That on or about the 26th day of December, 1965, in the municipality

PRESCRIPTION OF ACTION of Tanay, province of Rizal, Philippines and within the jurisdiction of
this Honorable Court the abovenamed accused conspiring and
G.R. No. L-45674 May 30, 1983 confederating together, with the deliberate intent of bringing one Dr.
Patrocinio Angeles into public discredit, disrepute and contempt,
EMILIANO A. FRANCISCO and HARRY B. BERNARDINO, petitioners, after having knowledge that the wife of one Romulo Cruz who was a
vs. former patient of the Morong Emergency Hospital was operated
THE HONORABLE COURT OF APPEALS and THE PEOPLE OF THE thereat by Dr. Patrocinio Angeles, did then and there wilfully,
PHILIPPINES, respondents. unlawfully and feloniously and publicly speak and utter the
following insulting and defamatory words and expressions, to wit:
Martiniano P. Vivo for petitioners.
Dr. Francisco (To Romulo Cruz):
The Solicitor General for respondents.
Your wife should not have been operated.If I were the doctor, all that I
should have done was to do a curretage raspa on her.

DE CASTRO, J.: Atty. Bernardino:

Petition for review on certiorari of the decision of the Court of Appeals Those doctors are incompetent. They are not surgeons. They are just
dated August 25, 1976 which modified the decision of the lower court by bold.
finding petitioners guilty of the crime of simple slander instead of grave
oral defamation as the former Court of First Instance has held, and Dr. Francisco:
imposed on him a fine of P200.00 with subsidiary imprisonment in case
of insolvency and ordered them to pay complainant the amount of The operation was unusual.
P1,000.00 as moral damages.
Atty. Bernardino:
On February 6, 1966 complainant Dr. Patrocinio Angeles, who was then
the Director of the Morong Emergency Hospital, filed a case for intriguing The doctors who operated on your wife could be charged for murder thru
against honor allegedly committed on December 26, 1965 against Dr. reckless imprudence. The doctors there are no good. They are not
Emiliano Francisco and Atty. Harry Bernardino with the Office of the surgeons.
Provincial Fiscal of Rizal. On May 3, 1966, the Provincial Fiscal filed an
information in the former Court of First Instance of Rizal accusing
thereby imputing upon the offended party, Dr. Patrocinio Angeles, the
Francisco and Bernardino of the crime of grave oral defamation. On
attending physician of the wife of Romulo Cruz and one of the physicians
October 8, 1966 the information upon order of the court, was amended
at the Morong Emergency Hospital, professional incompetence,
by adding the particular statements uttered by each accused allegedly
inefficiency, or negligence thus casting public contempt and ridicule upon
constituting the crime of slander to wit:
the reputation of the said Dr. Patrocinio Angeles.
AMENDED INFORMATION
Contrary to law.
The undersigned Special Counsel accuses Harry Bernardino and
Pasig, Rizal, October 8, 1966,On February 1, 1973 the trial court
Emiliano Francisco of the crime of Grave Oral Defamation, committed as
rendered its decision convicting the accused Harry Bernardino and
follows:
Emiliano Francisco of the crime of grave oral defamation, sentenced
each of them to suffer a penalty of four (4) months of arresto mayor as
minimum to one (1) year and one (1) day of prision correccional as
maximum and each of the accused was directed to pay complainant t the
amount of ten thousand pesos (P10,000.00).
On appeal to the Court of Appeals the decision of the trial court as
already stated was modified finding the accused guilty of simple slander.
As found out by the Court of Appeals, the facts of the case are as follows:
The evidence of the prosecution is that Mrs. Lourdes Cruz, wife of
Romulo Cruz, had been suffering from a vaginal bleeding since
November 24, 1965; that she consulted a Dr. Custodio about her ailment
and the latter was able to stop the bleeding for two days; that thereafter
her bleeding recurred that Mrs. Cruz then consulted a Dr. Floreza who
advised her that if her bleeding continued she should go to a hospital;
that her bleeding continued so on December 9, 1965 Lourdes Cruz
entered the Morong Emergency Hospital that she was attended by Dr.
Patrocinio Angeles, the complainant; that her ailment was tentatively
diagnosed by Dr. Angeles as "H-Mole, abortion and pregnancy"; that an
x-ray examination conducted on Mrs. Cruz, however, revealed that she
was negative for pregnancy; that Mrs. Cruz continued to lose blood and
had to be given a transfusion of fresh blood on December 11, 1965; that
as the bleeding did not stop Mrs. Cruz was operated on by the complaint
Dr. Patrocinio ; that her uterus which contained three (3) dead foetal
triplets was removed that the operation was successful and her bleeding
was arrested, that on December 26, 1965 at about 9:20 o'clock in the
evening the two accused Dr. Emiliano Francisco and Atty. Harry
Bernardino together with Dr. Crisologo Golla and Ernesto Ocampo went
to the house of Mrs. Lourdes Cruz in Tanay, Rizal that the two accused
interviewed Mrs. Cruz and her husband Romulo Cruz about her
operation; that the couple informed the two that they are satisfied with the
operation; that in the course of this interview the accused Dr. Emiliano
Francisco said that the operation was not correctly done and Mrs. Cruz
should not have been operated on and that if he were the one he would
not conduct an operation but only curretage (raspahin); that on the same
occasion the accused Atty. Harry Bernardino that the physicians in
Morong Emergency Hospital were no good, are incompetent and they are
not surgeons and said accused told Romulo Cruz that he could file
charges for murder through reckless imprudence; that the accused Dr.
Francisco was formerly a member of the Courtesy Medical Staff on the
Morong Emergency Hospital and as such he could bring in his private
patients who needed the facility of the hospital for proper management;
that, however, on December 15, 1965 his membership in the said staff
was cancelled by the Credential Committee of said hospital at a meeting
called for that purpose by the complainant Dr. Angeles who was then the
Director of the Morong Emergency Hospital; that the accused Harry
Bernardino, as counsel of a Dr. Lerma, had earlier moved for the ouster
of Dr. Angeles as Director of the Morong Emergency Hospital; that the
case was bitterly contested that it even reached the Office of the
President; that, furthermore, during the incumbency of the accused Atty.
Bernardino as Mayor of Morong, Rizal he caused the passage of a
resolution wherein he was given authority to recommend all charity cases
for admission to the Morong Emergency Hospital and that this resolution,
however, was ignored by the complaint Dr. Angeles in accordance with
the policy of the Director of the Bureau of Medical Services.
The evidence of the defense is that as Chairman of the Ethics Committee
of the Eastern District of Rizal Medical Society, the accused Dr.
Francisco sought to find out what could be done with the reported wrong
operation of Mrs. Lourdes Cruz by complainant Dr. Angeles which
resulted in the removal of triplets; that so the accused Dr. Francisco
consulted the other accused Atty. Bernardino on the proper steps to take;
that upon the advice of accused Atty. Bernardino, the accused Dr.
Francisco accompanied by Dr. Crisologo Golla who was a Committee
member, and the accused, Atty. Bernardino went on December 26, 1965
to Tanay, Rizal the hometown of Mrs. Lourdes Cruz; that they
interviewed the spouses Romulo Cruz and Lourdes Cruz regarding the
operation performed on Mrs. Cruz on December 13, 1965; that in that
interview the two accused sought the facts regarding the case pursuant
to the Ethics Committee decision to conduct the fact finding investigation;
and that after the interview with the Cruz spouses Dr. Golla and the
accused Dr. Francisco went to Dr. Floreza, in coming president of the
Rizal Medical Society on December 27, 1965, to take up the matter with
him but they were advised to take it up with the Eastern District of Rizal
Medical Society, which they did.
On the basis of the foregoing, the Court of Appeals concluded that while
it is true that the statements were made on the occasion of the so-called
fact finding interview pursuant to the Ethics Committee decision, the
accused went out of bounds by imputing to the complainant acts which
are not only derogatory but constitute a crime that can be prosecuted de
oficio. It went on to rule however that the defamation committed by the
accused cannot be considered as grave under the circumstances, and
the worst that was said of the complainant was that he should not have
performed the operation, and that he could be prosecuted for murder
through reckless imprudence.
Not satisfied with the decision of the Court of Appeals, the present case
was instituted. While the case was pending, Atty. Harry Bernardino one
of the petitioners herein died, hence in the resolution of April 10, 1979 the
case was dismissed insofar as he is concerned.
Petitioners' brief, prepared by their counsel with notable zeal raises
several questions. In synthesis, they are:
1. Whether or not the crime of simple slander found by the Court of
Appeals to be the offense committed by the petitioners has prescribed;
2. Whether or not the alleged defamatory remarks of petitioners may be
considered libelous;
3. Whether or not there was conspiracy;
4. Whether or not the failure to allege in the information that petitioners
acted with "malice" is fatal; and
5. Whether or not the Court erred in giving credence to the testimony of
the witnesses for the prosecution.
As the case against the late Harry Bernardino has already been
dismissed, We shall discuss only those matters as may be pertinent to
petitioner Francisco.
Francisco argues that since the Court of Appeals had found that the
offense committed was the lesser offense of simple slander, which
prescribed in two months under Article 90 of the Revised Penal Code, the
said court should have dismissed the case, and sustained the acquittal of
the accused on the ground that said crime had already prescribed. He
pointed out the alleged defamatory remarks were committed on
December 26, 1965, and the information charging the accused of the
greater offense of grave oral defamation was filed with the court more
than four (4) months later on May 3, 1966.
Disputing the foregoing, the Solicitor General contends that for the
purpose of determining the proper prescriptive period, what should be
considered is the nature of the offense charged in the information which
is grave oral defamation, not the crime committed by the accused, as
said crime was found by the Court to constitute only simple slander.
Hence, the period of prescription here should be six (6) months.
Moreover, according to the Solicitor General, the complaint was filed by
the offended party before the Fiscal's office on February 3, 1966 or only
thirty-nine (39) days after the incident in question which is still within the
prescriptive period. He cited the case of People v. Olarte   which 1
overruled the case of People v. del Rosario   and held that the filing of the
2
complaint in the Municipal Court, even if it be merely for purposes of
preliminary examination or investigation should, and does, interrupt the
period of prescription of criminal responsibility, even if the court where
the complaint or information is filed cannot try the case on the merits. It
makes no difference whether the case was filed in the Fiscal's Office and
not in the Municipal Court as in the Olarte case, since Article 91 of the
Revised Penal Code does not require that the complaint be one filed in
court in order to toll the running of the period.
Where an accused has been found to have committed a lesser offense
includible within the offense charged, he cannot be convicted of the
lesser offense, if it has already prescribed. To hold otherwise would be to
sanction the circumvention of the law on prescription by the simple
expedient of accusing the defendant of the graver offense. The principle
has the support of overwhelming authorities in American jurisprudence:
The general rule, as stated in 22 CJS, Criminal Law, sec. 225b, is "as a
general rule, one indicted for an offense not barred by limitation, but
convicted of a lesser included offense which is so barred, is entitled to
discharge", and in 15 Am. Jur., Criminal Law, Sec. 343; "It frequently
happens that a change of felony includes an offense of a lower grade
with a different period of limitation so that, while the felony is not barred,
the statute has ran as to the lesser offense. In this situation, the rule is
that if the statute has not run against the felony, while the lesser offense
is barred. the bar cannot be evaded by the defendant for the felony and
convicting him of the lesser offense." 3
Article 91 of the Revised Penal Code provides that "the period of
prescription shall commence to run from the day on which the crime is
discovered by the offended party, the authorities. or their agents, and
shall be interrupted by the filing of the complaint or information, and shall
commence to run again when such proceedings terminate without the
accused being convicted or acquitted, or are unjustifiably stopped for any
reason not imputable to him."
Interpreting the foregoing provision, this Court in People vs. Tayco   held
4
that the complaint or information referred to in Article 91 is that which is
filed in the proper court and not the denuncia or accusation lodged by the
offended party in the Fiscal's Office. This is so, according to the court,
because under this rule it is so provided that the period shall commence
to run again when the proceedings initiated by the filing of the complaint
or information terminate without the accused being convicted or
acquitted, adding that the proceedings in the Office of the Fiscal cannot
end there in the acquittal or conviction of the accused.
The basis of the doctrine in the Tayco case, however, was disregarded
by this Court in the Olarte case, cited by the Solicitor General. It should
be recalled that before the Olarte case there was diversity of precedents
on the issue of prescription. One view declares that the filing of the
complaint with the justice of the (or municipal judge) does in the course of
prescriptive term. This view is found in People v. Olarte, L-13027, June
30, 1960 and cases cited therein; People vs. Uba, L-13106, October 16,
1959; People v. Aquino, 68 Phil. 588, 590. The other pronouncement is
that to produce interruption, the complainant or information must have
been filed in the proper court that has jurisdiction to try the case on its
merits, found in the cases of People v. del Rosario, L-15140, December
29, 1960; People v. Coquia, L- 15456, June 29, 1963.
The Olarte case set at rest the conflict views, and enunciated the doctrine
aforecited by the Solicitor General. The reasons for the doctrine which
We find applicable to the case at bar reads:
In view of this diversity of precedents, and in order to
provide guidance for Bench and Bar, this Court has re-
examined the question and, after mature consideration,
has arrived at the conclusion that the true doctrine is, and
should be, the one established by the decisions holding
that the filing of the complaint in the Municipal Court, even
if it be merely for purposes of preliminary examination or
investigation, should, and does, interrupt the period of
prescription of the criminal responsibility, even if the court
where the complaint or information is filed can not try the
case on its merits. Several reasons buttress this
conclusion: first, the text of Article 91 of the Revised
Penal Code, in declaring that the period of prescription
"shall be interrupted by the filing of the complaint or
information" without distinguishing whether the complaint
is filed in the court for preliminary examination or
investigation merely, or for action on the merits. Second,
even if the court where the complaint or information is
filed may only proceed to investigate the case, its
actuations already represent the initial step of the
proceedings against the offender. Third, it is unjust to
deprive the injured party of the right to obtain vindication
on account of delays that are not under his control. All
that the victim of the offense may do on his part to initiate
the prosecution is to file the requisite complaint.
And it is no argument that Article 91 also expresses that
the interrupted prescription "shall commence to run again
when such p terminate without the accused being
convicted or acquitted", thereby indicating that the court in
which the complaint or information is filed must have
power to acquit or convict the accused. Precisely, the trial
on the merits usually terminates in conviction or acquittal
not otherwise. But it is in the court conducting a
preliminary investigation where the proceedings may
terminate without conviction or acquittal if the court should
discharge the accused because no prima facie case has
been shown.
As is a well-known fact, like the proceedings in the court conducting a p
investigation, a proceeding in the Fiscal's Office may terminate without
conviction or acquittal.
As Justice Claudio Teehankee has observed:
To the writer's mind, these reasons logically call with
equal force, for the express overruling also of the doctrine
in People vs. Tayco, 73 Phil. 509, (1941) that the filing of
a complaint or denuncia by the offended party with the
City Fiscal's Office which is required by law to conduct the
preliminary investigation does not interrupt the period of
prescription. In chartered cities, criminal prosecution is
generally initiated by the filing of the complaint or
denuncia with the city fiscal for preliminary investigation.
In the case of provincial fiscals, besides being
empowered like municipal judges to conduct preliminary
investigations, they may even reverse actions of
municipal judges with respect to charges triable by Courts
of First Instance. ... 
5
Clearly, therefore, the firing of the denuncia or complaint for intriguing
against honor by the offended party, later changed by the Fiscal to grave
oral defamation, even if it were in the Fiscal's Office, 39 days after the
alleged defamatory remarks were committed (or discovered) by the
accused interrupts the period of prescription.
Nevertheless, petitioner Francisco cannot be held liable, for his
statements —
Your wife would not have been operated, If I were the doctor, all that I
should have done was to do a curretage raspa on her.
xxx xxx xxx
The operation was unusual.
are clearly not libelous per se. Complainant Angeles had admitted that he
committed a mistake in the management of the case of Mrs. Cruz. The
remarks made by Francisco were but a harmless expression of his
opinion on what should have been done in treating her, if he were the
doctor managing her. His statements were nothing more than a comment
that complainant committed a mistake in the diagnosis and management
of the patient. An impartial observer would readily note that such remarks
do not degrade the competency of a doctor, for the latter, because of
human limitations cannot be expected to be accurate at all times in the
diagnosis of patients. As noted in the case of Blende vs. Hearst
Publications, 93 P 2d. 733, a "physician is only required to possess the
ordinary knowledge and skill of his profession, and is not liable for
mistakes if he uses the methods recognized and approved by those
reasonably skilled in the profession. Clearly, a criticism in a physician's
wrong management of the case, such as that of Francisco cannot be
considered libelous. In the same American case, it was held:
It is clear that to charge a physician merely with the mismanagement of
the making of a wrong diagnosis in a particular case is not of itself
actionable. Such a charge implies nothing more, at most, than ignorance
or unskillfulness in that case, and does not materially affect his reputation
as respects his general competency to practice his profession.
To charge a professional man with negligence or unskillfulness in the
management or treatment of an individual case is not more than to
impute to him the mistakes and errors incident to fallible human nature.
The most eminent and skillfull physician or surgeon may make mistake
on the symptoms of a particular case without detracting from his general
professional skill or learning. To say of him, therefore, that he was
mistaken in that case would not be calculated to impair the confidence of
the community in his general professional competency.
We cannot see our way clear on how Francisco's questioned statements
could be branded as libelous. To stigmatize them as libelous would be a
dangerous precedent whereby a mere criticism on the actuation of
another will generate criminal liability for slander. His alleged defamatory
remarks may be likened to a criticism of a lawyer's or Judge's erroneous
handling of the case.
It may be mentioned here that in the brief of the Solicitor General, the
statements quoted and stigmatized as defamatory are those only of
accused Bernardino.   That latter's statements are what the Solicitor
6
General considered as "strong words that are evidently serious and
damaging." Nothing has been said by the Solicitor General regarding the
statements uttered by Francisco. Nonetheless, the Solicitor General
would like to hold Francisco liable by the utterances of Bernardino on the
ground of conspiracy. Assuming that Bernardino's statement is libelous,
Francisco cannot be held liable for the same. Neither the lower court nor
the Court of Appeals found that they conspired with each other to commit
the alleged crane. This is so because no evidence was offered to show
that there was prior consultation on what each would say. The fact alone
that they were together when those words were uttered is not proof that
there was conspiracy to utter those words. Clearly, each accused spoke
spontaneously and individually.
Conspiracy being of a very far-reaching effect, the degree of proof
required for establishing it must be the same as that required to support a
finding of guilt for the crime itself   which must be upon proof beyond
7
reasonable doubt.  8
The finding of the Court of Appeals that the "statements were made on
the occasion of the so-called fact-finding interview pursuant to the Ethics
Committee decision" is obviously incompatible with the notion that
petitioners had gone to the residence of the Cruz pursuant to a
conspiracy to defame or slander Dr. Angeles. The legitimate purpose of
going to Tanay, Rizal, having been accepted as a fact by the Court of
Appeals, it is incongruous to allege, as respondents now do, that Atty.
Bernardino and Dr. Francisco had conspired to slander Dr. Angeles.
From what has been said, there is no further need to discuss the other
issues raised in this case.
WHEREFORE, in view of the foregoing, accused Emiliano Francisco is
hereby acquitted, with cost de oficio.

SO ORDERED.

G.R. No. L-37682 March 29, 1974

REPUBLIC OF THE PHILIPPINES, Represented by the DIRECTOR OF

LANDS, petitioner,
vs.
HON. PEDRO SAMSON ANIMAS, in his capacity as Judge of CFI South
Cotabato, Branch I, General Santos City, ISAGANI DU TIMBOL and the
REGISTER OF DEEDS OF GENERAL SANTOS CITY, respondent.

Office of the Solicitor General Estelito P. Mendoza, Assistant Solicitor General

Santiago M. Kapunan and Solicitor Patricio M. Patajo for petitioner.

Quitain Law Office for private respondent.


ESGUERRA, J.:p
Petition to review the order of the Court of First Instance of South Cotabato, Branch I, General Santos
City, dated June 22, 1973, dismissing the complaint in its Civil Case No. 1253, entitled "Republic of the
Philippines, Plaintiff, vs. Isagani Du Timbol and the Register of Deeds of General Santos City,
Defendants", instituted by the plaintiff to declare null and void Free Patent No. V-466102 and Original
Certificate of Title (O.C.T.) No. P-2508 based thereon issued in the name of defendant Isagani Du
Timbol; to order the aforesaid defendant to surrender the owner's duplicate of O.C.T. No. P-2508 and
the defendant Register of Deeds to cancel the same; to decree the reversion of the land in question to
the mass of public domain, and granting such further relief as may be just and equitable in the
premises.
The land covered by the free patent and title in question was originally
applied for by Precila Soria, who on February 23, 1966, transferred her
rights to the land and its improvements to defendant Isagani Du Timbol
who filed his application therefor on February 3, 1969, as a transferee
from Precila Soria.
On December 12, 1969, free Patent No. V-466102 was issued by the
President of the Philippines for the land in question, and on July 20,
1970, after transmittal of the patent to the Register of Deeds of General
Santos City, Original Certificate of Title (O.C.T.) No. P-2508 was issued
in the name of defendant Isagani Du Timbol.
On August 5, 1971, the Republic of the Philippines, at the instance of the
Bureau of Forestry, filed a complaint in the Court of First Instance of
Cotabato, Branch I, General Santos City (Civil Case No. 1253), to
declare free patent No. V-466102 and Original Certificate of Title No. P-
2508 in the name of defendant Isagani Du Timbol null and void ab
initio and to order the reversion of the land in question to the mass of
public domain. The action is based on the ground that the land covered
thereby is a forest or timber land which is not disposable under the Public
Land Act; that in a reclassification of the public lands in the vicinity where
the land in question is situated made by the Bureau of Forestry on March
7, 1958, the said land was plotted on Bureau of Forestry map L.C. 700 to
be inside the area which was reverted to the category of public forest,
whereas the application for free patent by Isagani Du Timbol was filed on
June 3, 1969, or more than eleven years thereafter; that the said patent
and title were obtained fraudulently as private respondent Isagani Du
Timbol never occupied and cultivated the land applied for.
Invoking the case of Ramirez vs. Court of Appeals (G.R. No. L-28591, 30
SCRA 207-301), holding that a certificate of title fraudulently secured is
not null and void ab initio, unless the fraud consisted in misrepresenting
that the land covered by the application is part of the public domain when
it is not, the respondent court dismissed the complaint on the ground that
Certificate of Title based on the patent had became indefeasible in view
of the lapse of the one-year period prescribed under Section 38 of the
Land Registration Act for review of a decree of title on the ground of
fraud. From this order of June 22, 1973, dismissing the complaint, plaintiff
Republic of the Philippines has appealed to this Court for review.
After careful deliberation, this Court grants the petition on the ground that
the area covered by the patent and title is not disposable public land, it
being a part of the forest zone and, hence the patent and title thereto are
null and void.
The defense of indefeasibility of a certificate of title issued pursuant to a
free patent does not lie against the state in an action for reversion of the
land covered thereby when such land is a part of a public forest or of a
forest reservation. As a general rule, timber or forest lands are not
alienable or disposable under either the Constitution of 1935 or the
Constitution of 1973. Although the Director of Lands has jurisdiction over
public lands classified as agricultural under the constitution, or alienable
or disposable under the Public Land Act, and is charged with the
administration of all laws relative thereto, mineral and timber lands are
beyond his jurisdiction. It is the Bureau of Forestry that has jurisdiction
and authority over the demarcation, protection, management,
reproduction, occupancy and use of all public forests and forest
reservations and over the granting of licenses for the taking of products
therefrom, including stone and earth (Section 1816 of the Revised
Administrative Code). That the area in question is a forest or timber land
is clearly established by the certification made by the Bureau of Forest
Development that it is within the portion of the area which was reverted to
the category of forest land, approved by the President on March 7, 1958.
When the defendant Isagani Du Timbol filed his application for free
patent over the land in question on June 3, 1969, the area in question
was not a disposable or alienable public land but a public forest. Titles
issued to private parties by the Bureau of Lands when the land covered
thereby is not disposable public land but forest land are void ab initio.
In Gatchalian vs. Pavilen, et al., L-17619, Oct. 31, 1962, 6 SCRA p. 508,
512, this Court said:
And if it be true that the Bureau of Lands had no
jurisdiction to issue a patent because the land involved
was still inalienable forest land when granted, then it may
be plausibly contended that the patent title would be ab
initio void, subject to attack at any time by any party
 adversely affected. (Gatchalian vs. Pavilen, et al., L-
17619, Oct. 31, 1962, supra, citing Civil Code Arts. 1409
and 1421; Vaño vs. Insular Gov't., 41 Phil. 161; Aderable
vs. Director of Forestry, L-13663, March 25, 1960).
A patent is void at law if the officer who issued the patent had no
authority to do so (Knight vs. Land Ass., 142 U.S. 161, 12 Sup. Ct., 258,
35L ED. 974; emphasis supplied). If a person obtains a title under the
Public Land Act which includes, by mistake or oversight, lands which
cannot be registered under the Torrens System, or when the Director of
Lands did not have jurisdiction over the same because it is a public
forest, the grantee does not, by virtue of said certificate of title alone,
become the owner of the land illegally included. (See Ledesma vs.
Municipality of Iloilo, 49 Phil. 769)
The case of Ramirez vs. Court of Appeals, G. R. No. L-28591, Oct. 31,
1969, 30 SCRA 297, relied upon by respondent Court in dismissing this
case, is not controlling. In that case no forest land was involved but
agricultural public land which was first covered by a patent issued to one
party and later registered under the Torrens System by the other party.
The litigation was between private parties where the party who registered
it under Act No. 496 sought the nullity of the title of the patentee under
the Public Land Act. In the case at bar the party seeking the nullity of the
title and reversion of the land is the state itself which is specifically
authorized under Section 101 of the Public Land Act to initiate such
proceedings as an attribute of sovereignty, a remedy not available to a
private individual.
The complaint alleges in its paragraph 8 that applicant Isagani Du Timbol
was never in possession of the property prior to his filing the application,
contrary to the provisions of law that the applicant must have been in
possession or cultivation thereof for at least 30 years; that the applicant,
after diligent search by the Acting Chief of the Survey-Party, Francisco R.
Alcones, in South Cotabato, could not be contacted because he is a
resident of Davao City; that there are no existing signs of improvements
found in the area in question as it is not under cultivation but covered with
grasses, bushes and small trees; that it is being used as ranch for
grazing cows by the heirs of Hermogenes Chilsot; that no monuments
were placed on the area surveyed which goes to show that there was no
actual survey thereof; that the property in question is inside the ranch of
the heirs of Hermogenes Chilsot under Pasture Lease Agreement No.
1244 and, therefore, inside the forest zone; and that said ranch has a
fence around it to show that other persons could not enter and cultivate
the same, and that the signature of then Acting District Land Officer Elias
de Castro of South Cotabato has been forged to facilitate the issuance of
patent in favor of Isagani Du Timbol.
The above alleged circumstances are indicative of fraud in the filing of
the application and obtaining title to the land, and if proven would
override respondent Judge's order dismissing the case without hearing.
The misrepresentations of the applicant that he had been occupying and
cultivating the land and residing thereon are sufficient grounds to nullify
the grant of the patent and title under Section 91 of the Public Land Law
which provides as follows:
That statements made in the application shall be
considered as essential conditions or parts of any
concession, title or permit issued on the basis of such
application, and any false statement thereon or omission
of facts, changing, or modifying the consideration of the
facts set forth in such statement, and any subsequent
modification, alteration, or change of the material facts set
forth in the application shall ipso facto produce the
cancellation of the concession, title or permit granted. ...
A certificate of title that is void may be ordered cancelled. A title will be
considered void if it is procured through fraud, as when a person applies
for registration of the land under his name although the property belongs
to another. In the case of disposable public lands, failure on the part of
the grantee to comply with the conditions imposed by law is a ground for
holding such title void (Director of Lands vs. Court of Appeals, et al., G.R.
No. L-17696, May 19, 1966, 17 SCRA, 71, 79-80; emphasis supplied).
The lapse of the one year period within which a decree of title may be
reopened for fraud would not prevent the cancellation thereof, for to hold
that a title may become indefeasible by registration, even if such title had
been secured through fraud or in violation of the law, would be the height
of absurdity. Registration should not be a shield of fraud in securing title.
(J. M. Tuason & Co., Inc. vs. Macalindog, L-15398, December 29, 1962,
6 SCRA 938, page 38).
Considering that it is the state is seeking the cancellation of the title of
respondent Isagani Du Timbol, said title has not become indefeasible for
prescription cannot be invoked against the state. A title founded on fraud
may be cancelled, notwithstanding the lapse of one year from the
issuance thereof, through a petition filed in court by the Solicitor General,
(Sumail vs. Court of First Instance of Cotabato, 51 O.G. p. 2414 Phil. L-
8278. 96 Phil. 946: Eugenio, et al., vs. Perdido, et al., G. R. No. L-7083,
May 19, 1955; De los Santos vs. Roman Catholic Church of Midsayap
G.R. No. L-6088, Feb. 24, 1954, 94 Phil. 405).

Public land fraudulently included in patents or certificates of title may be

recovered or reverted to the state in accordance with Section 101 of the
Public Land Act (Director of Lands vs. Jugado et al., G.R. No. L-14707,
May 23, 1961). Prescription does not lie against the state in such cases
for the Statute of Limitations does not run against the state (Article 1108,
paragraph 4 of the New Civil Code). The right of reversion or
reconveyance to the state is not barred prescription (Republic of the
Philippines vs. Ramona Ruiz, et al., G.R. No. L-23712, April 29, 1968, 23
SCRA 348. People vs. Ramos, G.R. No. L-15484, Jan. 31, 1963, 47
SCRA 12; Government of the Philippines vs. Monte de Piedad 35 Phil.
728; 751-753).

Even granting that the title of private respondent Isagani Du Timbol can
no longer be reopened under the Land Registration Act, the land covered
thereby may be reconveyed to the state in an action for reconveyance
under Section 101 of Commonwealth Act 141 (Public Land Act), for the
remedy of reconveyance is adequately covered by the prayer of the
complaint for the grant of such other relief as may be just and equitable in
the premises.

FOR ALL THE FOREGOING, the order of the respondent court, dated
June 22, 1973, dismissing the complaint, and that of September 29,
1973, denying the motion for its reconsideration, both issued in Civil
Case No. 1253 of the respondent court, are hereby annulled and set
aside. The respondent court shall proceed to hear said Civil Case and
render judgment thereon accordingly.

Costs against respondent Isagani Du Timbol.

LILIAN CAPITLE, SOFRONIO CORREJADO,

ARTEMIO CORREJADO, VICENTE
CORREJADO, CECILIA CORREJADO, GLORIA
VDA. DE BEDUNA, ROGELIA CORREJADO,
MANUEL CORREJADO, RODOLFO
CORREJADO, TERESITA C. AMARANTE,
JUANITA CORREJADO AND JULIETA C.
PEREGRINO, Petitioners, v. JULIETA VDA. DE
GABAN, JULIA CORREJADO AND
HERMINIGILDO CORREJADO, Respondents.
DECISION
CARPIO-MORALES, J.:
Fabian Correjado (Fabian) inherited from his
father Santos Correjado two parcels of land
subject of the case at bar, Lot No. 1782-B of the
Pontevedra Cadastre and Lot No. 952 of the
Hinigaran Cadastre containing 26,728 sq. m. and
55,591 sq. m., respectively.
Fabian died intestate in 1919.He was survived by
four children, namely:Julian, Zacarias, Francisco
and Manuel, all surnamed Correjado.
After Fabians death in 1919, his son Julian
occupied and cultivated the two subject parcels of
land (the property) until his death in 1950.He
was survived by three children, namely, herein
respondents Julieta vda. de Gaban (Julieta), Julia
Correjado (Julia) and Hermegildo Correjado.
Julians brother Francisco died in 1960.He was
survived by herein petitioners Manuel Correjado,
Teresita C. Amarante, Juanita Correjado, Rodolfo
Correjado, and Jileta Peregrino.
Julians brother Zacarias died in 1984.He was
survived by the other petitioners herein, Aurora
P. vda. de Correjado, Lilia Capitle, Artemio
Correjado, Cecilia Correjado, Rogelia Correjado
(Rogelia), Sofronio Correjado, Vicente Correjado
and Gloria vda. de Beduna.
On November 26, 1986, petitioners filed a
complaint1 for partition of the property and
damages before the Regional Trial Court (RTC) of
La Carlota City against respondents, alleging that
Fabian contracted two marriages, the first with
Brigida Salenda who was the mother of Julian,
and the subsequent one with Maria Catahay
(Maria) who was the mother of Zacarias, Manuel
and Francisco; that the property remained
undivided even after the death of Julian in 1950,
his children-herein respondents having arrogated
unto themselves the use and enjoyment of the
property, to the exclusion of petitioners; and that
respondents refused to deliver petitioners share
in the property despite demands therefor and for
partition.
To the Complaint respondents countered in their
Answer2 that in the proceedings in the intestate
estate of their great grandfather Santos
Correjado, petitioners were not adjudicated any
share in the property, for Maria, the mother of
petitioners respective fathers Francisco and
Zacarias, was just a mistress of Fabian, hence,
Francisco and Zacarias (as well as Manuel) were
illegitimate who were not entitled to inherit under
the old Civil Code (Spanish Civil Code of 1889).
By Decision of December 29, 1992,3 Branch 63 of
the La Carlota City RTC dismissed the complaint
upon the grounds of prescription and laches.
On appeal to the Court of Appeals wherein
petitioners raised as sole error of the trial court
its dismissal of the complaint without basis in fact
and in law, the appellate court, by Decision of
August 29, 2000,4 dismissed the appeal and
affirmed the decision of the trial court.
In affirming the decision of the trial court,
appellant passed upon the issue of legitimacy of
the brothers Francisco and Zacarias (as well as of
their brother Manuel) in order to determine
whether they co-owned the property with Julian,
illegitimate children not being entitled to inherit
under the Spanish Civil Code of 18895 which was
in force when the brothers father Fabian died in
1919.
The appellate court found that respondents failed
to discharge the onus of proving that Francisco
and Zacarias were illegitimate.But it too found
that petitioners also failed to prove that Zacarias
and Francisco were legitimate.
Upon the disputable presumption, however, that
a man and a woman deporting themselves as
husband and wife have entered into a lawful
contract of marriage,6 the appellate court
presumed that Fabian and Maria were lawfully
married, hence, their children Zacarias and
Francisco (as well as Manuel) -predecessors-in-
interest of petitioners were legitimate children
and, therefore, they co-owned with Julian the
property.
Its finding of co-ownership of the property by the
predecessors-in-interest of the parties
notwithstanding, the appellate court held that, as
did the trial court, prescription and laches had set
in, ratiocinating as follows:
ςηαñrοblεš νιr†υαl  lαω lιbrαrÿ
It is a hornbook doctrine that the possession of a
co-owner is like that of a trustee and shall not be
regarded as adverse to the other co-owners but
in fact as beneficial to all of them so much so that
each co-owner may demand at anytime the
partition of the common property and that this
implies that an action to demand partition is
imprescriptible or cannot be barred by laches
(Salvador v. Court of Appeals, 243 SCRA 23; De
Castro v. Echarri, 20 Phil. 23).
While the right of action to demand partition does
not
prescribe, acquisitive prescription may set in whe
re one of the co-
owners openly and adversely occupies
the property without recognizing the co-
ownership (Cordova v. Cordova, 102 Phil. 1182;
Heirs of Segunda Manungding v. Court of
Appeals, 276 SCRA 601), The statute of
limitations operates, as in other cases, from the
moment such adverse title is asserted by the
possessor of the property (Ramos v. Ramos, 45
Phil. 362; Bargayo v. Camumot, 40 Phil. 857).
The elements constituting adverse possession by
a co-owner against another co-owner or cestui
que trust  are:(1) that he has performed
unequivocal acts of repudiation amounting to an QShe is presently in possession of the said lot? chanroblesvirtualawlibrary

ouster of the cestui que trust or other co-owners;

(ii) that such positive acts of repudiation have AYes, sir.
been made known to the cestui que trust or the QCan you tell us since when did she possess that
other co-owners; and (iii) that the evidence land? chanroblesvirtualawlibrary

thereon must be clear and convincing (Salvador

v. Court of Appeals, supra). A1980.

Granting that appellants, as well as their QPrevious to that, can you tell us if she was in
predecessors-in-interest, were initially co-owners possession of the said land? chanroblesvirtualawlibrary

of the disputed property,

AYes, sir.She has been in possession of the said
nevertheless, acquisitive prescription in favor of a
lot before 1980.
ppellees had already set in. Appellees
had performed unequivocal acts of repudiation.Th QWas there a period of years that you have been
is is shown by the unrebutted testimony of in possession of the said land? chanroblesvirtualawlibrary

[herein respondent] Julia who declared that her

brother Atilano (deceased) introduced [ANo, sir.We have never been in possession of
improvements on the disputed property and the the said land.]
fact that appellees and xxx
their father Julian paid the realty taxes thereon a
s exclusive owners thereof.Moreover, applicants QWere you
admitted in paragraph 12 of the Complaint able to gather benefits from that land? chanroblesvirtualawlibrary

that after Julians death (in 1950),
AWe never benefited.
appellees arrogated unto themselves the use and 
enjoyment of the disputed property, to the exclus QSince when have you not benefited from that la
ion of appellants.This admission is bolstered by nd?chanroblesvirtualawlibrary

[herein petitioner] Rogelias testimony, as

follows:ςηαñrοblεš  νιr†υαl  lαω lιbrαrÿ
ASince 1919.

