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Torts and Damages Case Digest: Cerrano v. Tan (1918)

G.R. No. L-12907  August 1, 1918
Lessons Applicable: Mitigation of Liability (Torts and Damages)
Laws Applicable: Article 1106, Article 1107 and Article 1581 of the Civil Code

  • January, 1916: Tan Chuco owner of casco No. 1033 rented it to Vivencio Cerrano for P70/month payable at the end of each month. No duration was stipulated.
  • May, 1916: Tan notified Cerrano that it was necessary to repair it at Malabon.  Cerrano was interested to rent it after the repair but Tan told him that it was already for P80/month.
  • A week before the end of the repair, Tan sold it to Siy Cong Bieng & Co. 
  • Siy Cong Bieng & Co. induced Santos to refuse to take orders from the new owners
  • Siy Cong Bieng & Co. were obliged to bring an action of replevin against Santos for the recovery of the possession of their casco
  • The sheriff took possession of the casco under a writ of replevin, but redelivered it to Santos upon a delivery bond and his wife as sureties
  • After the casco had been in possession of Santos for some three months, the replevin suit  held that casco was the property of Siy Cong Bieng & Co. at the time of the suit was commenced, and that the "illegal detention" of the casco by Santos had caused damages of  P457.98 to Siy Cong Bieng & Co.
  • Cerrano paid the judgment in favor of Siy Cong Bieng & Co. and the attorney's fees of Santos which shows that Santos was only a nominal defendant in the replevin suit,which was entirely controlled by Cerrano.
  • CFI: casco was rented 10 months at the rate of P60, P457.98 for damages and P500 for attorney's fees
ISSUE: W/N the contract of rent is broken by Tan Chuco's act as proximate cause making him liable to Cerrano for damages

HELD: NO. RTC: reversed P50 damage and his costs in the CFI

  • article 1581 of the Civil Code provides that when no definite agreement has been made regarding its duration, the lease of a house is deemed to have been made from day to day, from month to month, or from year to year, according to whether a daily, monthly, or yearly rent is to be paid.
    • reasonable presumption that one who agrees to pay a monthly rent intends that his tenancy is to endure for a like period, subject to indefinite tacit renewals at the end of each month as long as the arrangement is agreeable to both parties
  • Article 1106 of the Civil Code establishes the rule that prospective profits may be recovered as damages
  • Article 1107 of the same Code provides that the damages recoverable for the breach of obligations not originating in fraud (dolo) are those which were or might have been foreseen at the time the contract was entered into. 
    • it is unquestionable that defendant must be deemed to have foreseen at the time he made contract that in the event of his failure perform it, the plaintiff would be damaged by the loss of the profit he might reasonably have expected to derive from its use
  • GR: plaintiff may recover compensation for any gain which he can make it appear with reasonable certainty the defendant's wrongful act prevented him from acquiring
    • plaintiff would have earned a net profit of P50 from the use of the casco in the month during which he was entitled to its possession
    • damages resulting from avoidable consequences of the breach of a contract or other legal duty are not recoverable
      • It is the duty of one injured by the unlawful act of another to take such measures as prudent men usually take under such circumstances to reduce the damages as much as possible.
        • burden of proof rests upon the defendant to show that the plaintiff might have reduced the damages - none in this case
    • The contract of lease or hiring does not create a right in rem in favor of the lessee, except in the case of a recorded lease of real estate  
      • Santos' attempt to retain possession of it against the lawful owners by whom he had been placed in charge of it, was unlawful
        • if Cerrano is unable to recover from Santos the money paid by him will not justify us in imposing the burden of repaying this money to him
        • damages suffered by reason of his voluntary assumption of the liability incurred by Santos by reason of his unlawful attempt to withhold possession of the casco from its owners, by whom he was put in charge of it, are not attributable to Cerrano and he is not responsible for them -NOT proximate cause (proximate cause is Cerrano's own imprudence)
TORRES, J., dissenting: should be affirmed