Nature and Effects of Obligations
In the conduct of its operations, a business is required to observe a certain standard of care depending on that prescribed by the law or what has been agreed upon. By default, a person who is obliged to give something is also required to take care of the item with the proper diligence of a good father of a family except if there is a different standard of care required by law or through a stipulation of the parties.
Similarly, a person who is obliged to perform an obligation is required to observe the diligence of a good father of a family if the law or contract does not state the diligence which is to be observed in the performance thereof.
Canlas v. Court of Appeals
G.R. No. 112160, 28 February 2000
Complainants Sps. Osmundo S. Canlas and Angelina Canlas filed a Complaint for annulment of real estate mortgage against defendants Vicente Mañosca, Asian Savings Bank, among others. Previously, complainant Osmundo and defendant Mañosca decided to enter into a venture. In order to raise capital needed for the business, complainant Osmundo executed a Special Power of Attorney (SPA) authorizing defendant Mañosca to mortgage two parcels of land located at Parañaque. Subsequently, complainant agreed to sell the properties to defendant Mañosca for Php850,000.00 with a portion thereof considered as defendant Mañosca’s share in the starting capital. Thus, complainant delivered the transfer certificate of titles to defendant Mañosca despite the latter not having paid yet for the complete purchase price. With the help of impostors who posed as the Sps. Canlas, defendant Mañosca mortgaged the properties to a lawyer. Later on, with the assistance of the impostors again, defendant Mañosca obtained a loan from defendant Asian Savings Bank with the properties mortgaged as security. When defendant Mañosca defaulted on the loan, the bank extrajudicially foreclosed the mortgaged.
HELD: Asian bank was liable. “For not observing the degree of diligence required of banking institutions, whose business is impressed with public interest, respondent Asian Savings Bank has to bear the loss sued upon.” Banks are required to observe diligence more than that of a good father of a family. “The business of a bank is affected with public interest, holding in trust the money of the depositors, which bank deposits the bank should guard against loss due to negligence or bad faith, by reason of which the bank would be denied the protective mantle of the land registration law, accorded only to purchases or mortgagees for value and in good faith.
The bank did not observe the requisite diligence in confirming and verifying the real identity of the impostors. “It is worthy to note that not even a single identification card was exhibited by the said impostors to show their true identity; and yet, the bank acted on their representations simply on the basis of the residence certificates bearing signatures which tended to match the signatures affixed on a previous deed of mortgage to a certain Atty. Magno, covering the same parcels of land in question.”
It is evident that the bank “fell short of the responsibility of the bank to observe more than the diligence of a good father of a family. The negligence of respondent bank was magnified by the fact that the previous deed of mortgage (which was used as the basis for checking the genuineness of the signatures of the suppose Canlas spouses) did not bear the tax account number of the spouses, as well as the Community Tax Certificate of Angelina Canlas. But such fact notwithstanding, the bank did not require the impostors to submit additional proof of their true identity.”
Best Legal Practices:
Observe standard of care required – Businesses should exercise the standard of care (or degree of diligence) required by law for their respective industries if there is no contractual stipulation.
The standard of care is adjudged according to those observed in an industry or by other members of the same profession. For instance, when doctors accept a case, they “in effect represented that, having the needed training and skill possessed by physicians and surgeons practicing in the same field, they will employ such training, care and skill in the treatment of their patients. They have a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances. 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. Consequently, in the event that any injury results to the patient from want of due care or skill during the operation, the surgeons may be held answerable in damages for negligence.”
Ninevetch v. Court of Appeals
G.R. No. 122445, 18 November 1997
Dr. Ninevetch Cruz was charged with reckless imprudence resulting in homicide as a result of medical malpractice. Previously, the accused operated on Lydia Umali for the treatment of “myoma” but the said patient died. The complaint’s basis for the offense is on the inadequacy and untidiness of the facilities of the clinic, lack of provisions for blood, oxygen, and certain medicines, as well as the failure of the physician to subject the decedent to a cardio-pulmonary test prior operation, omission of blood typing before transfusion, and the subsequent transfer to another hospital where the patient was re-operated.