QBy the way you said that you are going to xxx
recover this 1/6 share from Julieta vda. de QBy the way, can you tell us since when you hav
Gaban.Why, is she in possession of this land? chanroblesvirtualawlibrary

e been deprived of that land, from what year? chanroblesvirtualawlibrary

AYes, sir.
AFrom 1919 to 1990. (TSN, January 9, 1990, pp.
51-55). (Underscoring supplied)7  ςrνll
Petitioners filed a motion for reconsideration8 of
the appellate courts decision upon the ground
that THIS CASE HAS BEEN OVERTAKEN BY
EVENTS, PARTICULARLY ART. 19 OF THE [NEW]
CIVIL CODE which reads: ςηαñrοblεš  νιr†υαl  lαω lιbrαrÿ
ART. 19.Every person, must be in the exercise of
his rights and in the performance of his duties,
act with justice, give everyone his due, and
observe honesty and good faith,
citing some cases in support thereof.
Finding the invocation of Art. 19 misplaced, the
appellate court, by Resolution of February 7,
2001,9 denied the Motion for Reconsideration,
hence, the present petition10 proffering the
following
ISSUES FOR RESOLUTION
I 1919: ςηαñrοblεš νιr†υαl  lαω lιbrαrÿ
WHETHER OR NOT RELIANCE ON ART. 19 OF THE
CIVIL CODE ISMISPLACED.
II
WHETHER IN RESOLVING CASES, THE ISSUE OF
MORALITY OF THE ACT DOES NOT COME INTO
PLAY.
III
WHETHER OR NOT LACHES IS APPLICABLE IN
THE CASE AT BAR.11  ςrνll
Petitioners contend that [t]here is such a thing as
morality that comes into play, as after all, the
appellate court found the parties to be first
cousins and, therefore, following Art. 19 of the
Civil Code, petitioners should get their share in
the property.
Petitioners further contend that laches is not
strictly applied when it comes to close relations,
citing Gallardo v. IAC, 155 SCRA 248.
The petition fails.
Article 19 of the Civil Code in Chapter 2 on
Human Relations is a statement of principle that
supplements but does not supplant a specific
provision of law.
With respect to rights to the inheritance of a
person who died before the effectivity on August
30, 1950 of the Civil Code like Fabian who died in
Art. 2263, New Civil Code
ART. 2263.Rights to the inheritance of a person
who died, with or without a will, before the
effectivity of this Code, shall be governed by the
Civil Code of 1889, by other previous laws, and
by the Rules of Court. x x x
ART. 807, Spanish Civil Code of 1889
ART 807.The following are forced heirs: ςηαñrοblεš νιr†υαl  lαω lιbrαrÿ adverse possession thereof for thirty years,
without need of title or of good faith.
1.Legitimate children and descendants, with
respect to their legitimate parents and Assuming arguendo  that petitioners respective
ascendants; chanroblesvirtuallawlibrary fathers Francisco and Zacarias were legitimate
and, therefore, were co-owners of the
2. In default of the foregoing, legitimate parents property:From the moment co-owner Julian
and ascendants, with respect to their legitimate occupied in 1919 and claimed to be the absolute
children and descendants; chanroblesvirtuallawlibrary

and exclusive owner of the property and denied

The widower or widow, natural children legally his brothers any share therein up to the time of
acknowledged, and the father or the mother of his death in 1950, the question involved is no
the latter, in the manner and to the extent longer one of partition but of ownership in which
established by Articles 834, 835, 836, 837, 840, case imprescriptibility of the action for partition
841, 842, and 846. can no longer be invoked.The adverse possession
by Julian and his successors-in-interest- herein
ART. 939, Spanish Civil Code of 1889, respondents as exclusive owner of the property
having entailed a period of about 67 years at the
ART. 939.In the absence of legitimate
time of the filing of the case at bar in 1986,
descendants and ascendants, the natural children
ownership by prescription had vested in them.12 
legally acknowledged and those legitimated by
ςrνll

royal concession shall succeed to the entire As for estoppel by laches which is a creation of
estate of the deceased. equity,13 since laches cannot interfere with the
running of the period of prescription, absent any
With respect to prescription:
conduct of the parties operating as estoppel,14 in
ςηαñrοblεš  νιr†υαl  lαω lιbrαrÿ

Art. 1134, New Civil Code light of the prescription of petitioners action,
discussion thereof is dispensed with.Suffice it to
ART. 1134.Ownership and other real rights over state that while laches may not be strictly applied
immovable property are acquired by ordinary between near relatives, under the facts and
prescription through possession of ten years. circumstances of the case, especially the
Art. 1137, New Civil Code uncontroverted claim of respondents that their
father Julian, and the documented claim of
ART. 1137.Ownership and other real rights over respondent Julieta, had paid realty taxes on the
immovables also prescribe through uninterrupted property as exclusive owner, as well as the
admission of petitioner Rogelia that, as quoted
above, she and her co-petitioners never benefited
or were deprived of any benefits from the
property since 1919 up to the time of the filing
ofthe case in 1986 before the RTC or for a period
of 67 years, despite demands therefor, even an
extremely liberal application of laches would bar
the filing of the case.
G.R. No. 11263             November 2, 1916
WHEREFORE, the petition is hereby DISMISSED
and the decision of the Court of Appeals is ELOISA GOITIA DE LA CAMARA, plaintiff-appellant,
AFFIRMED. vs.
JOSE CAMPOS RUEDA, defendant-appellee.
SO ORDERED.
Eduardo Gutierrez Repide and Felix Socias for appellant.
Sanz, Opisso and Luzuriaga for appellee.

TRENT, J.:

This is an action by the wife against her husband for support outside of
the conjugal domicile. From a judgment sustaining the defendant's
demurrer upon the ground that the facts alleged in the complaint do not
state a cause of action, followed by an order dismissing the case after the
plaintiff declined to amend, the latter appealed.

It was urged in the first instance, and the court so held, that the
defendant cannot be compelled to support the plaintiff, except in his own
house, unless it be by virtue of a judicial decree granting her a divorce or
separation from the defendant.

The parties were legally married in the city of Manila on January 7, 1915,
and immediately thereafter established their residence at 115 Calle San
Marcelino, where they lived together for about a month, when the plaintiff
returned to the home of her parents. The pertinent allegations of the
complaint are as follows:
 That the defendant, one month after he had contracted marriage
with the plaintiff, demanded of her that she perform unchaste and
lascivious acts on his genital organs; that the plaintiff spurned the
obscene demands of the defendant and refused to perform any
act other than legal and valid cohabitation; that the defendant,
since that date had continually on other successive dates, made
similar lewd and indecorous demands on his wife, the plaintiff,
who always spurned them, which just refusals of the plaintiff
exasperated the defendant and induce him to maltreat her by
word and deed and inflict injuries upon her lips, her face and
different parts of her body; and that, as the plaintiff was unable by
any means to induce the defendant to desist from his repugnant
desires and cease from maltreating her, she was obliged to leave
the conjugal abode and take refuge in the home of her parents.
Marriage in this jurisdiction is a contract entered into in the manner and
with the solemnities established by General Orders No. 68, in so far as its
civil effects are concerned requiring the consent of the parties. (Garcia
vs. Montague, 12 Phil. Rep., 480, citing article 1261 of Civil Code.) Upon
the termination of the marriage ceremony, a conjugal partnership is
formed between the parties. (Sy Joc Lieng vs. Encarnacion, 16 Phil.
Rep., 137.) To this extent a marriage partakes of the nature of an
ordinary contract. But it is something more than a mere contract. It is a
new relation, the rights, duties, and obligations of which rest not upon the
agreement of the parties but upon the general law which defines and
prescribes those rights, duties, and obligations .Marriage is an institution,
in the maintenance of which in its purity the public is deeply interested. It
is a relation for life and the parties cannot terminate it at any shorter
period by virtue of any contract they may make .The reciprocal rights
arising from this relation, so long as it continues, are such as the law
determines from time to time, and none other. When the legal existence
of the parties is merged into one by marriage, the new relation is
regulated and controlled by the state or government upon principles of
public policy for the benefit of society as well as the parties. And when
the object of a marriage is defeated by rendering its continuance
intolerable to one of the parties and productive of no possible good to the
community, relief in some way should be obtainable. With these
principles to guide us, we will inquire into the status of the law touching
and governing the question under consideration.
Articles 42 to 107 of the Civil Code are not in force in the Philippine
Islands (Benedicto vs. De la Rama, 3 Phil .Rep., 34). Articles 44 to 78 of
the Law of Civil Marriage of 1870, in force in the Peninsula, were
extended to the Philippine Islands by royal decree on April 13, 1883
(Ebreo vs. Sichon, 4 Phil. Rep., 705). Articles 44, 45, and 48 of this law
read:
ART. 44. The spouses are obliged to be faithful to each other and
to mutually assist each other.
ART. 45. The husband must live with and protect his wife. (The
second paragraph deals with the management of the wife's
property.)
ART. 48. The wife must obey her husband, live with him, and
follow him when he charges his domicile or residence.
Notwithstanding the provisions of the foregoing paragraph, the
court may for just cause relieve her from this duty when the
husband removes his residence to a foreign country.
And articles 143 and 149 of the Civil Code are as follows:
ART. 143. The following are obliged to support each other
reciprocally to the whole extent specified in the preceding article.
1. The consorts.
xxx     xxx     xxx
ART. (149) 49. The person obliged to give support may, at his
option, satisfy it, either by paying the pension that may be fixed or
by receiving and maintaining in his own home the person having
the right to the same.
Article 152 of the Civil Code gives the instances when the obligation to
give support shall cease. The failure of the wife to live with her husband
is not one of them.
The above quoted provisions of the Law of Civil Marriage and the Civil
Code fix the duties and obligations of the spouses. The spouses must be
faithful to, assist, and support each other. The husband must live with
and protect his wife. The wife must obey and live with her husband and
follow him when he changes his domicile or residence, except when he
removes to a foreign country. But the husband who is obliged to support
his wife may, at his option, do so by paying her a fixed pension or by
receiving and maintaining her in his own home. May the husband, on
account of his conduct toward his wife, lose this option and be compelled
to pay the pension? Is the rule established by article 149 of the Civil
Code absolute? The supreme court of Spain in its decision of December
5, 1903, held:.
That in accordance with the ruling of the supreme court of Spain
in its decisions dated May 11, 1897, November 25, 1899, and
July 5, 1901, the option which article 149 grants the person,
obliged to furnish subsistence, between paying the pension fixed
or receiving and keeping in his own house the party who is
entitled to the same, is not so absolute as to prevent cases being
considered wherein, either because this right would be opposed
to the exercise of a preferential right or because of the existence
of some justifiable cause morally opposed to the removal of the
party enjoying the maintenance, the right of selection must be
understood as being thereby restricted.
Whereas the only question discussed in the case which gave rise
to this appeal was whether there was any reason to prevent the
exercise of the option granted by article 149 of the Civil Code to
the person obliged to furnish subsistence, to receive and maintain
in his own house the one who is entitled to receive it; and
inasmuch as nothing has been alleged or discussed with regard
to the parental authority of Pedro Alcantara Calvo, which he ha
not exercised, and it having been set forth that the natural father
simply claims his child for the purpose of thus better attending to
her maintenance, no action having been taken by him toward
providing the support until, owing to such negligence, the mother
was obliged to demand it; it is seen that these circumstances,
together with the fact of the marriage of Pedro Alcantara, and that
it would be difficult for the mother to maintain relations with her
daughter, all constitute an impediment of such a nature as to
prevent the exercise of the option in the present case, without
prejudice to such decision as may be deemed proper with regard
to the other questions previously cited in respect to which no
opinion should be expressed at this time.
The above was quoted with approval in United States and De Jesus vs.
Alvir (9 Phil. Rep., 576), wherein the court held that the rule laid down in
article 149 of the Civil Code "is not absolute." but it is insisted that there
existed a preexisting or preferential right in each of these cases which
was opposed to the removal of the one entitled to support. It is true that
in the first the person claiming the option was the natural father of the
child and had married a woman other than the child's mother, and in the
second the right to support had already been established by a final
judgment in a criminal case. Notwithstanding these facts the two cases
clearly established the proposition that the option given by article 149 of
the Civil Code may not be exercised in any and all cases.
Counsel for the defendant cite, in support of their contention, the decision
of the supreme court of Spain, dated November 3, 1905. In this case Don
Berno Comas, as a result of certain business reverses and in order no to
prejudice his wife, conferred upon her powers to administer and dispose
of her property. When she left him he gave her all the muniments of title,
mortgage credits, notes, P10,000 in accounts receivable, and the key to
the safe in which he kept a large amount of jewels, thus depriving himself
of all his possessions and being reduced in consequence to want.
Subsequently he instituted this civil action against his wife, who was then
living in opulence, for support and the revocation of the powers
heretofore granted in reference to the administration and disposal of her
property. In her answer the wife claimed that the plaintiff (her husband)
was not legally in a situation to claim support and that the powers
voluntarily conferred and accepted by her were bilateral and could not be
canceled by the plaintiff. From a judgment in favor of the plaintiff the
defendant wife appealed to the Audencia Territorial wherein, after due
trial, judgment was rendered in her favor dismissing the action upon the
merits. The plaintiff appealed to the supreme court and that high tribunal,
in affirming the judgment of the Audencia Territorial, said:
Considering that article 143, No. 1, of the Civil Code, providing
that the spouses are mutually obliged to provide each other with
support, cannot but be subordinate to the other provisions of said
Code which regulates the family organization and the duties of
spouses not legally separated, among which duties are those of
their living together and mutually helping each other, as provided
in article 56 of the aforementioned code; and taking this for
granted, the obligation of the spouse who has property to furnish
support to the one who has no property and is in need of it for
subsistence, is to be understood as limited to the case where, in
accordance with law, their separation has been decreed, either
temporarily or finally and this case, with respect to the husband,
cannot occur until a judgment of divorce is rendered, since, until
then, if he is culpable, he is not deprived of the management of
his wife's property and of the product of the other property
belonging to the conjugal partnership; and
 Considering that, should the doctrine maintained in the appeal
prevail, it would allow married persons to disregard the marriage
bond and separate from each other of their own free will, thus
establishing, contrary to the legal provision contained in said
article 56 of the Civil Code, a legal status entirely incompatible
with the nature and effects of marriage in disregard of the duties
inherent therein and disturbing the unity of the family, in
opposition to what the law, in conformity with good morals, has
established; and.
Considering that, as the spouses D. Ramon Benso and Doña
Adela Galindo are not legally separated, it is their duty to live
together and afford each other help and support; and for this
reason, it cannot be held that the former has need of support from
his wife so that he may live apart from her without the conjugal
abode where it is his place to be, nor of her conferring power
upon him to dispose even of the fruits of her property in order
therewith to pay the matrimonial expenses and, consequently,
those of his own support without need of going to his wife;
wherefore the judgment appealed from, denying the petition of D.
Ramon Benso for support, has not violated the articles of the Civil
Code and the doctrine invoked in the assignments of error 1 and
5 of the appeal.
From a careful reading of the case just cited and quoted from it appears
quite clearly that the spouses separated voluntarily in accordance with an
agreement previously made. At least there are strong indications to this
effect, for the court says, "should the doctrine maintained in the appeal
prevail, it would allow married persons to disregard the marriage bond
and separate from each other of their own free will." If this be the true
basis upon which the supreme court of Spain rested its decision, then the
doctrine therein enunciated would not be controlling in cases where one
of the spouses was compelled to leave the conjugal abode by the other
or where the husband voluntarily abandons such abode and the wife
seeks to force him to furnish support. That this is true appears from the
decision of the same high tribunal, dated October 16, 1903. In this case
the wife brought an action for support against her husband who had
willfully and voluntarily abandoned the conjugal abode without any cause
whatever. The supreme court, reversing the judgment absolving the
defendant upon the ground that no action for divorce, etc., had been
instituted, said:
In the case at bar, it has been proven that it was Don Teodoro
Exposito who left the conjugal abode, although he claims, without
however proving his contention, that the person responsible for
this situation was his wife, as she turned him out of the house.
From this state of affairs it results that it is the wife who is party
abandoned, the husband not having prosecuted any action to
keep her in his company and he therefore finds himself, as long
as he consents to the situation, under the ineluctable obligation to
support his wife in fulfillment of the natural duty sanctioned in
article 56 of the Code in relation with paragraph 1 of article 143.
In not so holding, the trial court, on the mistaken ground that for
the fulfillment of this duty the situation or relation of the spouses
should be regulated in the manner it indicates, has made the
errors of law assigned in the first three grounds alleged, because
the nature of the duty of affording mutual support is compatible
and enforcible in all situations, so long as the needy spouse does
not create any illicit situation of the court above described.
lawphil.net
If we are in error as to the doctrine enunciated by the supreme court of
Spain in its decision of November 3, 1905, and if the court did hold, as
contended by counsel for the defendant in the case under consideration,
that neither spouse can be compelled to support the other outside of the
conjugal abode, unless it be by virtue of a final judgment granting the
injured one a divorce or separation from the other, still such doctrine or
holding would not necessarily control in this jurisdiction for the reason
that the substantive law is not in every particular the same here as it is in
Spain. As we have already stated, articles 42 to 107 of the Civil Code in
force in the Peninsula are not in force in the Philippine Islands. The law
governing the duties and obligations of husband and wife in this country
are articles 44 to 78 of the Law of Civil Marriage of 1870 .In Spain the
complaining spouse has, under article 105 of the Civil Code, various
causes for divorce, such as adultery on the part of the wife in every case
and on the part of the husband when public scandal or disgrace of the
wife results therefrom; personal violence actually inflicted or grave
insults: violence exercised by the husband toward the wife in order to
force her to change her religion; the proposal of the husband to prostitute
his wife; the attempts of the husband or wife to corrupt their sons or to
prostitute their daughters; the connivance in their corruption or
prostitution; and the condemnation of a spouse to perpetual chains or
hard labor, while in this jurisdiction the only ground for a divorce is
adultery. (Benedicto vs. De la Rama, 3 Phil .Rep., 34, 45.) This positive
and absolute doctrine was announced by this court in the case just cited
after an exhaustive examination of the entire subject. Although the case
was appealed to the Supreme Court of the United States and the
judgment rendered by this court was there reversed, the reversal did not
affect in any way or weaken the doctrine in reference to adultery being
the only ground for a divorce. And since the decision was promulgated by
this court in that case in December, 1903, no change or modification of
the rule has been announced. It is, therefore, the well settled and
accepted doctrine in this jurisdiction.

But it is argued that to grant support in an independent suit is equivalent

to granting divorce or separation, as it necessitates a determination of the
question whether the wife has a good and sufficient cause for living
separate from her husband; and, consequently, if a court lacks power to
decree a divorce, as in the instant case, power to grant a separate
maintenance must also be lacking. The weakness of this argument lies in
the assumption that the power to grant support in a separate action is EN BANC
dependent upon a power to grant a divorce. That the one is not
dependent upon the other is apparent from the very nature of the marital [G.R. No. L-23289. February 28, 1969.]
obligations of the spouses. The mere act of marriage creates an
obligation on the part of the husband to support his wife. This obligation JOVENCIO LUANSING, Petitioner, v. THE PEOPLE OF THE
is founded not so much on the express or implied terms of the contract of
PHILIPPINES, and THE HONORABLE COURT OF
marriage as on the natural and legal duty of the husband; an obligation,
APPEALS, Respondents.
the enforcement of which is of such vital concern to the state itself that
the laws will not permit him to terminate it by his own wrongful acts in
driving his wife to seek protection in the parental home. A judgment for Onofre K . Quizon for Petitioner.
separate maintenance is not due and payable either as damages or as a
penalty; nor is it a debt in the strict legal sense of the term, but rather a Solicitor General Arturo A. Alafriz, Assistant Solicitor
judgment calling for the performance of a duty made specific by the General Antonio A. Torres and Solicitor Rafael P. Cañiza
mandate of the sovereign. This is done from necessity and with a view to for Respondents.
preserve the public peace and the purity of the wife; as where the
husband makes so base demands upon his wife and indulges in the habit
of assaulting her. The pro tanto separation resulting from a decree for
separate support is not an impeachment of that public policy by which DECISION
marriage is regarded as so sacred and inviolable in its nature; it is merely
a stronger policy overruling a weaker one; and except in so far only as
such separation is tolerated as a means of preserving the public peace MAKALINTAL, J.:
and morals may be considered, it does not in any respect whatever
impair the marriage contract or for any purpose place the wife in the
situation of a feme sole. Petition for review by certiorari of the decision of the Court of
Appeals in CA-G.R. No. 00779-CR. chanrobles virtual lawlibrary

The foregoing are the grounds upon which our short opinion and order for
judgment, heretofore filed in this case, rest.
Torres, Johnson and
Jovencio Luansing was originally charged with rape in Criminal
Case No. 1240 before the Court of First Instance of Batangas
(Lipa City Branch). After due trial the court dismissed the case,
stating that no crime of rape was committed, but directed the
Provincial Fiscal to file an information for seduction against the
accused within ten (10) days from receipt of the copy of the
decision, otherwise the said accused would be discharged from
custody.
On August 15, 1958 the offended party, Felisa Hernandez, filed
a complaint for seduction against the accused. On the basis
thereof the corresponding information was filed by the Fiscal, as
follows:
jgc:chanrobles.com.ph
"That on or about the 10th day of July, 1957, in the Barrio of
San Roque, Municipality of Sto. Tomas, Province of Batangas,
Philippines, and within the jurisdiction of this Honorable Court
the above-named accused by means of deceit and false promise
of marriage, did then and there wilfully, unlawfully and
feloniously seduce and have sexual intercourse several times
with one Feliza Hernandez, a virgin over 12 but under 18 years
of age." cralaw virtua1aw library
This information was later amended by the Fiscal to change the
date of the alleged commission of the crime from July 10, 1957
to July 15, 1957. During the trial the private prosecutor made a
reservation to file a separate civil action and from then on the
prosecution was handled solely by the assistant Provincial
Fiscal. The Court a quo subsequently rendered judgment finding
the accused guilty beyond reasonable doubt of the crime of
seduction and sentencing him to suffer four (4) months of
arresto mayor; to indemnify the offended party in the sum of
P2,000.00, with the corresponding subsidiary imprisonment in
case of insolvency, but not to exceed one-third of the principal
penalty; to acknowledge his offspring with her; to give the said
offspring a monthly support of P35.00; and to pay the costs and
suffer all accessory penalties prescribed by law.
Petitioner seasonably appealed to the Court of Appeals, which
affirmed in toto the judgment of the trial court. The motion for
reconsideration having been denied, the accused filed the
instant petition for review.
Petitioner avers here: (1) that the trial court acted without
jurisdiction when it tried the case on the basis of the amended
information without the corresponding amended complaint of
the offended party; (2) that the trial court had no jurisdiction
over the case, it being under the jurisdiction of the municipal
court; and (3) that assuming that the trial court had jurisdiction
over the case, the same was exceeded when it awarded
damages and other civil liabilities to the offended party, there
having been a reservation to file a separate civil action.
On the first averment it appears that the Fiscal filed the
information for seduction on August 15, 1958, after conducting
a preliminary investigation upon the complaint presented by the
offended party. On September 16 following, the Fiscal
conducted another preliminary investigation, after which he filed
an amended information changing the date of the commission
of the offense from July 10, 1957 to July 15, 1957. This
amended information, petitioner argues, was a nullity since
there was no corresponding amended complaint of the offended
party which would authorize another preliminary investigation.
The point raised is of no material consequence. The original
information for seduction alleged that the offense was
committed "on or about July 10, 1957." The phrase "on or
about" is comprehensive enough to cover the change to July 15,
1957, as the evidence in the hands of the prosecutor indicated.
The substantial rights of the accused were in no way prejudiced
by the amendment.
On the issue of jurisdiction, Section 44(f), Republic Act No. 296,
as amended, provides the Courts of First Instance have original
jurisdiction of "all criminal cases in which the penalty provided
by law is imprisonment for more than six months, or a fine of
more than two hundred pesos," and section 87(b) of the same
Act provides that Justice of the Peace and Municipal Courts have
original jurisdiction over "all offenses in which the penalty
provided by law is imprisonment for not more than six months,
or a fine of not more than two hundred pesos, or both such fine
and imprisonment." The penalty imposed by Article 338 of the
Revised Penal Code for the crime of simple seduction is arresto
mayor, the duration of which is from one month and one day to
six months. Apparently, the crime of simple seduction falls
under the original jurisdiction of the Justice of the Peace or
Municipal Courts. However, it should not be overlooked that
persons guilty of seduction shall also be sentenced to indemnify
the offended woman, to acknowledge the offspring unless the
law should prevent him from so doing, and to give support to
such offspring (Article 345, Revised Penal Code). These are
inherent accessory civil liabilities when a child is born as a result
of the crime. The acknowledgment of, and the giving of support
to, the offspring are matters beyond the jurisdiction of the
Justice of the Peace or Municipal Courts. They pertain to the
Courts of First Instance (Section 44(a) and (e), Republic Act No.
296).chanrobles.com.ph : virtual law library
It has been held that laws conferring jurisdiction on the inferior
courts over demands below certain amounts do not preclude a
determination of said demands in the superior court, where
they are connected with larger claims or with a type of demand
solely within the jurisdiction of the superior court. Thus for
instance, where an action is within the jurisdiction of the Court
of First Instance because it involves an issue of admiralty, the
said court must be held likewise to have jurisdiction over other
causes of action joined thereto even if the amount sought to be
collected is less than the jurisdictional limit (Fireman’s Fund
Insurance Co. v. Cia. General de Tabacos de Filipinas, G.R. No.
L-22625, April 27, 1867). In like manner, since the crime of
seduction carries with it a liability, under Article 345 of the
Revised Penal Code, to acknowledge and give support to the
offspring resulting from the crime — matters beyond the
jurisdiction of the Justice of the Peace or Municipal Courts — it
follows that the instant case falls within the jurisdiction of the
Court of First Instance (U.S. v. Bernardo, 19 Phil. 265). It would
be absurd to have the principal case of seduction tried and
decided by the Municipal Court and the resulting
acknowledgment and support of the offspring by the Court of
First Instance. The duplication would entail unnecessary waste
of time and effort for the parties and for the courts, to the
detriment of an orderly administration of justice.
It is further contended that the amended information was
legally defective for failure to allege lewd design. Reliance is
placed on the case of People v. Gilo, G.R. No. L-18202, April 30,
1964, wherein it was held: jgc:chanrobles.com.ph
"Considering that in order that a crime constituting acts of
lasciviousness may be committed it is necessary that it be
alleged that it was committed with lewd design, the latter being
an indispensable element of all crimes against chastity, such as
abduction, seduction and rape, including acts of lasciviousness .
. . the words "feloniously and criminally" that are alleged in the
complaint are mere general terms which denote the criminal
intent of the accused but which do not necessarily connote the
idea of lust needed in the commission of the act. Lust or lewd
design is an element that characterizes all crimes against
chastity, apart from the felonious or criminal intent of the
offender, and such element must be always present in order
that they may be so considered in contemplation of law." cralaw virtua1aw library
In People v. Obsania, G.R. No. L-24447, June 29, 1968, which
involved a case of rape, we had occasion to pass upon the
above-quoted decision in this wise: jgc:chanrobles.com.ph
"Nothing in the foregoing statement can be reasonably
interpreted as requiring, an explicit allegation of "lewd design"
in a complaint for rape. We hold in no uncertain terms that in a
complaint for rape it is not necessary to allege "lewd design" or
"unchaste motive," for to require such averment is to demand a
patent superfluity. Lascivious intent inheres in rape and the
unchaste design is manifest in the very act itself — the carnal
knowledge of a woman through force or intimidation, or when
the woman is deprived of reason or otherwise unconscious, or
when the woman is under twelve of age."
cralaw virtua1aw library
By the same token, "lewd design" is inherent in the very act
itself of having sexual intercourse with a chaste woman over 12
and under 18 years of age under a false promise of marriage,
which act constitutes the crime of seduction. Besides, the Gilo
case involved acts of lasciviousness, and the element of "lewd
design" must necessarily be alleged in the information, because
without it the offense would be merely unjust vexation.
Lastly, petitioner contends that the trial court exceeded its
jurisdiction when it awarded damages and other civil liabilities
despite the express reservation by the offended woman,
through the private prosecutor, to file a separate civil action.
On this point the Court of Appeals ruled that "if the complainant
had wanted to insist on filing a separate civil action for damages
against the appellant, she would have filed a motion to
reconsider the decision a quo of September 14, 1959. The fact
that she did not take this step is clear proof that she had
previously abandoned her reservation to file a separate civil
action." We do not go along with this pronouncement.
Abandonment requires a more convincing quantum of evidence
than mere forbearance to actually file the civil action, especially
considering that the same could be filed even after the decision
in a criminal case had been rendered. Besides, the claim for
damages requires proof, and contemplates a right on the part of
the defendant to present his own rebuttal. As it was, neither the
offended party nor the accused was accorded the chance to
present evidence on the point. The same is true with regard to
the amount of support for the offspring.

WHEREFORE, the decision subject of review is hereby modified

by eliminating the award of damages and of support for the EN BANC
offspring, and affirmed in all other respects. No pronouncement
as to costs in this instance. G.R. No. L-13541 January 28, 1961
Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Fernando and EDUARDO TUASON, Plaintiff-Appellant,
Teehankee, JJ., concur.
vs. LUZON STEVEDORING; CO., INC. and
Sanchez Castro and Capistrano, JJ., did not take part. JULIAN RAMOS, Defendants-Appellees.
M. H. de Joya for plaintiff-appellant.
E. R. Tiongson and H. San Luis for defendant-
appellee.
GUTIERREZ DAVID, J.: chanrobles virtual law library

