1. LEGASPI OIL CO., INC. vs. THE COURT OF APPEALS and BERNARD OSERAOS [G.R. No. 96505; July 1, 1993] FACTS: Private Respondent Bernard Oseraos acting through his authorized agents, had several transactions with Legaspi Oil Co. for the sale of copra to the latter. In 1976, Oseraos' agent signed a contract for the sale of copra at P82.00/100 kg with delivery terms of 20 days. However, the period to deliver had lapsed and respondent delivered only 46,334 kg of copra, leaving an undelivered balance of 53,666 kg. Petitioner made repeated demands but Oseraos elected to ignore the same. A final demand with a warning was issued that should Oseraos fail to complete the delivery, petitioner would purchase the balance at the open market and charge the price differential to the latter, still Oseraos failed to deliver the remaining balance. Hence, petitioner exercised its right under the contract and purchased the undelivered balance at the open market at the then prevailing price of P168.00/100 kg. ISSUE: Is Oseraos liable for damages arising from fraud or bad faith in deliberately breaching the contract of sale entered into by the parties? Explain the grounds for his liability, if any. 2. SSS vs. MOONWALK DEVELOPMENT AND HOUSING CORPORATION [G.R. No. 73345. April 7, 1993] FACTS: Plaintiff SSS approved the application of Defendant Moonwalk for a loan of P30,000,000 for the purpose of developing and constructing a housing project. Out of P30,000,000 approved loan, the sum of P9,595,000 was released to defendant Moonwalk. A third Amendment Deed of Mortgage was executed for the payment of the amount of P9,595,000. Moonwalk made a total payment of P23,657,901.84 to SSS for the loan principal of P12,254,700. After settlement of the account, SSS issued to Moonwalk the release of Mortgage for Moonwalk's Mortgaged properties. In a letter to Moonwalk, SSS alleged that it committed an honest mistake in releasing defendant; that Moonwalk has still 12% penalty for failure to pay on time the amortization which is in the penal clause of the contract. Moonwalk's counsel told SSS that it had completely paid its obligation to SSS and therefore there is no recovery of any penalty. ISSUE: Is the penalty demandable even after the extinguishment of the principal obligation? Explain your answer. 3. PICART vs. SMITH, JR. [G.R. No. L-12219; March 15, 1918] FACTS: On the Carlatan Bridge in La Union, Picart was riding on his pony over said bridge. Before he had gotten half way across, Smith approached from the opposite direction in an automobile. As the defendant neared the bridge he saw a horseman on it and blew his horn to give warning of his approach. He continued his course and after he had taken the bridge he gave two (2) more successive blasts, as it appeared to him that the man on horseback before him was not observing the rule of the road. Picart saw the automobile coming and heard the warning signals. However, being perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the pony closely up against the railing on the right side of the bridge instead of going to the left. He says that the reason he did this was that he thought he did not have sufficient time to get over to the other side. As the automobile approached, Smith guided it toward his left, that being the proper side of the road for the machine. In so doing, the defendant assumed that the horseman would move to the other side. Seeing that the pony was apparently quiet, the defendant, instead of veering to the right while yet some distance away or slowing down, continued to approach directly toward the horse without diminution of speed. When he had gotten quite near, there being then no possibility of the horse getting across to the other side, the defendant quickly turned his car sufficiently to the right to escape hitting the horse; but in so doing the automobile passed in such close proximity to the animal that it became frightened and turned its body across the bridge, got hit by the car and the limb was broken. The horse fell and its rider was thrown off with some violence. As a result of its injuries, the horse died. The plaintiff received contusions which caused temporary unconsciousness and required medical attention for several days. From a judgment of the lower court of La Union absolving Smith from liability, Picart has appealed. ISSUE: Is Smith guilty of negligence? Is the lower court right in absolving Smith from liability? Explain your