employees in the grave which was dug earlier. After the burial, the vault was covered by a cement lid.

6. Barzaga v. CA, February 12, 1997* Facts: Petitioner s wife suffered from a debilitating ailment. She wish to be laid to rest before Christmas day to spare her family of the long vigils as it was almost Christmas. When his wife died, petitioner bought materials from private respondent for the construction of her niche. The latter however failed to deliver on agreed time and date despite repeated follow¬ups. The niche was completed in the afternoon of the 27th of December, and Barzaga s wife was finally laid to rest. However, it was two-and-a-half days behind schedule. Petitioner thus claimed that there was legal delay on the part of private respondent. Resisting petitioner s claim, private respondent contended that legal delay could not be validly ascribed to him because no specific time of delivery was agreed upon between them. He pointed out that the invoices evidencing the sale did not contain any stipulation as to the exact time of delivery and that assuming that the materials were not delivered within the period desired by petitioner. ’

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Issue: W/N demand was necessary in order to validly ascribe legal delay on the part of private respondent. Ruling: No. Demand was not necessary in this case because time is of essence. Private respondent had no right to manipulate petitioner s timetable and substitute it with his own. Petitioner had a deadline to meet. A few hours of delay was no piddling matter to him who in his bereavement had yet to attend to other pressing family concerns. This is clearly a case of non-performance of a reciprocal obligation, as in the contract of purchase and sale; the petitioner had already done his part, which is the payment of the price. It was incumbent upon respondent to immediately fulfill his obligation to deliver the goods otherwise delay would attach. ’

7. Dioquino v. Laureano, 33 SCRA 65* Facts: Attorney Pedro Dioquino, a practicing lawyer of Masbate, is the owner of a car. On March 31, 1964, he went to the office of the MVO, Masbate, to register the same. Attorney Dioquino requested the defendant Federico Laureano to introduce him to one of the clerks in the MVO Office, who could facilitate the registration of his car and the request was graciously attended to. Defendant Laureano rode on the car of  Atty. Dioquino on his way to the P.C. Barracks at Masbate. W hile about to reach their destination, the car driven by plaintiff s driver and with defendant Federico Laureano as the sole passenger was stoned by some 'mischievous boys, and its windshield was broken. The defendant Federico Laureano refused to file any charges against the boy and his parents because he thought that the stone-throwing was merely accidental and that it was due to force majeure. Laureano refused to pay for the damaged done to the windshield and challenged the case for judicial adjudication. There is no question that the plaintiff tried to convince the defendant Federico Laureano just to pay the value of the windshield and he even came to the extent of asking the wife to convince her husband to settle the matter amicably but the defendant Federico Laureano refused to make any settlement, clinging [to] the belief that he could not be held liable because a minor child threw a stone accidentally on the windshield and therefore, the same was due to force majeur. Including in the action filed the wife, Aida de Laureano, and the father, Juanito Laureano. Issue: Whether or not there was fortuitous event and Federico Laureano is liable to pay for damages. Whether or not the plaintiff is liable for damages for including Federico Laureano s wife and father. ’

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Held: 1. The express language of Art. 1174 of the present Civil Code states that "Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be, foreseen, or which, though foreseen were inevitable." Authorities of repute are in agreement, more specifically concerning an obligation arising from contract "that some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito." 5 If it could be shown that such indeed was the case, liability is ruled out. There is no requirement of "diligence beyond what human care and foresight can provide." 6 The throwing of the stone by the child was clearly unforeseen or if foreseen, was

inevitable. Hence, the law being what it is, such a belief on the part of defendant Laureano was  justified and he shall not be held liable for the damages caused to the car. 2. No moral damages should be awarded against the parties. Mistaken as plaintiff apparently was, it cannot be concluded that he was prompted solely by the desire to inflict needless and unjustified vexation on them. Considering the equities of the situation, plaintiff having suffered a pecuniary loss which while resulting from a fortuitous event, perhaps would not have occurred at all had not defendant Federico Laureano borrowed his car, we, feel that he is not to be penalized further by his mistaken view of the law in including them in his complaint. Well-worth paraphrasing is the thought expressed in a United States Supreme Court decision as to the existence of an abiding and fundamental principle that the expenses and annoyance of litigation form part of the social burden of living in a society which seeks to attain social control through law. 8. Austria v. CA, 39 Phil 527, 39 SCRA 527* 9. Keep v. Chan Gioco, 14 Phil 5 10. Limpangco & Sons v. Yangco Steamship Co., 34 Phil 597 Facts: Plaintiff