Early in the morning of April 13, 1953, Eduardo

Tuason left Baguio City in a 1952 model Packard
car, with three passengers, namely, Olivia de
Leon, Francisco de Leon and Manuel de Leon. He
passed the Kennon Road Checkpoint at 3:00
o'clock and winged on his way passing the
National Toll Road, Camp 6 Toll Gate, 24 minutes
later. After paying the toll, he continued slashing
through the early morning air so that by 5: 00
o'clock of that same morning he arrived at a town
in Tarlac. There he stopped at a gasoline station
to fill up his car's gasoline tank. This took about
15 to 20 minutes. Thereafter, he continued his
drive for Manila.
chanroblesvirtualawlibrarychanrobles virtual law library
At about the same time Eduardo Tuason left
Baguio City, Julian Ramos, an employee of the
Luzon Stevedoring Co., Inc., together with a
mechanic, Graciano Bautista, and a laborer, Zoilo
Tolentino, left the company's compound at
Guagua, Pampanga, driving one of its truck-
trailers for Manaoag, Pangasinan. They passed
through the towns of Bacolor, San Fernando,
Angeles, Mabalacat, of the province of Pampanga.
When they reached the municipality of Bamban,
Tarlac, the truck developed some engine trouble.
The mechanic, Graciano Bautista, had to clean
the carburetor and the gasoline line, which took
him about 25 to 30 minutes to finish. Afterwards,
they proceeded on their way.
At around 5:10 o'clock that same morning at
about 75 meters south of the bridge at barrio
Cut-Cut of the municipality of Capas, Tarlac, the
Packard car driven by Eduardo Tuason and the
truck-trailer driven by Julian Ramos collided. As a
result of the collision, Eduardo Tuason's left leg
was pinned down by the door of his car. After he
was extricated from his seat, he was taken to the
clinic of Dr. Pineda at Capas, and later, on that
same day, brought to the National Orthopedic
Hospital in Manila. His companions in the car,
chanroblesvirtualawlibrarychanrobles virtual law library
who were also injured were, likewise, taken to
the clinic at Capas.
chanroblesvirtualawlibrarychanrobles virtual law library
On February 22, 1956, or after almost three
years from the date of the collision, Eduardo
Tuason filed with the Court of First Instance of
Manila a complaint against the Luzon Stevedoring
Co., Inc., and Julian Ramos for the recovery of
damages suffered by him as a result of the
collision above referred to. The complaint alleges,
among other things, that plaintiff was driving at a
moderate speed - 35 to 40 kilometers per hour -
with headlights on, when the truck-trailer driven
by the defendant Julian Ramos struck his car;
that the collision completely wrecked plaintiff's
car and caused serious physical injuries to him
and his companions; and that defendant Julian
Ramos was then driving recklessly and
negligently at a high rate of speed. Plaintiff,
therefore, claims and prays for actual and
compensatory damages in the sum of P200,000,
moral damages in the amount of P25,000, and
exemplary or corrective damages in the sum of
P25,000, plus attorney's fees.
chanroblesvirtualawlibrarychanrobles virtual law library
The defendants, in their separate answers, denied
any liability for damages, alleging by way of
special defenses that the truck trailer driven by
the defendant Julian Ramos was traveling at low-
speed, with lights on, along the right side of the
road when it was hit by the Packard car driven by
plaintiff recklessly and negligently at a high
speed; that after the accident, both plaintiff and
defendant Julian Ramos were charged criminally
before the Justice of the Peace Court of Capas,
Tarlac, and upon the case being forwarded to the
Court of First Instance of the same province, the
information as against the defendant Julian
Ramos was dismissed; and that the collision was
due to the fault and negligence of plaintiff as
defendant Julian Ramos exercised due care and
diligence in the performance of his duties as
driver of the truck-trailer. The defendant
company, in addition, alleged that it exercised the
care and diligence of a good father of a family in
the selection and supervision of Julian Ramos as
its driver.
chanroblesvirtualawlibrarychanrobles virtual law library
At the trial, both parties presented testimonial
and documentary evidence. Finding the evidence
adduced by plaintiff and his witnesses to he
contradictory and unworthy of belief, and holding
that plaintiff was traveling at a very high speed
and on the wrong side of the road, that it to say,
on the left lane facing south, while the truck-
trailer driven by the defendant Julian Ramos was
traveling at a moderate speed and was almost at
a stop before the collision, the trial court, on
January 9, 1958, rendered decision, the
dispositive part of which reads:
"WHEREFORE, the court finds the plaintiff
Eduardo Tuason, solely and wholly responsible for
the collision which occurred on April 13, 1953,
subject matter of the present case, and absolves
the defendants Julian Ramos and Luzon
Stevedoring Co., Inc., from any liability or
responsibility in connection therewith. The court
hereby orders plaintiffs claims against the
defendants dismissed with costs against the
plaintiff."
From this decision, the plaintiff appealed directly
to this Court. chanroblesvirtualawlibrarychanrobles virtual law library
After going over the record, we find no reason for
rejecting the findings of fact below, justifying the
dismissal of plaintiff's claim for damages. The
issue being one of credibility, the question of
which testimony should be given more credence
is best left to the trial judge, who had the
advantage of hearing the parties testify and of
observing their demeanor on the witness
stand.chanroblesvirtualawlibrarychanrobles virtual law library
Briefly stated, plaintiff's version is that while he
was driving his new Packard car along the right
lane of the road, with lights on and blowing his
horn, at a curve, about 75 meters south of the
bridge in Barrio Cut-Cut, of the municipality of
Capas, Tarlac, his car collided with the truck-
trailer of the Luzon Stevedoring Company driven
without any lights by defendant Julian Ramos;
that the collision took place at the middle of the
road; that as a result thereof, the two vehicles
became attached to and entangled with one
another; that the people who were attracted to
the scene of the collision had to separate the
automobile from the truck-trailer before they
could extricate plaintiff from the driver's seat of
his car; and that to separate the two vehicles the
truck-trailer had to move backwards, with the use
of its own power, dragging the automobile, which
after being separated from the truck-trailer, was
also moved backwards.
In support of his complaint, plaintiff himself
testified. He contradicted himself, however, in
some particulars, admitted that he was in
extreme pain after the collision - and, indeed,
must have been unconscious - so that he could
not have observed the details of the accident.
Considering the other circumstances of the case,
which shall hereafter be discussed, we think the
trial court was justified in resolving his testimony
against him.chanroblesvirtualawlibrarychanrobles virtual law library
Manuel de Leon, one of plaintiff's companions in
the car, in an effort to corroborate plaintiff's
version and theory of the case, also took the
witness stand. The lower c ourt, however, noted
from his testimony and demeanor that he was not
at all clear about the special circumstances and
important details of the accident which an
eyewitness would normally notice, recall and
remember. He could not, for instance, tell "who
moved the trailer nor whether it was moved on
its own power or pushed by the people around;
he could not even tell or recall on what part of
the road the Packard car was. Moreover, this
witness could not even recall how wide Cut-Cut
bridge is or whether two vehicles could meet and
pass each other, safely, over the bridge; he
chanroblesvirtualawlibrarychanrobles virtual law library
could, likewise, not recall whether there were
shoulders and ditches on both sides of the road at
the scene of the collision." Explaining his
unreliability as a witness, the trial court made the
following observations:
"In the mind of the court, this witness was in a
state of shock and light-headed after he
recovered consciousness and, as he admitted that
he was unconscious for 30 minutes after the
collision, he could not have seen anything that
was done during his state of unconsciousness nor
afterwards. The court is convinced that Manuel de
Leon was merely accommodating the plaintiff, his
friend, when he testified for the reason that he
was neither clear nor positive as to his
testimony."
Alberto Yandan, a resident of Barrio Cut-Cut,
Capas, Tarlac, at the time of the accident,
testifying for the plaintiff, claims that he saw the
collision. He declared, among other things, that
he ordered the truck to be moved backward; and
that it took thirty minutes to take plaintiff out of
the car. He disclaimed knowledge, however, of
the identity of the person who moved the truck.
It also appears that he was investigated by the
police of Capas at 10:00 a.m. of the day of the
collision in the presence of the chief of police and
the Justice of the Peace. In that investigation,
which was later reduced to writing, sworn to and
signed by him before the Justice of the Peace, he
declared - contrary to his testimony in court -
that he was in his house when he heard a crash;
that he immediately went downstairs and found
that the crash was caused by a collision between
a truck and a car; that the driver of the car was
badly injured; and its three occupants suffered
minor injuries; that the car was wrecked while
the truck was only slightly damaged; and that he
brought one of the injured to the clinic of Dr.
Pineda at Capas. He was asked three times in the
course of the investigation whether or not he had
anything more to say in connection with the
collision and in like number of times the
answered, "no more, sir." For this reason, the
trial court found it difficult to believe his
testimony and opines that his participation in the
matter of the collision was merely to bring one of
the injured to the clinic of Dr. Pineda at Capas
and nothing else. We are inclined to agree with
the lower court, for it has not been explained why
he did not, at the time he was investigated, tell
the matters he testified to in court, when he
admittedly was aware that he was being
investigated to bring out everything that he knew
of the accident.chanroblesvirtualawlibrarychanrobles virtual law library
Pedro Mallari, another resident of Barrio Cut-Cut,
Capas, likewise, testified for plaintiff. This witness
admitted on direct and cross-examination that he
stayed at the scene of the accident only for five
minutes, yet he sought to convince the court of
facts which could not have happened, and which
he could not have seen, during that period. Thus,
he said that when he arrived at the scene of the
collision, He saw Alberto Yandan, carrying plaintiff
Eduardo Tuason while the three car passengers
were still inside the automobile. This statement is
contrary to the testimonies of plaintiff's other
witnesses, namely, Alberto Yandan and Manuel
de Leon, who declared that, the last person taken
out of the car was plaintiff and that it took them
some 30 minutes to extricate him from the
driver's seat. Witness Mallari also declared that
plaintiff's left leg was pinned down by the left
bumper of the truck and that when the truck was
moved back, the leg was still pinned by the
bumper. If such were the case, plaintiff's leg
would have been crushed or severed and he
would not now have possession and use of both
legs. Considering these contradictions and
observing that the witness, while testifying, was
restless, nervous and uncomfortable and that he
was shifting around and could not keep his eyes
fixed, the trial court entertained grave doubts
concerning the veracity of his testimony. The
lower court, we think, was justified in doing so.
Evidence, to be worthy of credit, must not only
proceed from a credible source, but must, in
addition, be credible itself. And by this is meant
that it shall be natural, reasonable and probable
as to make it easy to believe.
chanroblesvirtualawlibrarychanrobles virtual law library
Examining further Pedro Mallari's testimony, we
find that there is, indeed, good reason to believe
this witness was never at the scene of the
collision. He stated that he returned from work
around 12 noon to take his lunch; that thereafter
he went to the police station of Capas and when
he peeped inside he saw the police investigating
Alberto Yandan; that he did not listen to the
investigation but he knew that it concerned the
accident which occurred in Barrio Cut-Cut, Capas,
that morning; that he did not volunteer to testify
nor made known his presence at the scene of the
collision. His declarations are directly contradicted
by those of Alberto Yandan who testified that he
was investigated at 10:00 a.m. and that he
(Mallari) was inside the police station and present
during the investigation. And had Mallari really
been present then, whether inside or outside the
police station, he would certainly have
volunteered his testimony, having taken the
trouble of going to the police station at the town
proper and knowing as he did the subject matter
of the police investigation. But he did not do this
and instead admitted that he testified in this case
after he was approached by Alberto Yandan to do
so for plaintiff.
chanroblesvirtualawlibrarychanrobles virtual law library
Salvador Baun, chief of police of the municipality
of Capas another witness for the plaintiff. The
trial court, however, from his demeanor on the
witness stand and from the long delayed and
often evasive answers, he gave, was convinced
that he was suppressing and hiding the true facts
of the case. He admitted that he conducted an
investigation of the collision and he testified that
in the course of that investigation, he saw
evidence that the Packard car driven by plaintiff
swerved from the middle of the road to the left
lane facing south, thus hitting the truck-trailer.
He made such statement in his official report of
the accident (Exh. "I"), and the proof of the
swerving of the car as reported by him were the
skid marks of the tires of the car at the scene of
the collision. The record also shows that it was on
the basis of his report that the criminal case for
physical injuries and damage to property thru
reckless imprudence filed against both plaintiff
and defendant Julian Ramos was dismissed as
against the latter. The dismissal was made upon
motion of the Provincial Fiscal on the ground that
"during a reinvestigation of the case, and as can
be seen from the sketch attached to the record
prepared by the Chief of Police of Capas, Tarlac,
the driver of the truck-trailer, Julian Ramos, the
accused, tried his best to avoid the incident; that
it is the other driver, Eduardo Tuason, who was at
fault in causing the collision; and that the
prosecution has no evidence to sustain any
criminal action against Julian Ramos." .
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The evidence for the defendants, on the other
hand, showed that the truck-trailer driven by
Julian Ramos covered the distance of 50.89
kilometers between Guagua, Pampanga, and Cut-
Cut bridge, Capas, Tarlac, in 2 hours and 10
minutes. Subtracting the 30 minutes consumed in
fixing the engine trouble that developed on the
way, the traveling time was, therefore, 1 hour
and 40 minutes. This shows that the truck-trailer
ran at an average speed of 30 kilometers per
hour on the national highway from Guagua,
Pampanga, to Cut-Cut bridge, Capas, Tarlac.
Upon the other hand, plaintiff drove his car from
Baguio City to Cut-Cut bridge in Capas, a
distance of 144.22 kilometers, in 2 hours and 10
minutes. Deducting the maximum of 20 minutes
it took him to load up gasoline, that leaves a
traveling time of 1 hour and 50 minutes. As
correctly found by the court below, it is evident
from the above facts, which are not disputed,
that plaintiff drove his car at great speed and in
excess of the speed limits along the national
highway. chanroblesvirtualawlibrarychanrobles virtual law library
Plaintiff claims that the truck-trailer, which
weighed 10 tons, was traveling at the rate of 60
kilometers per hour when the collision occurred,
but if such were the case, the car he was driving
would have been sent flying, or, at least, carried
and pushed back by virtue of the truck's
momentum and weight. There were, however, no
indications on the surface of the road at the
scene of the collision showing that the Packard
car was carried and dragged by the truck-trailer.
Indeed, none of the witnesses testified to this
fact. On the contrary, Salvador Baun, chief of
police, and Jesus Baluyot, patrolman, both of
Capas, and other witnesses for the defendants
testified that the skid marks present at the scene
of the collision were those made by the tires of
the Packard car. No skid marks made by the tires
of the truck-trailer existed or were present at the
scene of the collision.
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The evidence for the defendants also showed that
at the time of the collision, the truck-trailer was
on the right lane of the road facing north with the
right front wheel of the truck on the shoulder of
the road about six inches from the ditch on the
right side and that the Packard car was on the left
lane of the road going south towards Pampanga.
These facts were testified to by the defendant
Julian Ramos, his mechanic, Graciano Bautista,
Jesus Baluyot and Pagano Atienza, both members
of the police force of Capas, Mariano Nacpil, a
farmer and civilian guard residing in Barrio Cut-
Cut, and others. Policeman Jesus Baluyot, at the
time of the collision, drew a sketch (Exh. 1.A)
showing the relative positions of the vehicles,
which piece of evidence became the basis of the
chief of police's report but which he tried to
suppress at the trial of the case. Regarding the
testimony of defendants' witnesses, the trial court
said..
"The court has observed the conduct and
demeanor of the witnesses, for the defendants,
and noted that they testified in a straight-forward
manner indicating that they know the subject
matter of their testimonies and that they were
testifying on facts and circumstances of their own
personal knowledge. Defendant Julian was
lengthily cross-examined and there was no
divergence in his, testimony. Likewise, the
mechanic, Graciano Bautista, was clear and
explicit in his narration of facts. The witnesses for
the defendants, Jesus Baluyot and Paciano
Atienza are members of the police force of the
Municipality of Capas and they testified on facts
and circumstances surrounding the collision
between the two vehicles, which they gathered in
the course of their official investigation. There is
no reason for the court to doubt the testimony of
these police officers considering the official
positions and the fact that they testified on
matters gathered in the performance of their
official duties. Moreover, they submitted a report
of their investigation to their Chief of Police.
Arturo Cabrera, another witness for the
defendants is a government employee who
testified in regard to his own personal knowledge
of the collision in question. He stated that after
viewing the scene of the collision and noting that
the Packard car involved therein was a hazard to
traffic, he telephoned a report to his superior, the
District Engineer of Tarlac that he was able to talk
to Mr. Epifanio Panopio, Maintenance Engineer
who personally viewed the scene of the collision;
that after the investigation being conducted by
the Police was through he caused the Packard car
to be removed upon the instruction of Engineer
Panopio. Again, there is no reason for the court to
doubt the testimony of this witness. Mariano
Nacpil is an old man and a farmer. His demeanor
in court was that of a witness testifying to the
truth. As a matter of fact, Mariano Nacpil signed a
sworn statement, Exh. '8' before the Chief of
Police and Justice of the Peace of Capas, Tarlac,
on the same day, April 13, 1953, when the
collision occurred. His testimony during the trial
conforms with his sworn statement appearing on
Exhibit '8'."
Plaintiff claims that the truck-trailer and the
Packard car were linked together and in order to
give room to take plaintiff out of the car, the
truck-trailer was moved back, on its own power,
across the line at the center of the road and
stopped on the right lane facing north carrying
the car along with it. The trial court, however,
after a close scrutiny of the evidence adduced,
rejected the claim, defendant shaving shown to
its satisfaction that the truck's battery and front
axle were damaged, the U-bolt broken, and
mudguard stuck to the left front wheel. The
truck-trailer's weight of ten tons eliminated the
possibility of its having been pushed by the
people gathered at the scene of the collision, so
that the trial court believed that it was the
Packard car which was moved back about three
feet in order to extricate plaintiff from his seat,
some persons stepping on the bumper of the
automobile while others pushed it away. The
defendant Julian Ramos, whose testimony was
found by the court to be credible and straight
forward, testified in this regard. This testimony of
defendant Julian Ramos, contrary to plaintiff's
claim, does not necessarily contradict those of
policemen Jesus Baluyot and Pagano Atienza,
who declared that the vehicles were not moved
during their investigation. Apparently, the
vehicles were disengaged before the arrival of the
aforenamed policeman, who had to come yet
from the town proper. It would certainly have
been unnatural and cruel for the people who were
there to have waited for them or other authorities
before doing anything, considering that plaintiff
was painfully pinned by the door of his car and
could not be extricated without disconnecting the
vehicles.
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It might not be amiss to mention here that
plaintiff's complaint was filed only after the lapse
of almost three years from the date of the
accident. This, in itself, is indicative of the
weakness of plaintiff's cause of action. And
considering the established fact that said plaintiff
was really the proximate cause of the accident,
we find no valid reason to disturb the decision
complained of denying his claim for damages.
IN VIEW OF THE FOREGOING, the decision
appealed from is hereby affirmed, with costs
against plaintiff-appellant.
G.R. No. L-48006             July 8, 1942
FAUSTO BARREDO, petitioner,
vs.
SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.
Celedonio P. Gloria and Antonio Barredo for petitioner.
Jose G. Advincula for respondents.
BOCOBO, J.:
This case comes up from the Court of Appeals which held the petitioner
herein, Fausto Barredo, liable in damages for the death of Faustino
chanroblesvirtualawlibrarychanrobles virtual law library Garcia caused by the negligence of Pedro Fontanilla, a taxi driver
employed by said Fausto Barredo.
At about half past one in the morning of May 3, 1936, on the road
between Malabon and Navotas, Province of Rizal, there was a head-on
chanroblesvirtualawlibrarychanrobles virtual law library
collision between a taxi of the Malate Taxicab driven by Pedro Fontanilla
and a carretela guided by Pedro Dimapalis. The carretela was
overturned, and one of its passengers, 16-year-old boy Faustino Garcia,
suffered injuries from which he died two days later. A criminal action was
filed against Fontanilla in the Court of First Instance of Rizal, and he was
convicted and sentenced to an indeterminate sentence of one year and
one day to two years of prision correccional. The court in the criminal
case granted the petition that the right to bring a separate civil action be
reserved. The Court of Appeals affirmed the sentence of the lower court
in the criminal case. Severino Garcia and Timotea Almario, parents of the
deceased on March 7, 1939, brought an action in the Court of First
Instance of Manila against Fausto Barredo as the sole proprietor of the
Malate Taxicab and employer of Pedro Fontanilla. On July 8, 1939, the
Court of First Instance of Manila awarded damages in favor of the
plaintiffs for P2,000 plus legal interest from the date of the complaint.
This decision was modified by the Court of Appeals by reducing the
damages to P1,000 with legal interest from the time the action was
instituted. It is undisputed that Fontanilla 's negligence was the cause of
the mishap, as he was driving on the wrong side of the road, and at high
speed. As to Barredo's responsibility, the Court of Appeals found:
... It is admitted that defendant is Fontanilla's employer. There is
proof that he exercised the diligence of a good father of a family
to prevent damage. (See p. 22, appellant's brief.) In fact it is
shown he was careless in employing Fontanilla who had been
caught several times for violation of the Automobile Law and
speeding (Exhibit A) — violation which appeared in the records of
the Bureau of Public Works available to be public and to himself.
Therefore, he must indemnify plaintiffs under the provisions of
article 1903 of the Civil Code.
The main theory of the defense is that the liability of Fausto Barredo is
governed by the Revised Penal Code; hence, his liability is only
subsidiary, and as there has been no civil action against Pedro
Fontanilla, the person criminally liable, Barredo cannot be held
responsible in the case. The petitioner's brief states on page 10:
... The Court of Appeals holds that the petitioner is being sued for
his failure to exercise all the diligence of a good father of a family
in the selection and supervision of Pedro Fontanilla to prevent
damages suffered by the respondents. In other words, The Court
of Appeals insists on applying in the case article 1903 of the Civil
Code. Article 1903 of the Civil Code is found in Chapter II, Title
16, Book IV of the Civil Code. This fact makes said article to a
civil liability arising from a crime as in the case at bar simply
because Chapter II of Title 16 of Book IV of the Civil Code, in the
precise words of article 1903 of the Civil Code itself, is applicable
only to "those (obligations) arising from wrongful or negligent acts
or commission not punishable by law.
The gist of the decision of the Court of Appeals is expressed thus:
... We cannot agree to the defendant's contention. The liability
sought to be imposed upon him in this action is not a civil
obligation arising from a felony or a misdemeanor (the crime of
Pedro Fontanilla,), but an obligation imposed in article 1903 of the
Civil Code by reason of his negligence in the selection or
supervision of his servant or employee.
The pivotal question in this case is whether the plaintiffs may bring this
separate civil action against Fausto Barredo, thus making him primarily
and directly, responsible under article 1903 of the Civil Code as an
employer of Pedro Fontanilla. The defendant maintains that Fontanilla's
negligence being punishable by the Penal Code, his (defendant's) liability
as an employer is only subsidiary, according to said Penal code, but
Fontanilla has not been sued in a civil action and his property has not
been exhausted. To decide the main issue, we must cut through the
tangle that has, in the minds of many confused and jumbled
together delitos and cuasi delitos, or crimes under the Penal Code and
fault or negligence under articles 1902-1910 of the Civil Code. This
should be done, because justice may be lost in a labyrinth, unless
principles and remedies are distinctly envisaged. Fortunately, we are
aided in our inquiry by the luminous presentation of the perplexing
subject by renown jurists and we are likewise guided by the decisions of
this Court in previous cases as well as by the solemn clarity of the
consideration in several sentences of the Supreme Tribunal of Spain.
Authorities support the proposition that a quasi-delict or "culpa aquiliana "
is a separate legal institution under the Civil Code with a substantivity all
its own, and individuality that is entirely apart and independent from delict
or crime. Upon this principle and on the wording and spirit article 1903 of
the Civil Code, the primary and direct responsibility of employers may be
safely anchored.
The pertinent provisions of the Civil Code and Revised Penal Code are
as follows:
CIVIL CODE
ART. 1089 Obligations arise from law, from contracts and quasi-
contracts, and from acts and omissions which are unlawful or in
which any kind of fault or negligence intervenes.
xxx     xxx     xxx
ART. 1092. Civil obligations arising from felonies or
misdemeanors shall be governed by the provisions of the Penal
Code.
ART. 1093. Those which are derived from acts or omissions in
which fault or negligence, not punishable by law, intervenes shall
be subject to the provisions of Chapter II, Title XVI of this book.
xxx     xxx     xxx
 ART 1902. Any person who by an act or omission causes
damage to another by his fault or negligence shall be liable for
the damage so done.
ART. 1903. The obligation imposed by the next preceding article
is enforcible, not only for personal acts and omissions, but also
for those of persons for whom another is responsible.
The father and in, case of his death or incapacity, the mother, are
liable for any damages caused by the minor children who live with
them.
Guardians are liable for damages done by minors or
incapacitated persons subject to their authority and living with
them.
Owners or directors of an establishment or business are equally
liable for any damages caused by their employees while engaged
in the branch of the service in which employed, or on occasion of
the performance of their duties.
The State is subject to the same liability when it acts through a
special agent, but not if the damage shall have been caused by
the official upon whom properly devolved the duty of doing the act
performed, in which case the provisions of the next preceding
article shall be applicable.
Finally, teachers or directors of arts trades are liable for any
damages caused by their pupils or apprentices while they are
under their custody.
The liability imposed by this article shall cease in case the
persons mentioned therein prove that they are exercised all the
diligence of a good father of a family to prevent the damage.
ART. 1904. Any person who pays for damage caused by his
employees may recover from the latter what he may have paid.
REVISED PENAL CODE
ART. 100. Civil liability of a person guilty of felony. — Every
person criminally liable for a felony is also civilly liable.
ART. 101. Rules regarding civil liability in certain cases. — The
exemption from criminal liability established in subdivisions 1, 2,
3, 5, and 6 of article 12 and in subdivision 4 of article 11 of this
Code does not include exemption from civil liability, which shall
be enforced to the following rules:
First. In cases of subdivision, 1, 2 and 3 of article 12 the civil
liability for acts committed by any imbecile or insane person, and
by a person under nine years of age, or by one over nine but
under fifteen years of age, who has acted without discernment
shall devolve upon those having such person under their legal
authority or control, unless it appears that there was no fault or
negligence on their part.
Should there be no person having such insane, imbecile or minor
under his authority, legal guardianship, or control, or if such
person be insolvent, said insane, imbecile, or minor shall respond
with their own property, excepting property exempt from
execution, in accordance with the civil law.
Second. In cases falling within subdivision 4 of article 11, the
person for whose benefit the harm has been prevented shall be
civilly liable in proportion to the benefit which they may have
received.
The courts shall determine, in their sound discretion, the proportionate
amount for which each one shall be liable.
When the respective shares can not be equitably determined, even
approximately, or when the liability also attaches to the Government, or
to the majority of the inhabitants of the town, and, in all events, whenever
the damage has been caused with the consent of the authorities or their
agents, indemnification shall be made in the manner prescribed by
special laws or regulations.
Third. In cases falling within subdivisions 5 and 6 of article 12, the
persons using violence or causing the fear shall be primarily liable and
secondarily, or, if there be no such persons, those doing the act shall be
liable, saving always to the latter that part of their property exempt from
execution.
ART. 102. Subsidiary civil liability of innkeepers, tavern keepers
and proprietors of establishment. — In default of persons
criminally liable, innkeepers, tavern keepers, and any other
persons or corporation shall be civilly liable for crimes committed
in their establishments, in all cases where a violation of municipal
ordinances or some general or special police regulation shall
have been committed by them or their employees.
 Innkeepers are also subsidiarily liable for the restitution of goods
taken by robbery or theft within their houses lodging therein, or
the person, or for the payment of the value thereof, provided that
such guests shall have notified in advance the innkeeper himself,
or the person representing him, of the deposit of such goods
within the inn; and shall furthermore have followed the directions
which such innkeeper or his representative may have given them
with respect to the care of and vigilance over such goods. No
liability shall attach in case of robbery with violence against or
intimidation against or intimidation of persons unless committed
by the innkeeper's employees.
ART. 103. Subsidiary civil liability of other persons. — The
subsidiary liability established in the next preceding article shall
also apply to employers, teachers, persons, and corporations
engaged in any kind of industry for felonies committed by their
servants, pupils, workmen, apprentices, or employees in the
discharge of their duties.
xxx     xxx     xxx
ART. 365. Imprudence and negligence. — Any person who, by
reckless imprudence, shall commit any act which, had it been
intentional, would constitute a grave felony, shall suffer the
penalty of arresto mayor in its maximum period to prision
correccional in its minimum period; if it would have constituted a
less grave felony, the penalty of arresto mayor in its minimum and
medium periods shall be imposed.
Any person who, by simple imprudence or negligence, shall
commit an act which would otherwise constitute a grave felony,
shall suffer the penalty of arresto mayor in its medium and
maximum periods; if it would have constituted a less serious
felony, the penalty of arresto mayor in its minimum period shall be
imposed."
It will thus be seen that while the terms of articles 1902 of the Civil Code
seem to be broad enough to cover the driver's negligence in the instant
case, nevertheless article 1093 limits cuasi-delitos to acts or omissions
"not punishable by law." But inasmuch as article 365 of the Revised
Penal Code punishes not only reckless but even simple imprudence or
negligence, the fault or negligence under article 1902 of the Civil Code
has apparently been crowded out. It is this overlapping that makes the
"confusion worse confounded." However, a closer study shows that such
a concurrence of scope in regard to negligent acts does not destroy the
distinction between the civil liability arising from a crime and the
responsibility for cuasi-delitos or culpa extra-contractual. The same
negligent act causing damages may produce civil liability arising from a
crime under article 100 of the Revised Penal Code, or create an action
for cuasi-delito or culpa extra-contractual under articles 1902-1910 of the
Civil Code.
The individuality of cuasi-delito or culpa extra-contractual looms clear and
unmistakable. This legal institution is of ancient lineage, one of its early
ancestors being the Lex Aquilia in the Roman Law. In fact, in Spanish
legal terminology, this responsibility is often referred to as culpa
aquiliana. The Partidas also contributed to the genealogy of the present
fault or negligence under the Civil Code; for instance, Law 6, Title 15, of
Partida 7, says: "Tenudo es de fazer emienda, porque, como quier que el
non fizo a sabiendas en daño al otro, pero acaescio por su culpa."
The distinctive nature of cuasi-delitos survives in the Civil Code.
According to article 1089, one of the five sources of obligations is this
legal institution of cuasi-delito or culpa extra-contractual: "los actos . . . en
que intervenga cualquier genero de culpa o negligencia." Then article
1093 provides that this kind of obligation shall be governed by Chapter II
of Title XVI of Book IV, meaning articles 1902-0910. This portion of the
Civil Code is exclusively devoted to the legal institution of culpa aquiliana.
Some of the differences between crimes under the Penal Code and
the culpa aquiliana or cuasi-delito under the Civil Code are:
1. That crimes affect the public interest, while cuasi-delitos are only of
private concern.
2. That, consequently, the Penal Code punishes or corrects the criminal
act, while the Civil Code, by means of indemnification, merely repairs the
damage.
3. That delicts are not as broad as quasi-delicts, because the former are
punished only if there is a penal law clearly covering them, while the
latter, cuasi-delitos, include all acts in which "any king of fault or
negligence intervenes." However, it should be noted that not all violations
of the penal law produce civil responsibility, such as begging in
contravention of ordinances, violation of the game laws, infraction of the
rules of traffic when nobody is hurt. (See Colin and Capitant, "Curso
Elemental de Derecho Civil," Vol. 3, p. 728.)
Let us now ascertain what some jurists say on the separate existence of
quasi-delicts and the employer's primary and direct liability under article
1903 of the Civil Code.
Dorado Montero in his essay on "Responsibilidad" in the "Enciclopedia
Juridica Española" (Vol. XXVII, p. 414) says:
El concepto juridico de la responsabilidad civil abarca diversos
aspectos y comprende a diferentes personas. Asi, existe una
responsabilidad civil propiamente dicha, que en ningun casl lleva
aparejada responsabilidad criminal alguna, y otra que es
consecuencia indeclinable de la penal que nace de todo delito o
falta."
The juridical concept of civil responsibility has various aspects
and comprises different persons. Thus, there is a civil
responsibility, properly speaking, which in no case carries with it
any criminal responsibility, and another which is a necessary
consequence of the penal liability as a result of every felony or
misdemeanor."
Maura, an outstanding authority, was consulted on the following case:
There had been a collision between two trains belonging respectively to
the Ferrocarril Cantabrico and the Ferrocarril del Norte. An employee of
the latter had been prosecuted in a criminal case, in which the company
had been made a party as subsidiarily responsible in civil damages. The
employee had been acquitted in the criminal case, and the employer, the
Ferrocarril del Norte, had also been exonerated. The question asked was
whether the Ferrocarril Cantabrico could still bring a civil action for
damages against the Ferrocarril del Norte. Maura's opinion was in the
affirmative, stating in part (Maura, Dictamenes, Vol. 6, pp. 511-513):
Quedando las cosas asi, a proposito de la realidad pura y neta de
los hechos, todavia menos parece sostenible que exista cosa
juzgada acerca de la obligacion civil de indemnizar los
quebrantos y menoscabos inferidos por el choque de los trenes.
El titulo en que se funda la accion para demandar el
resarcimiento, no puede confundirse con las responsabilidades
civiles nacidas de delito, siquiera exista en este, sea el cual sea,
una culpa rodeada de notas agravatorias que motivan sanciones
penales, mas o menos severas. La lesion causada por delito o
falta en los derechos civiles, requiere restituciones, reparaciones
o indemnizaciones, que cual la pena misma atañen al orden
publico; por tal motivo vienen encomendadas, de ordinario, al
Ministerio Fiscal; y claro es que si por esta via se enmiendan los
quebrantos y menoscabos, el agraviado excusa procurar el ya
conseguido desagravio; pero esta eventual coincidencia de los
efectos, no borra la diversidad originaria de las acciones civiles
para pedir indemnizacion.
Estas, para el caso actual (prescindiendo de
culpas contractuales, que no vendrian a cuento y que tiene otro
regimen), dimanan, segun el articulo 1902 del Codigo Civil, de
toda accion u omision, causante de daños o perjuicios, en que
intervenga culpa o negligencia. Es trivial que acciones
semejantes son ejercitadas ante los Tribunales de lo civil
cotidianamente, sin que la Justicia punitiva tenga que mezclarse
en los asuntos. Los articulos 18 al 21 y 121 al 128 del Codigo
Penal, atentos al espiritu y a los fines sociales y politicos del
mismo, desenvuelven y ordenan la materia de responsabilidades
civiles nacidas de delito, en terminos separados del regimen por
ley comun de la culpa que se denomina aquiliana, por alusion a
precedentes legislativos del Corpus Juris. Seria intempestivo un
paralelo entre aquellas ordenaciones, y la de la obligacion de
indemnizar a titulo de culpa civil; pero viene al caso y es
necesaria una de las diferenciaciones que en el tal paralelo se
notarian.
Los articulos 20 y 21 del Codigo Penal, despues de distribuir a su
modo las responsabilidades civiles, entre los que sean por
diversos conceptos culpables del delito o falta, las hacen
extensivas a las empresas y los establecimientos al servicio de
los cuales estan los delincuentes; pero con caracter subsidiario, o
sea, segun el texto literal, en defecto de los que sean
responsables criminalmente. No coincide en ello el Codigo Civil,
cuyo articulo 1903, dice; La obligacion que impone el articulo
anterior es exigible, no solo por los actos y omisiones
propios, sino por los de aquellas personas de quienes se debe
responder; personas en la enumeracion de las cuales figuran los
dependientes y empleados de los establecimientos o empresas,
sea por actos del servicio, sea con ocasion de sus funciones. Por
esto acontece, y se observa en la jurisprudencia, que las
empresas, despues de intervenir en las causas criminales con el
caracter subsidiario de su responsabilidad civil por razon del
delito, son demandadas y condenadas directa y aisladamente,
cuando se trata de la obligacion, ante los tribunales civiles.
Siendo como se ve, diverso el titulo de esta obligacion, y
formando verdadero postulado de nuestro regimen judicial la
separacion entre justicia punitiva y tribunales de lo civil, de suerte
que tienen unos y otros normas de fondo en distintos cuerpos
legales, y diferentes modos de proceder, habiendose, por
añadidura, abstenido de asistir al juicio criminal la Compañia del
Ferrocarril Cantabrico, que se reservo ejercitar sus acciones,
parece innegable que la de indemnizacion por los daños y
perjuicios que le irrogo el choque, no estuvo sub judice ante el
Tribunal del Jurado, ni fue sentenciada, sino que permanecio
intacta, al pronunciarse el fallo de 21 de marzo. Aun cuando el
veredicto no hubiese sido de inculpabilidad, mostrose mas arriba,
que tal accion quedaba legitimamente reservada para despues
del proceso; pero al declararse que no existio delito, ni
responsabilidad dimanada de delito, materia unica sobre que
tenian jurisdiccion aquellos juzgadores, se redobla el motivo para
la obligacion civil ex lege, y se patentiza mas y mas que la accion
para pedir su cumplimiento permanece incolume, extraña a
la cosa juzgada.
As things are, apropos of the reality pure and simple of the facts,
it seems less tenable that there should be res judicata with regard
to the civil obligation for damages on account of the losses
caused by the collision of the trains. The title upon which the
action for reparation is based cannot be confused with the civil
responsibilities born of a crime, because there exists in the latter,
whatever each nature, a culpa surrounded with aggravating
aspects which give rise to penal measures that are more or less
severe. The injury caused by a felony or misdemeanor upon civil
rights requires restitutions, reparations, or indemnifications which,
like the penalty itself, affect public order; for this reason, they are
ordinarily entrusted to the office of the prosecuting attorney; and it
is clear that if by this means the losses and damages are
repaired, the injured party no longer desires to seek another
relief; but this coincidence of effects does not eliminate the
peculiar nature of civil actions to ask for indemnity.
Such civil actions in the present case (without referring to
contractual faults which are not pertinent and belong to another
scope) are derived, according to article 1902 of the Civil Code,
from every act or omission causing losses and damages in which
culpa or negligence intervenes. It is unimportant that such actions
are every day filed before the civil courts without the criminal
courts interfering therewith. Articles 18 to 21 and 121 to 128 of
the Penal Code, bearing in mind the spirit and the social and
political purposes of that Code, develop and regulate the matter
of civil responsibilities arising from a crime, separately from the
regime under common law, of culpa which is known as aquiliana,
in accordance with legislative precedent of the Corpus Juris. It
would be unwarranted to make a detailed comparison between
the former provisions and that regarding the obligation to
indemnify on account of civil culpa; but it is pertinent and
necessary to point out to one of such differences.
Articles 20 and 21 of the Penal Code, after distriburing in their
own way the civil responsibilities among those who, for different
reasons, are guilty of felony or misdemeanor, make such civil
responsibilities applicable to enterprises and establishments for
which the guilty parties render service, but with subsidiary
character, that is to say, according to the wording of the Penal
Code, in default of those who are criminally responsible. In this
regard, the Civil Code does not coincide because article 1903
says: "The obligation imposed by the next preceding article is
demandable, not only for personal acts and omissions, but also
for those of persons for whom another is responsible." Among the
persons enumerated are the subordinates and employees of
establishments or enterprises, either for acts during their service
or on the occasion of their functions. It is for this reason that it
happens, and it is so observed in judicial decisions, that the
companies or enterprises, after taking part in the criminal cases
because of their subsidiary civil responsibility by reason of the
crime, are sued and sentenced directly and separately with
regard to the obligation, before the civil courts.
Seeing that the title of this obligation is different, and the
separation between punitive justice and the civil courts being a
true postulate of our judicial system, so that they have different
fundamental norms in different codes, as well as different modes
of procedure, and inasmuch as the Compaña del Ferrocarril
Cantabrico has abstained from taking part in the criminal case
and has reserved the right to exercise its actions, it seems
undeniable that the action for indemnification for the losses and
damages caused to it by the collision was not sub judice before
the Tribunal del Jurado, nor was it the subject of a sentence, but
it remained intact when the decision of March 21 was rendered.
Even if the verdict had not been that of acquittal, it has already
been shown that such action had been legitimately reserved till
after the criminal prosecution; but because of the declaration of
the non-existence of the felony and the non-existence of the
responsibility arising from the crime, which was the sole subject
matter upon which the Tribunal del Jurado had jurisdiction, there
 is greater reason for the civil obligation ex lege, and it becomes
clearer that the action for its enforcement remain intact and is
not res judicata.
Laurent, a jurist who has written a monumental work on the French Civil
Code, on which the Spanish Civil Code is largely based and whose
provisions on cuasi-delito or culpa extra-contractual are similar to those
of the Spanish Civil Code, says, referring to article 1384 of the French
Civil Code which corresponds to article 1903, Spanish Civil Code:
The action can be brought directly against the person responsible
(for another), without including the author of the act. The action
against the principal is accessory in the sense that it implies the
existence of a prejudicial act committed by the employee, but it is
not subsidiary in the sense that it can not be instituted till after the
judgment against the author of the act or at least, that it is
subsidiary to the principal action; the action for responsibility (of
the employer) is in itself a principal action. (Laurent, Principles of
French Civil Law, Spanish translation, Vol. 20, pp. 734-735.)
Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4, pp.
429, 430), declares that the responsibility of the employer is principal and
not subsidiary. He writes:
Cuestion 1. La responsabilidad declarada en el articulo 1903 por
las acciones u omisiones de aquellas personas por las que se
debe responder, es subsidiaria? es principal? Para contestar a
esta pregunta es necesario saber, en primer lugar, en que se
funda el precepto legal. Es que realmente se impone una
responsabilidad por una falta ajena? Asi parece a primera vista;
pero semejante afirmacion seria contraria a la justicia y a la
maxima universal, segun la que las faltas son personales, y cada
uno responde de aquellas que le son imputables. La
responsabilidad de que tratamos se impone con ocasion de un
delito o culpa, pero no por causa de ellos, sino por causa del
causi delito, esto es, de la imprudencia o de la negligencia del
padre, del tutor, del dueño o director del establecimiento, del
maestro, etc. Cuando cualquiera de las personas que enumera el
articulo citado (menores de edad, incapacitados, dependientes,
aprendices) causan un daño, la ley presume que el padre, el
tutor, el maestro, etc., han cometido una falta de negligencia para
prevenir o evitar el daño. Esta falta es la que la ley castiga. No
hay, pues, responsabilidad por un hecho ajeno, sino en la
apariencia; en realidad la responsabilidad se exige por un hecho
propio. La idea de que esa responsabilidad sea subsidiaria es,
por lo tanto, completamente inadmisible.
Question No. 1. Is the responsibility declared in article 1903 for
the acts or omissions of those persons for who one is
responsible, subsidiary or principal? In order to answer this
question it is necessary to know, in the first place, on what the
legal provision is based. Is it true that there is a responsibility for
the fault of another person? It seems so at first sight; but such
assertion would be contrary to justice and to the universal maxim
that all faults are personal, and that everyone is liable for those
faults that can be imputed to him. The responsibility in question is
imposed on the occasion of a crime or fault, but not because of
the same, but because of the cuasi-delito, that is to say, the
imprudence or negligence of the father, guardian, proprietor or
manager of the establishment, of the teacher, etc. Whenever
anyone of the persons enumerated in the article referred to
(minors, incapacitated persons, employees, apprentices) causes
any damage, the law presumes that the father, guardian, teacher,
etc. have committed an act of negligence in not preventing or
avoiding the damage. It is this fault that is condemned by the law.
It is, therefore, only apparent that there is a responsibility for the
act of another; in reality the responsibility exacted is for one's own
act. The idea that such responsibility is subsidiary is, therefore,
completely inadmissible.
Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia,
Referentes al Codigo Civil Español," says in Vol. VII, p. 743:
Es decir, no responde de hechos ajenos, porque se responde
solo de su propia culpa, doctrina del articulo 1902; mas por
excepcion, se responde de la ajena respecto de aquellas
personas con las que media algun nexo o vinculo, que motiva o
razona la responsabilidad. Esta responsabilidad, es directa o es
subsidiaria? En el orden penal, el Codigo de esta clase distingue
entre menores e incapacitados y los demas, declarando directa la
primera (articulo 19) y subsidiaria la segunda (articulos 20 y 21);
pero en el orden civil, en el caso del articulo 1903, ha de
entenderse directa, por el tenor del articulo que impone la
responsabilidad precisamente "por los actos de aquellas
personas de quienes se deba responder."
That is to say, one is not responsible for the acts of others,
because one is liable only for his own faults, this being the
doctrine of article 1902; but, by exception, one is liable for the
 acts of those persons with whom there is a bond or tie which
gives rise to the responsibility. Is this responsibility direct or
subsidiary? In the order of the penal law, the Penal Code
distinguishes between minors and incapacitated persons on the
one hand, and other persons on the other, declaring that the
responsibility for the former is direct (article 19), and for the latter,
subsidiary (articles 20 and 21); but in the scheme of the civil law,
in the case of article 1903, the responsibility should be
understood as direct, according to the tenor of that articles, for
precisely it imposes responsibility "for the acts of those persons
for whom one should be responsible."
Coming now to the sentences of the Supreme Tribunal of Spain, that
court has upheld the principles above set forth: that a quasi-
delict or culpa extra-contractual is a separate and distinct legal institution,
independent from the civil responsibility arising from criminal liability, and
that an employer is, under article 1903 of the Civil Code, primarily and
directly responsible for the negligent acts of his employee.
One of the most important of those Spanish decisions is that of October
21, 1910. In that case, Ramon Lafuente died as the result of having been
run over by a street car owned by the "compañia Electric Madrileña de
Traccion." The conductor was prosecuted in a criminal case but he was
acquitted. Thereupon, the widow filed a civil action against the street car
company, paying for damages in the amount of 15,000 pesetas. The
lower court awarded damages; so the company appealed to the Supreme
Tribunal, alleging violation of articles 1902 and 1903 of the Civil Code
because by final judgment the non-existence of fault or negligence had
been declared. The Supreme Court of Spain dismissed the appeal,
saying:
Considerando que el primer motivo del recurso se funda en el
equivocado supuesto de que el Tribunal a quo, al condonar a la
compañia Electrica Madrileña al pago del daño causado con la
muerte de Ramon La fuente Izquierdo, desconoce el valor y
efectos juridicos de la sentencia absolutoria deictada en la causa
criminal que se siguio por el mismo hecho, cuando es lo cierto
que de este han conocido las dos jurisdicciones bajo diferentes
as pectos, y como la de lo criminal declrao dentro de los limites
de su competencia que el hecho de que se trata no era
constitutivo de delito por no haber mediado descuido o
negligencia graves, lo que no excluye, siendo este el unico
fundamento del fallo absolutorio, el concurso de la culpa o
negligencia no califacadas, fuente de obligaciones civiles segun
el articulo 1902 del Codigo, y que alcanzan, segun el 1903, netre
otras perosnas, a los Directores de establecimientos o empresas
por los daños causados por sus dependientes en determinadas
condiciones, es manifesto que la de lo civil, al conocer del mismo
hehco baho este ultimo aspecto y al condenar a la compañia
recurrente a la indemnizacion del daño causado por uno de sus
empleados, lejos de infringer los mencionados textos, en relacion
con el articulo 116 de la Ley de Enjuciamiento Criminal, se ha
atenido estrictamente a ellos, sin invadir atribuciones ajenas a su
jurisdiccion propia, ni contrariar en lo mas minimo el fallo recaido
en la causa.
Considering that the first ground of the appeal is based on the
mistaken supposition that the trial court, in sentencing
the Compañia Madrileña to the payment of the damage caused
by the death of Ramon Lafuente Izquierdo, disregards the value
and juridical effects of the sentence of acquittal rendered in the
criminal case instituted on account of the same act, when it is a
fact that the two jurisdictions had taken cognizance of the same
act in its different aspects, and as the criminal jurisdiction
declared within the limits of its authority that the act in question
did not constitute a felony because there was no grave
carelessness or negligence, and this being the only basis of
acquittal, it does no exclude the co-existence of fault or
negligence which is not qualified, and is a source of civil
obligations according to article 1902 of the Civil Code, affecting,
in accordance with article 1903, among other persons, the
managers of establishments or enterprises by reason of the
damages caused by employees under certain conditions, it is
manifest that the civil jurisdiccion in taking cognizance of the
same act in this latter aspect and in ordering the company,
appellant herein, to pay an indemnity for the damage caused by
one of its employees, far from violating said legal provisions, in
relation with article 116 of the Law of Criminal Procedure, strictly
followed the same, without invading attributes which are beyond
its own jurisdiction, and without in any way contradicting the
decision in that cause. (Emphasis supplied.)
It will be noted, as to the case just cited:
First. That the conductor was not sued in a civil case, either separately or
with the street car company. This is precisely what happens in the
present case: the driver, Fontanilla, has not been sued in a civil action,
either alone or with his employer.
Second. That the conductor had been acquitted of grave criminal
negligence, but the Supreme Tribunal of Spain said that this did not
exclude the co-existence of fault or negligence, which is not qualified, on
the part of the conductor, under article 1902 of the Civil Code. In the
present case, the taxi driver was found guilty of criminal negligence, so
that if he had even sued for his civil responsibility arising from the crime,
he would have been held primarily liable for civil damages, and Barredo
would have been held subsidiarily liable for the same. But the plaintiffs
are directly suing Barredo, on his primary responsibility because of his
own presumed negligence — which he did not overcome — under article
1903. Thus, there were two liabilities of Barredo: first, the subsidiary one
because of the civil liability of the taxi driver arising from the latter's
criminal negligence; and, second, Barredo's primary liability as an
employer under article 1903. The plaintiffs were free to choose which
course to take, and they preferred the second remedy. In so doing, they
were acting within their rights. It might be observed in passing, that the
plaintiff choose the more expeditious and effective method of relief,
because Fontanilla was either in prison, or had just been released, and
besides, he was probably without property which might be seized in
enforcing any judgment against him for damages.
Third. That inasmuch as in the above sentence of October 21, 1910, the
employer was held liable civilly, notwithstanding the acquittal of the
employee (the conductor) in a previous criminal case, with greater reason
should Barredo, the employer in the case at bar, be held liable for
damages in a civil suit filed against him because his taxi driver had been
convicted. The degree of negligence of the conductor in the Spanish
case cited was less than that of the taxi driver, Fontanilla, because the
former was acquitted in the previous criminal case while the latter was
found guilty of criminal negligence and was sentenced to an
indeterminate sentence of one year and one day to two years of prision
correccional.
(See also Sentence of February 19, 1902, which is similar to the one
above quoted.)
In the Sentence of the Supreme Court of Spain, dated February 14,
1919, an action was brought against a railroad company for damages
because the station agent, employed by the company, had unjustly
and fraudulently, refused to deliver certain articles consigned to the
plaintiff. The Supreme Court of Spain held that this action was properly
under article 1902 of the Civil Code, the court saying:
Considerando que la sentencia discutida reconoce, en virtud de
los hechos que consigna con relacion a las pruebas del pleito:
1.º, que las expediciones facturadas por la compañia ferroviaria a
la consignacion del actor de las vasijas vacias que en su
demanda relacionan tenian como fin el que este las devolviera a
sus remitentes con vinos y alcoholes; 2.º, que llegadas a su
destino tales mercanias no se quisieron entregar a dicho
consignatario por el jefe de la estacion sin motivo justificado y
con intencion dolosa, y 3.º, que la falta de entrega de estas
expediciones al tiempo de reclamarlas el demandante le
originaron daños y perjuicios en cantidad de bastante importancia
como expendedor al por mayor que era de vinos y alcoholes por
las ganancias que dejo de obtener al verse privado de servir los
pedidos que se le habian hecho por los remitentes en los
envases:
Considerando que sobre esta base hay necesidad de estimar los
cuatro motivos que integran este recurso, porque la demanda
inicial del pleito a que se contrae no contiene accion que nazca
del incumplimiento del contrato de transporte, toda vez que no se
funda en el retraso de la llegada de las mercancias ni de ningun
otro vinculo contractual entre las partes contendientes,
careciendo, por tanto, de aplicacion el articulo 371 del Codigo de
Comercio, en que principalmente descansa el fallo recurrido, sino
que se limita a pedir la reparaction de los daños y perjuicios
producidos en el patrimonio del actor por la injustificada y dolosa
negativa del porteador a la entrega de las mercancias a su
nombre consignadas, segun lo reconoce la sentencia, y cuya
responsabilidad esta claramente sancionada en el articulo 1902
del Codigo Civil, que obliga por el siguiente a la Compañia
demandada como ligada con el causante de aquellos por
relaciones de caracter economico y de jurarquia administrativa.
Considering that the sentence, in question recognizes, in virtue of
the facts which it declares, in relation to the evidence in the case:
(1) that the invoice issued by the railroad company in favor of the
plaintiff contemplated that the empty receptacles referred to in the
complaint should be returned to the consignors with wines and
liquors; (2) that when the said merchandise reached their
destination, their delivery to the consignee was refused by the
station agent without justification and with fraudulent intent, and
(3) that the lack of delivery of these goods when they were
demanded by the plaintiff caused him losses and damages of
considerable importance, as he was a wholesale vendor of wines
and liquors and he failed to realize the profits when he was
 unable to fill the orders sent to him by the consignors of the
receptacles:
Considering that upon this basis there is need of upholding the
four assignments of error, as the original complaint did not
contain any cause of action arising from non-fulfillment of a
contract of transportation, because the action was not based on
the delay of the goods nor on any contractual relation between
the parties litigant and, therefore, article 371 of the Code of
Commerce, on which the decision appealed from is based, is not
applicable; but it limits to asking for reparation for losses and
damages produced on the patrimony of the plaintiff on account of
the unjustified and fraudulent refusal of the carrier to deliver the
goods consigned to the plaintiff as stated by the sentence, and
the carrier's responsibility is clearly laid down in article 1902 of
the Civil Code which binds, in virtue of the next article, the
defendant company, because the latter is connected with the
person who caused the damage by relations of economic
character and by administrative hierarchy. (Emphasis supplied.)
The above case is pertinent because it shows that the same act may
come under both the Penal Code and the Civil Code. In that case, the
action of the agent was unjustified and fraudulent and therefore could
have been the subject of a criminal action. And yet, it was held to be also
a proper subject of a civil action under article 1902 of the Civil Code. It is
also to be noted that it was the employer and not the employee who was
being sued.
Let us now examine the cases previously decided by this Court.
In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7 Phil.,
359, 362-365 [year 1907]), the trial court awarded damages to the
plaintiff, a laborer of the defendant, because the latter had negligently
failed to repair a tramway in consequence of which the rails slid off while
iron was being transported, and caught the plaintiff whose leg was
broken. This Court held:
It is contended by the defendant, as its first defense to the action
that the necessary conclusion from these collated laws is that the
remedy for injuries through negligence lies only in a criminal
action in which the official criminally responsible must be made
primarily liable and his employer held only subsidiarily to him.
According to this theory the plaintiff should have procured the
arrest of the representative of the company accountable for not
repairing the track, and on his prosecution a suitable fine should
have been imposed, payable primarily by him and secondarily by
his employer.
This reasoning misconceived the plan of the Spanish codes upon
this subject. Article 1093 of the Civil Code makes obligations
arising from faults or negligence not punished by the law, subject
to the provisions of Chapter II of Title XVI. Section 1902 of that
chapter reads:
"A person who by an act or omission causes damage to
another when there is fault or negligence shall be obliged
to repair the damage so done.
"SEC. 1903. The obligation imposed by the preceeding
article is demandable, not only for personal acts and
omissions, but also for those of the persons for whom
they should be responsible.
"The father, and on his death or incapacity, the mother, is
liable for the damages caused by the minors who live with
them.
xxx     xxx     xxx
"Owners or directors of an establishment or enterprise are
equally liable for the damages caused by their employees
in the service of the branches in which the latter may be
employed or in the performance of their duties.
xxx     xxx     xxx
"The liability referred to in this article shall cease when the
persons mentioned therein prove that they employed all
the diligence of a good father of a family to avoid the
damage."
As an answer to the argument urged in this particular action it
may be sufficient to point out that nowhere in our general statutes
is the employer penalized for failure to provide or maintain safe
appliances for his workmen. His obligation therefore is one 'not
punished by the laws' and falls under civil rather than criminal
jurisprudence. But the answer may be a broader one. We should
be reluctant, under any conditions, to adopt a forced construction
of these scientific codes, such as is proposed by the defendant,
that would rob some of these articles of effect, would shut out
litigants against their will from the civil courts, would make the
assertion of their rights dependent upon the selection for
prosecution of the proper criminal offender, and render recovery
doubtful by reason of the strict rules of proof prevailing in criminal
actions. Even if these articles had always stood alone, such a
construction would be unnecessary, but clear light is thrown upon
their meaning by the provisions of the Law of Criminal Procedure
of Spain (Ley de Enjuiciamiento Criminal), which, though never in
actual force in these Islands, was formerly given a suppletory or
explanatory effect. Under article 111 of this law, both classes of
action, civil and criminal, might be prosecuted jointly or
separately, but while the penal action was pending the civil was
suspended. According to article 112, the penal action once
started, the civil remedy should be sought therewith, unless it had
been waived by the party injured or been expressly reserved by
him for civil proceedings for the future. If the civil action alone was
prosecuted, arising out of a crime that could be enforced only on
private complaint, the penal action thereunder should be
extinguished. These provisions are in harmony with those of
articles 23 and 133 of our Penal Code on the same subject.
An examination of this topic might be carried much further, but
the citation of these articles suffices to show that the civil liability
was not intended to be merged in the criminal nor even to be
suspended thereby, except as expressly provided in the law.
Where an individual is civilly liable for a negligent act or omission,
it is not required that the injured party should seek out a third
person criminally liable whose prosecution must be a condition
precedent to the enforcement of the civil right.
Under article 20 of the Penal Code the responsibility of an
employer may be regarded as subsidiary in respect of criminal
actions against his employees only while they are in process of
prosecution, or in so far as they determine the existence of the
criminal act from which liability arises, and his obligation under
the civil law and its enforcement in the civil courts is not barred
thereby unless by the election of the injured person. Inasmuch as
no criminal proceeding had been instituted, growing our of the
accident in question, the provisions of the Penal Code can not
affect this action. This construction renders it unnecessary to
finally determine here whether this subsidiary civil liability in penal
actions has survived the laws that fully regulated it or has been
abrogated by the American civil and criminal procedure now in
force in the Philippines.
The difficulty in construing the articles of the code above cited in
this case appears from the briefs before us to have arisen from
the interpretation of the words of article 1093, "fault or negligence
not punished by law," as applied to the comprehensive definition
of offenses in articles 568 and 590 of the Penal Code. It has been
shown that the liability of an employer arising out of his relation to
his employee who is the offender is not to be regarded as derived
from negligence punished by the law, within the meaning of
articles 1902 and 1093. More than this, however, it cannot be
said to fall within the class of acts unpunished by the law, the
consequence of which are regulated by articles 1902 and 1903 of
the Civil Code. The acts to which these articles are applicable are
understood to be those not growing out of pre-existing duties of
the parties to one another. But where relations already formed
give rise to duties, whether springing from contract or quasi
contract, then breaches of those duties are subject to articles
1101, 1103, and 1104 of the same code. A typical application of
this distinction may be found in the consequences of a railway
accident due to defective machinery supplied by the employer.
His liability to his employee would arise out of the contract of
employment, that to the passengers out of the contract for
passage, while that to the injured bystander would originate in the
negligent act itself.
In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother of the 8
of 9-year-old child Salvador Bona brought a civil action against Moreta to
recover damages resulting from the death of the child, who had been run
over by an automobile driven and managed by the defendant. The trial
court rendered judgment requiring the defendant to pay the plaintiff the
sum of P1,000 as indemnity: This Court in affirming the judgment, said in
part:
If it were true that the defendant, in coming from the southern part
of Solana Street, had to stop his auto before crossing Real Street,
because he had met vehicles which were going along the latter
street or were coming from the opposite direction along Solana
Street, it is to be believed that, when he again started to run his
auto across said Real Street and to continue its way along Solana
Street northward, he should have adjusted the speed of the auto
which he was operating until he had fully crossed Real Street and
had completely reached a clear way on Solana Street. But, as the
child was run over by the auto precisely at the entrance of Solana
Street, this accident could not have occurred if the auto had been
running at a slow speed, aside from the fact that the defendant, at
 the moment of crossing Real Street and entering Solana Street,
in a northward direction, could have seen the child in the act of
crossing the latter street from the sidewalk on the right to that on
the left, and if the accident had occurred in such a way that after
the automobile had run over the body of the child, and the child's
body had already been stretched out on the ground, the
automobile still moved along a distance of about 2 meters, this
circumstance shows the fact that the automobile entered Solana
Street from Real Street, at a high speed without the defendant
having blown the horn. If these precautions had been taken by
the defendant, the deplorable accident which caused the death of
the child would not have occurred.
It will be noticed that the defendant in the above case could have been
prosecuted in a criminal case because his negligence causing the death
of the child was punishable by the Penal Code. Here is therefore a clear
instance of the same act of negligence being a proper subject-matter
either of a criminal action with its consequent civil liability arising from a
crime or of an entirely separate and independent civil action for fault or
negligence under article 1902 of the Civil Code. Thus, in this jurisdiction,
the separate individually of a cuasi-delito or culpa aquiliana under the
Civil Code has been fully and clearly recognized, even with regard to a
negligent act for which the wrongdoer could have been prosecuted and
convicted in a criminal case and for which, after such a conviction, he
could have been sued for this civil liability arising from his crime.
Years later (in 1930) this Court had another occasion to apply the same
doctrine. In Bernal and Enverso vs. House and Tacloban Electric & Ice
Plant, Ltd., 54 Phil., 327, the parents of the five-year-old child,
Purificacion Bernal, brought a civil action to recover damages for the
child's death as a result of burns caused by the fault and negligence of
the defendants. On the evening of April 10, 1925, the Good Friday
procession was held in Tacloban, Leyte. Fortunata Enverso with her
daughter Purificacion Bernal had come from another municipality to
attend the same. After the procession the mother and the daughter with
two others were passing along Gran Capitan Street in front of the offices
of the Tacloban Electric & Ice Plant, Ltd., owned by defendants J. V.
House, when an automobile appeared from the opposite direction. The
little girl, who was slightly ahead of the rest, was so frightened by the
automobile that she turned to run, but unfortunately she fell into the street
gutter where hot water from the electric plant was flowing. The child died
that same night from the burns. The trial courts dismissed the action
because of the contributory negligence of the plaintiffs. But this Court
held, on appeal, that there was no contributory negligence, and allowed
the parents P1,000 in damages from J. V. House who at the time of the
tragic occurrence was the holder of the franchise for the electric plant.
This Court said in part:
Although the trial judge made the findings of fact hereinbefore
outlined, he nevertheless was led to order the dismissal of the
action because of the contributory negligence of the plaintiffs. It is
from this point that a majority of the court depart from the stand
taken by the trial judge. The mother and her child had a perfect
right to be on the principal street of Tacloban, Leyte, on the
evening when the religious procession was held. There was
nothing abnormal in allowing the child to run along a few paces in
advance of the mother. No one could foresee the coincidence of
an automobile appearing and of a frightened child running and
falling into a ditch filled with hot water. The doctrine announced in
the much debated case of Rakes vs. Atlantic Gulf and Pacific Co.
([1907]), 7 Phil., 359), still rule. Article 1902 of the Civil Code
must again be enforced. The contributory negligence of the child
and her mother, if any, does not operate as a bar to recovery, but
in its strictest sense could only result in reduction of the damages.
It is most significant that in the case just cited, this Court specifically
applied article 1902 of the Civil Code. It is thus that although J. V. House
could have been criminally prosecuted for reckless or simple negligence
and not only punished but also made civilly liable because of his criminal
negligence, nevertheless this Court awarded damages in an independent
civil action for fault or negligence under article 1902 of the Civil Code.
In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915), the action
was for damages for the death of the plaintiff's daughter alleged to have
been caused by the negligence of the servant in driving an automobile
over the child. It appeared that the cause of the mishap was a defect in
the steering gear. The defendant Leynes had rented the automobile from
the International Garage of Manila, to be used by him in carrying
passengers during the fiesta of Tuy, Batangas. Leynes was ordered by
the lower court to pay P1,000 as damages to the plaintiff. On appeal this
Court reversed the judgment as to Leynes on the ground that he had
shown that the exercised the care of a good father of a family, thus
overcoming the presumption of negligence under article 1903. This Court
said:
As to selection, the defendant has clearly shown that he
exercised the care and diligence of a good father of a family. He
obtained the machine from a reputable garage and it was, so far
as appeared, in good condition. The workmen were likewise
 selected from a standard garage, were duly licensed by the
Government in their particular calling, and apparently thoroughly
competent. The machine had been used but a few hours when
the accident occurred and it is clear from the evidence that the
defendant had no notice, either actual or constructive, of the
defective condition of the steering gear.
The legal aspect of the case was discussed by this Court thus:
Article 1903 of the Civil Code not only establishes liability in
cases of negligence, but also provides when the liability shall
cease. It says:
"The liability referred to in this article shall cease when the
persons mentioned therein prove that they employed all
the diligence of a good father of a family to avoid the
damage."
From this article two things are apparent: (1) That when an injury
is caused by the negligence of a servant or employee there
instantly arises a presumption of law that there was negligence
on the part of the matter or employer either in the selection of the
servant or employee, or in supervision over him after the
selection, or both; and (2) that presumption is juris tantum and
not juris et de jure, and consequently, may be rebutted. It follows
necessarily that if the employer shows to the satisfaction of the
court that in selection and supervision he has exercised the care
and diligence of a good father of a family, the presumption is
overcome and he is relieve from liability.
This theory bases the responsibility of the master ultimately on
his own negligence and not on that of his servant.
The doctrine of the case just cited was followed by this Court in Cerf vs.
Medel (33 Phil., 37 [year 1915]). In the latter case, the complaint alleged
that the defendant's servant had so negligently driven an automobile,
which was operated by defendant as a public vehicle, that said
automobile struck and damaged the plaintiff's motorcycle. This Court,
applying article 1903 and following the rule in Bahia vs. Litonjua and
Leynes, said in part (p. 41) that:
The master is liable for the negligent acts of his servant where he
is the owner or director of a business or enterprise and the
negligent acts are committed while the servant is engaged in his
master's employment as such owner.
Another case which followed the decision in Bahia vs. Litonjua and
Leynes was Cuison vs. Norton & Harrison Co., 55 Phil., 18 (year 1930).
The latter case was an action for damages brought by Cuison for the
death of his seven-year-old son Moises. The little boy was on his way to
school with his sister Marciana. Some large pieces of lumber fell from a
truck and pinned the boy underneath, instantly killing him. Two youths,
Telesforo Binoya and Francisco Bautista, who were working for Ora, an
employee of defendant Norton & Harrison Co., pleaded guilty to the crime
of homicide through reckless negligence and were sentenced
accordingly. This Court, applying articles 1902 and 1903, held:
The basis of civil law liability is not respondent superior but the
relationship of pater familias. This theory bases the liability of the
master ultimately on his own negligence and not on that of his
servant. (Bahia vs. Litonjua and Leynes [1915], 30 Phil., 624;
Cangco vs. Manila Railroad Co. [1918], 38 Phil., 768.)
In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil.,
517 (year 1930) the plaintiff brought an action for damages for the
demolition of its wharf, which had been struck by the steamer Helen C
belonging to the defendant. This Court held (p. 526):
The evidence shows that Captain Lasa at the time the plaintiff's
wharf collapsed was a duly licensed captain, authorized to
navigate and direct a vessel of any tonnage, and that the
appellee contracted his services because of his reputation as a
captain, according to F. C. Cadwallader. This being so, we are of
the opinion that the presumption of liability against the defendant
has been overcome by the exercise of the care and diligence of a
good father of a family in selecting Captain Lasa, in accordance
with the doctrines laid down by this court in the cases cited
above, and the defendant is therefore absolved from all liability.
It is, therefore, seen that the defendant's theory about his secondary
liability is negatived by the six cases above set forth. He is, on the
authority of these cases, primarily and directly responsible in damages
under article 1903, in relation to article 1902, of the Civil Code.
Let us now take up the Philippine decisions relied upon by the defendant.
We study first, City of Manila vs. Manila Electric Co., 52 Phil., 586 (year
1928). A collision between a truck of the City of Manila and a street car of
the Manila Electric Co. took place on June 8, 1925. The truck was
damaged in the amount of P1,788.27. Sixto Eustaquio, the motorman,
was prosecuted for the crime of damage to property and slight injuries
through reckless imprudence. He was found guilty and sentenced to pay
a fine of P900, to indemnify the City of Manila for P1,788.27, with
subsidiary imprisonment in case of insolvency. Unable to collect the
indemnity from Eustaquio, the City of Manila filed an action against the
Manila Electric Company to obtain payment, claiming that the defendant
was subsidiarily liable. The main defense was that the defendant had
exercised the diligence of a good father of a family to prevent the
damage. The lower court rendered judgment in favor of the plaintiff. This
Court held, in part, that this case was governed by the Penal Code,
saying:
With this preliminary point out of the way, there is no escaping the
conclusion that the provisions of the Penal Code govern. The
Penal Code in easily understandable language authorizes the
determination of subsidiary liability. The Civil Code negatives its
application by providing that civil obligations arising from crimes
or misdemeanors shall be governed by the provisions of the
Penal Code. The conviction of the motorman was a misdemeanor
falling under article 604 of the Penal Code. The act of the
motorman was not a wrongful or negligent act or omission not
punishable by law. Accordingly, the civil obligation connected up
with the Penal Code and not with article 1903 of the Civil Code. In
other words, the Penal Code affirms its jurisdiction while the Civil
Code negatives its jurisdiction. This is a case of criminal
negligence out of which civil liability arises and not a case of civil
negligence.
xxx     xxx     xxx
Our deduction, therefore, is that the case relates to the Penal
Code and not to the Civil Code. Indeed, as pointed out by the trial
judge, any different ruling would permit the master to escape
scot-free by simply alleging and proving that the master had
exercised all diligence in the selection and training of its servants
to prevent the damage. That would be a good defense to a strictly
civil action, but might or might not be to a civil action either as a
part of or predicated on conviction for a crime or misdemeanor.
(By way of parenthesis, it may be said further that the statements
here made are offered to meet the argument advanced during our
deliberations to the effect that article 0902 of the Civil Code
should be disregarded and codal articles 1093 and 1903 applied.)
It is not clear how the above case could support the defendant's
proposition, because the Court of Appeals based its decision in the
present case on the defendant's primary responsibility under article 1903
of the Civil Code and not on his subsidiary liability arising from
Fontanilla's criminal negligence. In other words, the case of City of Manila
vs. Manila Electric Co., supra, is predicated on an entirely different
theory, which is the subsidiary liability of an employer arising from a
criminal act of his employee, whereas the foundation of the decision of
the Court of Appeals in the present case is the employer's primary liability
under article 1903 of the Civil Code. We have already seen that this is a
proper and independent remedy.
Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case invoked
by the defendant. A motorman in the employ of the Manila Electric
Company had been convicted o homicide by simple negligence and
sentenced, among other things, to pay the heirs of the deceased the sum
of P1,000. An action was then brought to enforce the subsidiary liability of
the defendant as employer under the Penal Code. The defendant
attempted to show that it had exercised the diligence of a good father of a
family in selecting the motorman, and therefore claimed exemption from
civil liability. But this Court held:
In view of the foregoing considerations, we are of opinion and so
hold, (1) that the exemption from civil liability established in article
1903 of the Civil Code for all who have acted with the diligence of
a good father of a family, is not applicable to the subsidiary civil
liability provided in article 20 of the Penal Code.
The above case is also extraneous to the theory of the defendant in the
instant case, because the action there had for its purpose the
enforcement of the defendant's subsidiary liability under the Penal Code,
while in the case at bar, the plaintiff's cause of action is based on the
defendant's primary and direct responsibility under article 1903 of the
Civil Code. In fact, the above case destroys the defendant's contention
because that decision illustrates the principle that the employer's primary
responsibility under article 1903 of the Civil Code is different in character
from his subsidiary liability under the Penal Code.
In trying to apply the two cases just referred to, counsel for the defendant
has failed to recognize the distinction between civil liability arising from a
crime, which is governed by the Penal Code, and the responsibility
for cuasi-delito or culpa aquiliana under the Civil Code, and has likewise
failed to give the importance to the latter type of civil action.
The defendant-petitioner also cites Francisco vs. Onrubia (46 Phil., 327).
That case need not be set forth. Suffice it to say that the question
involved was also civil liability arising from a crime. Hence, it is as
inapplicable as the two cases above discussed.
The foregoing authorities clearly demonstrate the separate individuality
of cuasi-delitos or culpa aquiliana under the Civil Code. Specifically they
show that there is a distinction between civil liability arising from criminal
negligence (governed by the Penal Code) and responsibility for fault or
negligence under articles 1902 to 1910 of the Civil Code, and that the
same negligent act may produce either a civil liability arising from a crime
under the Penal Code, or a separate responsibility for fault or negligence
under articles 1902 to 1910 of the Civil Code. Still more concretely, the
authorities above cited render it inescapable to conclude that the
employer — in this case the defendant-petitioner — is primarily and
directly liable under article 1903 of the Civil Code.
The legal provisions, authors, and cases already invoked should
ordinarily be sufficient to dispose of this case. But inasmuch as we are
announcing doctrines that have been little understood in the past, it might
not be inappropriate to indicate their foundations.
Firstly, the Revised Penal Code in article 365 punishes not only reckless
but also simple negligence. If we were to hold that articles 1902 to 1910
of the Civil Code refer only to fault or negligence not punished by law,
according to the literal import of article 1093 of the Civil Code, the legal
institution of culpa aquiliana would have very little scope and application
in actual life. Death or injury to persons and damage to property through
any degree of negligence — even the slightest — would have to be
indemnified only through the principle of civil liability arising from a crime.
In such a state of affairs, what sphere would remain for cuasi-
delito or culpa aquiliana? We are loath to impute to the lawmaker any
intention to bring about a situation so absurd and anomalous. Nor are we,
in the interpretation of the laws, disposed to uphold the letter that killeth
rather than the spirit that giveth life. We will not use the literal meaning of
the law to smother and render almost lifeless a principle of such ancient
origin and such full-grown development as culpa aquiliana or cuasi-delito,
which is conserved and made enduring in articles 1902 to 1910 of the
Spanish Civil Code.
Secondly, to find the accused guilty in a criminal case, proof of guilt
beyond reasonable doubt is required, while in a civil case,
preponderance of evidence is sufficient to make the defendant pay in
damages. There are numerous cases of criminal negligence which can
not be shown beyond reasonable doubt, but can be proved by a
preponderance of evidence. In such cases, the defendant can and should
be made responsible in a civil action under articles 1902 to 1910 of the
Civil Code. Otherwise, there would be many instances of unvindicated
civil wrongs. Ubi jus ibi remedium.
Thirdly, to hold that there is only one way to make defendant's liability
effective, and that is, to sue the driver and exhaust his (the latter's)
property first, would be tantamount to compelling the plaintiff to follow a
devious and cumbersome method of obtaining relief. True, there is such
a remedy under our laws, but there is also a more expeditious way, which
is based on the primary and direct responsibility of the defendant under
article 1903 of the Civil Code. Our view of the law is more likely to
facilitate remedy for civil wrongs, because the procedure indicated by the
defendant is wasteful and productive of delay, it being a matter of
common knowledge that professional drivers of taxis and similar public
conveyance usually do not have sufficient means with which to pay
damages. Why, then, should the plaintiff be required in all cases to go
through this roundabout, unnecessary, and probably useless procedure?
In construing the laws, courts have endeavored to shorten and facilitate
the pathways of right and justice.
At this juncture, it should be said that the primary and direct responsibility
of employers and their presumed negligence are principles calculated to
protect society. Workmen and employees should be carefully chosen and
supervised in order to avoid injury to the public. It is the masters or
employers who principally reap the profits resulting from the services of
these servants and employees. It is but right that they should guarantee
the latter's careful conduct for the personnel and patrimonial safety of
others. As Theilhard has said, "they should reproach themselves, at
least, some for their weakness, others for their poor selection and all for
their negligence." And according to Manresa, "It is much more equitable
and just that such responsibility should fall upon the principal or director
who could have chosen a careful and prudent employee, and not upon
the injured person who could not exercise such selection and who used
such employee because of his confidence in the principal or director."
(Vol. 12, p. 622, 2nd Ed.) Many jurists also base this primary
responsibility of the employer on the principle of representation of the
principal by the agent. Thus, Oyuelos says in the work already cited (Vol.
7, p. 747) that before third persons the employer and employee "vienen a
ser como una sola personalidad, por refundicion de la del dependiente
en la de quien le emplea y utiliza." ("become as one personality by the
merging of the person of the employee in that of him who employs and
utilizes him.") All these observations acquire a peculiar force and
significance when it comes to motor accidents, and there is need of
stressing and accentuating the responsibility of owners of motor vehicles.
Fourthly, because of the broad sweep of the provisions of both the Penal
Code and the Civil Code on this subject, which has given rise to the
overlapping or concurrence of spheres already discussed, and for lack of
understanding of the character and efficacy of the action for culpa
aquiliana, there has grown up a common practice to seek damages only
by virtue of the civil responsibility arising from a crime, forgetting that
there is another remedy, which is by invoking articles 1902-1910 of the
Civil Code. Although this habitual method is allowed by our laws, it has
nevertheless rendered practically useless and nugatory the more
expeditious and effective remedy based on culpa aquiliana or culpa
extra-contractual. In the present case, we are asked to help perpetuate
this usual course. But we believe it is high time we pointed out to the
harm done by such practice and to restore the principle of responsibility
for fault or negligence under articles 1902 et seq. of the Civil Code to its
full rigor. It is high time we caused the stream of quasi-delict or culpa
aquiliana to flow on its own natural channel, so that its waters may no
longer be diverted into that of a crime under the Penal Code. This will, it
is believed, make for the better safeguarding of private rights because it
re-establishes an ancient and additional remedy, and for the further
reason that an independent civil action, not depending on the issues,
limitations and results of a criminal prosecution, and entirely directed by
the party wronged or his counsel, is more likely to secure adequate and
efficacious redress.