HELD: The doctor was not liable. The determination of “inexcusable lack of precaution” which is an element of the crime is to be determined “according to the standard of care observed by other members of the profession in good standing under similar circumstances bearing in mind the advanced state of the profession at the time of treatment or the present state of medical science.”
In accepting a case, “a doctor in effect represents that, having the needed training and skill possessed by physicians and surgeons practicing in the same field, he will employ such training, care and skill in the treatment of his patients. He therefore has a duty to use at least the same level of care that any other reasonably competent doctor would use to treat a condition under the same circumstances.” Thus, there is a need to expert testimony in order to determine whether the accused was remiss in observing the standard of care required.
Here, while the lower courts found the claims in the complaint to be true, the conclusion that the accused is guilty of reckless imprudence “is still best arrived at not through the educated surmises nor conjectures of laymen, including judges, but by the unquestionable knowledge of expert witnesses. For whether a physician or surgeon has exercised the requisite degree of skill and care in the treatment of his patient is, in the generality of cases, a matter of expert opinion. The deference of courts to the expert opinion of qualified physicians stems from its realization that the latter possess unusual technical skills which laymen in most instances are incapable of intelligently evaluating. Expert testimony should have been offered to prove that the circumstances cited by the courts below are constitutive of conduct falling below the standard of care employed by other physicians in good standing when performing the same operation. It must be remembered that when the qualifications of a physician are admitted, as in the instant case, there is an inevitable presumption that in proper cases he takes the necessary precaution and employs the best of his knowledge and skill in attending to his clients, unless the contrary is sufficiently established. This presumption is rebuttable by expert opinion which is so sadly lacking in the case at bench.”
Accessory Follows the Principal – The creditor acquires a right to the fruits of the thing from the time the obligation to deliver becomes due and demandable. Nevertheless, the creditor does not acquire any real right over the fruits until delivery is made. This follows the principle that an accessory follows the principal.
Cu Unjieng Hijos v. The Mabalacat Sugar Company
G.R. No. 37206, 22 September 1933
To secure a loan from plaintiff Cu Unjieng E Hijos, defendant Mabalacat Sugar Company mortgaged two parcels of land with all the buildings, improvements, sugar-cane mill, railway, telephone installations, apparatus, utensils, and everything forming part or necessary to complete the said sugar-cane mill, railway, or telephone installation, actually existing or that may later exist on the said lots, belonging exclusively to the mortgage debtor. After the mortgage was foreclosed for defendant’s failure to pay, the sheriff sold in public auction defendant’s sugar mill including the machinery and accessories found therein. Defendants claimed that the machinery and accessories should not have been included in the sale.
HELD: The machinery and accessories follow the principal which were the lands subject of the foreclosed mortgaged. “As to whether or not the machinery and accessories in question were included in the notice of sale of public auction, inasmuch as the sheriff stated therein that he would sell all the properties belonging to the Mabalacat Sugar Central… they were included in the notice in question, following the principle of law that the accessory follows the principal.”
Best Legal Practices:
Exclude accessories or personal/movable properties in a real estate mortgage or contract of sale – To exclude certain accessories or personal/movable properties in a real estate mortgage, a contractual stipulation to that effect should be clearly and categorically stated on the agreement. The same should be observed in a contract of sale.
When the debtor who fails to do his obligation or contravenes the tenor of thereof, the creditor may have it executed at the cost of the debtor. The creditor may likewise require the debtor to undo an obligation which was been poorly done. If the debtor does what has been forbidden of him arising from an obligation not to do, the creditor may likewise require the debtor to undo the same at the expense of the debtor.
Further, in obligation to deliver a specific thing, the creditor may demand the following from the debtor: (1) to deliver the determinate thing, and/or (2) damages. Despite not being mentioned, the obligation to deliver includes the conveyance all its accessions and accessories. On the other hand, if the obligation is to deliver a generic thing, the creditor may have the same done through another at the expense of the debtor.