employed defendant to tow from Guagua to Manila two cascos loaded with 2,041.80 piculs of sugar, property of the plaintiff. The cascos left Guagua towed by the launches Tahimic and Matulin, belonging to the defendant. When the launches, together with their tows, arrived off the Malabon River, the patron of the launch Matulin, decided to leave the cascos in the Malabon River as testified by the casco men. Next day, the launch Matulin was in the Malabon River and the patron talked to the men in charge of the cascos, which were at that time tied up at Tansa, and told them that on the following day, he would await them off the mouth of the Malabon River, and that, if the weather was then favorable, he would tow them to Manila. It was agreed between them that the cascos should move out of the river which is 1,500 meters away in an open sea by means of their tikines or bamboo poles and proceed to the agreed meeting place. As agreed and under the instructions of the patron of Matulin, the crew poled their cascos out of the river while the Matulin waited for them outside the shallows. The cascos were met with high seas and strong winds after passing the shallow waters. The cascos called to the Matulin for help. The patron of the Matulin, they allege, did not help them. By reason of the high seas and strong winds, they were driven ashore and their cargoes lost. The patron of the Matulin testified that he was unable to render assistance to the cascos by reason of the shallow water in which they were at the time they were caught by the winds and waves and washed ashore. Issue: WON

the defendant is entitled to the extinguishment of liability due to fortuitous event.

Held:

No. While the captain of the Matulin would not have been responsible for an act of God by which the cascos were lost, it was his duty to foresee what the weather was likely to be, and to take such precautions as were necessary to protect his tow. It was not an act of God by which the cascos were lost; it was the direct result of the failure of the captain of the Matulin to meet the responsibilities which the occasion placed on him. To be exempt from liability because of an act of God, the tug must be free from any previous negligence or misconduct by which that loss or danger may have been occasioned. For, al though the immediate or proximate cause of the loss in any given instance may have been what is termed an act of God, yet, if the tug unnecessarily exposed the two to such accident by any culpable act or omission of its own, it is not excluded. (Manresa, vol. 8, pages 91 et seq.; art. 1105, Civil Code.)

11. Lasam v. Smith, 45 Phil 657 FACTS: The defendant was the owner of a public garage in the town of San Fernando, La Union, and engaged in the business of carrying passengers for hire from one point to another in the Province of La Union and the surrounding provinces. Defendant undertook to convey the plaintiffs from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant, Bueno, to drive the car. Bueno held no driver  s license, but had some experience in driving. The car functioned well until after the crossing of the Abra River in Tagudin, when, according to the testimony of the witnesses for the plaintiffs, defects developed in the steering gear so as to make accurate steering impossible, and after zigzagging for a distance of about half kilometer, the car left the road and went down a steep embankment. The automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions and a dislocated rib, but his wife, Joaquina, received serious injuries, among which was a compound fracture of one of the bones in her left wrist. She also suffered nervous breakdown from which she has not fully recovered at the time of trial. The complaint was filed about a year and a half after and alleges that the accident was due to defects in the automobile as well as to the incompetence and negligence of the chauffeur. The trial court held, however, that the cause of action rests on the defendant s breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code, and not article 1903, are applicable. The court further found that the breach of contact was not due to fortuitous events and that, therefore the defendant was liable in damages. ’

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ISSUE: W/N the trial court is correct in its findings that the breach of contract was not due to a fortuitous event RULING: Yes. It is sufficient to reiterate that the source of the defendant s legal liability is the contract of carriage; that by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads: ’

No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability. “

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 As will be seen, some extraordinary circumstances independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito. In the present case, this element is lacking. It is not suggested that the accident in question was due to an act of God or to adverse road conditions which could have been foreseen. As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. That is not a caso fortuito.

12. Republic v. Luzon Stevedoring, 21 SCRA 279* Facts: A barge being towed by tugboats "Bangus" and "Barbero" all owned by Luzon Stevedoring Corp. rammed one of the wooden piles of the Nagtahan Bailey Bridge due to the swollen current of the Pasig after heavy rains days before. The Republic sued Luzon Stevedoring for actual and consequential damages. Luzon Stevedoring claimed it had exercised due diligence in the selection and supervision of its employees; that the damages to the bridge were caused by force majeure; that plaintiff has no capacity to sue; and that the Nagtahan bailey bridge is an obstruction to navigation. Issue: W/N the collision of appellant's barge with the supports or piers of the Nagtahan bridge was in law caused by fortuitous event or  force majeure. Held: There is a presumption of negligence on part of the employees of Luzon Stevedoring, as the Nagtahan Bridge is stationary. For caso fortuito or  force majeure (which in law are identical in so far as they exempt an obligor from liability) by definition, are extraordinary events not foreseeable or avoidable, "events that could not   be foreseen, or which, though foreseen, were inevitable" (Art. 1174, Civ. Code of the Philippines). It is, therefore, not enough that the event should not have been foreseen or anticipated, as is commonly believed, but it must be one impossible to foresee or to avoid. The mere difficulty   to foresee the happening is not impossibility to foresee the same. Luzon Stevedoring k new the perils posed by the swollen stream and its swift current, and voluntarily entered into a situation involving obvious danger; it theref ore assured the risk, and can not shed responsibility merely because the precautions it adopted turned out to be insufficient. It is thus liable for damages.