In view of the foregoing, the judgment of the Court of Appeals should be

and is hereby affirmed, with costs against the defendant-petitioner.

G.R. No. L-24803 May 26, 1977
PEDRO ELCANO and PATRICIA ELCANO, in their capacity as
Ascendants of Agapito Elcano, deceased, plaintiffs-appellants,
vs.
REGINALD HILL, minor, and MARVIN HILL, as father and Natural
Guardian of said minor, defendants-appellees.
Cruz & Avecilla for appellants.
Marvin R. Hill & Associates for appellees.
BARREDO, J.:
Appeal from the order of the Court of First Instance of Quezon City dated
January 29, 1965 in Civil Case No. Q-8102, Pedro Elcano et al. vs.
Reginald Hill et al. dismissing, upon motion to dismiss of defendants, the
complaint of plaintiffs for recovery of damages from defendant Reginald
Hill, a minor, married at the time of the occurrence, and his father, the
defendant Marvin Hill, with whom he was living and getting subsistence,
for the killing by Reginald of the son of the plaintiffs, named Agapito
Elcano, of which, when criminally prosecuted, the said accused was
acquitted on the ground that his act was not criminal, because of "lack of
intent to kill, coupled with mistake."
Actually, the motion to dismiss based on the following grounds:
1. The present action is not only against but a violation of
section 1, Rule 107, which is now Rule III, of the Revised
Rules of Court;
2. The action is barred by a prior judgment which is now
final and or in res-adjudicata;
3. The complaint had no cause of action against
defendant Marvin Hill, because he was relieved as
guardian of the other defendant through emancipation by
marriage.
(P. 23, Record [p. 4, Record on Appeal.])
was first denied by the trial court. It was only upon motion for
reconsideration of the defendants of such denial, reiterating the above
grounds that the following order was issued:
Considering the motion for reconsideration filed by the
defendants on January 14, 1965 and after thoroughly
examining the arguments therein contained, the Court
finds the same to be meritorious and well-founded.
WHEREFORE, the Order of this Court on December 8,
1964 is hereby reconsidered by ordering the dismissal of
the above entitled case.
SO ORDERED.
Quezon City, Philippines, January 29, 1965. (p. 40,
Record [p. 21, Record on Appeal.)
Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are
presenting for Our resolution the following assignment of errors:
THE LOWER COURT ERRED IN DISMISSING THE
CASE BY UPHOLDING THE CLAIM OF DEFENDANTS
THAT -
I
 THE PRESENT ACTION IS NOT ONLY AGAINST BUT
ALSO A VIOLATION OF SECTION 1, RULE 107, NOW
RULE 111, OF THE REVISED RULES OF COURT, AND
THAT SECTION 3(c) OF RULE 111, RULES OF COURT
IS APPLICABLE;
II
THE ACTION IS BARRED BY A PRIOR JUDGMENT
WHICH IS NOW FINAL OR RES-ADJUDICTA;
III
THE PRINCIPLES OF QUASI-DELICTS, ARTICLES
2176 TO 2194 OF THE CIVIL CODE, ARE
INAPPLICABLE IN THE INSTANT CASE; and
IV
THAT THE COMPLAINT STATES NO CAUSE OF
ACTION AGAINST DEFENDANT MARVIN HILL
BECAUSE HE WAS RELIEVED AS GUARDIAN OF THE
OTHER DEFENDANT THROUGH EMANCIPATION BY
MARRIAGE. (page 4, Record.)
It appears that for the killing of the son, Agapito, of plaintiffs-appellants,
defendant- appellee Reginald Hill was prosecuted criminally in Criminal
Case No. 5102 of the Court of First Instance of Quezon City. After due
trial, he was acquitted on the ground that his act was not criminal
because of "lack of intent to kill, coupled with mistake." Parenthetically,
none of the parties has favored Us with a copy of the decision of
acquittal, presumably because appellants do not dispute that such indeed
was the basis stated in the court's decision. And so, when appellants filed
their complaint against appellees Reginald and his father, Atty. Marvin
Hill, on account of the death of their son, the appellees filed the motion to
dismiss above-referred to.
As We view the foregoing background of this case, the two decisive
issues presented for Our resolution are:
1. Is the present civil action for damages barred by the acquittal of
Reginald in the criminal case wherein the action for civil liability, was not
reversed?
2. May Article 2180 (2nd and last paragraphs) of the Civil Code he
applied against Atty. Hill, notwithstanding the undisputed fact that at the
time of the occurrence complained of. Reginald, though a minor, living
with and getting subsistenee from his father, was already legally married?
The first issue presents no more problem than the need for a reiteration
and further clarification of the dual character, criminal and civil, of fault or
negligence as a source of obligation which was firmly established in this
jurisdiction in Barredo vs. Garcia, 73 Phil. 607. In that case, this Court
postulated, on the basis of a scholarly dissertation by Justice Bocobo on
the nature of culpa aquiliana in relation to culpa criminal or delito and
mere culpa or fault, with pertinent citation of decisions of the Supreme
Court of Spain, the works of recognized civilians, and earlier
jurisprudence of our own, that the same given act can result in civil
liability not only under the Penal Code but also under the Civil Code.
Thus, the opinion holds:
The, above case is pertinent because it shows that the
same act machinist. come under both the Penal Code
and the Civil Code. In that case, the action of the agent
killeth unjustified and fraudulent and therefore could have
been the subject of a criminal action. And yet, it was held
to be also a proper subject of a civil action under article
1902 of the Civil Code. It is also to be noted that it was
the employer and not the employee who was being sued.
(pp. 615-616, 73 Phil.). 1
It will be noticed that the defendant in the above case
could have been prosecuted in a criminal case because
his negligence causing the death of the child was
punishable by the Penal Code. Here is therefore a clear
instance of the same act of negligence being a proper
subject matter either of a criminal action with its
consequent civil liability arising from a crime or of an
entirely separate and independent civil action for fault or
negligence under article 1902 of the Civil Code. Thus, in
this jurisdiction, the separate individuality of a cuasi-
delito or culpa aquiliana, under the Civil Code has been
fully and clearly recognized, even with regard to a
negligent act for which the wrongdoer could have been
prosecuted and convicted in a criminal case and for
which, after such a conviction, he could have been sued
for this civil liability arising from his crime. (p. 617, 73
Phil.) 2
It is most significant that in the case just cited, this Court
specifically applied article 1902 of the Civil Code. It is thus
that although J. V. House could have been criminally
prosecuted for reckless or simple negligence and not only
punished but also made civilly liable because of his criminal
negligence, nevertheless this Court awarded damages in an
independent civil action for fault or negligence under article
1902 of the Civil Code. (p. 618, 73 Phil.) 3
The legal provisions, authors, and cases already invoked
should ordinarily be sufficient to dispose of this case. But
inasmuch as we are announcing doctrines that have been
little understood, in the past, it might not he inappropriate
to indicate their foundations.
Firstly, the Revised Penal Code in articles 365 punishes
not only reckless but also simple negligence. If we were
to hold that articles 1902 to 1910 of the Civil Code refer
only to fault or negligence not punished by law,
accordingly to the literal import of article g1093 of the Civil
Code, the legal institution of culpa aquiliana would have
very little scope and application in actual life. Death or
injury to persons and damage to property- through any
degree of negligence - even the slightest - would have to
be Idemnified only through the principle of civil liability
arising from a crime. In such a state of affairs, what
sphere would remain for cuasi-delito or culpa aquiliana?
We are loath to impute to the lawmaker any intention to
bring about a situation so absurd and anomalous. Nor are
we, in the interpretation of the laws, disposed to uphold
the letter that killeth rather than the spirit that giveth life.
We will not use the literal meaning of the law to smother
and render almost lifeless a principle of such ancient
origin and such full-grown development as culpa
aquiliana or cuasi-delito, which is conserved and made
enduring in articles 1902 to 1910 of the Spanish Civil
Code.
Secondary, to find the accused guilty in a criminal case,
proof of guilt beyond reasonable doubt is required, while
in a civil case, preponderance of evidence is sufficient to
make the defendant pay in damages. There are
numerous cases of criminal negligence which can not be
shown beyond reasonable doubt, but can be proved by a
preponderance of evidence. In such cases, the defendant
can and should be made responsible in a civil action
under articles 1902 to 1910 of the Civil Code. Otherwise.
there would be many instances of unvindicated civil
wrongs. "Ubi jus Idemnified remedium." (p. 620,73 Phil.)
Fourthly, because of the broad sweep of the provisions of
both the Penal Code and the Civil Code on this subject,
which has given rise to the overlapping or concurrence of
spheres already discussed, and for lack of understanding
of the character and efficacy of the action for culpa
aquiliana, there has grown up a common practice to seek
damages only by virtue of the civil responsibility arising
from a crime, forgetting that there is another remedy,
which is by invoking articles 1902-1910 of the Civil Code.
Although this habitual method is allowed by, our laws, it
has nevertheless rendered practically useless and
nugatory the more expeditious and effective remedy
based on culpa aquiliana or culpa extra-contractual. In the
present case, we are asked to help perpetuate this usual
course. But we believe it is high time we pointed out to
the harms done by such practice and to restore the
principle of responsibility for fault or negligence under
articles 1902 et seq. of the Civil Code to its full rigor. It is
high time we caused the stream of quasi-delict or culpa
aquiliana to flow on its own natural channel, so that its
waters may no longer be diverted into that of a crime
under the Penal Code. This will, it is believed, make for
the better safeguarding or private rights because it realtor,
an ancient and additional remedy, and for the further
reason that an independent civil action, not depending on
the issues, limitations and results of a criminal
prosecution, and entirely directed by the party wronged or
his counsel, is more likely to secure adequate and
efficacious redress. (p. 621, 73 Phil.)
Contrary to an immediate impression one might get upon a reading of the
foregoing excerpts from the opinion in Garcia that the concurrence of the
Penal Code and the Civil Code therein referred to contemplate only acts
of negligence and not intentional voluntary acts - deeper reflection would
reveal that the thrust of the pronouncements therein is not so limited, but
that in fact it actually extends to fault or culpa. This can be seen in the
reference made therein to the Sentence of the Supreme Court of Spain of
February 14, 1919, supra, which involved a case of fraud or estafa, not a
negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force
here at the time of Garcia, provided textually that obligations "which are
derived from acts or omissions in which fault or negligence, not
punishable by law, intervene shall be the subject of Chapter II, Title XV of
this book (which refers to quasi-delicts.)" And it is precisely the underline
qualification, "not punishable by law", that Justice Bocobo emphasized
could lead to an ultimo construction or interpretation of the letter of the
law that "killeth, rather than the spirit that giveth lift- hence, the ruling that
"(W)e will not use the literal meaning of the law to smother and render
almost lifeless a principle of such ancient origin and such full-grown
development as culpa aquiliana or quasi-delito, which is conserved and
made enduring in articles 1902 to 1910 of the Spanish Civil Code." And
so, because Justice Bacobo was Chairman of the Code Commission that
drafted the original text of the new Civil Code, it is to be noted that the
said Code, which was enacted after the Garcia doctrine, no longer uses
the term, 11 not punishable by law," thereby making it clear that the
concept of culpa aquiliana includes acts which are criminal in character
or in violation of the penal law, whether voluntary or matter. Thus, the
corresponding provisions to said Article 1093 in the new code, which is
Article 1162, simply says, "Obligations derived from quasi-delicto shall be
governed by the provisions of Chapter 2, Title XVII of this Book,
(on quasi-delicts) and by special laws." More precisely, a new provision,
Article 2177 of the new code provides:
ART. 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct from
the civil liability arising from negligence under the Penal
Code. But the plaintiff cannot recover damages twice for
the same act or omission of the defendant.
According to the Code Commission: "The foregoing provision (Article
2177) through at first sight startling, is not so novel or extraordinary when
we consider the exact nature of criminal and civil negligence. The former
is a violation of the criminal law, while the latter is a "culpa aquiliana" or
quasi-delict, of ancient origin, having always had its own foundation and
individuality, separate from criminal negligence. Such distinction between
criminal negligence and "culpa extracontractual" or "cuasi-delito" has
been sustained by decision of the Supreme Court of Spain and
maintained as clear, sound and perfectly tenable by Maura, an
outstanding Spanish jurist. Therefore, under the proposed Article 2177,
acquittal from an accusation of criminal negligence, whether on
reasonable doubt or not, shall not be a bar to a subsequent civil action,
not for civil liability arising from criminal negligence, but for damages due
to a quasi-delict or 'culpa aquiliana'. But said article forestalls a double
recovery.", (Report of the Code) Commission, p. 162.)
Although, again, this Article 2177 does seem to literally refer to only acts
of negligence, the same argument of Justice Bacobo about construction
that upholds "the spirit that giveth lift- rather than that which is literal that
killeth the intent of the lawmaker should be observed in applying the
same. And considering that the preliminary chapter on human relations of
the new Civil Code definitely establishes the separability and
independence of liability in a civil action for acts criminal in character
(under Articles 29 to 32) from the civil responsibility arising from crime
fixed by Article 100 of the Revised Penal Code, and, in a sense, the
Rules of Court, under Sections 2 and 3 (c), Rule 111, contemplate also
the same separability, it is "more congruent with the spirit of law, equity
and justice, and more in harmony with modern progress"- to borrow the
felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific Co., 7
Phil. 359, to hold, as We do hold, that Article 2176, where it refers to
"fault or negligencia covers not only acts "not punishable by law" but also
acts criminal in character, whether intentional and voluntary or negligent.
Consequently, a separate civil action lies against the offender in a
criminal act, whether or not he is criminally prosecuted and found guilty
or acquitted, provided that the offended party is not allowed, if he is
actually charged also criminally, to recover damages on both scores, and
would be entitled in such eventuality only to the bigger award of the two,
assuming the awards made in the two cases vary. In other words, the
extinction of civil liability referred to in Par. (e) of Section 3, Rule 111,
refers exclusively to civil liability founded on Article 100 of the Revised
Penal Code, whereas the civil liability for the same act considered as
a quasi-delict only and not as a crime is not estinguished even by a
declaration in the criminal case that the criminal act charged has not
happened or has not been committed by the accused. Briefly stated, We
here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary
and negligent acts which may be punishable by law. 4
It results, therefore, that the acquittal of Reginal Hill in the criminal case
has not extinguished his liability for quasi-delict, hence that acquittal is
not a bar to the instant action against him.
Coming now to the second issue about the effect of Reginald's
emancipation by marriage on the possible civil liability of Atty. Hill, his
father, it is also Our considered opinion that the conclusion of appellees
that Atty. Hill is already free from responsibility cannot be upheld.
While it is true that parental authority is terminated upon emancipation of WHEREFORE, the order appealed from is reversed and the trial court is
the child (Article 327, Civil Code), and under Article 397, emancipation ordered to proceed in accordance with the foregoing opinion. Costs
takes place "by the marriage of the minor (child)", it is, however, also against appellees.
clear that pursuant to Article 399, emancipation by marriage of the minor
is not really full or absolute. Thus "(E)mancipation by marriage or by Fernando (Chairman), Antonio, and Martin, JJ., concur.
voluntary concession shall terminate parental authority over the child's
person. It shall enable the minor to administer his property as though he Concepcion Jr., J, is on leave.
were of age, but he cannot borrow money or alienate or encumber real
property without the consent of his father or mother, or guardian. He can
Martin, J, was designated to sit in the Second Division.
sue and be sued in court only with the assistance of his father, mother or
guardian."

Now under Article 2180, "(T)he obligation imposed by article 2176 is

demandable not only for one's own acts or omissions, but also for those
of persons for whom one is responsible. The father and, in case of his
death or incapacity, the mother, are responsible. The father and, in case
of his death or incapacity, the mother, are responsible for the damages
caused by the minor children who live in their company." In the instant
case, it is not controverted that Reginald, although married, was living
with his father and getting subsistence from him at the time of the
occurrence in question. Factually, therefore, Reginald was still
subservient to and dependent on his father, a situation which is not
unusual.

It must be borne in mind that, according to Manresa, the reason behind

the joint and solidary liability of presuncion with their offending child
under Article 2180 is that is the obligation of the parent to supervise their
minor children in order to prevent them from causing damage to third
persons. 5 On the other hand, the clear implication of Article 399, in providing
that a minor emancipated by marriage may not, nevertheless, sue or be sued
without the assistance of the parents, is that such emancipation does not
carry with it freedom to enter into transactions or do any act that can give rise
to judicial litigation. (See Manresa, Id., Vol. II, pp. 766-767, 776.) And surely,
killing someone else invites judicial action. Otherwise stated, the marriage of
a minor child does not relieve the parents of the duty to see to it that the
child, while still a minor, does not give answerable for the borrowings of
money and alienation or encumbering of real property which cannot be done
by their minor married child without their consent. (Art. 399; Manresa, supra.)

Accordingly, in Our considered view, Article 2180 applies to Atty. Hill

notwithstanding the emancipation by marriage of Reginald. However,
inasmuch as it is evident that Reginald is now of age, as a matter of
equity, the liability of Atty. Hill has become milling, subsidiary to that of
his son.

G.R. No. L-4089             January 12, 1909
ARTUROPELAYO, plaintiff-appellant,
vs.
MARCELO LAURON, ET AL., defendants-appellees.
J.H. Junquera, for appellant.
Filemon Sotto, for appellee.
TORRES, J.:
On the 23rd of November, 1906, Arturo Pelayo, a physician residing in
Cebu, filed a complaint against Marcelo Lauron and Juana Abella setting
forth that on or about the 13th of October of said year, at night, the
plaintiff was called to the house of the defendants, situated in San
Nicolas, and that upon arrival he was requested by them to render
medical assistance to their daughter-in-law who was about to give birth to
a child; that therefore, and after consultation with the attending physician,
Dr. Escaño, it was found necessary, on account of the difficult birth, to
remove the fetus by means of forceps which operation was performed by
the plaintiff, who also had to remove the afterbirth, in which services he
was occupied until the following morning, and that afterwards, on the
same day, he visited the patient several times; that the just and equitable
value of the services rendered by him was P500, which the defendants
refuse to pay without alleging any good reason therefor; that for said
reason he prayed that the judgment be entered in his favor as against the
defendants, or any of them, for the sum of P500 and costs, together with
any other relief that might be deemed proper.
In answer to the complaint counsel for the defendants denied all of the
allegation therein contained and alleged as a special defense, that their
daughter-in-law had died in consequence of the said childbirth, and that
when she was alive she lived with her husband independently and in a
separate house without any relation whatever with them, and that, if on
the day when she gave birth she was in the house of the defendants, her
stay their was accidental and due to fortuitous circumstances; therefore,
he prayed that the defendants be absolved of the complaint with costs
against the plaintiff.
The plaintiff demurred to the above answer, and the court below
sustained the demurrer, directing the defendants, on the 23rd of January,
1907, to amend their answer. In compliance with this order the
defendants presented, on the same date, their amended answer, denying
each and every one of the allegations contained in the complaint, and
requesting that the same be dismissed with costs.
As a result of the evidence adduced by both parties, judgment was
entered by the court below on the 5th of April, 1907, whereby the
defendants were absolved from the former complaint, on account of the
lack of sufficient evidence to establish a right of action against the
defendants, with costs against the plaintiff, who excepted to the said
judgment and in addition moved for a new trial on the ground that the
judgment was contrary to law; the motion was overruled and the plaintiff
excepted and in due course presented the corresponding bill of
exceptions. The motion of the defendants requesting that the declaration
contained in the judgment that the defendants had demanded therefrom,
for the reason that, according to the evidence, no such request had been
made, was also denied, and to the decision the defendants excepted.
Assuming that it is a real fact of knowledge by the defendants that the
plaintiff, by virtue of having been sent for by the former, attended a
physician and rendered professional services to a daughter-in-law of the
said defendants during a difficult and laborious childbirth, in order to
decide the claim of the said physician regarding the recovery of his fees,
it becomes necessary to decide who is bound to pay the bill, whether the
father and mother-in-law of the patient, or the husband of the latter.
According to article 1089 of the Civil Code, obligations are created by
law, by contracts, by quasi-contracts, and by illicit acts and omissions or
by those in which any kind of fault or negligence occurs.
Obligations arising from law are not presumed. Those expressly
determined in the code or in special laws, etc., are the only demandable
ones. Obligations arising from contracts have legal force between the
contracting parties and must be fulfilled in accordance with their
stipulations. (Arts. 1090 and 1091.)
The rendering of medical assistance in case of illness is comprised
among the mutual obligations to which the spouses are bound by way of
mutual support. (Arts. 142 and 143.)
If every obligation consists in giving, doing or not doing something (art.
1088), and spouses are mutually bound to support each other, there can
be no question but that, when either of them by reason of illness should
be in need of medical assistance, the other is under the unavoidable
obligation to furnish the necessary services of a physician in order that
health may be restored, and he or she may be freed from the sickness by
which life is jeopardized; the party bound to furnish such support is
therefore liable for all expenses, including the fees of the medical expert
for his professional services. This liability originates from the above-cited
mutual obligation which the law has expressly established between the
married couple.
In the face of the above legal precepts it is unquestionable that the
person bound to pay the fees due to the plaintiff for the professional
services that he rendered to the daughter-in-law of the defendants during
her childbirth, is the husband of the patient and not her father and
mother- in-law, the defendants herein. The fact that it was not the
husband who called the plaintiff and requested his assistance for his wife
is no bar to the fulfillment of the said obligation, as the defendants, in
view of the imminent danger, to which the life of the patient was at that
moment exposed, considered that medical assistance was urgently
needed, and the obligation of the husband to furnish his wife in the
indispensable services of a physician at such critical moments is
specially established by the law, as has been seen, and compliance
therewith is unavoidable; therefore, the plaintiff, who believes that he is
entitled to recover his fees, must direct his action against the husband
who is under obligation to furnish medical assistance to his lawful wife in
such an emergency.
From the foregoing it may readily be understood that it was improper to
have brought an action against the defendants simply because they were
the parties who called the plaintiff and requested him to assist the patient
during her difficult confinement, and also, possibly, because they were
her father and mother-in-law and the sickness occurred in their house.
The defendants were not, nor are they now, under any obligation by
virtue of any legal provision, to pay the fees claimed, nor in consequence
of any contract entered into between them and the plaintiff from which
such obligation might have arisen.
In applying the provisions of the Civil Code in an action for support, the
supreme court of Spain, while recognizing the validity and efficiency of a
contract to furnish support wherein a person bound himself to support
another who was not his relative, established the rule that the law does
impose the obligation to pay for the support of a stranger, but as the
liability arose out of a contract, the stipulations of the agreement must be
held. (Decision of May 11, 1897.)
Within the meaning of the law, the father and mother-in-law are strangers
with respect to the obligation that devolves upon the husband to provide
support, among which is the furnishing of medical assistance to his wife
at the time of her confinement; and, on the other hand, it does not appear
that a contract existed between the defendants and the plaintiff physician,
for which reason it is obvious that the former can not be compelled to pay
fees which they are under no liability to pay because it does not appear
that they consented to bind themselves.
The foregoing suffices to demonstrate that the first and second errors
assigned to the judgment below are unfounded, because, if the plaintiff
has no right of action against the defendants, it is needless to declare
whether or not the use of forceps is a surgical operation.
Therefore, in view of the consideration hereinbefore set forth, it is our
opinion that the judgment appealed from should be affirmed with the
costs against the appellant. So ordered.

KATIPUNAN V. CALTEX-
SUBJECT: CONTRACTS.
On June 24, 1953 the Court of Industrial Relations received a
petition of the Katipunan Labor Union dated June 8, 1953 entitled “Caltex
Cebu Branch vs. Katipunan Labor Union” and docketed as Case No. 430-V
(1), alleging that employee Florencio Alforque of the Respondent labor
union has been dismissed by the Petitioner without sufficient or valid cause
and without an investigation, in violation of the order of the Court of
Industrial Relations dated March 18, 1950, and praying that said Alforque be
reinstated in his position with full pay from May 1, 1953, the date of his
dismissal, to the date of his reinstatement. This petition was received in the
Court of Industrial Relations after the approval of Republic Act No. 875 on
June 17, 1953, although it was mailed prior to the said date of approval. The
Caltex (Philippines) Inc. filed an answer alleging that Alforque lacks
judgment, initiative and ability in his work as a mechanic;  that the branch
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in which he worked is over-staffed and the services of Alforque were not
needed;  that case No. 430-V was terminated long before the petition was
chan roblesvirtualawlibrary
filed;  and that the petition does not state facts to merit an exercise of
chan roblesvirtualawlibrary
jurisdiction by the Court of Industrial Relations. After hearing the Court
declared it has jurisdiction over the case and ordered the provisional
reinstatement of Alforque to his former position, pending hearing on the
merits of the dismissal. A motion to reconsider the same was denied, so this
present petition was filed in this court alleging that the Court of Industrial
Relations has no jurisdiction over the case first, because the court lacks
jurisdiction to order the reinstatement after the enactment of Republic Act
No. 875;  second, because only one employee, not 31 members, is
chan roblesvirtualawlibrary
involved;  and, third, there is no labor dispute between the employer and
chan roblesvirtualawlibrary
the workers.
It appears that sometime in 1950, a labor dispute arose between the
Katipunan Labor Union and the Caltex (Philippines) Inc. The case was
docketed in the Court of Industrial Relations as case No. 430-V, “Caltex Cebu
Branch vs. Katipunan Labor Union.” The case was amicably settled on June
29, 1950, the court approving the settlement in an order issued on July 28,
1950. Among the terms of the amicable settlement was an agreement that
“the company prior to any dismissal, lay-off or suspension should give the
union opportunity to be heard and the union should be given not less than
three (3) days notice before any hearing or investigation” is conducted.
Failure of the Court of Industrial Relations for the reinstatement to comply
with this agreement was the basis for the order of Alforque.
One of the reasons given why the Court of Industrial Relations is alleged to
have no jurisdiction over the case is that the petition was received in the
Court of Industrial Relations after Republic Act No. 875 was approved on
June 17, 1953. In answer to this contention it is to be noted that it is the
practice before courts of justice to consider the mails as an agent of the
Government — so the date of mailing is always considered as the date of
filing any petition, motion or paper. As the petition in the present case was
mailed before the approval of Republic Act No. 875, it may not be
considered filed after the new law had become effective.
The next contention is that the dismissal of the employee is not a labor
dispute. This is without merit. The term labor dispute is defined as including.
“  any controversy concerning terms, tenure or conditions of employment  ”
 cralaw  cralaw
(Sec. 2[j], Republic Act No. 875).
The existing agreement between the Katipunan Labor Union and
the Petitioner, that no employee should be dismissed without notice and an
opportunity for hearing, is a condition or term of the employment
agreement. The enforcement of the agreement is not the concern of the
employee affected alone, but that of the whole labor union to which he
belongs;  there is labor dispute because there is controversy between the
chan roblesvirtualawlibrary

union and the employer regarding it.

Another argument of Petitioner is that the agreement in question, entered
into in the year 1950, only terminated the case then existing, and it or the
decision rendered thereon is not applicable three (3) years thereafter. This
contention is not justified by the very terms of the agreement itself, which
clearly contemplate future relationship between the parties. As the
relationship of employer and employee continued to exist without any
change or modification of the agreement, the parties are presumed to have
continued under its terms.
We find no merit in the petition and we hereby deny it with costs against
the Petitioner.
 ultimate facts as found by the court and essential to support the
decision and judgment rendered thereon; they consist of the
court’s "conclusions with respect to the determinative facts on
issue."cralaw virtua1aw library

4. ID.; ID.; ID.; QUESTION OF LAW EXPLAINED. — A question

of law is "one which does not call for an examination of the
probative value of the evidence presented by the parties." cralaw virtua1aw library

5. PLEADING AND PRACTICE; APPEAL; WHAT MAY BE RAISED

AIR FRANCE, Petitioner, v. RAFAEL CARRASCOSO and THE ON APPEAL FROM COURT OF APPEALS. — It is not appropriately
HONORABLE COURT OF APPEALS, Respondents. the business of the Supreme Court to alter the facts or to
review the questions of fact because, by statute, only questions
Lichauco, Picazo & Agcaoili for Petitioner. of law may be raised in an appeal by certiorari from a judgment
of the Court of Appeals, which judgment is conclusive as to the
Bengzon, Villegas & Zarraga for respondent R. facts.
Carrascoso.
6. ID.; ID.; EFFECT OF AFFIRMANCE BY COURT OF APPEALS OF
TRIAL COURT’S DECISION. — When the Court of Appeals
SYLLABUS affirms a judgment of the trial court, and the findings of fact of
said appellate court are not in any way at war with those of the
trial court, nor is said affirmance upon a ground or grounds
1. JUDGMENT; FINDINGS OF FACT; REQUIREMENT OF LAW. — different from those which were made the basis of the trial
Courts of justice are not burdened with the obligation to specify court’s conclusions, such judgment of affirmance is (1) a
in the sentence every bit and piece of evidence presented by determination by the Court of Appeals that the proceeding in
the parties upon the issues raised. The law solely insists that a the lower court was free from prejudicial error; (7) that all
decision state the "essential ultimate facts" upon which the questions raised by the assignments of error and all questions
court’s conclusion is drawn. that might have been so raised have been finally adjudicated as
free from all error.
2. ID.; ID.; ID.; APPEAL AND ERROR; FAILURE TO MAKE
FINDINGS ON EVIDENCE AND CONTENTIONS OF ONE PARTY, 7. ID.; COMPLAINT; SPECIFIC MENTION OF THE TERM "BAD
EFFECT OF; DECISION NOT TO BE CLOGGED WITH DETAILS. — FAITH" IN THE COMPLAINT NOT REQUIRED. — Although there
The mere failure to make specific findings of fact on the is no specific mention of the term bad faith in the complaint, the
evidence presented for the defense or to specify in the decision inference of bad faith may be drawn from the facts and
the contentions of the appellant and the reasons for refusing to circumstances set forth therein. 8. EVIDENCE; FINDING OF
believe them is not sufficient to hold the same contrary to the COURT OF APPEALS THAT RESPONDENT WAS ENTITLED TO A
requirement of the law and the Constitution. There is no law FIRST CLASS SEAT. — The Court of Appeals properly found that
that so requires. A decision is not to be clogged with details a first class-ticket holder is entitled to first class seat, given the
such that prolixity, if not confusion, may result. fact that seat availability in specific flights is therein confirmed;
otherwise, an air passenger will be placed in the hollow of the
3. ID.; ID.; ID.; FINDINGS OF FACT BY COURTS DEFINED. — hands of an airline, because it will always be easy for an airline
Findings of fact may be defined as the written statement of the to strike out the very stipulations in the ticket and say that
there was verbal agreement to the contrary. If only to achieve
stability in the relations between passenger and air carrier,
adherence to the ticket so issued is desirable.
9. ID.; LACK OF SPECIFIC AVERMENT OF BAD FAITH CURED BY
NOTICE TO DEFENDANT OF WHAT PLAINTIFF INTENDS TO
PROVE AND BY EVIDENCE PRESENTED WITHOUT OBJECTION;
AMENDMENT OF COMPLAINT TO CONFORM TO EVIDENCE
UNNECESSARY. — If there was lack of specific averment of bad
faith in the complaint, such deficiency was cured by notice, right
at the start of the trial, by plaintiff’s counsel to defendant as to
what plaintiff intended to prove: while in the plane in Bangkok,
plaintiff was ousted by defendant’s manager who gave his seat
to a white man; and by evidence of bad faith in the fulfillment
of the contract presented without objection on the part of the
defendant. An amendment of the complaint to conform to the
evidence is not even required.
10. ID.; ADMISSIBILITY OF TESTIMONY ON AN ENTRY IN A
NOTEBOOK; TESTIMONY NOT COVERED BY BEST EVIDENCE
RULE. — The testimony of a witness that the purser made an
entry in his notebook reading "First Class passenger was forced
to go to the tourist class against his will and that the captain
refused to intervene," is competent and admissible because the
subject of the inquiry is not the entry but the ouster incident. It
does not come within the prescription of the best evidence rule.
11. CONTRACT OF CARRIAGE; QUASI-DELICT; LIABILITY OF
COMMON CARRIERS; CASE AT BAR. — Neglect or malfeasance
of the carrier’s employees could give ground for an action for
damages. Damages here are proper because the stress of
respondent’s action is placed upon his wrongful expulsion,
which is a violation of a public duty by petitioner- aircarrier — a
case of quasi-delict.
12. ID.; ID.; ID.; AWARD OF MORAL DAMAGES FOR BREACH OF
CONTRACT. — Award of moral damages is proper, despite
petitioner’s argument that respondent’s action is planted upon
breach of contract, where the stress of the action is put on
wrongful expulsion, the contract having been averred only to
establish the relation between the parties.
13. ID.; ID.; ID.; EMPLOYER IS RESPONSIBLE FOR TORTIOUS
ACTS OF HIS EMPLOYEE; CASE AT BAR. — The responsibility of
an employer for the tortious act of his employees is well settled
in law. (Art. 2130, Civil Code). Petitioner-aircarrier must answer
for the willful, malevolent act of its manager.
14. ID.; ID.; ID.; LIABILITY FOR EXEMPLARY DAMAGES;
POWER OF COURTS TO GRANT; CASE AT BAR. — The Civil Code
gives the court ample power to grant exemplary damages, the
only condition being that defendant should have "acted in a
wanton, fraudulent, reckless, oppressive, or malevolent
manner." As the manner of ejectment of plaintiff from his first
class seat fits into this legal precept, exemplary damages are
well awarded, in addition to moral damages.
15. ID.; ID.; LIABILITY FOR ATTORNEY’S FEES; COURT
DISCRETION WELL EXERCISED SHOULD NOT BE DISTURBED.
— The grant of exemplary damages justifies a similar judgment
for attorney’s fees. The court below felt that it is but just and
equitable that attorney’s fees be given and the Supreme Court
does not intend to break faith with the tradition that discretion
well-exercised — as it is here should not be disturbed.
16. ID.; RIGHTS OF PASSENGERS. — Passengers do not
contract merely for transportation. They have a right to be
treated by the carrier’s employees with kindness, respect,
courtesy and due consideration. They are entitled to be
protected against personal misconduct, injurious language,
indignities and abuses from such employees. So, any rude or
discourteous conduct on the part of employees towards a
passenger gives the latter an action for damages against the
carrier. (4 R. C. L-1174-1175).
17. ID.; BREACH OF CONTRACT MAY BE A TORT. — Although
the relation of passenger and carrier is contractual both in origin
and nature, nevertheless, the act that breaks the contract may
also be a tort.
18. WORDS AND PHRASES; BAD FAITH DEFINED. — "Bad
faith", as understood in law, contemplates a state of mind
affirmatively operating with furtive design or with some motive
of self-interest or ill will or for ulterior purpose
 passengers got nervous in the tourist class; when they found
out that Mr. Carrascoso was having a hot discussion with the
DECISION white man [manager], they came all across to Mr. Carrascoso
and pacified Mr. Carrascoso to give his seat to the ‘white man’
(Transcript, p. 12, Hearing of May 26, 1959); and plaintiff
SANCHEZ, J.: reluctantly gave his ‘first class’ seat in the plane." 3

1. The thrust of the relief petitioner now seeks is that we review

The Court of First Instance of Manila 1 sentenced petitioner to "all the findings" 4 of respondent Court of Appeals. Petitioner
pay respondent Rafael Carrascoso P25,000.00 by way of moral charges that respondent court failed to make complete findings
damages; P10,000.00 as exemplary damages; P393.20 of fact on all the issues properly laid before it. We are asked to
representing the difference in fare between first class and consider facts favorable to petitioner, and then, to overturn the
tourist class for the portion of the trip Bangkok-Rome, these appellate court’s decision.
various amounts with interest at the legal rate, from the date of
the filing of the complaint until paid; plus P3,000.00 for Coming into focus is the constitutional mandate that "No
attorneys’ fees; and the costs of suit. decision shall be rendered by any court of record without
expressing therein clearly and distinctly the facts and the law on
On appeal, 2 the Court of Appeals slightly reduced the amount which it is based." 5 This is echoed in the statutory demand that
of refund on Carrascoso’s plane ticket from P393.20 to P383.10, a judgment determining the merits of the case shall state
and voted to affirm the appealed decision "in all other respects", "clearly and distinctly the facts and the law on which it is
with costs against petitioner. based", 6 and that "Every decision of the Court of Appeals shall
contain complete findings of fact on all issues properly raised
The case is now before us for review on certiorari. before it." 7

The facts declared by the Court of Appeals as "fully supported
by the evidence of record", are: jgc:chanrobles.com.ph
"Plaintiff, a civil engineer, was a member of a group of 48
Filipino pilgrims that left Manila for Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its
authorized agent, Philippine Air Lines, Inc., issued to plaintiff a
‘first class’ round trip airplane ticket from Manila to Rome. From
Manila to Bangkok, plaintiff traveled in ‘first class’, but at
Bangkok, the Manager of the defendant airline forced plaintiff to
vacate the ‘first class’ seat that he was occupying because, in
the words of the witness Ernesto G. Cuento, there was a ‘white
man’, who, the Manager alleged, had a ‘better right to the seat.
When asked to vacate his ‘first class’ seat, the plaintiff, as was
to be expected, refused, and told defendant’s Manager that his
seat would be taken over his dead body; a commotion ensued,
and, according to said Ernesto G. Cuento, many of the Filipino
A decision with absolutely nothing to support it is a nullity. It is
open to direct attack. 8 The law, however, solely insists that a
decision state the "essential ultimate facts" upon which the
court’s conclusion is drawn. 9 A court of justice is not hidebound
to write in its decision every bit and piece of evidence 10
presented by one party and the other upon the issues raised.
Neither is it to be burdened with the obligation "to specify in the
sentence the facts" which a party "considered as proved." 11
This is but a part of the mental process from which the Court
draws the essential ultimate facts. A decision is not to be so
clogged with details such that prolixity, if not confusion, may
result. So long as the decision of the Court of Appeals contains
the necessary facts to warrant its conclusions, it is no error for
said court to withhold therefrom "any specific finding of facts
with respect to the evidence for the defense." Because, as this
Court well observed, "There is no law that so requires." 12
Indeed, "the mere failure to specify (in the decision) the
contentions of the appellant and the reasons for refusing to
believe them is not sufficient to hold the same contrary to the
requirements of the provisions of law and the Constitution." It is
in this setting that in Manigque, it was held that the mere fact
that the findings "were based entirely on the evidence for the
prosecution without taking into consideration or even
mentioning the appellant’s side in the controversy as shown by
his own testimony", would not vitiate the judgment. 13 If the
court did not recite in the decision the testimony of each
witness for, or each item of evidence presented by, the
defeated party, it does not mean that the court has overlooked
such testimony or such item of evidence. 14 At any rate, the
guarantee that he would have a first class ride, but that such
would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented
and discussed in its brief before the Court of Appeals under its
third assignment of error, which reads: "The trial court erred in
finding that plaintiff had confirmed reservations for, and a right
to, first class seats on the ‘definite’ segments of his journey,
particularly that from Saigon to Beirut." 21
And, the Court of Appeals disposed of this contention thus: jgc:chanrobles.com.ph

legal presumptions are that official duty has been regularly

performed, and that all the matters within an issue in a case
were laid before the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make,
may be defined as "the written statement of the ultimate facts
as found by the court . . . and essential to support the decision
and judgment rendered thereon." 16 They consist of the court’s
"conclusions with respect to the determinative facts in issue" 17
A question of law, upon the other hand, has been declared as
"one which does not call for an examination of the probative
value of the evidence presented by the parties." 18
2. By statute, "only questions of law may be raised" in an
appeal by certiorari from a judgment of the Court of Appeals 19
That judgment is conclusive as to the facts. It is not
appropriately the business of this Court to alter the facts or to
review the questions of fact. 20
"Defendant seems to capitalize on the argument that the
issuance of a first-class ticket was no guarantee that the
passenger to whom the same had been issued, would be
accommodated in the first-class compartment, for as in the case
of plaintiff he had yet to make arrangements upon arrival at
every station for the necessary first class reservation. We are
not impressed by such a reasoning. We cannot understand how
a reputable firm like defendant airplane company could have
the indiscretion to give out ticket it never meant to honor at all.
It received the corresponding amount in payment of first-class
tickets end yet it allowed the passenger to be at the mercy of
its employees. It is more in keeping with the ordinary course of
business that the company should know whether or not the
tickets it issues are to be honored or not." 22
Not that the Court of Appeals is alone. The trial court similarly
disposed of petitioner’s contention, thus: jgc:chanrobles.com.ph

With these guideposts, we now face the problem of whether the "On the fact that plaintiff paid for, and was issued a ‘First class
findings of fact of the Court of Appeals support its judgment. ticket, there can be no question. Apart from his testimony, see
plaintiffs Exhibits ‘A’, ‘A-1’ ‘B’, ‘B-1’, ‘B-2’, ‘C’ and ‘C-1’, and
3. Was Carrascoso entitled to the first class seat he claims? defendant’s own witness, Rafael Altonaga, confirmed plaintiff’s
testimony and testified as follows: chanrob1es virtual 1aw library

It is conceded in all quarters that on March 28, 1958 he paid to

and received from petitioner a first class ticket. But petitioner Q. In these tickets there are marks ‘O.K.’ From what you know,
asserts that said ticket did not represent the true and complete what does this O.K. mean?
intent and agreement of the parties; that said respondent knew
that he did not have confirmed reservations for first class on A. That the space is confirmed.
any specific flight, although he had tourist class protection;
that, accordingly, the issuance of a first class ticket was no Q. Confirmed for first class?
A. Yes, ‘first class’. (Transcript, p. 169)
x           x          x
"Defendant tried to prove by the testimony of its witnesses Luis
Zaldariaga and Rafael Altonaga that although plaintiff paid for,
and was issued a ‘first class’ airplane ticket, the ticket was
subject to confirmation in Hongkong. The court cannot give
credit to the testimony of said witnesses. Oral evidence cannot
prevail over written evidence, and plaintiff’s Exhibits ‘A’, ‘A1’,
‘B’, ‘B-1’, ‘C’ and ‘C- 1’ belie the testimony of said witnesses,
and clearly show that the plaintiff was issued, and paid for, a
first class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant’s own witness
Rafael Altonaga testified that the reservation for a ‘first class’
accommodation for the plaintiff was confirmed. The court
cannot believe that after such confirmation ,defendant had a
verbal understanding with plaintiff that the ‘first class’ ticket
issued to him by defendant would be subject to confirmation in
Hongkong." 23
We have heretofore adverted to the fact that except for a slight
difference of a few pesos in the amount refunded on
Carrascoso’s ticket, the decision of the Court of First Instance
was affirmed by the Court of Appeals in all other respects. We
hold the view that such a judgment of affirmance has merged
the judgment of the lower court. 24 Implicit in that affirmance
is a determination by the Court of Appeals that the proceeding
in the Court of First Instance was free from prejudicial error and
that ‘all questions raised by the assignments of error and all
questions that might have been so raised are to be regarded as
finally adjudicated against the appellant." So also, the judgment
affirmed "must be regarded as free from all error" 25 We
reached this policy construction because nothing in the decision
of the Court of Appeals on this point would suggest that its
findings of fact are in any way at war with those of the trial
court. Nor was said affirmance by the Court of Appeals upon a
ground or grounds different from those which were made the
basis of the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not
entitled to a first class seat, notwithstanding the fact that seat
availability in specific flights is therein confirmed, then an air
passenger is placed in the hollow of the hands of an airline.
What security then can a passenger have? It will always be an
easy matter for an airline aided by its employees, to strike out
the very stipulations in the ticket, and say that there was a
verbal agreement to the contrary. What if the passenger had a
schedule to fulfill? We have long learned that, as a rule, a
written document speaks a uniform language; that spoken word
could be notoriously unreliable. If only to achieve stability in the
relations between passenger and air carrier, adherence to the
ticket so issued is desirable. Such is the case here. The lower
courts refused to believe the oral evidence intended to defeat
the covenants in the ticket.
The foregoing are the considerations which point to the
conclusion that there are facts upon which the Court of Appeals
predicated the finding that respondent Carrascoso had a first
class ticket and was entitled to a first class seat at Bangkok,
which is a stopover in the Saigon to Beirut leg of the flight, 27
We perceive no "welter of distortions by the Court of Appeals of
petitioner’s statement of its position", as charged by petitioner.
28 Nor do we subscribe to petitioners accusation that
respondent Carrascoso "surreptitiously took a first class seat to
provoke an issue." 29 And this because, as petitioner states,
Carrascoso went to see the Manager at his office in Bangkok "to
confirm my seat and because from Saigon I was told again to
see the Manager. 30 Why, then, was he allowed to take a first
class seat in the plane at Bangkok, if he had no seat? Or, if
another had a better right to the seat?
4. Petitioner assails respondent court’s award of moral
damages. Petitioner’s trenchant claim is that Carrascoso’s
action is planted upon breach of contract; that to authorize an
award for moral damages there must be an averment of fraud
or bad faith; 31 and that the decision of the Court of Appeals
fails to make a finding of bad faith. The pivotal allegations in
the complaint bearing on this issue are: jgc:chanrobles.com.ph
"3. That . . . plaintiff entered into a contract of air carriage with
the Philippine Air Lines for a valuable consideration, the latter
acting as general agents for and in behalf of the defendant,
under which aid contract, plaintiff was entitled to, as defendant
agreed to furnish plaintiff, First Class passage on defendant’s
plane during the entire duration of plaintiff’s tour of Europe with
Hongkong as starting point up to and until plaintiff’s return trip
to Manila, . . . and humiliations, thereby causing him mental anguish, serious
4. That during the first two legs of the trip from Hongkong to
Saigon and from Saigon to Bangkok, defendant furnished to the
plaintiff First Class accommodation but only after protestations,
arguments and/or insistence were made by the plaintiff with
defendant’s employees.
5. That finally, defendant failed to provide First Class passage,
but instead furnished plaintiff only Tourist Class
accommodations from Bangkok to Teheran and/or Casablanca, .
. . the plaintiff has been compelled by defendant’s employees to
leave the First Class accommodation berths at Bangkok after he
was already seated.
6. That consequently, the plaintiff, desiring no repetition of the
inconvenience and embarrassments brought by defendant’s
breach of contract was forced to take a Pan American World
Airways plane on his return trip from Madrid to Manila. 32
x           x          x
2. That likewise, as a result of defendant’s failure to furnish
First Class accommodations aforesaid, plaintiff suffered
inconveniences, embarrassments, and humiliations, thereby
causing plaintiff mental anguish, serious anxiety, wounded
feelings, social humiliation, and the like injury, resulting in
moral damages in the amount of P30,000.00." 33
x           x          x
The foregoing, in our opinion, substantially aver: First, That
there was a contract to furnish plaintiff a first class passage
covering, amongst others, the Bangkok-Teheran leg; Second,
That said contract was breached when petitioner failed to
furnish first class transportation at Bangkok; and Third, That
there was bad faith when petitioner’s employee compelled
Carrascoso to leave his first class accommodation berth "after
he was already seated" and to take a seat in the tourist class,
by reason of which he suffered inconvenience, embarrassments
anxiety, wounded feelings and social humiliation, resulting in
moral damages. It is true that there is no specific mention of
the term bad faith in the complaint. But, the inference of bad
faith is there; it may be drawn from the facts and circumstances
set forth therein. 34 The contract was averred to establish the
relation between the parties. But the stress of the action is put
on wrongful expulsion.
Quite apart from the foregoing is that (a) right at the start of
the trial, respondent’s counsel placed petitioner on guard on
what Carrascoso intended to prove: That while sitting in the
plane in Bangkok, Carrascoso was ousted by petitioner’s
manager who gave his seat to a white man; 35 and (b)
evidence of bad faith in the fulfillment of the contract was
presented without objection on the part of the petitioner. It is,
therefore, unnecessary to inquire as to whether or not there is
sufficient averment in the complaint to justify an award for
moral damages. Deficiency in the complaint, if any, was cured
by the evidence. An amendment thereof to conform to the
evidence is not even required. 36 On the question of bad faith,
the Court of Appeals declared: jgc:chanrobles.com.ph
"That the plaintiff was forced out of his seat in the first class
compartment of the plane belonging to the defendant Air France
while at Bangkok, and was transferred to the tourist class not
only without his consent but against his will, has been
sufficiently established by plaintiff in his testimony before the
court, corroborated by the corresponding entry made by the
purser of the plane in his notebook which notation reads as
follows:
chanrob1es virtual 1aw library
‘First-class passenger was forced to go to the tourist class
against his will and that the captain refused to intervene’,
and by the testimony of an eye-witness Ernesto G. Cuento, who
was a co-passenger. The captain of the plane who was asked by
the manager of defendant company at Bangkok to intervene
even refused to do so. It is noteworthy that no one on behalf of
defendant ever contradicted or denied this evidence for the
plaintiff. It could have been easy for defendant to present its
manager at Bangkok to testify at the trial of the case, or yet to
secure his deposition; but defendant did neither. 37
The Court of Appeals further
"Neither is there evidence as to whether or ,not a prior
reservation was made by the white man. Hence, if the
employees of the defendant at Bangkok sold a first-class ticket
to him when all the seats had already been taken, surely the
plaintiff should not have been picked out as the one to suffer
the consequences and to be subjected to the humiliation and
indignity of being ejected from his seat in the presence of
others. Instead of explaining to the white man the improvidence
committed by defendant’s employees, the manager adopted the
more drastic step of ousting the plaintiff who was then safely
ensconced in his rightful seat. We are strengthened in our belief
that this probably was what happened there, by the testimony
of defendant’s witness Rafael Altonaga who, when asked to
explain the meaning of the letters ‘O.K., appearing on the
tickets of plaintiff, said that ‘the space is confirmed’ for first
class. Likewise, Zenaida Faustino, another witness for
defendant, who was the chief of the Reservation Office of
defendant, testified as follows: chanrob1es
‘Q. How does the person in the ticket-issuing office know what
reservation the passenger has arranged with you?
A. They call us up by phone and ask for the confirmation.’
(t.s.n., p. 247, June 19, 1959)
In this connection, we quote with approval what the trial Judge
has said on this point: chanrob1es
‘Why did the, using the words of witness Ernesto G. Cuento,
‘white man’ have a ‘better right’ to the seat occupied by Mr.
Carrascoso? The record is silent. The defendant airline did not
prove ‘any better’, nay, any right on the part of the ‘white man’
to the ‘First class’ seat that the plaintiff was occupying and for
which he paid and was issued a corresponding ‘first class’ ticket.
‘If there was a justified reason for the action of the defendant’s
Manager in Bangkok, the defendant could have easily proven it
by having taken the testimony of the said Manager by
deposition, but defendant did not do so; the presumption is that
evidence willfully suppressed would be adverse if produced
stated — [Sec. 69, par. (e) Rules of Court]; and, under the
circumstances, the Court is constrained to find, as it does find,
that the Manager of the defendant airline in Bangkok not merely
asked but threatened the plaintiff to throw him out of the plane
if he did not give up his ‘first class’ seat because the said
Manager wanted to accommodate using the words of the
witness Ernesto G. Cuento, the ‘white man’." 38
It is really correct to say that the Court of Appeals in the quoted
portion first transcribed did not use the term "bad faith." But
can it be doubted that the recital of facts therein points to bad
faith? The manager not only prevented Carrascoso from
enjoying his right to a first class seat; worse, he imposed his
arbitrary will; he forcibly ejected him from his seat, made him
suffer the humiliation of having to go to the tourist class
compartment — just to give way to another passenger whose
right thereto has not been established. Certainly, this is bad
faith. Unless, of course, bad faith has assumed a meaning
different from what is understood in law. For, "bad faith"
virtual 1aw library contemplates a "state of mind affirmatively operating with
furtive design or with some motive of self-interest or ill will or
for ulterior purposes." 39
And if the foregoing were not yet sufficient, there is the express
finding of bad faith in the judgment of the Court of First
Instance, thus:jgc:chanrobles.com.ph
"The evidence shows that defendant violated its contract of
virtual 1aw library transportation with plaintiff in bad faith, with the aggravating
circumstances that defendant’s Manager in Bangkok went to the
extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the
‘first class’ seat that he was occupying to, again using the words
of witness Ernesto G. Cuento, a ‘white man’ whom he
(defendant’s Manager) wished to accommodate, and the
defendant has not proven that this ‘white man’ had any ‘better
right’ to occupy the ‘first class’ seat that the plaintiff was
occupying, duly paid for, and for which the corresponding ‘first
class’ ticket was issued by the defendant to him." 40
5. The responsibility of an employer for the tortuous act of its
employees-need not be essayed. It is well settled in law. 41 For
the willful malevolent act of petitioner’s manager, petitioner’s
his employer, must answer. Article 21 of the Civil Code says:
"Art. 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage."
payment under threat of ejection, though the language used
was not insulting and she was not ejected. 46 And this,
because, altho the relation of passenger and carrier is
"contractual both in origin and nature" nevertheless "the act
that breaks the contract may be also a tort." 47 And in another
case, "Where a passenger on a railroad train, when the
conductor came to collect his fare, tendered him the cash fare
to a point where the train was scheduled not to stop, and told
him that as soon as the train reached such point he would pay
jgc:chanrobles.com.ph the cash fare from that point to destination, there was nothing
in the conduct of the passenger which justified the conductor in
using insulting language to him, as by calling him a lunatic," 48
and the Supreme Court of South Carolina there held the carrier
cralaw virtua1aw library liable for the mental suffering of said passenger.