13. Lawyers Cooperative Publishing Co. v. Tabora, 13 SCRA 762* Facts: Perfecto A. Tabora(buyer) bought from the Lawyers Cooperative Publishing Company(seller) one complete set of American Jurisprudence consisting of 48 volumes with 1954 pocket parts, plus one set of American Jurisprudence, General Index, consisting of 4 volumes, for a total price of P1,675.50 which, in addition to the cost of freight of P6.90, makes a total of P1,682.40. Tabora made a partial payment of P300.00, leaving a balance of P1,382.40. The books were duly delivered and receipted for by Tabora on May 15, 1955 in his law office in Naga City. However, a big fire broke out in that locality which destroyed and burned all the buildings standing on one whole block including at the law office and library of Tabora.  As a result, the books bought from the company as above stated, together with Tabora s important documents and papers, were burned during the conflagration. This unfortunate event was immediately reported by Tabora to the company in a letter he sent on May 20, 1955. On May 23, the company replied and as a token of goodwill it sent to Tabora free of charge volumes 75, 76, 77 and 78 of the Philippine Reports.  As Tabora failed to pay he monthly installments agreed upon on the balance of the purchase price notwithstanding the long time that had elapsed, the company demanded payment of the installments due, and having failed, to pay the same, it commenced the present action before the CFI of Manila for the recovery of the balance of the obligation. Defendant, in his answer, pleaded force majeure as a defense. He alleged that the books bought from the plaintiff were burned during the fire that broke out in Naga City on May 15, 1955, and since the loss was due to force majeure he cannot be held responsible for the loss. CFI rendered judgment for the plaintiff. It ordered Tabora to pay the sum of P1,382.40, with legal interest thereon from the filing of the complaint, plus a sum equivalent to 25% of the total amount due as liquidated damages, and the cost of action. Tabora appealed to the CA, but the case was forwarded to the SC by virtue of a certification issued by the CA that the case involves only questions of law ’

Issue: W/N respondent Tabora should bear the loss and pay the unpaid purchase price. Ratio: YES. It was provided in the contract that "title to and ownership of the books shall remain with the seller until the purchase price shall have been fully paid. Loss or damage to the books after delivery to the buyer shall be borne by the buyer." General Rule: the loss of the object of the contract of sale is borne by the owner, or in case of  force majeure the one under obligation to deliver the object is exempt from liability. BUT, this rule does not apply in this case because the parties clearly agreed to the above-mentioned contrary stipulation.  Although the seller agreed that the ownership of the books shall remain with it until the purchase price shall have been fully paid,  such stipulation cannot make the seller liable in case of loss not only because such was agreed merely to secure the performance by the buyer of his obligation but in the very contract it was expressly agreed that the "loss or damage to the books after delivery to the buyer shall be borne by the buyer."  Any such stipulation is sanctioned by Article 1504 of our Civil Code, which in part provides: (1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery

Force majeure will not exempt Tabora from his liability. This is because this only holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event. Here these qualifications are not present. The obligation does not refer to a determinate thing, but is pecuniary in nature(money), and the obligor bound himself to assume the loss after the delivery of the goods to him. Obligor (Tabora) agreed to assume any risk concerning the goods from the time of their delivery. WHEREFORE, the decision appealed from is modified by eliminating that portion which refers to liquidated damages. No costs.

14. Vasquez v. CA, 138 SCRA 553* Facts: Petitioners lost their children in a shipwreck involving the vessel of private respondent when it sailed despite a typhoon. Issue: 1) W/n it is a fortuitous event; 2) W/n respondents are liable

HELD: 1) No. It is not a caso fortuito. The elements to consider in sustaining a case of caso fortuito are the ff: 1) the event must be independent of the human will, 2) the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner, 3) the obligor must be free of participation in, aggravation of, the injury to the creditor, 2) Petitioners are liable as it is not a caso fortutito. There is no caso fortuito when the ship captain proceeded en route despite a typhoon advice close to the area where the vessel will pass. Moreover, the Board of Marine s inquiry conclusion that the ship captain was not negligent is not binding on the Court when said finding is not complete. The liability of the ship owner also extends to the value of vessel and the insurance proceeds thereon. ’