In parallel circumstances, we applied the foregoing legal Petitioner’s contract with Carrascoso is one attended with public
precept; and, we held that upon the provisions of Article 2219 duty. The stress of Carrascoso’s action as we have said, is
(10), Civil Code, moral damages are recoverable. 42 placed upon his wrongful expulsion. This is a violation of public
duty by the petitioner-air carrier — a case of quasi-delict.
6. A contract to transport passengers is quite different in kind Damages are proper.
and degree from any other contractual relation. 43 And this,
because of the relation which an air-carrier sustains with the 7. Petitioner draws our attention to respondent Carrascoso’s
public. Its business is mainly with the travelling public. It invites testimony, thus —
people to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation attended "Q. You mentioned about an attendant. Who is that attendant
with a public duty. Neglect or malfeasance of the carrier’s and purser?
employees, naturally, could give ground for an action for
damages. A. When we left already — that was already in the trip — I could
not help it. So one of the flight attendants approached me and
Passengers do not contract merely for transportation. They requested from me my ticket and I said, What for? and she
have a light to be treated by the carrier’s employees with said, ‘We will note that you were transferred to the tourist
kindness, respect, courtesy and due consideration. They are class’. I said, ‘Nothing of that kind. That is tantamount to
entitled to be protected against personal misconduct, injurious accepting my transfer.’ And I also said, You are not going to
language, indignities and abuses from such employees. So it is, note anything there because I am protesting to this transfer.
that any rude or discourteous conduct on the part of employees
towards a passenger gives the latter an action for damages Q. Was she able to note it?
against the carrier. 44
A. No, because I did not give my ticket.
Thus, "Where a steamship company 45 had accepted a
passenger’s check, it was a breach of contract and a tort, giving Q. About that purser?
a right of action for its agent in the presence of third persons to
falsely notify her that the check was worthless and demand A. Well, the seats there are so close that you feel uncomfortable
and you don’t have enough leg room, I stood up and I went to the deposition of the purser could have cleared up the matter.
the pantry that was next to me and the purser was there. He
told me, ‘I have recorded the incident in my notebook.’ He read We, therefore, hold that the transcribed testimony of
it and translated it to me — because it was recorded in French Carrascoso is admissible in evidence.
— ‘First class passenger was forced to go to the tourist class
against his will, and that the captain refused to intervene.’ 8. Exemplary damages are well awarded. The Civil Code gives
the Court ample power to grant exemplary damages — in
MR. VALTE — contracts and quasi-contracts. The only condition is that
defendant should have "acted in a wanton, fraudulent, reckless,
I move to strike out the last part of the testimony of the witness oppressive, or malevolent manner." 53 The manner of
because the best evidence would be the notes. Your Honor. ejectment of respondent Carrascoso from his first class seat fits
into this legal precept. And this, in addition to moral damages.
COURT — 54

I will allow that as part of his testimony." 49 9. The right to attorneys’ fees is fully established. The grant of
exemplary damages justifies a similar judgment for attorneys’
Petitioner charges that the finding of the Court of Appeals that fees. The least that can be said is that the courts below felt that
the purser made an entry in his notebooks reading "First class it is but just and equitable that attorneys’ fees be given. 55 We
passenger was forced to go to the tourist class against his will, do not intend to break faith with the tradition that discretion
and that the captain refused to intervene" is predicated upon well exercised — as it was here —should not be disturbed.
evidence [Carrascoso’s testimony above] which is incompetent.
We do not think so. The subject of inquiry is not the entry, but 10. Questioned as excessive are the amounts decreed by both
the ouster incident. Testimony of the entry does not come the trial court and the Court of Appeals, thus: P25,000.00 as
within the proscription of the best evidence rule. Such moral damages; P10,000.00, by way of exemplary damages,
testimony is admissible. 49 and P3,000.00 as attorney’s fees. The task of fixing these
amounts is primarily with the trial-court. 56 The Court of
Besides, from a reading of the transcript just quoted, when the Appeals did not interfere with the same. The dictates of good
dialogue happened, the impact of the startling occurrence was sense suggest that we give our imprimatur thereto. Because,
still fresh and continued to be felt. The excitement had not as the facts and circumstances point to the reasonableness
yet died down. Statements then, in this environment, are thereof. 57
admissible as part of the res gestae. 50 For, they grow "out of
the nervous excitement and mental and physical condition of On balance, we say that the judgment of the Court of Appeals
the declarant." 51 The utterance of the purser regarding his does not suffer from reversible error. We accordingly vote to
entry in the notebook was spontaneous, and related to the affirm the same. Costs against petitioner. So ordered.
circumstances of the ouster incident. Its trustworthiness has
been guaranteed. 52 It thus escapes the operation of the
hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And,
by an employee of petitioner. It would have been an easy
matter for petitioner to have contradicted Carrascoso’s
testimony. If it were really true that no such entry was made,

.R. No. 157917               August 29, 2012
SPOUSES TEODORO and NANETTE PERENA, Petitioners,
1 
vs.
SPOUSES TERESITA PHILIPPINE NICOLAS and L. ZARATE,
NATIONAL RAILWAYS, and the COURT OF APPEALS Respondents.
DECISION
BERSAMIN, J.:
The operator of a. school bus service is a common carrier in the eyes of
the law. He is bound to observe extraordinary diligence in the conduct of
his business. He is presumed to be negligent when death occurs to a
passenger. His liability may include indemnity for loss of earning capacity
even if the deceased passenger may only be an unemployed high school
student at the time of the accident.
The Case
By petition for review on certiorari, Spouses Teodoro and Nanette Perefia
(Perefias) appeal the adverse decision promulgated on November 13,
2002, by which the Court of Appeals (CA) affirmed with modification the
decision rendered on December 3, 1999 by the Regional Trial Court
(RTC), Branch 260, in Parañaque City that had decreed them jointly and
severally liable with Philippine National Railways (PNR), their co-
defendant, to Spouses Nicolas and Teresita Zarate (Zarates) for the
death of their 15-year old son, Aaron John L. Zarate (Aaron), then a high
school student of Don Bosco Technical Institute (Don Bosco).
Antecedents
The Pereñas were engaged in the business of transporting students from
their respective residences in Parañaque City to Don Bosco in Pasong
Tamo, Makati City, and back. In their business, the Pereñas used a KIA
Ceres Van (van) with Plate No. PYA 896, which had the capacity to
transport 14 students at a time, two of whom would be seated in the front
beside the driver, and the others in the rear, with six students on either
side. They employed Clemente Alfaro (Alfaro) as driver of the van.
In June 1996, the Zarates contracted the Pereñas to transport Aaron to
and from Don Bosco. On August 22, 1996, as on previous school days,
the van picked Aaron up around 6:00 a.m. from the Zarates’ residence.
Aaron took his place on the left side of the van near the rear door. The
van, with its air-conditioning unit turned on and the stereo playing loudly,
ultimately carried all the 14 student riders on their way to Don Bosco.
Considering that the students were due at Don Bosco by 7:15 a.m., and
that they were already running late because of the heavy vehicular traffic
on the South Superhighway, Alfaro took the van to an alternate route at
about 6:45 a.m. by traversing the narrow path underneath the
Magallanes Interchange that was then commonly used by Makati-bound
vehicles as a short cut into Makati. At the time, the narrow path was
marked by piles of construction materials and parked passenger
jeepneys, and the railroad crossing in the narrow path had no railroad
warning signs, or watchmen, or other responsible persons manning the
crossing. In fact, the bamboo barandilla was up, leaving the railroad
crossing open to traversing motorists.
At about the time the van was to traverse the railroad crossing, PNR
Commuter No. 302 (train), operated by Jhonny Alano (Alano), was in the
vicinity of the Magallanes Interchange travelling northbound. As the train
neared the railroad crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger bus. His view of the
oncoming train was blocked because he overtook the passenger bus on
its left side. The train blew its horn to warn motorists of its approach.
When the train was about 50 meters away from the passenger bus and
the van, Alano applied the ordinary brakes of the train. He applied the
emergency brakes only when he saw that a collision was imminent. The
passenger bus successfully crossed the railroad tracks, but the van
driven by Alfaro did not. The train hit the rear end of the van, and the
impact threw nine of the 12 students in the rear, including Aaron, out of
the van. Aaron landed in the path of the train, which dragged his body
and severed his head, instantaneously killing him. Alano fled the scene
on board the train, and did not wait for the police investigator to arrive.
Devastated by the early and unexpected death of Aaron, the Zarates
commenced this action for damages against Alfaro, the Pereñas, PNR
and Alano. The Pereñas and PNR filed their respective answers, with
cross-claims against each other, but Alfaro could not be served with
summons.
At the pre-trial, the parties stipulated on the facts and issues, viz:
A. FACTS:
(1)) That spouses Zarate were the legitimate parents of
Aaron John L. Zarate;
(2)) Spouses Zarate engaged the services of spouses
Pereña for the adequate and safe transportation carriage
of the former spouses' son from their residence in
Parañaque to his school at the Don Bosco Technical
Institute in Makati City;
(3)) During the effectivity of the contract of carriage and
in the implementation thereof, Aaron, the minor son of
spouses Zarate died in connection with a vehicular/train
collision which occurred while Aaron was riding the
contracted carrier Kia Ceres van of spouses Pereña, then
driven and operated by the latter's employee/authorized
driver Clemente Alfaro, which van collided with the train of
PNR, at around 6:45 A.M. of August 22, 1996, within the
vicinity of the Magallanes Interchange in Makati City,
Metro Manila, Philippines;
(4)) At the time of the vehicular/train collision, the subject
site of the vehicular/train collision was a railroad crossing
used by motorists for crossing the railroad tracks;
(5)) During the said time of the vehicular/train collision,
there were no appropriate and safety warning signs and
railings at the site commonly used for railroad crossing;
(6)) At the material time, countless number of Makati
bound public utility and private vehicles used on a daily
basis the site of the collision as an alternative route and
short-cut to Makati;
(7)) The train driver or operator left the scene of the
incident on board the commuter train involved without
waiting for the police investigator;
(8)) The site commonly used for railroad crossing by
motorists was not in fact intended by the railroad operator
for railroad crossing at the time of the vehicular collision;
(9)) PNR received the demand letter of the spouses
Zarate;
(10)0) PNR refused to acknowledge any liability for the
vehicular/train collision;
(11)) The eventual closure of the railroad crossing
alleged by PNR was an internal arrangement between the
former and its project contractor; and
(12)) The site of the vehicular/train collision was within
the vicinity or less than 100 meters from the Magallanes
station of PNR.
B. ISSUES
(1) Whether or not defendant-driver of the van is, in the
performance of his functions, liable for negligence
constituting the proximate cause of the vehicular collision,
which resulted in the death of plaintiff spouses' son;
(2) Whether or not the defendant spouses Pereña being
the employer of defendant Alfaro are liable for any
negligence which may be attributed to defendant Alfaro;
(3) Whether or not defendant Philippine National Railways
being the operator of the railroad system is liable for
negligence in failing to provide adequate safety warning
signs and railings in the area commonly used by motorists
for railroad crossings, constituting the proximate cause of
the vehicular collision which resulted in the death of the
plaintiff spouses' son;
 (4) Whether or not defendant spouses Pereña are liable
for breach of the contract of carriage with plaintiff-spouses
in failing to provide adequate and safe transportation for
the latter's son;
(5) Whether or not defendants spouses are liable for
actual, moral damages, exemplary damages, and
attorney's fees;
(6) Whether or not defendants spouses Teodorico and
Nanette Pereña observed the diligence of employers and
school bus operators;
(7) Whether or not defendant-spouses are civilly liable for
the accidental death of Aaron John Zarate;
(8) Whether or not defendant PNR was grossly negligent
in operating the commuter train involved in the accident,
in allowing or tolerating the motoring public to cross, and
its failure to install safety devices or equipment at the site
of the accident for the protection of the public;
(9) Whether or not defendant PNR should be made to
reimburse defendant spouses for any and whatever
amount the latter may be held answerable or which they
may be ordered to pay in favor of plaintiffs by reason of
the action;
(10) Whether or not defendant PNR should pay plaintiffs
directly and fully on the amounts claimed by the latter in
their Complaint by reason of its gross negligence;
(11) Whether or not defendant PNR is liable to
defendants spouses for actual, moral and exemplary
damages and attorney's fees. 2 SO ORDERED.
The Zarates’ claim against the Pereñas was upon breach of the contract
of carriage for the safe transport of Aaron; but that against PNR was
based on quasi-delict under Article 2176, Civil Code.
In their defense, the Pereñas adduced evidence to show that they had
exercised the diligence of a good father of the family in the selection and
supervision of Alfaro, by making sure that Alfaro had been issued a
driver’s license and had not been involved in any vehicular accident prior
to the collision; that their own son had taken the van daily; and that
Teodoro Pereña had sometimes accompanied Alfaro in the van’s trips
transporting the students to school.
For its part, PNR tended to show that the proximate cause of the collision
had been the reckless crossing of the van whose driver had not first
stopped, looked and listened; and that the narrow path traversed by the
van had not been intended to be a railroad crossing for motorists.
Ruling of the RTC
On December 3, 1999, the RTC rendered its decision, disposing:
3 
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiff and against the defendants ordering them to jointly
and severally pay the plaintiffs as follows:
(1) (for) the death of Aaron- Php50,000.00;
(2) Actual damages in the amount of Php100,000.00;
(3) For the loss of earning capacity- Php2,109,071.00;
(4) Moral damages in the amount of Php4,000,000.00;
(5) Exemplary damages in the amount of
Php1,000,000.00;
(6) Attorney’s fees in the amount of Php200,000.00; and
(7) Cost of suit.
On June 29, 2000, the RTC denied the Pereñas’ motion for
reconsideration, reiterating that the cooperative gross negligence of the
4 
Pereñas and PNR had caused the collision that led to the death of Aaron;
and that the damages awarded to the Zarates were not excessive, but
based on the established circumstances.
The CA’s Ruling
Both the Pereñas and PNR appealed (C.A.-G.R. CV No. 68916).
PNR assigned the following errors, to wit: 5
The Court a quo erred in:
1. In finding the defendant-appellant Philippine National
Railways jointly and severally liable together with
defendant-appellants spouses Teodorico and Nanette
Pereña and defendant-appellant Clemente Alfaro to pay
plaintiffs-appellees for the death of Aaron Zarate and
damages.
2. In giving full faith and merit to the oral testimonies of
plaintiffs-appellees witnesses despite overwhelming
documentary evidence on record, supporting the case of
defendants-appellants Philippine National Railways.
The Pereñas ascribed the following errors to the RTC, namely:
The trial court erred in finding defendants-appellants jointly and severally
liable for actual, moral and exemplary damages and attorney’s fees with
the other defendants.
The trial court erred in dismissing the cross-claim of the appellants
Pereñas against the Philippine National Railways and in not holding the
latter and its train driver primarily responsible for the incident.
The trial court erred in awarding excessive damages and attorney’s fees.
The trial court erred in awarding damages in the form of deceased’s loss
of earning capacity in the absence of sufficient basis for such an award.
On November 13, 2002, the CA promulgated its decision, affirming the
findings of the RTC, but limited the moral damages to ₱ 2,500,000.00;
and deleted the attorney’s fees because the RTC did not state the factual
and legal bases, to wit:6
WHEREFORE, premises considered, the assailed Decision of the
Regional Trial Court, Branch 260 of Parañaque City is AFFIRMED with
the modification that the award of Actual Damages is reduced to ₱
59,502.76; Moral Damages is reduced to ₱ 2,500,000.00; and the award
for Attorney’s Fees is Deleted.
SO ORDERED.
The CA upheld the award for the loss of Aaron’s earning capacity, taking
cognizance of the ruling in Cariaga v. Laguna Tayabas Bus Company
and Manila Railroad Company, wherein the Court gave the heirs of
7 
Cariaga a sum representing the loss of the deceased’s earning capacity
despite Cariaga being only a medical student at the time of the fatal
incident. Applying the formula adopted in the American Expectancy Table
of Mortality:–
2/3 x (80 - age at the time of death) = life expectancy
the CA determined the life expectancy of Aaron to be 39.3 years upon
reckoning his life expectancy from age of 21 (the age when he would
have graduated from college and started working for his own livelihood)
instead of 15 years (his age when he died). Considering that the nature
of his work and his salary at the time of Aaron’s death were unknown, it
used the prevailing minimum wage of ₱ 280.00/day to compute Aaron’s
gross annual salary to be ₱ 110,716.65, inclusive of the thirteenth month
pay. Multiplying this annual salary by Aaron’s life expectancy of 39.3
years, his gross income would aggregate to ₱ 4,351,164.30, from which
his estimated expenses in the sum of ₱ 2,189,664.30 was deducted to
finally arrive at P 2,161,500.00 as net income. Due to Aaron’s computed
net income turning out to be higher than the amount claimed by the
Zarates, only ₱ 2,109,071.00, the amount expressly prayed for by them,
was granted.
On April 4, 2003, the CA denied the Pereñas’ motion for reconsideration. 8
Issues
In this appeal, the Pereñas list the following as the errors committed by
the CA, to wit:
I. The lower court erred when it upheld the trial court’s decision holding
the petitioners jointly and severally liable to pay damages with Philippine
National Railways and dismissing their cross-claim against the latter.
II. The lower court erred in affirming the trial court’s decision awarding
damages for loss of earning capacity of a minor who was only a high
school student at the time of his death in the absence of sufficient basis
for such an award.
III. The lower court erred in not reducing further the amount of damages
awarded, assuming petitioners are liable at all.
Ruling
The petition has no merit.
1.
Were the Pereñas and PNR jointly
and severally liable for damages?
The Zarates brought this action for recovery of damages against both the
Pereñas and the PNR, basing their claim against the Pereñas on breach
of contract of carriage and against the PNR on quasi-delict.
The RTC found the Pereñas and the PNR negligent. The CA affirmed the
findings.
We concur with the CA.
To start with, the Pereñas’ defense was that they exercised the diligence
of a good father of the family in the selection and supervision of Alfaro,
the van driver, by seeing to it that Alfaro had a driver’s license and that
he had not been involved in any vehicular accident prior to the fatal
collision with the train; that they even had their own son travel to and
from school on a daily basis; and that Teodoro Pereña himself
sometimes accompanied Alfaro in transporting the passengers to and
from school. The RTC gave scant consideration to such defense by
regarding such defense as inappropriate in an action for breach of
contract of carriage.
We find no adequate cause to differ from the conclusions of the lower
courts that the Pereñas operated as a common carrier; and that their
standard of care was extraordinary diligence, not the ordinary diligence of
a good father of a family.
Although in this jurisdiction the operator of a school bus service has been
usually regarded as a private carrier, primarily because he only caters to
9 
some specific or privileged individuals, and his operation is neither open
to the indefinite public nor for public use, the exact nature of the
operation of a school bus service has not been finally settled. This is the
occasion to lay the matter to rest.
A carrier is a person or corporation who undertakes to transport or
convey goods or persons from one place to another, gratuitously or for
hire. The carrier is classified either as a private/special carrier or as a
common/public carrier. A private carrier is one who, without making the
10 
activity a vocation, or without holding himself or itself out to the public as
ready to act for all who may desire his or its services, undertakes, by
special agreement in a particular instance only, to transport goods or
persons from one place to another either gratuitously or for hire. The 11 
provisions on ordinary contracts of the Civil Code govern the contract of
private carriage.The diligence required of a private carrier is only
ordinary, that is, the diligence of a good father of the family. In contrast, a
common carrier is a person, corporation, firm or association engaged in
the business of carrying or transporting passengers or goods or both, by
land, water, or air, for compensation, offering such services to the
public. Contracts of common carriage are governed by the provisions on
12 
common carriers of the Civil Code, the Public Service Act, and other
13 
special laws relating to transportation. A common carrier is required to
observe extraordinary diligence, and is presumed to be at fault or to have
acted negligently in case of the loss of the effects of passengers, or the
death or injuries to passengers. 14
In relation to common carriers, the Court defined public use in the
following terms in United States v. Tan Piaco, viz:
15 
"Public use" is the same as "use by the public". The essential feature of
the public use is not confined to privileged individuals, but is open to the
indefinite public. It is this indefinite or unrestricted quality that gives it its
public character. In determining whether a use is public, we must look not
only to the character of the business to be done, but also to the proposed
mode of doing it. If the use is merely optional with the owners, or the
public benefit is merely incidental, it is not a public use, authorizing the
exercise of the jurisdiction of the public utility commission. There must be,
in general, a right which the law compels the owner to give to the general
public. It is not enough that the general prosperity of the public is
promoted. Public use is not synonymous with public interest. The true
criterion by which to judge the character of the use is whether the public
may enjoy it by right or only by permission.
In De Guzman v. Court of Appeals, the Court noted that Article 1732 of
16 
the Civil Code avoided any distinction between a person or an enterprise
offering transportation on a regular or an isolated basis; and has not
distinguished a carrier offering his services to the general public, that is,
the general community or population, from one offering his services only
to a narrow segment of the general population.
Nonetheless, the concept of a common carrier embodied in Article 1732
of the Civil Code coincides neatly with the notion of public service under
the Public Service Act, which supplements the law on common carriers
found in the Civil Code. Public service, according to Section 13,
paragraph (b) of the Public Service Act, includes:
x x x every person that now or hereafter may own, operate, manage, or
control in the Philippines, for hire or compensation, with general or limited
clientèle, whether permanent or occasional, and done for the general
business purposes, any common carrier, railroad, street railway, traction
railway, subway motor vehicle, either for freight or passenger, or both,
with or without fixed route and whatever may be its classification, freight
or carrier service of any class, express service, steamboat, or steamship
line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, ice-
refrigeration plant, canal, irrigation system, gas, electric light, heat and
power, water supply and power petroleum, sewerage system, wire or
wireless communications systems, wire or wireless broadcasting stations
and other similar public services. x x x.17
Given the breadth of the aforequoted characterization of a common
carrier, the Court has considered as common carriers pipeline
operators, custom brokers and warehousemen, and barge
18  19  defined under Article 1755 of the Civil Code.  24
operators even if they had limited clientèle.
20 
As all the foregoing indicate, the true test for a common carrier is not the
quantity or extent of the business actually transacted, or the number and
character of the conveyances used in the activity, but whether the
undertaking is a part of the activity engaged in by the carrier that he has
held out to the general public as his business or occupation. If the
undertaking is a single transaction, not a part of the general business or
occupation engaged in, as advertised and held out to the general public,
the individual or the entity rendering such service is a private, not a
common, carrier. The question must be determined by the character of
the business actually carried on by the carrier, not by any secret intention
or mental reservation it may entertain or assert when charged with the
duties and obligations that the law imposes. 21
Applying these considerations to the case before us, there is no question
that the Pereñas as the operators of a school bus service were: (a)
engaged in transporting passengers generally as a business, not just as
a casual occupation; (b) undertaking to carry passengers over
established roads by the method by which the business was conducted;
and (c) transporting students for a fee. Despite catering to a limited
clientèle, the Pereñas operated as a common carrier because they held
themselves out as a ready transportation indiscriminately to the students
of a particular school living within or near where they operated the
service and for a fee.
The common carrier’s standard of care and vigilance as to the safety of
the passengers is defined by law. Given the nature of the business and
for reasons of public policy, the common carrier is bound "to observe
extraordinary diligence in the vigilance over the goods and for the safety
of the passengers transported by them, according to all the
circumstances of each case." Article 1755 of the Civil Code specifies that
22 
the common carrier should "carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances." To
successfully fend off liability in an action upon the death or injury to a
passenger, the common carrier must prove his or its observance of that
extraordinary diligence; otherwise, the legal presumption that he or it was
at fault or acted negligently would stand. No device, whether by
23 
stipulation, posting of notices, statements on tickets, or otherwise, may
dispense with or lessen the responsibility of the common carrier as
And, secondly, the Pereñas have not presented any compelling defense
or reason by which the Court might now reverse the CA’s findings on
their liability. On the contrary, an examination of the records shows that
the evidence fully supported the findings of the CA.
As earlier stated, the Pereñas, acting as a common carrier, were already
presumed to be negligent at the time of the accident because death had
occurred to their passenger. The presumption of negligence, being a
25 
presumption of law, laid the burden of evidence on their shoulders to
establish that they had not been negligent. It was the law no less that
26 
required them to prove their observance of extraordinary diligence in
seeing to the safe and secure carriage of the passengers to their
destination. Until they did so in a credible manner, they stood to be held
legally responsible for the death of Aaron and thus to be held liable for all
the natural consequences of such death.
There is no question that the Pereñas did not overturn the presumption of
their negligence by credible evidence. Their defense of having observed
the diligence of a good father of a family in the selection and supervision
of their driver was not legally sufficient. According to Article 1759 of the
Civil Code, their liability as a common carrier did not cease upon proof
that they exercised all the diligence of a good father of a family in the
selection and supervision of their employee. This was the reason why the
RTC treated this defense of the Pereñas as inappropriate in this action
for breach of contract of carriage.
The Pereñas were liable for the death of Aaron despite the fact that their
driver might have acted beyond the scope of his authority or even in
violation of the orders of the common carrier. In this connection, the
27 
records showed their driver’s actual negligence. There was a showing, to
begin with, that their driver traversed the railroad tracks at a point at
which the PNR did not permit motorists going into the Makati area to
cross the railroad tracks. Although that point had been used by motorists
as a shortcut into the Makati area, that fact alone did not excuse their
driver into taking that route. On the other hand, with his familiarity with
that shortcut, their driver was fully aware of the risks to his passengers
but he still disregarded the risks. Compounding his lack of care was that
loud music was playing inside the air-conditioned van at the time of the
accident. The loudness most probably reduced his ability to hear the
warning horns of the oncoming train to allow him to correctly appreciate
the lurking dangers on the railroad tracks. Also, he sought to overtake a
passenger bus on the left side as both vehicles traversed the railroad
tracks. In so doing, he lost his view of the train that was then coming from
the opposite side of the passenger bus, leading him to miscalculate his
chances of beating the bus in their race, and of getting clear of the train.
As a result, the bus avoided a collision with the train but the van got
slammed at its rear, causing the fatality. Lastly, he did not slow down or
go to a full stop before traversing the railroad tracks despite knowing that
his slackening of speed and going to a full stop were in observance of the
right of way at railroad tracks as defined by the traffic laws and
regulations. He thereby violated a specific traffic regulation on right of
28 
way, by virtue of which he was immediately presumed to be negligent. 29
The omissions of care on the part of the van driver constituted
negligence, which, according to Layugan v. Intermediate Appellate
30 
Court, is "the omission to do something which a reasonable man, guided
31 
by those considerations which ordinarily regulate the conduct of human
affairs, would do, or the doing of something which a prudent and
reasonable man would not do, or as Judge Cooley defines it, ‘(t)he
32 
failure to observe for the protection of the interests of another person,
that degree of care, precaution, and vigilance which the circumstances
justly demand, whereby such other person suffers injury.’" 33
The test by which to determine the existence of negligence in a particular
case has been aptly stated in the leading case of Picart v.
Smith, thuswise:
34 
The test by which to determine the existence of negligence in a particular
case may be stated as follows: Did the defendant in doing the alleged
negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, then he is
guilty of negligence. The law here in effect adopts the standard supposed
to be supplied by the imaginary conduct of the discreet paterfamilias of
the Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in the
situation before him. The law considers what would be reckless,
blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in
a given situation must of course be always determined in the light of
human experience and in view of the facts involved in the particular case.
Abstract speculation cannot here be of much value but this much can be
profitably said: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They are not,
and are not supposed to be, omniscient of the future. Hence they can be
expected to take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the course actually pursued? If
so, it was the duty of the actor to take precautions to guard against that
harm. Reasonable foresight of harm, followed by the ignoring of the
suggestion born of this prevision, is always necessary before negligence
can be held to exist. Stated in these terms, the proper criterion for
determining the existence of negligence in a given case is this: Conduct
is said to be negligent when a prudent man in the position of the
tortfeasor would have foreseen that an effect harmful to another was
sufficiently probable to warrant his foregoing the conduct or guarding
against its consequences. (Emphasis supplied)
Pursuant to the Picart v. Smith test of negligence, the Pereñas’ driver
was entirely negligent when he traversed the railroad tracks at a point not
allowed for a motorist’s crossing despite being fully aware of the grave
harm to be thereby caused to his passengers; and when he disregarded
the foresight of harm to his passengers by overtaking the bus on the left
side as to leave himself blind to the approach of the oncoming train that
he knew was on the opposite side of the bus.
Unrelenting, the Pereñas cite Phil. National Railways v. Intermediate
Appellate Court, where the Court held the PNR solely liable for the
35 
damages caused to a passenger bus and its passengers when its train
hit the rear end of the bus that was then traversing the railroad crossing.
But the circumstances of that case and this one share no similarities. In
Philippine National Railways v. Intermediate Appellate Court, no
evidence of contributory negligence was adduced against the owner of
the bus. Instead, it was the owner of the bus who proved the exercise of
extraordinary diligence by preponderant evidence. Also, the records are
replete with the showing of negligence on the part of both the Pereñas
and the PNR. Another distinction is that the passenger bus in Philippine
National Railways v. Intermediate Appellate Court was traversing the
dedicated railroad crossing when it was hit by the train, but the Pereñas’
school van traversed the railroad tracks at a point not intended for that
purpose.
At any rate, the lower courts correctly held both the Pereñas and the
PNR "jointly and severally" liable for damages arising from the death of
Aaron. They had been impleaded in the same complaint as defendants
against whom the Zarates had the right to relief, whether jointly,
severally, or in the alternative, in respect to or arising out of the accident,
and questions of fact and of law were common as to the
Zarates. Although the basis of the right to relief of the Zarates (i.e.,
36 
breach of contract of carriage) against the Pereñas was distinct from the
basis of the Zarates’ right to relief against the PNR (i.e., quasi-delict
under Article 2176, Civil Code), they nonetheless could be held jointly
and severally liable by virtue of their respective negligence combining to
cause the death of Aaron. As to the PNR, the RTC rightly found the PNR
also guilty of negligence despite the school van of the Pereñas traversing
the railroad tracks at a point not dedicated by the PNR as a railroad
crossing for pedestrians and motorists, because the PNR did not ensure
the safety of others through the placing of crossbars, signal lights,
warning signs, and other permanent safety barriers to prevent vehicles or
pedestrians from crossing there. The RTC observed that the fact that a
crossing guard had been assigned to man that point from 7 a.m. to 5 p.m.
was a good indicium that the PNR was aware of the risks to others as
well as the need to control the vehicular and other traffic there. Verily, the
Pereñas and the PNR were joint tortfeasors.
2.
Was the indemnity for loss of
Aaron’s earning capacity proper?
The RTC awarded indemnity for loss of Aaron’s earning capacity.
Although agreeing with the RTC on the liability, the CA modified the
amount. Both lower courts took into consideration that Aaron, while only
a high school student, had been enrolled in one of the reputable schools
in the Philippines and that he had been a normal and able-bodied child
prior to his death. The basis for the computation of Aaron’s earning
capacity was not what he would have become or what he would have
wanted to be if not for his untimely death, but the minimum wage in effect
at the time of his death. Moreover, the RTC’s computation of Aaron’s life
expectancy rate was not reckoned from his age of 15 years at the time of
his death, but on 21 years, his age when he would have graduated from
college.
We find the considerations taken into account by the lower courts to be
reasonable and fully warranted.
Yet, the Pereñas submit that the indemnity for loss of earning capacity
was speculative and unfounded.  They cited People v. Teehankee,
1âwphi1
Jr., where the Court deleted the indemnity for victim Jussi Leino’s loss of
37 
earning capacity as a pilot for being speculative due to his having
graduated from high school at the International School in Manila only two
years before the shooting, and was at the time of the shooting only
enrolled in the first semester at the Manila Aero Club to pursue his
ambition to become a professional pilot. That meant, according to the
Court, that he was for all intents and purposes only a high school
graduate.
We reject the Pereñas’ submission.
First of all, a careful perusal of the Teehankee, Jr. case shows that the
situation there of Jussi Leino was not akin to that of Aaron here. The CA
and the RTC were not speculating that Aaron would be some highly-paid
professional, like a pilot (or, for that matter, an engineer, a physician, or a
lawyer). Instead, the computation of Aaron’s earning capacity was
premised on him being a lowly minimum wage earner despite his being
then enrolled at a prestigious high school like Don Bosco in Makati, a fact
that would have likely ensured his success in his later years in life and at
work.
And, secondly, the fact that Aaron was then without a history of earnings
should not be taken against his parents and in favor of the defendants
whose negligence not only cost Aaron his life and his right to work and
earn money, but also deprived his parents of their right to his presence
and his services as well. Our law itself states that the loss of the earning
capacity of the deceased shall be the liability of the guilty party in favor of
the heirs of the deceased, and shall in every case be assessed and
awarded by the court "unless the deceased on account of permanent
physical disability not caused by the defendant, had no earning capacity
at the time of his death." Accordingly, we emphatically hold in favor of
38 
the indemnification for Aaron’s loss of earning capacity despite him
having been unemployed, because compensation of this nature is
awarded not for loss of time or earnings but for loss of the deceased’s
power or ability to earn money. 39
This favorable treatment of the Zarates’ claim is not unprecedented. In
Cariaga v. Laguna Tayabas Bus Company and Manila Railroad
Company, fourth-year medical student Edgardo Carriaga’s earning
40 
capacity, although he survived the accident but his injuries rendered him
permanently incapacitated, was computed to be that of the physician that
he dreamed to become. The Court considered his scholastic record
sufficient to justify the assumption that he could have finished the medical
course and would have passed the medical board examinations in due
time, and that he could have possibly earned a modest income as a
medical practitioner. Also, in People v. Sanchez, the Court opined that
41 
The moral damages of ₱ 2,500,000.00 were really just and reasonable
under the established circumstances of this case because they were
intended by the law to assuage the Zarates’ deep mental anguish over
their son’s unexpected and violent death, and their moral shock over the
senseless accident. That amount would not be too much, considering
that it would help the Zarates obtain the means, diversions or
amusements that would alleviate their suffering for the loss of their child.
At any rate, reducing the amount as excessive might prove to be an
injustice, given the passage of a long time from when their mental
anguish was inflicted on them on August 22, 1996.
Anent the ₱ 1,000,000.00 allowed as exemplary damages, we should not
reduce the amount if only to render effective the desired example for the
public good. As a common carrier, the Pereñas needed to be vigorously
reminded to observe their duty to exercise extraordinary diligence to
prevent a similarly senseless accident from happening again. Only by an
award of exemplary damages in that amount would suffice to instill in
them and others similarly situated like them the ever-present need for
greater and constant vigilance in the conduct of a business imbued with
public interest.
WHEREFORE, we DENY the petition for review
on certiorari; AFFIRM the decision promulgated on November 13, 2002;
and ORDER the petitioners to pay the costs of suit.

murder and rape victim Eileen Sarmienta and murder victim Allan Gomez SO ORDERED.
could have easily landed good-paying jobs had they graduated in due
time, and that their jobs would probably pay them high monthly salaries
from ₱ 10,000.00 to ₱ 15,000.00 upon their graduation. Their earning
capacities were computed at rates higher than the minimum wage at the
time of their deaths due to their being already senior agriculture students
of the University of the Philippines in Los Baños, the country’s leading
educational institution in agriculture.

3.
Were the amounts of damages excessive?

The Pereñas plead for the reduction of the moral and exemplary
damages awarded to the Zarates in the respective amounts of ₱
2,500,000.00 and ₱ 1,000,000.00 on the ground that such amounts were
excessive.

The plea is unwarranted.


G.R. No. 185440               July 13, 2011
VICELET LALICON and VICELEN LALICON, Petitioners,
vs.
NATIONAL HOUSING AUTHORITY, Respondent.
DECISION
ABAD, J.:
This case is about (a) the right of the National Housing Authority to seek
annulment of sales made by housing beneficiaries of lands they bought
from it within the prohibited period and (b) the distinction between actions
for rescission instituted under Article 1191 of the Civil Code and those
instituted under Article 1381 of the same code.
The Facts and the Case
On November 25, 1980 the National Housing Authority (NHA) executed a
Deed of Sale with Mortgage over a Quezon City lot1 in favor of the
spouses Isidro and Flaviana Alfaro (the Alfaros). In due time, the Quezon
City Registry of Deeds issued Transfer Certificate of Title (TCT) 277321
in the name of the Alfaros. The deed of sale provided, among others, that
the Alfaros could sell the land within five years from the date of its
release from mortgage without NHA’s prior written consent. Thus:
x x x. 5. Except by hereditary succession, the lot herein sold and
conveyed, or any part thereof, cannot be alienated, transferred or
encumbered within five (5) years from the date of release of herein
mortgage without the prior written consent and authority from the
VENDOR-MORTGAGEE (NHA). x x x.2 (Emphasis supplied)
The mortgage and the restriction on sale were annotated on the Alfaros’
title on April 14, 1981.
About nine years later or on November 30, 1990, while the mortgage on
the land subsisted, the Alfaros sold the same to their son, Victor Alfaro,
who had taken in a common-law wife, Cecilia, with whom he had two
daughters, petitioners Vicelet and Vicelen Lalicon (the Lalicons). Cecilia,
who had the means, had a house built on the property and paid for the
amortizations. After full payment of the loan or on March 21, 1991 the
NHA released the mortgage. Six days later or on March 27 Victor
transferred ownership of the land to his illegitimate daughters.
About four and a half years after the release of the mortgage or on
October 4, 1995, Victor registered the November 30, 1990 sale of the
land in his favor, resulting in the cancellation of his parents’ title. The
register of deeds issued TCT 140646 in Victor’s name. On December 14,
1995 Victor mortgaged the land to Marcela Lao Chua, Rosa Sy, Amparo
Ong, and Ida See. Subsequently, on February 14, 1997 Victor sold the
property to Chua, one of the mortgagees, resulting in the cancellation of
his TCT 140646 and the issuance of TCT N-172342 in Chua’s name.
A year later or on April 10, 1998 the NHA instituted a case before the
Quezon City Regional Trial Court (RTC) for the annulment of the NHA’s
1980 sale of the land to the Alfaros, the latter’s 1990 sale of the land to
their son Victor, and the subsequent sale of the same to Chua, made in
violation of NHA rules and regulations.
On February 12, 2004 the RTC rendered a decision in the case. It ruled
that, although the Alfaros clearly violated the five-year prohibition, the
NHA could no longer rescind its sale to them since its right to do so had
already prescribed, applying Article 1389 of the New Civil Code. The
NHA and the Lalicons, who intervened, filed their respective appeals to
the Court of Appeals (CA).
On August 1, 2008 the CA reversed the RTC decision and found the
NHA entitled to rescission. The CA declared TCT 277321 in the name of
the Alfaros and all subsequent titles and deeds of sale null and void. It
ordered Chua to reconvey the subject land to the NHA but the latter must
pay the Lalicons the full amount of their amortization, plus interest, and
the value of the improvements they constructed on the property.
The Issues Presented
The issues in this case are: the resale without the NHA’s consent is a substantial breach. The
essence of the government’s socialized housing program is to preserve
1. Whether or not the CA erred in holding that the Alfaros violated the beneficiary’s ownerships for a reasonable length of time, here at least
their contract with the NHA; within five years from the time he acquired it free from any encumbrance.

2. Whether or not the NHA’s right to rescind has prescribed; and Second. Invoking the RTC ruling, the Lalicons claim that under Article
1389 of the Civil Code the "action to claim rescission must be
3. Whether or not the subsequent buyers of the land acted in commenced within four years" from the time of the commission of the
good faith and their rights, therefore, cannot be affected by the cause for it.
rescission.
But an action for rescission can proceed from either Article 1191 or
The Rulings of the Court Article 1381. It has been held that Article 1191 speaks of rescission in
reciprocal obligations within the context of Article 1124 of the Old Civil
Code which uses the term "resolution." Resolution applies only to
First. The contract between the NHA and the Alfaros forbade the latter
reciprocal obligations such that a breach on the part of one party
from selling the land within five years from the date of the release of the
constitutes an implied resolutory condition which entitles the other party
mortgage in their favor.3 But the Alfaros sold the property to Victor on
to rescission. Resolution grants the injured party the option to pursue, as
November 30, 1990 even before the NHA could release the mortgage in
principal actions, either a rescission or specific performance of the
their favor on March 21, 1991. Clearly, the Alfaros violated the five-year
obligation, with payment of damages in either case.
restriction, thus entitling the NHA to rescind the contract.
Rescission under Article 1381, on the other hand, was taken from Article
The Lalicons contend, however, that the Alfaros did not violate the five-
1291 of the Old Civil Code, which is a subsidiary action, not based on a
year restriction against resale since what the contract between the
party’s breach of obligation. 4 The four-year prescriptive period provided in
parties barred was a transfer of the property within five years from the
Article 1389 applies to rescissions under Article 1381.
release of the mortgage, not a transfer of the same prior to such release.
Here, the NHA sought annulment of the Alfaros’ sale to Victor because
But the Lalicons are trying to be clever. The restriction clause is more of
they violated the five-year restriction against such sale provided in their
a condition on the sale of the property to the Alfaros rather than a
contract. Thus, the CA correctly ruled that such violation comes under
condition on the mortgage constituted on it. Indeed, the prohibition
Article 1191 where the applicable prescriptive period is that provided in
against resale remained even after the land had been released from the
Article 1144 which is 10 years from the time the right of action
mortgage. The five-year restriction against resale, counted from the
accrues.  The NHA’s right of action accrued on February 18, 1992 when
release of the property from the NHA mortgage, measures out the
1avvphi1

it learned of the Alfaros’ forbidden sale of the property to Victor. Since the
desired hold that the government felt it needed to ensure that its objective
NHA filed its action for annulment of sale on April 10, 1998, it did so well
of providing cheap housing for the homeless is not defeated by wily
within the 10-year prescriptive period.
entrepreneurs.
Third. The Court also agrees with the CA that the Lalicons and Chua
The Lalicons claim that the NHA unreasonably ignored their letters that
were not buyers in good faith. Since the five-year prohibition against
asked for consent to the resale of the subject property. They also claim
alienation without the NHA’s written consent was annotated on the
that their failure to get NHA’s prior written consent was not such a
property’s title, the Lalicons very well knew that the Alfaros’ sale of the
substantial breach that warranted rescission.
property to their father, Victor, even before the release of the mortgage
violated that prohibition.
But the NHA had no obligation to grant the Lalicons’ request for
exemption from the five-year restriction as to warrant their proceeding
with the sale when such consent was not immediately forthcoming. And
As regards Chua, she and a few others with her took the property by way
of mortgage from Victor in 1995, well within the prohibited period. Chua
knew, therefore, based on the annotated restriction on the property, that
Victor had no right to mortgage the property to her group considering that
the Alfaros could not yet sell the same to him without the NHA’s consent.
Consequently, although Victor later sold the property to Chua after the
five-year restriction had lapsed, Chua cannot claim lack of awareness of
the illegality of Victor’s acquisition of the property from the Alfaros.
Lastly, since mutual restitution is required in cases involving rescission
under Article 1191,5 the NHA must return the full amount of the
amortizations it received for the property, plus the value of the
improvements introduced on the same, with 6% interest per annum from
the time of the finality of this judgment. The Court will no longer dwell on
the matter as to who has a better right to receive the amount from the
NHA: the Lalicons, who paid the amortizations and occupied the
property, or Chua, who bought the subject lot from Victor and obtained
for herself a title to the same, as this matter was not raised as one of the
issues in this case. Chua’s appeal to the Court in a separate case 6 having
been denied due course and NHA failing to file its own petition for review,
the CA decision ordering the restitution in favor of the Lalicons has now
become final and binding against them.
WHEREFORE, the Court AFFIRMS the Decision of the Court of Appeals
in CA-G.R. CV 82298 dated August 1, 2008.
SO ORDERED.
HIRD DIVISION
G.R. No. 182629, February 24, 2016
MERCEDES N. ABELLA, MA. THERESA A. BALLESTEROS
AND MARIANITO N. ABELLA, Petitioners, v. HEIRS OF
FRANCISCA C. SAN JUAN namely: GLICERIA SAN JUAN
CAPISTRANO, BENIGNA SAN JUAN VASQUEZ, EVARISTO
SAN JUAN, NIEVES SAN JUAN LUSTRE AND MATILDE SAN
JUAN QUILONIO, Respondents.
DECISION
JARDELEZA, J.:
In this case, we reiterate the prohibition on the transfer of lands
under Presidential Decree No. 271 (PD 27) except transfer to the
Government or by hereditary succession.
The Facts
Francisca C. San Juan (Francisca), was a tenant to a parcel of
land consisting of six thousand (6,000) square meters owned by
petitioners, and located at Balatas, Naga City, Camarines Sur
(Balatas property). The portion was covered by Certificate of
Land Transfer (CLT) No. 843 (159301) issued on October 18,
1973.2
On January 28, 1981, Dr. Manuel Abella (Dr. Abella) and
Francisca entered into an Agreement3 whereby the Balatas
property will be exchanged with a 6,000-square meter
agricultural lot situated at San Rafael, Cararayan, Naga City
(Cararayan property). The parties agreed that in addition to the
Cararayan property, Francisca shall receive from Dr. Abella the
amount of P5,250.00 as disturbance compensation and a 120-
square meter home lot situated at Balatas, Naga City.4
Dr. Abella complied with all the stipulations in the Agreement.
The Department of Agrarian Reform (DAR) thru Salvador Pejo,
CESO II, Ministry of Agrarian Reform (MAR) Regional
Director5 and later DAR Regional Director Pablo S. Sayson also
approved the Agreement.6
Subsequently, the Cararayan property was declared in the
name of Francisca, under Tax Declaration (TD) No. 01-006-
0169.7 On the other hand, the home lot at Balatas, Naga City,
was later sold for P7,200.00 to Felimon Delfino, Jr. (Delfino), on
February 26, 1988.8 However, CLT No. 843 (159301) was not
cancelled.
Sometime in 1983, Benigna San Juan Vasquez (Benigna),
daughter of Francisca, sought permission from, and was allowed
by Mercedes N. Abella (Mrs. Abella), wife of Dr. Abella, to
construct a small house on the Balatas property. Thus, on
different occasions, Benigna and her children constructed their
residential houses on the property.9 Later, when Mrs. Abella
requested Benigna and her children to vacate the property, they
refused, claiming ownership. This prompted Mrs. Abella to file
an action for unlawful detainer before the Municipal Trial Court
(MTC) of Naga City.10
On November 26, 2004, the MTC ruled in favor of the heirs of
Dr. Abella in the unlawful detainer case.11 The MTC issued a writ
of execution12 and writ of demolition13 against Benigna and her
sons.
On March 15, 2005, Benigna, for herself and in behalf of the
other heirs of Francisca namely: Gliceria San Juan-Capistrano,
Evaristo C. San Juan, Benigna San Juan Vasquez, Eduvejes San
Juan-Martines, Nieves San Juan-Lustre, Maria San Juan-
Banavides and Matilde San Juan-Quilonio (respondents), filed a
Complaint with the Regional Trial Court, Branch 23, Naga City
(RTC) for quieting of title and declaration of ownership and
possession of real property with prayer for a temporary
restraining order, preliminary injunction and damages against
Mrs. Abella, Theresa A. Ballesteros and Marianito N. Abella
(petitioners).14 The Complaint prayed for a decision declaring
respondents as absolute and lawful owners of the Balatas
property and holding petitioners jointly and severally liable for
moral and exemplary damages, attorney's fees and appearance
fee, litigation expenses and costs of suit.15 The RTC
subsequently granted the application for a temporary
restraining order.16
Petitioners alleged that Dr. Abella and Francisca executed the
Agreement for the exchange of lots because the Balatas
property was reclassified as a high density commercial,
residential and urban area and hence no longer suitable for
agriculture.17 Since the Balatas property was exchanged with
the Cararayan property on January 28, 1981, Francisca ceased
to be its owner long before she died on November 19, 1996.
Thus, respondents could not have inherited the Balatas
property.18
Respondents countered that the reclassification by the City
Government of Naga did not convert the use of the land from
agricultural to residential or commercial. The authority to
convert the land use of a property is vested by law in the
DAR.19 They further argued that the Agreement is null and void
as it contravened the prohibition on transfer under PD 27. Thus,
the approval by the DAR was of no moment.20
RTC Ruling
The RTC rendered a Decision on April 12, 200521 dismissing the
complaint for lack of merit. It ruled that with the execution of
the Agreement between Dr. Abella and Francisca, the latter's
legal or equitable title to, or interest on the Balatas property,
ceased to exist. Under the exchange, Francisca gave up her
interest in the Balatas property in favor of an interest in the
Cararayan property. Respondents as heirs of Francisca, in turn,
acquired this interest on the Cararayan property.22
The RTC further ruled that the Agreement did not affect the
right or interest of Francisca as a tenant. The right was
eventually enjoyed by one of her daughters, respondent Maria
San Juan-Banavides, who is the present possessor and
cultivator of the Cararayan property. The RTC held that
although there was no showing that the title to the Balatas
property was cancelled or encumbered, most probably due to
oversight, the execution of the Agreement, duly approved by
the DAR, operates to cancel the certificate of land transfer.23
The respondents appealed to the Court of Appeals (CA),
contending that under PD 27, title to the Balatas property could
not have been acquired by the petitioners since its transfer is
limited only to the government or the grantee's heirs by way of
succession. Thus, the Agreement is an invalid instrument which
casts a cloud on respondents' title.24
CA Decision
On October 16, 2007, the CA reversed the RTC Decision and
ruled that the Agreement was void, for being violative of (1) PD
27 which provides that title to the land acquired pursuant to the
Decree of Land Reform Program of the Government shall not be
transferable, except by hereditar}/ succession or to the
Government, in accordance with its provisions, the Code of
Agrarian Reform and other existing laws and regulations;25 and
(2) Memorandum Circular No. 7, series of 1979 issued by the
MAR, which declares as null and void the transfer by the
beneficiaries under PD 27 of the ownership, rights and/or
possession of their farms/home lots to other persons.26 The CA
also cited Toralba v. Mercado,27 where this Court ruled that the
rights and interests covered by certificates of land transfer are
beyond the commerce of man.28
The CA further ruled that the DAR approval cannot clothe the
void Agreement with validity.29 In addition, the CA noted that
the classification of the Balatas property from agricultural to
high density commercial, residential and urban area was done
after the Agreement was executed, contrary to petitioners'
claim.30 The dispositive portion of the CA decision reads:
WHEREFORE, the assailed decision dated April 12, 2005 of the
RTC, Branch 23, Naga City, in Civil Case No. RTC'2005-0033,
is REVERSED and SET ASIDE. A new judgment is entered,
declaring plaintiffs-appellants the owners of the subject
property covered by CLT No. 843 and quieting their title
thereto.
SO ORDERED.31 (Emphasis in the original.)
Petitioners filed a Motion for Reconsideration which was denied
by the CA in a Resolution dated April 14, 2008.32
The Petition
Petitioners assail the CA Decision and Resolution on the
following grounds:
First, the Agreement, being a mere relocation agreement, did
not violate nor contravene the true spirit of PD 27 and other
agrarian reform laws, rules and regulations.33
Second, the DAR/MAR are agencies tasked to implement PD 27
and other agrarian laws, rules and regulations relative to the
disputed land, thus their approval of the Agreement must be
accorded great weight by the CA.34]
Third, Toralba v. Mercado is not applicable because Francisca
did not surrender the Balatas property to her former landowner,
Dr. Abella, as contemplated under PD 27. Instead, she received
in return the Cararayan property.35
Fourth, PD 27 does not automatically vest ownership of a piece
of land to a. tenant-farmer beneficiary, contrary to the findings
of the CA. Pending compliance with certain conditions set forth
by PD 27, a qualified farmer cannot claim the right of absolute
ownership over the land because he is considered as a mere
prospective owner. Francisca defaulted in the payment of the
annual amortizations for more than two years, thus, her status
as deemed owner of the landholding covered by CLT No. 843
(159301) had ceased to exist. This holds true even if the
cancellation of the CLT was not annotated on the certificate of
land transfer and the CLT was not cancelled from the registry
book of the Registry of Deeds.36
Fifth, petitioners maintain that the respondents are estopped
from questioning the Agreement. Benigna knew of the
Agreement and yet, she neither complained nor moved to have
it cancelled. When Benigna sought permission from Mrs. Abella
that she be allowed to stay in the property, she recognized Mrs.
Abella and the children as its owners. Benigna even benefited
from the benevolence of the petitioners when upon her request,
she and her family were allowed to construct their houses on
the property without paying any rentals.37
Sixth, the decision of the CA would unjustly enrich respondents
at the expense of the petitioners. Francisca, the predecessor-in-
interest of the respondents had already received, and enjoyed
the following properties: (a) 0.600 hectare or 6,000-square
meter Cararayan property; (b) disturbance compensation of
P5,250.00; and (c) the 120-square meter Balatas home lot, all
of which were given by Dr. Abella in exchange for the Balatas
property.
And yet, by virtue of the CA decision, the respondents would
still be entitled to recover the Balatas property.38
Our Ruling
I. The Agreement is void for con/ravening PD 27.
The resolution of this Petition hinges on the determination of
whether the Agreement between Dr. Abella and Francisca is
void for violating PD 27.
We affirm the CA ruling.
PD 27 provides for only two exceptions to the prohibition on
transfer, namely, (1) transfer by hereditary succession and (2)
transfer to the Government.39
Torres v. Ventura40 explained the provision, thus:
xxx
The law is clear and leaves no room for doubt. Upon the
promulgation of Presidential Decree No. 27 on October 21,
1972, petitioner was DEEMED OWNER of the land in question.
As of that date, he was declared emancipated from the bondage
of the soil. As such, he gained the rights to possess, cultivate,
and enjoy the landholding for himself. Those rights over that
particular property were granted by the government to him and
to no other. To insure his continued possession and
enjoyment of the property, he could not, under the law,
make any valid form of transfer except to the
government or by hereditary succession, to his
successors.
Yet, it is a fact that despite the prohibition, many farmer-
beneficiaries like petitioner herein were tempted to make use of
their land to acquire much needed money. Hence, the then
Ministry of Agrarian Reform issued the following Memorandum
Circular:
"Despite the above prohibition, however, there are
reports that many farmer-beneficiaries of PD 27 have
transferred the ownership, rights, and/or possession of
their farms/homelots to other persons or
have surrendered the same to their former landowners.
All these transactions/surrenders are violative of PD 27
and therefore, null and void."41 (Citations omitted, emphasis
supplied.)
This interpretation is reiterated in Estate of the Late
Encarnacion Vda. de Panlilio v. Dizon,42 where we ruled:
Thus, PD 27 is clear that after full payment and title to the land
is acquired, the land shall not be transferred except to the heirs
of the beneficiary or the Government. If the amortizations for
the land have not yet been paid, then there can be no transfer
to anybody since the lot is still owned by the Government. The
prohibition against transfers to persons other than the heirs of
other qualified beneficiaries stems from the policy of the
Government to develop generations of farmers to attain its
avowed goal to have an adequate and sustained agricultural
production. With certitude, such objective will not see the light
of day if lands covered by agrarian reform can easily be
converted for non-agricultural purposes.
xxx
Anent the contravention of the prohibition under PD 27, we
ruled in Siacor v. Giganktna and more recently in [Calixvug-
Carmona] v. Court of Appeals, that sales or transfers of
lands made in violation of PD 27 and EO 228 in favor of
persons other than the Government by other legal means
or to the farmer's successor by hereditary succession are
null and void. The prohibition even extends to the
surrender of the land to the former landowner. The sales
or transfers are void ab initio, being contrary to law and public
policy under Art. 5 of the Civil Code that "acts executed against
the provisions of mandatory or prohibiting laws shall be void x x
x." In this regard, the DAR is duty-bound to take appropriate
measures to annul the illegal transfers and recover the land
unlawfully conveyed to non-qualified persons for disposition to
qualified beneficiaries. In the case at bar, the alleged transfers
made by some if not all of respondents Gonzalo Dizon, et
al. (G.R. No. 148777) of lands covered by PD 27 to non-
qualified persons are illegal and null and void.43 (Citations
omitted.)
In the Agreement, Dr. Abella and Francisca stipulated that the
Cararayan property will be placed under Operation Land
Transfer and that a new CLT shall be issued in the name of
Francisca.44 The parties also agreed that after the execution of
the Agreement, Francisca shall vacate the Balatas property and
deliver its possession to Dr. Abella.45 Further, the  Deed of
Donation of Land Covered by Presidential Decree No. 27 dated
July 1, 1981 provided that "for and in consideration of the
[landowner-donor's] generosity and in exchange of the [tenant-
tiller donee's] [farm lot] at Balatas, City of Naga, the
[landowner-donor] do hereby transfer and convey to the
[tenant-tiller-donee], by way of [donation] the parcel of land
above-described."46
The intended exchange of properties by the parties as
expressed in the Agreement and in the Deed of Donation
entailed transfer of all the rights and interests of Francisca over
the Balatas property to Dr. Abella. It is the kind of transfer
contemplated by and prohibited by law. Thus, petitioners'
argument that the Agreement was merely a relocation
agreement, or one for the exchange or swapping of properties
between Dr. Abella and Francisca, and not a transfer or
conveyance under PD 27, has no merit. A relocation, exchange
or swap of a property is a transfer of property. They cannot
excuse themselves from the prohibition by a mere play on
words.
We likewise agree with the CA that the DAR's approval did not
validate the Agreement. Under PD 27 and the pronouncements
of this Court, transfer of lands under PD 27 other than to
successors by hereditary succession and the Government is
void.47 A void or inexistent contract is one which has no force
and effect from the beginning, as if it has never been entered
into, and which cannot be validated either by time or
ratification.48 No form of validation can make the void
Agreement legal.
II. The prohibition under PD 27
applies even if the farmer-beneficiary
has not yet acquired absolute title.
Our ruling in Torres is clear that the prohibition applies even if
the farmer-beneficiary has not yet acquired absolute title to the
land, and the protection begins upon the promulgation of the
law, thus:
[T]itle refers not only to that issued upon compliance by the
tenant-farmer of the said conditions but also includes those
rights and interests that the tenant-farmer immediately
acquired upon the promulgation of the law. To rule otherwise
would make a tenant-farmer falling in the category of those
who have not yet been issued a formal title to the land they till
— easy prey to those who would like to tempt them with cash in
exchange for inchoate title over the same. Following this,
absolute title over lands covered by Presidential Decree No. 27
would end up in the name of persons who were not the actual
tillers when the law was promulgated.49
Further, as we ruled in Estate of the Late Encarnacion Vda. de
Panlilio, the prohibition extends to the rights and interests of
the farmer in the land even while he is still paying the
amortizations on it.50
Petitioners merely alleged in their petition that since Francisca
defaulted in the payment of the annual amortizations for more
than two years, she has given a ground for the forfeiture of her
CLT.
We disagree. Even assuming that the respondents defaulted in
paying the amortization payments, default or non-payment is
not a ground for cancellation of the CLT under the law. Instead,
PD 27 provides that "(i)n case of default, the amortization due
shall be paid by the farmers' cooperative in which the defaulting
tenant-farmer is a member, with the cooperative having a right
of recourse against him." In any event, petitioners failed to
show the cancellation of the CLT prior to the Agreement which
would have removed the deemed owner status of Francisca
over the Balatas property.
III. The respondents are not estopped from questioning
the Agreement.
Petitioners urge us to deny any equitable relief to the
respondents on the ground that they did not complain or have
the Agreement cancelled and even benefited from the
benevolence of petitioners. Under the theory of the petitioners,
estoppel would bar the respondents from recovering the Balatas
property.51
We are not convinced. Estoppel cannot be predicated on a void
contract or on acts which are prohibited by law or are against
public policy.52
In Torres, we refused to apply the principle of pari delicto  which
would in effect have deprived the leasehold tenant of his right
to recover the landholding which was illegally disposed of. We
ruled that "(t)o hold otherwise will defeat the spirit and intent of
[PD 27] and the tillers will never be emancipated from the
bondage of the soil."53 In  Santos v. Roman Catholic Church of
Midsayap, et al.,54 we explained:
xxx Here appellee desires to nullify a transaction which was
done in violation of the law. Ordinarily the principle of pari
delicto would apply to her because her predecessor-in-
interest has carried out the sale with the presumed
knowledge of its illegality (8 Manresa 4th ed., pp. 717-
718), but because the subject of the transaction is a
piece of public land, public policy requires that she, as
heir, be not prevented from re-acquiring it because it
was given by law to her family for her home and
cultivation. This is the policy on which our homestead
law is predicated (Pascua vs. Talens, supra). This right
cannot be waived. "It is not within the competence of
any citizen to barter away what public policy by law
seeks to preserve" (Gonzalo Puyat & Sons, Inc. vs. Pantaleon
de las Ama, et al., 74 Phil., 3). We are, therefore, constrained
to hold that appellee can maintain the present action it being in
furtherance of this fundamental aim of our homestead
law."55 (Emphasis supplied.)
Thus, respondents were not estopped from questioning the
validity of the Agreement as it contravened the prohibition
under PD 27 on the transfer of land. The tenant-farmer cannot
barter away the benefit and protection granted in its favor by
law as it would defeat the policy behind PD 27.
IV. The nullity of the Agreement
requires the return of the parties to the
status quo ante to avoid unjust
enrichment.
In Flores v. Undo, Jr.,56 we laid down the elements of unjust
enrichment as follows:
There is unjust enrichment "when a person unjustly retains a
benefit to the loss of another, or when a person retains money
or property of another against the fundamental principles of
justice, equity and good conscience." The principle of unjust
enrichment requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such
benefit is derived at the expense of another.
The main objective of the principle against unjust enrichment is
to prevent one from enriching himself at the expense of another
without just cause or consideration.57
The consequence of our declaration that the Agreement is void
is that the respondents, as heirs of Francisca, have the right to
the Balatas property. This would unjustly enrich respondents at
the expense of petitioners, predecessors-in-interest of Dr.
Abella. To remedy this unjust result, respondents should return
to the petitioners the consideration given by Dr. Abel la in
exchange for the Balatas property: a) the Cararayan property;
b) P5,250.00 disturbance compensation; and c) the 120-square
meter home lot in Balatas, Naga City. We note however, that
the 120-square meter home lot in Balatas, Naga City has
already been sold and transferred to Delfino who was not
impleaded in this case. Thus, without prejudice to whatever
right petitioners have against Delfino, respondents should pay
petitioners the fair market value of the Balatas home lot at the
time it was transferred to respondents. Such fair market value
shall be subject to determination by the trial court.chanrobleslaw
WHEREFORE, the assailed Decision of the CA dated October
16, 2007 and Resolution dated April 14, 2008
are AFFIRMED with the MODIFICATION that respondents
should return to the petitioners the 6,000-square meter parcel
of land located in Cararayan, Naga City, Camarines Sur, and the
amount of P5,250.00 with legal interest computed at the rate of
6% per annum reckoned from the finality of this judgment until
fully paid. This case is remanded to the Regional Trial Court,
Branch 23, Naga City for the determination of the fair market
value of the Balatas home lot at the time of donation.
SO ORDERED. cralawlawlibrary
epublic of the Philippines
SUPREME COURT
THIRD DIVISION
G.R. No. 150255. April 22, 2005
SCHMITZ TRANSPORT & BROKERAGE CORPORATION, Petitioners,
vs.
TRANSPORT VENTURE, INC., INDUSTRIAL INSURANCE COMPANY,
LTD., and BLACK SEA SHIPPING AND DODWELL now INCHCAPE
SHIPPING SERVICES, Respondents.
DECISION
CARPIO-MORALES, J.:
On petition for review is the June 27, 2001 Decision of the Court of
1 
Appeals, as well as its Resolution dated September 28, 2001 denying the
2 
motion for reconsideration, which affirmed that of Branch 21 of the
Regional Trial Court (RTC) of Manila in Civil Case No. 92-63132 holding3 
petitioner Schmitz Transport Brokerage Corporation (Schmitz Transport),
together with Black Sea Shipping Corporation (Black Sea), represented
by its ship agent Inchcape Shipping Inc. (Inchcape), and Transport
Venture (TVI), solidarily liable for the loss of 37 hot rolled steel sheets in
coil that were washed overboard a barge.
On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the
port of Ilyichevsk, Russia on board M/V "Alexander Saveliev" (a vessel of
Russian registry and owned by Black Sea) 545 hot rolled steel sheets in
coil weighing 6,992,450 metric tons.
The cargoes, which were to be discharged at the port of Manila in favor
of the consignee, Little Giant Steel Pipe Corporation (Little Giant), were 4 
insured against all risks with Industrial Insurance Company Ltd.
(Industrial Insurance) under Marine Policy No. M-91-3747-TIS. 5
The vessel arrived at the port of Manila on October 24, 1991 and the
Philippine Ports Authority (PPA) assigned it a place of berth at the
outside breakwater at the Manila South Harbor. 6
Schmitz Transport, whose services the consignee engaged to secure the
requisite clearances, to receive the cargoes from the shipside, and to
deliver them to its (the consignee’s) warehouse at Cainta, Rizal, in turn7 
engaged the services of TVI to send a barge and tugboat at shipside.
On October 26, 1991, around 4:30 p.m., TVI’s tugboat "Lailani" towed the
barge "Erika V" to shipside. 8
By 7:00 p.m. also of October 26, 1991, the tugboat, after positioning the
barge alongside the vessel, left and returned to the port terminal. At 9:00 9 
p.m., arrastre operator Ocean Terminal Services Inc. commenced to
unload 37 of the 545 coils from the vessel unto the barge.
By 12:30 a.m. of October 27, 1991 during which the weather condition
had become inclement due to an approaching storm, the unloading unto
the barge of the 37 coils was accomplished. No tugboat pulled the barge
10 
back to the pier, however.
At around 5:30 a.m. of October 27, 1991, due to strong waves, the crew
11 
of the barge abandoned it and transferred to the vessel. The barge
pitched and rolled with the waves and eventually capsized, washing the
37 coils into the sea. At 7:00 a.m., a tugboat finally arrived to pull the
12 
already empty and damaged barge back to the pier. 13
Earnest efforts on the part of both the consignee Little Giant and
Industrial Insurance to recover the lost cargoes proved futile.
14
Little Giant thus filed a formal claim against Industrial Insurance which
paid it the amount of ₱5,246,113.11. Little Giant thereupon executed a
subrogation receipt in favor of Industrial Insurance.
15 
Industrial Insurance later filed a complaint against Schmitz Transport,
TVI, and Black Sea through its representative Inchcape (the defendants)
before the RTC of Manila, for the recovery of the amount it paid to Little
Giant plus adjustment fees, attorney’s fees, and litigation expenses. 16
Industrial Insurance faulted the defendants for undertaking the unloading
of the cargoes while typhoon signal No. 1 was raised in Metro Manila. 17
By Decision of November 24, 1997, Branch 21 of the RTC held all the
defendants negligent for unloading the cargoes outside of the breakwater
notwithstanding the storm signal. The dispositive portion of the decision
18  (hereinafter referred to as petitioner) filed the present petition against
reads:
WHEREFORE, premises considered, the Court renders judgment in
favor of the plaintiff, ordering the defendants to pay plaintiff jointly and
severally the sum of ₱5,246,113.11 with interest from the date the
complaint was filed until fully satisfied, as well as the sum of ₱5,000.00
representing the adjustment fee plus the sum of 20% of the amount
recoverable from the defendants as attorney’s fees plus the costs of suit.
The counterclaims and cross claims of defendants are hereby
DISMISSED for lack of [m]erit. 19
To the trial court’s decision, the defendants Schmitz Transport and TVI
filed a joint motion for reconsideration assailing the finding that they are
common carriers and the award of excessive attorney’s fees of more than
₱1,000,000. And they argued that they were not motivated by gross or
evident bad faith and that the incident was caused by a fortuitous event.  20
By resolution of February 4, 1998, the trial court denied the motion for
reconsideration. 21
All the defendants appealed to the Court of Appeals which, by decision of
June 27, 2001, affirmed in toto the decision of the trial court,  it finding
22 
that all the defendants were common carriers — Black Sea and TVI for
engaging in the transport of goods and cargoes over the seas as a
regular business and not as an isolated transaction, and Schmitz
23 
Transport for entering into a contract with Little Giant to transport the
cargoes from ship to port for a fee. 24
In holding all the defendants solidarily liable, the appellate court ruled that
"each one was essential such that without each other’s contributory
negligence the incident would not have happened and so much so that
the person principally liable cannot be distinguished with sufficient
accuracy." 25
In discrediting the defense of fortuitous event, the appellate court held
that "although defendants obviously had nothing to do with the force of
nature, they however had control of where to anchor the vessel, where
discharge will take place and even when the discharging will
commence." 26
The defendants’ respective motions for reconsideration having been
denied by Resolution of September 28, 2001, Schmitz Transport
27 
TVI, Industrial Insurance and Black Sea.
Petitioner asserts that in chartering the barge and tugboat of TVI, it was
acting for its principal, consignee Little Giant, hence, the transportation
contract was by and between Little Giant and TVI. 28
By Resolution of January 23, 2002, herein respondents Industrial
Insurance, Black Sea, and TVI were required to file their respective
Comments. 29
By its Comment, Black Sea argued that the cargoes were received by the
consignee through petitioner in good order, hence, it cannot be faulted, it
having had no control and supervision thereover. 30
For its part, TVI maintained that it acted as a passive party as it merely
received the cargoes and transferred them unto the barge upon the
instruction of petitioner. 31
In issue then are:
(1) Whether the loss of the cargoes was due to a fortuitous event,
independent of any act of negligence on the part of petitioner Black Sea
and TVI, and
(2) If there was negligence, whether liability for the loss may attach to
Black Sea, petitioner and TVI.
When a fortuitous event occurs, Article 1174 of the Civil Code absolves
any party from any and all liability arising therefrom:
ART. 1174. 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.
In order, to be considered a fortuitous event, however, (1) the cause of
the unforeseen and unexpected occurrence, or the failure of the debtor to
comply with his obligation, must be independent of human will; (2) it must
be impossible to foresee the event which constitute the caso fortuito, or if
it can be foreseen it must be impossible to avoid; (3) the occurrence must
be such as to render it impossible for the debtor to fulfill his obligation in
any manner; and (4) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor.
32
[T]he principle embodied in the act of God doctrine strictly requires that
the act must be occasioned solely by the violence of nature. Human
intervention is to be excluded from creating or entering into the cause of
the mischief. When the effect is found to be in part the result of the
participation of man, whether due to his active intervention or neglect or
failure to act, the whole occurrence is then humanized and removed from
the rules applicable to the acts of God. 33
The appellate court, in affirming the finding of the trial court that human
intervention in the form of contributory negligence by all the defendants
resulted to the loss of the cargoes, held that unloading outside the
34  offers to its clients as a brokerage firm includes the transportation of
breakwater, instead of inside the breakwater, while a storm signal was up
constitutes negligence. It thus concluded that the proximate cause of the
35 
loss was Black Sea’s negligence in deciding to unload the cargoes at an
unsafe place and while a typhoon was approaching. 36
From a review of the records of the case, there is no indication that there
was greater risk in loading the cargoes outside the breakwater. As the
defendants proffered, the weather on October 26, 1991 remained normal
with moderate sea condition such that port operations continued and
proceeded normally. 37
The weather data report, furnished and verified by the Chief of the
38 
Climate Data Section of PAG-ASA and marked as a common exhibit of
the parties, states that while typhoon signal No. 1 was hoisted over Metro
Manila on October 23-31, 1991, the sea condition at the port of Manila at
5:00 p.m. - 11:00 p.m. of October 26, 1991 was moderate. It cannot,
therefore, be said that the defendants were negligent in not unloading the
cargoes upon the barge on October 26, 1991 inside the breakwater.
That no tugboat towed back the barge to the pier after the cargoes were
completely loaded by 12:30 in the morning is, however, a material fact
39 
which the appellate court failed to properly consider and
appreciate — the proximate cause of the loss of the cargoes. Had the
40 
barge been towed back promptly to the pier, the deteriorating sea
conditions notwithstanding, the loss could have been avoided. But the
barge was left floating in open sea until big waves set in at 5:30 a.m.,
causing it to sink along with the cargoes. The loss thus falls outside the
41 
"act of God doctrine."
The proximate cause of the loss having been determined, who among
the parties is/are responsible therefor?
Contrary to petitioner’s insistence, this Court, as did the appellate court,
finds that petitioner is a common carrier. For it undertook to transport the
cargoes from the shipside of "M/V Alexander Saveliev" to the consignee’s
warehouse at Cainta, Rizal. As the appellate court put it, "as long as a
person or corporation holds [itself] to the public for the purpose of
transporting goods as [a] business, [it] is already considered a common
carrier regardless if [it] owns the vehicle to be used or has to hire
one." That petitioner is a common carrier, the testimony of its own Vice-
42 
President and General Manager Noel Aro that part of the services it
cargoes reflects so.
Atty. Jubay: Will you please tell us what [are you] functions x x x as
Executive Vice-President and General Manager of said Company?
Mr. Aro: Well, I oversee the entire operation of the brokerage and
transport business of the company. I also handle the various division
heads of the company for operation matters, and all other related
functions that the President may assign to me from time to time, Sir.
Q: Now, in connection [with] your duties and functions as you mentioned,
will you please tell the Honorable Court if you came to know the company
by the name Little Giant Steel Pipe Corporation?
A: Yes, Sir. Actually, we are the brokerage firm of that Company.
Q: And since when have you been the brokerage firm of that company, if
you can recall?
A: Since 1990, Sir.
Q: Now, you said that you are the brokerage firm of this Company. What
work or duty did you perform in behalf of this company?
A: We handled the releases (sic) of their cargo[es] from the Bureau of
Customs. We [are] also in-charged of the delivery of the goods to their
warehouses. We also handled the clearances of their shipment at the
Bureau of Customs, Sir.
xxx
Q: Now, what precisely [was] your agreement with this Little Giant Steel
Pipe Corporation with regards to this shipment? What work did you do
with this shipment?
A: We handled the unloading of the cargo[es] from vessel to lighter and
then the delivery of [the] cargo[es] from lighter to BASECO then to the
truck and to the warehouse, Sir.
Q: Now, in connection with this work which you are doing, Mr. Witness,
you are supposed to perform, what equipment do (sic) you require or did
you use in order to effect this unloading, transfer and delivery to the
warehouse?
A: Actually, we used the barges for the ship side operations, this
unloading [from] vessel to lighter, and on this we hired or we sub-
contracted with [T]ransport Ventures, Inc. which [was] in-charged (sic) of
the barges. Also, in BASECO compound we are leasing cranes to have
the cargo unloaded from the barge to trucks, [and] then we used trucks to
deliver [the cargoes] to the consignee’s warehouse, Sir.
Q: And whose trucks do you use from BASECO compound to the
consignee’s warehouse?
A: We utilized of (sic) our own trucks and we have some other contracted
trucks, Sir.
xxx
ATTY. JUBAY: Will you please explain to us, to the Honorable Court why
is it you have to contract for the barges of Transport Ventures
Incorporated in this particular operation?
A: Firstly, we don’t own any barges. That is why we hired the services of
another firm whom we know [al]ready for quite sometime, which is
Transport Ventures, Inc. (Emphasis supplied) 43
It is settled that under a given set of facts, a customs broker may be
regarded as a common carrier. Thus, this Court, in A.F. Sanchez
Brokerage, Inc. v. The Honorable Court of Appeals, held: 44 
The appellate court did not err in finding petitioner, a customs broker, to
be also a common carrier, as defined under Article 1732 of the Civil
Code, to wit,
Art. 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation,
offering their services to the public.
xxx
Article 1732 does not distinguish between one whose principal business
activity is the carrying of goods and one who does such carrying only as
an ancillary activity. The contention, therefore, of petitioner that it is not a
common carrier but a customs broker whose principal function is to
prepare the correct customs declaration and proper shipping documents
as required by law is bereft of merit. It suffices that petitioner undertakes
to deliver the goods for pecuniary consideration. 45
And in Calvo v. UCPB General Insurance Co. Inc., this Court held that as
46 
the transportation of goods is an integral part of a customs broker, the
customs broker is also a common carrier. For to declare otherwise "would
be to deprive those with whom [it] contracts the protection which the law
affords them notwithstanding the fact that the obligation to carry goods
for [its] customers, is part and parcel of petitioner’s business." 47
As for petitioner’s argument that being the agent of Little Giant, any
negligence it committed was deemed the negligence of its principal, it
does not persuade.
True, petitioner was the broker-agent of Little Giant in securing the
release of the cargoes. In effecting the transportation of the cargoes from
the shipside and into Little Giant’s warehouse, however, petitioner was
discharging its own personal obligation under a contact of carriage.
Petitioner, which did not have any barge or tugboat, engaged the
services of TVI as handler to provide the barge and the tugboat. In their
48 
Service Contract, while Little Giant was named as the consignee,
49 
petitioner did not disclose that it was acting on commission and was
chartering the vessel for Little Giant. Little Giant did not thus
50 
automatically become a party to the Service Contract and was not,
therefore, bound by the terms and conditions therein.
Not being a party to the service contract, Little Giant cannot directly sue
TVI based thereon but it can maintain a cause of action for negligence.
In the case of TVI, while it acted as a private carrier for which it was
under no duty to observe extraordinary diligence, it was still required to
observe ordinary diligence to ensure the proper and careful handling,
care and discharge of the carried goods.
Thus, Articles 1170 and 1173 of the Civil Code provide:
ART. 1170. Those who in the performance of their obligations are guilty
of fraud, negligence, or delay, and those who in any manner contravene
the tenor thereof, are liable for damages.
ART. 1173. The fault or negligence of the obligor consists in the omission
of that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of articles 1171
and 2202, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed
in the performance, that which is expected of a good father of a family
shall be required.
Was the reasonable care and caution which an ordinarily prudent person
would have used in the same situation exercised by TVI? 52
This Court holds not.
TVI’s failure to promptly provide a tugboat did not only increase the risk
that might have been reasonably anticipated during the shipside
operation, but was the proximate cause of the loss. A man of ordinary
prudence would not leave a heavily loaded barge floating for a
considerable number of hours, at such a precarious time, and in the open
sea, knowing that the barge does not have any power of its own and is
totally defenseless from the ravages of the sea. That it was nighttime
and, therefore, the members of the crew of a tugboat would be charging
overtime pay did not excuse TVI from calling for one such tugboat.
As for petitioner, for it to be relieved of liability, it should, following Article
1739 of the Civil Code, prove that it exercised due diligence to prevent or
53 
minimize the loss, before, during and after the occurrence of the storm in
order that it may be exempted from liability for the loss of the goods.
51
While petitioner sent checkers and a supervisor on board the vessel to
54  55 
counter-check the operations of TVI, it failed to take all available and
reasonable precautions to avoid the loss. After noting that TVI failed to
arrange for the prompt towage of the barge despite the deteriorating sea
conditions, it should have summoned the same or another tugboat to
extend help, but it did not.
This Court holds then that petitioner and TVI are solidarily liable for the
56 
loss of the cargoes. The following pronouncement of the Supreme Court
is instructive:
The foundation of LRTA’s liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that contract
by reason of its failure to exercise the high diligence required of the
common carrier. In the discharge of its commitment to ensure the safety
of passengers, a carrier may choose to hire its own employees or avail
itself of the services of an outsider or an independent firm to undertake
the task. In either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only
be for tort under the provisions of Article 2176 and related provisions, in
conjunction with Article 2180 of the Civil Code. x x x [O]ne might ask
further, how then must the liability of the common carrier, on one hand,
and an independent contractor, on the other hand, be described? It would
be solidary. A contractual obligation can be breached by tort and when
the same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 2194 of the Civil Code
can well apply. In fine, a liability for tort may arise even under a contract,
where tort is that which breaches the contract. Stated differently, when an
act which constitutes a breach of contract would have itself constituted
the source of a quasi-delictual liability had no contract existed between
the parties, the contract can be said to have been breached by tort,
thereby allowing the rules on tort to apply. 57
As for Black Sea, its duty as a common carrier extended only from the WHEREFORE, judgment is hereby rendered ordering petitioner Schmitz
time the goods were surrendered or unconditionally placed in its Transport & Brokerage Corporation, and Transport Venture Incorporation
possession and received for transportation until they were delivered jointly and severally liable for the amount of ₱5,246,113.11 with the
actually or constructively to consignee Little Giant. 58
MODIFICATION that interest at SIX PERCENT per annum of the amount
due should be computed from the promulgation on November 24, 1997 of
Parties to a contract of carriage may, however, agree upon a definition of the decision of the trial court.
delivery that extends the services rendered by the carrier. In the case at
bar, Bill of Lading No. 2 covering the shipment provides that delivery be Costs against petitioner.
made "to the port of discharge or so near thereto as she may safely get,
always afloat." The delivery of the goods to the consignee was not from
59 

"pier to pier" but from the shipside of "M/V Alexander Saveliev" and into
barges, for which reason the consignee contracted the services of .R. No. L-15645             January 31, 1964
petitioner. Since Black Sea had constructively delivered the cargoes to
Little Giant, through petitioner, it had discharged its duty. 60