15. Sia v. CA, 222 SCRA 24* FACTS: The plaintiff rented on March 22, 1985 the Safety Deposit Box No. 54 of the defendant bank at its Binondo Branch wherein he placed his collection of stamps. The said safety deposit box leased by the plaintiff was at the bottom or at the lowest level of the safety deposit boxes of the defendant bank .During the floods that took place, floodwater entered into the defendant bank's premises, seeped into the safety deposit box leased by the plaintiff and caused, according to the plaintiff, damage to his stamps collection. The defendant bank rejected the plaintiff's claim for compensation for his damaged stamps collection, so, the plaintiff instituted an action for damages against the defendant bank. ISSUE: W/N it was a grave error or an abuse of discretion on the part of the respondent court when it ruled that respondent SBTC did not fail to exercise the required diligence in maintaining the safety deposit box RULING: Note that the primary function is still found within the parameters of a contract of deposit, i.e., the receiving in custody of funds, documents and other valuable objects for safekeeping. The renting out of the safety deposit boxes is not independent from, but related to or in conjunction with, this principal function. A contract of deposit may be entered into orally or in writing (Art. 1969, Civil Code] and, pursuant to  Article1306 of the Civil Code, the parties thereto may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public

policy. Accordingly, the depositary would be liable if, in performing its obligation, it is found guilty of fraud, negligence, delay or contravention of the tenor of the agreement [Art. 1170,id.]. In the absence of any stipulation prescribing the degree of diligence required, that of a good father of a family is to be observed [Art. 1173,id.]. Hence, any stipulation exempting the depositary from any liability arising from the loss of the thing deposited on account of fraud, negligence or delay would be void for being contrary to law and public policy. In the instant case, petitioner maintains that conditions 13 and l4 of the questioned contract of lease of the safety deposit box, which read: "13. The bank is a depositary of the contents of the safe and it has neither the possession nor control of the same. "14. The bank has no interest whatsoever in said contents, except as herein expressly provided, and it assumes absolutely no liability in connection therewith." are void as they are contrary to law and public policy. Public respondent further postulates that SBTC cannot be held responsible for the destruction or loss of the stamp collection because the flooding was a fortuitous event and there was no showing of SBTC's participation in the aggravation of the loss or injury. Both the law and authority cited are clear enough and require no further elucidation. Unfortunately, however, the public respondent failed to consider that in the instant case, as correctly held by the trial court, SBTC was guilty of negligence. thus comes to the succor of the petitioner. The destruction or loss of the stamp collection which was, in the language of the trial court, the "product of 27 years of patience and diligence" caused the petitioner pecuniary loss; hence, he must be compensated therefor.

16. Victorias Planters Association, Inc. v. Victorias Milling Co., 97 Phil 318 FACTS: The petitioners Victorias Planters Association, Inc.and North Negros Planters Association, Inc. and the respondent Victorias Milling Co., Inc entered into a milling contract whereby they stipulated a 30-year period within which the sugar cane produced by the petitioner would be milled by the respondent central. The parties also stipulated that in the event of force majuere, the contract shall be deemed suspended during this period. The petitioner failed to deliver the sugar cane during the four years of the Japanese occupation and the two years after liberation when the mill was being rebuilt or a total of six years. ISSUE: W/N the petitioners can be compelled to deliver sugar cane for six more years after the expiration of the 30-year period to make up for what they failed to deliver to the respondent RULING: No. Fortuitous event relieves the obligor from fulfilling the contractual obligation under Article 1174 of the Civil Code. The stipulation in the contract that in the event of force majeure the contract shall be deemed suspended during the said period does not mean that the happening of any of those events stops the running of the period agreed upon. It only relieves the parties from the fulfillment of their respective obligations during that time the petitioner from delivering the sugar cane and the respondent central from milling. In order that the respondent central may be entitled to demand from the petitioner the fulfillment of their part in the contracts, the latter must have been able to perform it but failed or refused to do so and not when they were prevented by force majeure such as war. To require the petitioners to deliver the sugar cane which they failed to deliver during the six years is to demand from them the fulfillment of an obligation, which was impossible of performance during the time it became due. Nemo tenetur ed impossibilia. The respondent central not being entitled to demand from the petitioners the performance of the latter  s part of the contracts under those circumstances cannot later on demand its fulfillment. The performance of what the law has written off cannot be demanded and required. The prayer that the petitioners be compelled to deliver sugar cannot for six years more to make up for what they failed to deliver, the fulfillment of which was impossible, of granted, would in effect be an extension of the terms of the contracts entered into by and between the parties. ’