PAZ P. ARRIETA and VITALIADO ARRIETA, plaintiffs-appellees,

In fine, no liability may thus attach to Black Sea.
Respecting the award of attorney’s fees in an amount over
₱1,000,000.00 to Industrial Insurance, for lack of factual and legal basis,
this Court sets it aside. While Industrial Insurance was compelled to
litigate its rights, such fact by itself does not justify the award of attorney’s
fees under Article 2208 of the Civil Code. For no sufficient showing of
bad faith would be reflected in a party’s persistence in a case other than
an erroneous conviction of the righteousness of his cause. To award 61 
vs.
NATIONAL RICE AND CORN CORPORATION, defendant-appellant,
MANILA UNDERWRITERS INSURANCE CO., INC., defendant-appellee.
Teehankee and Carreon for plaintiffs-appellees.
The Government Corporate Counsel for defendant-appellant.
Isidro A. Vera for defendant-appellee.
REGALA, J.:

attorney’s fees to a party just because the judgment is rendered in its

favor would be tantamount to imposing a premium on one’s right to This is an appeal of the defendant-appellant NARIC from the decision of
litigate or seek judicial redress of legitimate grievances. 62 the trial court dated February 20, 1958, awarding to the plaintiffs-
appellees the amount of $286,000.00 as damages for breach of contract
and dismissing the counterclaim and third party complaint of the
On the award of adjustment fees: The adjustment fees and expense of
defendant-appellant NARIC.
divers were incurred by Industrial Insurance in its voluntary but
unsuccessful efforts to locate and retrieve the lost cargo. They do not
constitute actual damages. 63 In accordance with Section 13 of Republic Act No. 3452, "the National
Rice and Corn Administration (NARIC) is hereby abolished and all its
assets, liabilities, functions, powers which are not inconsistent with the
As for the court a quo’s award of interest on the amount claimed, the
provisions of this Act, and all personnel are transferred "to the Rice and
same calls for modification following the ruling in Eastern Shipping Lines,
Corn Administration (RCA).
Inc. v. Court of Appeals that when the demand cannot be reasonably
64 

established at the time the demand is made, the interest shall begin to
run not from the time the claim is made judicially or extrajudicially but
from the date the judgment of the court is made (at which the time the
quantification of damages may be deemed to have been reasonably
ascertained). 65
All references, therefore, to the NARIC in this decision must accordingly
be adjusted and read as RCA pursuant to the aforementioned law.
On May 19, 1952, plaintiff-appellee participated in the public bidding
called by the NARIC for the supply of 20,000 metric tons of Burmese rice.
As her bid of $203.00 per metric ton was the lowest, she was awarded
the contract for the same. Accordingly, on July 1, 1952, plaintiff-appellee
Paz P. Arrieta and the appellant corporation entered into a Contract of
Sale of Rice, under the terms of which the former obligated herself to
deliver to the latter 20,000 metric tons of Burmess Rice at $203.00 per
metric ton, CIF Manila. In turn, the defendant corporation committed itself
to pay for the imported rice "by means of an irrevocable, confirmed and
assignable letter of credit in U.S. currency in favor of the plaintiff-appellee
and/or supplier in Burma, immediately." Despite the commitment to pay
immediately "by means of an irrevocable, confirmed and assignable
Letter of Credit," however, it was only on July 30, 1952, or a full month
from the execution of the contract, that the defendant corporation, thru its
general manager, took the first to open a letter of credit by forwarding to
the Philippine National Bank its Application for Commercial Letter Credit.
The application was accompanied by a transmittal letter, the relevant
paragraphs of which read:
In view of the fact that we do not have sufficient deposit with your
institution with which to cover the amount required to be
deposited as a condition for the opening of letters of credit, we
will appreciate it if this application could be considered special
case.
We understand that our supplier, Mrs. Paz P. Arrieta, has a
deadline to meet which is August 4, 1952, and in order to comply
therewith, it is imperative that the L/C be opened prior to that
date. We would therefore request your full cooperation on this
matter.
On the same day, July 30, 1952, Mrs. Paz P. Arrieta thru counsel,
advised the appellant corporation of the extreme necessity for the
immediate opening of the letter credit since she had by then made a
tender to her supplier in Rangoon, Burma, "equivalent to 5% of the
F.O.B. price of 20,000 tons at $180.70 and in compliance with the
regulations in Rangoon this 5% will be confiscated if the required letter of
credit is not received by them before August 4, 1952."
On August 4, 1952, the Philippine National Bank informed the appellant
corporation that its application, "for a letter of credit for $3,614,000.00 in
favor of Thiri Setkya has been approved by the Board of Directors with
the condition that marginal cash deposit be paid and that drafts are to be
paid upon presentment." (Exh. J-pl.; Exh. 10-def., p. 19, Folder of
Exhibits). Furthermore, the Bank represented that it "will hold your
application in abeyance pending compliance with the above stated
requirement."
As it turned out, however, the appellant corporation not in any financial
position to meet the condition. As matter of fact, in a letter dated August
2, 1952, the NARIC bluntly confessed to the appellee its dilemma: "In this
connection, please be advised that our application for opening of the
letter of credit has been presented to the bank since July 30th but the
latter requires that we first deposit 50% of the value of the letter
amounting to aproximately $3,614,000.00 which we are not in a position
to meet." (Emphasis supplied. Exh. 9-Def.; Exh. 1-Pe., p. 18, Folder of
Exhibits)
Consequently, the credit instrument applied for was opened only on
September 8, 1952 "in favor of Thiri Setkya, Rangoon, Burma, and/or
assignee for $3,614,000.00," (which is more than two months from the
execution of the contract) the party named by the appellee as beneficiary
of the letter of credit.
1äwphï1.ñët
As a result of the delay, the allocation of appellee's supplier in Rangoon
was cancelled and the 5% deposit, amounting to 524,000 kyats or
approximately P200,000.00 was forfeited. In this connection, it must be
made of record that although the Burmese authorities had set August 4,
1952, as the deadline for the remittance of the required letter of credit,
the cancellation of the allocation and the confiscation of the 5% deposit
were not effected until August 20, 1952, or, a full half month after the
expiration of the deadline. And yet, even with the 15-day grace, appellant
corporation was unable to make good its commitment to open the
disputed letter of credit.
The appellee endeavored, but failed, to restore the cancelled Burmese
rice allocation. When the futility of reinstating the same became apparent,
she offered to substitute Thailand rice instead to the defendant NARIC,
communicating at the same time that the offer was "a solution which
should be beneficial to the NARIC and to us at the same time." (Exh. X-
Pe., Exh. 25—Def., p. 38, Folder of Exhibits). This offer for substitution,
however, was rejected by the appellant in a resolution dated November
15, 1952.
On the foregoing, the appellee sent a letter to the appellant, demanding
compensation for the damages caused her in the sum of $286,000.00,
U.S. currency, representing unrealized profit. The demand having been
rejected she instituted this case now on appeal.
At the instance of the NARIC, a counterclaim was filed and the Manila
Underwriters Insurance Company was brought to the suit as a third party
defendant to hold it liable on the performance bond it executed in favor of
the plaintiff-appellee.
We find for the appellee.
It is clear upon the records that the sole and principal reason for the
cancellation of the allocation contracted by the appellee herein in
Rangoon, Burma, was the failure of the letter of credit to be opened with
the contemplated period. This failure must, therefore, be taken as the
immediate cause for the consequent damage which resulted. As it is
then, the disposition of this case depends on a determination of who was
responsible for such failure. Stated differently, the issue is whether
appellant's failure to open immediately the letter of credit in dispute
amounted to a breach of the contract of July 1, 1952 for which it may be
held liable in damages.
Appellant corporation disclaims responsibility for the delay in the opening
of the letter of credit. On the contrary, it insists that the fault lies with the
appellee. Appellant contends that the disputed negotiable instrument was
not promptly secured because the appellee , failed to seasonably furnish
data necessary and required for opening the same, namely, "(1) the
amount of the letter of credit, (2) the person, company or corporation in
whose favor it is to be opened, and (3) the place and bank where it may
be negotiated." Appellant would have this Court believe, therefore, that
had these informations been forthwith furnished it, there would have been
no delay in securing the instrument.
Appellant's explanation has neither force nor merit. In the first place, the
explanation reaches into an area of the proceedings into which We are
not at liberty to encroach. The explanation refers to a question of fact.
Nothing in the record suggests any arbitrary or abusive conduct on the
part of the trial judge in the formulation of the ruling. His conclusion on
the matter is sufficiently borne out by the evidence presented. We are
denied, therefore, the prerogative to disturb that finding, consonant to the
time-honored tradition of this Tribunal to hold trial judges better situated
to make conclusions on questions of fact. For the record, We quote
hereunder the lower court's ruling on the point:
The defense that the delay, if any in opening the letter of credit
was due to the failure of plaintiff to name the supplier, the amount
and the bank is not tenable. Plaintiff stated in Court that these
facts were known to defendant even before the contract was
executed because these facts were necessarily revealed to the
defendant before she could qualify as a bidder. She stated too
that she had given the necessary data immediately after the
execution of Exh. "A" (the contract of July 1, 1952) to Mr.
GABRIEL BELMONTE, General Manager of the NARIC, both
orally and in writing and that she also pressed for the opening of
the letter of credit on these occasions. These statements have
not been controverted and defendant NARIC, notwithstanding its
previous intention to do so, failed to present Mr. Belmonte to
testify or refute this. ...
Secondly, from the correspondence and communications which form part
of the record of this case, it is clear that what singularly delayed the
opening of the stipulated letter of credit and which, in turn, caused the
cancellation of the allocation in Burma, was the inability of the appellant
corporation to meet the condition importation by the Bank for granting the
same. We do not think the appellant corporation can refute the fact that
had it been able to put up the 50% marginal cash deposit demanded by
the bank, then the letter of credit would have been approved, opened and
released as early as August 4, 1952. The letter of the Philippine National
Bank to the NARIC was plain and explicit that as of the said date,
appellant's "application for a letter of credit ... has been approved by the
Board of Directors with the condition that 50% marginal cash deposit be
paid and that drafts are to be paid upon presentment." (Emphasis
supplied)
The liability of the appellant, however, stems not alone from this failure or
inability to satisfy the requirements of the bank. Its culpability arises from
its willful and deliberate assumption of contractual obligations even as it
was well aware of its financial incapacity to undertake the prestation. We
base this judgment upon the letter which accompanied the application
filed by the appellant with the bank, a part of which letter was quoted
earlier in this decision. In the said accompanying correspondence,
appellant admitted and owned that it did "not have sufficient deposit with
your institution (the PNB) with which to cover the amount required to be
deposited as a condition for the opening of letters of credit. ... .
A number of logical inferences may be drawn from the aforementioned
admission. First, that the appellant knew the bank requirements for
opening letters of credit; second, that appellant also knew it could not
meet those requirement. When, therefore, despite this awareness that
was financially incompetent to open a letter of credit immediately,
appellant agreed in paragraph 8 of the contract to pay immediately "by
means of an irrevocable, confirm and assignable letter of credit," it must
be similarly held to have bound itself to answer for all and every
consequences that would result from the representation. aptly observed
by the trial court:
... Having called for bids for the importation of rice involving
millions, $4,260,000.00 to be exact, it should have a certained its
ability and capacity to comply with the inevitably requirements in
cash to pay for such importation. Having announced the bid, it
must be deemed to have impliedly assured suppliers of its
capacity and facility to finance the importation within the required
period, especially since it had imposed the supplier the 90-day
period within which the shipment of the rice must be brought into
the Philippines. Having entered in the contract, it should have
taken steps immediately to arrange for the letter of credit for the
large amount involved and inquired into the possibility of its
issuance.
In relation to the aforequoted observation of the trial court, We would like
to make reference also to Article 11 of the Civil Code which provides:
Those who in the performance of their obligation are guilty of
fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable in damages.
Under this provision, not only debtors guilty of fraud, negligence or
default in the performance of obligations a decreed liable; in general,
every debtor who fails in performance of his obligations is bound to
indemnify for the losses and damages caused thereby (De la Cruz
Seminary of Manila, 18 Phil. 330; Municipality of Moncada v. Cajuigan,
21 Phil. 184; De la Cavada v. Diaz, 37 Phil. 982; Maluenda & Co. v.
Enriquez, 46 Phil. 916; Pasumil v. Chong, 49 Phil. 1003; Pando v.
Gimenez, 54 Phil. 459; Acme Films v. Theaters Supply, 63 Phil. 657).
The phrase "any manner contravene the tenor" of the obligation includes
any illicit act which impairs the strict and faithful fulfillment of the
obligation or every kind or defective performance. (IV Tolentino, Civil
Code of the Philippines, citing authorities, p. 103.)
The NARIC would also have this Court hold that the subsequent offer to
substitute Thailand rice for the originally contracted Burmese rice
amounted to a waiver by the appellee of whatever rights she might have
derived from the breach of the contract. We disagree. Waivers are not
presumed, but must be clearly and convincingly shown, either by express
stipulation or acts admitting no other reasonable explanation. (Ramirez v.
Court of Appeals, 52 O.G. 779.) In the case at bar, no such intent to
waive has been established.
We have carefully examined and studied the oral and documentary
evidence presented in this case and upon which the lower court based its
award. Under the contract, the NARIC bound itself to buy 20,000 metric
tons of Burmese rice at "$203.00 U.S. Dollars per metric ton, all net
shipped weight, and all in U.S. currency, C.I.F. Manila ..." On the other
hand, documentary and other evidence establish with equal certainty that
the plaintiff-appellee was able to secure the contracted commodity at the
cost price of $180.70 per metric ton from her supplier in Burma.
Considering freights, insurance and charges incident to its shipment here
and the forfeiture of the 5% deposit, the award granted by the lower court
is fair and equitable. For a clearer view of the equity of the damages
awarded, We reproduce below the testimony of the appellee, adequately
supported by the evidence and record:
Q. Will you please tell the court, how much is the damage you
suffered?
A. Because the selling price of my rice is $203.00 per metric ton,
and the cost price of my rice is $180.00 We had to pay also $6.25
for shipping and about $164 for insurance. So adding the cost of
the rice, the freight, the insurance, the total would be about
$187.99 that would be $15.01 gross profit per metric ton, multiply
by 20,000 equals $300,200, that is my supposed profit if I went
through the contract.
The above testimony of the plaintiff was a general approximation of the
actual figures involved in the transaction. A precise and more exact
demonstration of the equity of the award herein is provided by Exhibit HH
of the plaintiff and Exhibit 34 of the defendant, hereunder quoted so far
as germane.
It is equally of record now that as shown in her request dated July
29, 1959, and other communications subsequent thereto for the
opening by your corporation of the required letter of credit, Mrs.
Arrieta was supposed to pay her supplier in Burma at the rate of
One Hundred Eighty Dollars and Seventy Cents ($180.70) in U.S.
Currency, per ton plus Eight Dollars ($8.00) in the same currency
per ton for shipping and other handling expenses, so that she is
already assured of a net profit of Fourteen Dollars and Thirty
Cents ($14.30), U.S., Currency, per ton or a total of Two Hundred
 and Eighty Six Thousand Dollars ($286,000.00), U.S. Currency,
in the aforesaid transaction. ...
Lastly, herein appellant filed a counterclaim asserting that it has suffered,
likewise by way of unrealized profit damages in the total sum of
$406,000.00 from the failure of the projected contract to materialize. This
counterclaim was supported by a cost study made and submitted by the
appellant itself and wherein it was illustrated how indeed had the
importation pushed thru, NARIC would have realized in profit the amount
asserted in the counterclaim. And yet, the said amount of P406,000.00
was realizable by appellant despite a number of expenses which the
appellee under the contract, did not have to incur. Thus, under the cost
study submitted by the appellant, banking and unloading charges were to
be shouldered by it, including an Import License Fee of 2% and
superintendence fee of $0.25 per metric ton. If the NARIC stood to profit
over P400 000.00 from the disputed transaction inspite of the extra
expenditures from which the herein appellee was exempt, we are
convicted of the fairness of the judgment presently under appeal.
In the premises, however, a minor modification must be effected in the
dispositive portion of the decision appeal from insofar as it expresses the
amount of damages in U.S. currency and not in Philippine Peso. Republic
Act 529 specifically requires the discharge of obligations only "in any coin
or currency which at the time of payment is legal tender for public and
private debts." In view of that law, therefore, the award should be
converted into and expressed in Philippine Peso.
This brings us to a consideration of what rate of exchange should apply
in the conversion here decreed. Should it be at the time of the breach, at
the time the obligation was incurred or at the rate of exchange prevailing
on the promulgation of this decision.
In the case of Engel v. Velasco & Co., 47 Phil. 115, We ruled that in an
action for recovery of damages for breach of contract, even if the
obligation assumed by the defendant was to pay the plaintiff a sum of
money expressed in American currency, the indemnity to be allowed
should be expressed in Philippine currency at the rate of exchange at the
time of the judgment rather than at the rate of exchange prevailing on the
date of defendant's breach. This ruling, however, can neither be applied
nor extended to the case at bar for the same was laid down when there
was no law against stipulating foreign currencies in Philippine contracts.
But now we have Republic Act No. 529 which expressly declares such
stipulations as contrary to public policy, void and of no effect. And, as We
already pronounced in the case of Eastboard Navigation, Ltd. v. Juan
Ysmael & Co., Inc., G.R. No. L-9090, September 10, 1957, if there is any
agreement to pay an obligation in a currency other than Philippine legal
tender, the same is null and void as contrary to public policy (Republic
Act 529), and the most that could be demanded is to pay said obligation
in Philippine currency "to be measured in the prevailing rate of exchange
at the time the obligation was incurred (Sec. 1, idem)."
UPON ALL THE FOREGOING, the decision appealed from is hereby
affirmed, with the sole modification that the award should be converted
into the Philippine peso at the rate of exchange prevailing at the time the
obligation was incurred or on July 1, 1952 when the contract was
executed. The appellee insurance company, in the light of this judgment,
is relieved of any liability under this suit. No pronouncement as to costs.
G.R. No. 126297             January 31, 2007
PROFESSIONAL SERVICES, INC., Petitioner,
vs.
NATIVIDAD and ENRIQUE AGANA, Respondents.
x-----------------------x
G.R. No. 126467            January 31, 2007
NATIVIDAD (Substituted by her children MARCELINO AGANA III,
ENRIQUE AGANA, JR., EMMA AGANA ANDAYA, JESUS AGANA,
and RAYMUND AGANA) and ENRIQUE AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent.
x- - - - - - - - - - - - - - - - - - - -- - - - x
G.R. No. 127590            January 31, 2007
MIGUEL AMPIL, Petitioner,
vs.
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Hospitals, having undertaken one of mankind’s most important and
delicate endeavors, must assume the grave responsibility of pursuing it
with appropriate care. The care and service dispensed through this high
trust, however technical, complex and esoteric its character may be, must
meet standards of responsibility commensurate with the undertaking to
preserve and protect the health, and indeed, the very lives of those
placed in the hospital’s keeping.1
Assailed in these three consolidated petitions for review on certiorari is
the Court of Appeals’ Decision2 dated September 6, 1996 in CA-G.R. CV
No. 42062 and CA-G.R. SP No. 32198 affirming with modification the
Decision3 dated March 17, 1993 of the Regional Trial Court (RTC),
Branch 96, Quezon City in Civil Case No. Q-43322 and nullifying its
Order dated September 21, 1993.
The facts, as culled from the records, are:
On April 4, 1984, Natividad Agana was rushed to the Medical City
General Hospital (Medical City Hospital) because of difficulty of bowel
movement and bloody anal discharge. After a series of medical
examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590, diagnosed
her to be suffering from "cancer of the sigmoid."
On April 11, 1984, Dr. Ampil, assisted by the medical staff 4 of the Medical
City Hospital, performed an anterior resection surgery on Natividad. He
found that the malignancy in her sigmoid area had spread on her left
ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil
obtained the consent of Natividad’s husband, Enrique Agana, to permit
Dr. Juan Fuentes, respondent in G.R. No. 126467, to perform
hysterectomy on her.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over,
completed the operation and closed the incision.
However, the operation appeared to be flawed. In the corresponding
Record of Operation dated April 11, 1984, the attending nurses entered
these remarks:
"sponge count lacking 2
"announced to surgeon searched (sic) done but to no avail continue for
closure."
On April 24, 1984, Natividad was released from the hospital. Her hospital
and medical bills, including the doctors’ fees, amounted to P60,000.00.
After a couple of days, Natividad complained of excruciating pain in her
anal region. She consulted both Dr. Ampil and Dr. Fuentes about it. They
told her that the pain was the natural consequence of the surgery. Dr.
Ampil then recommended that she consult an oncologist to examine the
cancerous nodes which were not removed during the operation.
On May 9, 1984, Natividad, accompanied by her husband, went to the
United States to seek further treatment. After four months of
consultations and laboratory examinations, Natividad was told she was
free of cancer. Hence, she was advised to return to the Philippines.
On August 31, 1984, Natividad flew back to the Philippines, still suffering
from pains. Two weeks thereafter, her daughter found a piece of gauze
protruding from her vagina. Upon being informed about it, Dr. Ampil
proceeded to her house where he managed to extract by hand a piece of
gauze measuring 1.5 inches in width. He then assured her that the pains
would soon vanish.
Dr. Ampil’s assurance did not come true. Instead, the pains intensified,
prompting Natividad to seek treatment at the Polymedic General
Hospital. While confined there, Dr. Ramon Gutierrez detected the
presence of another foreign object in her vagina -- a foul-smelling gauze
measuring 1.5 inches in width which badly infected her vaginal vault. A
recto-vaginal fistula had formed in her reproductive organs which forced
stool to excrete through the vagina. Another surgical operation was
needed to remedy the damage. Thus, in October 1984, Natividad
underwent another surgery.
On November 12, 1984, Natividad and her husband filed with the RTC,
Branch 96, Quezon City a complaint for damages against the
Professional Services, Inc. (PSI), owner of the Medical City Hospital, Dr.
Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They
alleged that the latter are liable for negligence for leaving two pieces of
gauze inside Natividad’s body and malpractice for concealing their acts of
negligence.
Meanwhile, Enrique Agana also filed with the Professional Regulation
Commission (PRC) an administrative complaint for gross negligence and
malpractice against Dr. Ampil and Dr. Fuentes, docketed as
Administrative Case No. 1690. The PRC Board of Medicine heard the
case only with respect to Dr. Fuentes because it failed to acquire
jurisdiction over Dr. Ampil who was then in the United States.
On February 16, 1986, pending the outcome of the above cases,
Natividad died and was duly substituted by her above-named children
(the Aganas).
On March 17, 1993, the RTC rendered its Decision in favor of the
Aganas, finding PSI, Dr. Ampil and Dr. Fuentes liable for negligence and
malpractice, the decretal part of which reads:
WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the
defendants PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and
DR. JUAN FUENTES to pay to the plaintiffs, jointly and severally, except
in respect of the award for exemplary damages and the interest thereon
which are the liabilities of defendants Dr. Ampil and Dr. Fuentes only, as
follows:
1. As actual damages, the following amounts:
a. The equivalent in Philippine Currency of the total of
US$19,900.00 at the rate of P21.60-US$1.00, as
reimbursement of actual expenses incurred in the United
States of America;
b. The sum of P4,800.00 as travel taxes of plaintiffs and
their physician daughter;
c. The total sum of P45,802.50, representing the cost of
hospitalization at Polymedic Hospital, medical fees, and
cost of the saline solution;
2. As moral damages, the sum of P2,000,000.00;
3. As exemplary damages, the sum of P300,000.00;
4. As attorney’s fees, the sum of P250,000.00;
5. Legal interest on items 1 (a), (b), and (c); 2; and 3
hereinabove, from date of filing of the complaint until full payment;
and
6. Costs of suit.
SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the
Court of Appeals, docketed as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for
a partial execution of its Decision, which was granted in an Order dated
May 11, 1993. Thereafter, the sheriff levied upon certain properties of Dr.
Ampil and sold them for P451,275.00 and delivered the amount to the
Aganas.
Following their receipt of the money, the Aganas entered into an
agreement with PSI and Dr. Fuentes to indefinitely suspend any further
execution of the RTC Decision. However, not long thereafter, the Aganas
again filed a motion for an alias writ of execution against the properties of
PSI and Dr. Fuentes. On September 21, 1993, the RTC granted the
motion and issued the corresponding writ, prompting Dr. Fuentes to file
with the Court of Appeals a petition for certiorari and prohibition, with
prayer for preliminary injunction, docketed as CA-G.R. SP No. 32198.
During its pendency, the Court of Appeals issued a Resolution 5 dated
October 29, 1993 granting Dr. Fuentes’ prayer for injunctive relief.
On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-
G.R. CV No. 42062.
Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered
its Decision6 in Administrative Case No. 1690 dismissing the case against
Dr. Fuentes. The Board held that the prosecution failed to show that Dr.
Fuentes was the one who left the two pieces of gauze inside Natividad’s
body; and that he concealed such fact from Natividad.
On September 6, 1996, the Court of Appeals rendered its Decision jointly
disposing of CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198, thus:
WHEREFORE, except for the modification that the case against
defendant-appellant Dr. Juan Fuentes is hereby DISMISSED, and with
the pronouncement that defendant-appellant Dr. Miguel Ampil is liable to
reimburse defendant-appellant Professional Services, Inc., whatever
amount the latter will pay or had paid to the plaintiffs-appellees, the
decision appealed from is hereby AFFIRMED and the instant appeal
DISMISSED.
Concomitant with the above, the petition for certiorari and prohibition filed
by herein defendant-appellant Dr. Juan Fuentes in CA-G.R. SP No.
32198 is hereby GRANTED and the challenged order of the respondent
judge dated September 21, 1993, as well as the alias writ of execution
issued pursuant thereto are hereby NULLIFIED and SET ASIDE. The
bond posted by the petitioner in connection with the writ of preliminary
injunction issued by this Court on November 29, 1993 is hereby
cancelled.
Costs against defendants-appellants Dr. Miguel Ampil and Professional
Services, Inc.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration, but it was denied in a
Resolution7 dated December 19, 1996.
Hence, the instant consolidated petitions.
In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals
erred in holding that: (1) it is estopped from raising the defense that Dr.
Ampil is not its employee; (2) it is solidarily liable with Dr. Ampil; and (3) it
is not entitled to its counterclaim against the Aganas. PSI contends that
Dr. Ampil is not its employee, but a mere consultant or independent
contractor. As such, he alone should answer for his negligence.
In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred
in finding that Dr. Fuentes is not guilty of negligence or medical
malpractice, invoking the doctrine of res ipsa loquitur. They contend that
the pieces of gauze are prima facie proofs that the operating surgeons
have been negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals
erred in finding him liable for negligence and malpractice sans evidence
that he left the two pieces of gauze in Natividad’s vagina. He pointed to
other probable causes, such as: (1) it was Dr. Fuentes who used gauzes
in performing the hysterectomy; (2) the attending nurses’ failure to
properly count the gauzes used during surgery; and (3) the medical
intervention of the American doctors who examined Natividad in the
United States of America.
For our resolution are these three vital issues: first, whether the Court of
Appeals erred in holding Dr. Ampil liable for negligence and malpractice;
second, whether the Court of Appeals erred in absolving Dr. Fuentes of
any liability; and third, whether PSI may be held solidarily liable for the
negligence of Dr. Ampil.
I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil
Liable for Negligence and Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears the Court’s attention to
other possible causes of Natividad’s detriment. He argues that the Court
should not discount either of the following possibilities: first, Dr. Fuentes
left the gauzes in Natividad’s body after performing hysterectomy;
second, the attending nurses erred in counting the gauzes; and third, the
American doctors were the ones who placed the gauzes in Natividad’s
body.
Dr. Ampil’s arguments are purely conjectural and without basis. Records
show that he did not present any evidence to prove that the American
doctors were the ones who put or left the gauzes in Natividad’s body.
Neither did he submit evidence to rebut the correctness of the record of
operation, particularly the number of gauzes used. As to the alleged
negligence of Dr. Fuentes, we are mindful that Dr. Ampil examined his
(Dr. Fuentes’) work and found it in order.
The glaring truth is that all the major circumstances, taken together, as
specified by the Court of Appeals, directly point to Dr. Ampil as the
negligent party, thus:
First, it is not disputed that the surgeons used gauzes as sponges
to control the bleeding of the patient during the surgical operation.
Second, immediately after the operation, the nurses who assisted
in the surgery noted in their report that the ‘sponge count (was)
lacking 2’; that such anomaly was ‘announced to surgeon’ and
that a ‘search was done but to no avail’ prompting Dr. Ampil to
‘continue for closure’ x x x.
Third, after the operation, two (2) gauzes were extracted from the
same spot of the body of Mrs. Agana where the surgery was
performed.
An operation requiring the placing of sponges in the incision is not
complete until the sponges are properly removed, and it is settled that the
leaving of sponges or other foreign substances in the wound after the
incision has been closed is at least prima facie negligence by the
operating surgeon.8 To put it simply, such act is considered so
inconsistent with due care as to raise an inference of negligence. There
are even legions of authorities to the effect that such act is negligence
per se.9
Of course, the Court is not blind to the reality that there are times when
danger to a patient’s life precludes a surgeon from further searching
missing sponges or foreign objects left in the body. But this does not
leave him free from any obligation. Even if it has been shown that a
surgeon was required by the urgent necessities of the case to leave a
sponge in his patient’s abdomen, because of the dangers attendant upon
delay, still, it is his legal duty to so inform his patient within a reasonable
time thereafter by advising her of what he had been compelled to do.
This is in order that she might seek relief from the effects of the foreign
object left in her body as her condition might permit. The ruling in Smith
v. Zeagler10 is explicit, thus:
The removal of all sponges used is part of a surgical operation, and when
a physician or surgeon fails to remove a sponge he has placed in his
patient’s body that should be removed as part of the operation, he
thereby leaves his operation uncompleted and creates a new condition
which imposes upon him the legal duty of calling the new condition to his
patient’s attention, and endeavoring with the means he has at hand to
minimize and avoid untoward results likely to ensue therefrom.
Here, Dr. Ampil did not inform Natividad about the missing two pieces of
gauze. Worse, he even misled her that the pain she was experiencing
was the ordinary consequence of her operation. Had he been more
candid, Natividad could have taken the immediate and appropriate
medical remedy to remove the gauzes from her body. To our mind, what
was initially an act of negligence by Dr. Ampil has ripened into a
deliberate wrongful act of deceiving his patient.
This is a clear case of medical malpractice or more appropriately,
medical negligence. To successfully pursue this kind of case, a patient
must only prove that a health care provider either failed to do something
which a reasonably prudent health care provider would have done, or
that he did something that a reasonably prudent provider would not have
done; and that failure or action caused injury to the patient. 11 Simply put,
the elements are duty, breach, injury and proximate causation. Dr, Ampil,
as the lead surgeon, had the duty to remove all foreign objects, such as
gauzes, from Natividad’s body before closure of the incision. When he
failed to do so, it was his duty to inform Natividad about it. Dr. Ampil
breached both duties. Such breach caused injury to Natividad,
necessitating her further examination by American doctors and another
surgery. That Dr. Ampil’s negligence is the proximate cause12 of
Natividad’s injury could be traced from his act of closing the incision
despite the information given by the attending nurses that two pieces of
gauze were still missing. That they were later on extracted from
Natividad’s vagina established the causal link between Dr. Ampil’s
negligence and the injury. And what further aggravated such injury was
his deliberate concealment of the missing gauzes from the knowledge of
Natividad and her family.
II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case against
Dr. Fuentes on the ground that it is contrary to the doctrine of res ipsa
loquitur. According to them, the fact that the two pieces of gauze were left
inside Natividad’s body is a prima facie evidence of Dr. Fuentes’
negligence.
We are not convinced.
Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule
that the fact of the occurrence of an injury, taken with the surrounding
circumstances, may permit an inference or raise a presumption of
negligence, or make out a plaintiff’s prima facie case, and present a
question of fact for defendant to meet with an explanation. 13 Stated
differently, where the thing which caused the injury, without the fault of
the injured, is under the exclusive control of the defendant and the injury
is such that it should not have occurred if he, having such control used
proper care, it affords reasonable evidence, in the absence of
explanation that the injury arose from the defendant’s want of care, and
the burden of proof is shifted to him to establish that he has observed
due care and diligence.14
From the foregoing statements of the rule, the requisites for the
applicability of the doctrine of res ipsa loquitur are: (1) the occurrence of
an injury; (2) the thing which caused the injury was under the control and
management of the defendant; (3) the occurrence was such that in the
ordinary course of things, would not have happened if those who had
control or management used proper care; and (4) the absence of
explanation by the defendant. Of the foregoing requisites, the most
instrumental is the "control and management of the thing which caused
the injury."15
We find the element of "control and management of the thing which
caused the injury" to be wanting. Hence, the doctrine of res ipsa loquitur
will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the
operation of Natividad. He requested the assistance of Dr. Fuentes only
to perform hysterectomy when he (Dr. Ampil) found that the malignancy
in her sigmoid area had spread to her left ovary. Dr. Fuentes performed
the surgery and thereafter reported and showed his work to Dr. Ampil.
The latter examined it and finding everything to be in order, allowed Dr.
Fuentes to leave the operating room. Dr. Ampil then resumed operating
on Natividad. He was about to finish the procedure when the attending
nurses informed him that two pieces of gauze were missing. A "diligent
search" was conducted, but the misplaced gauzes were not found. Dr.
Ampil then directed that the incision be closed. During this entire period,
Dr. Fuentes was no longer in the operating room and had, in fact, left the
hospital.
Under the "Captain of the Ship" rule, the operating surgeon is the person
in complete charge of the surgery room and all personnel connected with
the operation. Their duty is to obey his orders.16 As stated before, Dr.
Ampil was the lead surgeon. In other words, he was the "Captain of the
Ship." That he discharged such role is evident from his following conduct:
(1) calling Dr. Fuentes to perform a hysterectomy; (2) examining the work
of Dr. Fuentes and finding it in order; (3) granting Dr. Fuentes’ permission
to leave; and (4) ordering the closure of the incision. To our mind, it was
this act of ordering the closure of the incision notwithstanding that two
pieces of gauze remained unaccounted for, that caused injury to
Natividad’s body. Clearly, the control and management of the thing which
caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.
In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence,
does not per se create or constitute an independent or separate ground
of liability, being a mere evidentiary rule.17 In other words, mere
invocation and application of the doctrine does not dispense with the
requirement of proof of negligence. Here, the negligence was proven to
have been committed by Dr. Ampil and not by Dr. Fuentes.
III - G.R. No. 126297
Whether PSI Is Liable for the Negligence of Dr. Ampil
The third issue necessitates a glimpse at the historical development of
hospitals and the resulting theories concerning their liability for the
negligence of physicians.
Until the mid-nineteenth century, hospitals were generally charitable
institutions, providing medical services to the lowest classes of society,
without regard for a patient’s ability to pay.18 Those who could afford
medical treatment were usually treated at home by their
doctors.19 However, the days of house calls and philanthropic health care
are over. The modern health care industry continues to distance itself
from its charitable past and has experienced a significant conversion
from a not-for-profit health care to for-profit hospital businesses.
Consequently, significant changes in health law have accompanied the
business-related changes in the hospital industry. One important legal
change is an increase in hospital liability for medical malpractice. Many
courts now allow claims for hospital vicarious liability under the theories
of respondeat superior, apparent authority, ostensible authority, or
agency by estoppel. 20
In this jurisdiction, the statute governing liability for negligent acts is
Article 2176 of the Civil Code, which reads:
Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of
this Chapter.
A derivative of this provision is Article 2180, the rule governing vicarious
liability under the doctrine of respondent superior, thus:
ART. 2180. The obligation imposed by Article 2176 is demandable not
only for one’s own acts or omissions, but also for those of persons for
whom one is responsible.
x x x x x x
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their
functions.
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks
even though the former are not engaged in any business or industry.
x x x x x x interns, nurses, administrative and manual workers. They charge patients
The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good
father of a family to prevent damage.
A prominent civilist commented that professionals engaged by an
employer, such as physicians, dentists, and pharmacists, are not
"employees" under this article because the manner in which they perform
their work is not within the control of the latter (employer). In other words,
professionals are considered personally liable for the fault or negligence
they commit in the discharge of their duties, and their employer cannot be
held liable for such fault or negligence. In the context of the present case,
"a hospital cannot be held liable for the fault or negligence of a physician
or surgeon in the treatment or operation of patients." 21
The foregoing view is grounded on the traditional notion that the
professional status and the very nature of the physician’s calling preclude
him from being classed as an agent or employee of a hospital, whenever
he acts in a professional capacity.22 It has been said that medical practice
strictly involves highly developed and specialized knowledge, 23 such that
physicians are generally free to exercise their own skill and judgment in
rendering medical services sans interference. 24 Hence, when a doctor
practices medicine in a hospital setting, the hospital and its employees
are deemed to subserve him in his ministrations to the patient and his
actions are of his own responsibility.25
The case of Schloendorff v. Society of New York Hospital 26 was then
considered an authority for this view. The "Schloendorff doctrine" regards
a physician, even if employed by a hospital, as an independent contractor
because of the skill he exercises and the lack of control exerted over his
work. Under this doctrine, hospitals are exempt from the application of
the respondeat superior principle for fault or negligence committed by
physicians in the discharge of their profession.
However, the efficacy of the foregoing doctrine has weakened with the
significant developments in medical care. Courts came to realize that
modern hospitals are increasingly taking active role in supplying and
regulating medical care to patients. No longer were a hospital’s functions
limited to furnishing room, food, facilities for treatment and operation, and
attendants for its patients. Thus, in Bing v. Thunig, 27 the New York Court
of Appeals deviated from the Schloendorff doctrine, noting that modern
hospitals actually do far more than provide facilities for treatment. Rather,
they regularly employ, on a salaried basis, a large staff of physicians,
for medical care and treatment, even collecting for such services through
legal action, if necessary. The court then concluded that there is no
reason to exempt hospitals from the universal rule of respondeat
superior.
In our shores, the nature of the relationship between the hospital and the
physicians is rendered inconsequential in view of our categorical
pronouncement in Ramos v. Court of Appeals 28 that for purposes of
apportioning responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals and their
attending and visiting physicians. This Court held:
"We now discuss the responsibility of the hospital in this particular
incident. The unique practice (among private hospitals) of filling up
specialist staff with attending and visiting "consultants," who are allegedly
not hospital employees, presents problems in apportioning responsibility
for negligence in medical malpractice cases. However, the difficulty is
more apparent than real.
In the first place, hospitals exercise significant control in the hiring and
firing of consultants and in the conduct of their work within the hospital
premises. Doctors who apply for ‘consultant’ slots, visiting or attending,
are required to submit proof of completion of residency, their educational
qualifications, generally, evidence of accreditation by the appropriate
board (diplomate), evidence of fellowship in most cases, and references.
These requirements are carefully scrutinized by members of the hospital
administration or by a review committee set up by the hospital who either
accept or reject the application. x x x.
After a physician is accepted, either as a visiting or attending consultant,
he is normally required to attend clinico-pathological conferences,
conduct bedside rounds for clerks, interns and residents, moderate grand
rounds and patient audits and perform other tasks and responsibilities,
for the privilege of being able to maintain a clinic in the hospital, and/or
for the privilege of admitting patients into the hospital. In addition to
these, the physician’s performance as a specialist is generally evaluated
by a peer review committee on the basis of mortality and morbidity
statistics, and feedback from patients, nurses, interns and residents. A
consultant remiss in his duties, or a consultant who regularly falls short of
the minimum standards acceptable to the hospital or its peer review
committee, is normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over
their attending and visiting ‘consultant’ staff. While ‘consultants’ are not,
technically employees, x x x, the control exercised, the hiring, and the
right to terminate consultants all fulfill the important hallmarks of an
employer-employee relationship, with the exception of the payment of
wages. In assessing whether such a relationship in fact exists, the control
test is determining. Accordingly, on the basis of the foregoing, we rule
that for the purpose of allocating responsibility in medical negligence
cases, an employer-employee relationship in effect exists between
hospitals and their attending and visiting physicians. "
But the Ramos pronouncement is not our only basis in sustaining PSI’s
liability. Its liability is also anchored upon the agency principle of apparent
authority or agency by estoppel and the doctrine of corporate negligence
which have gained acceptance in the determination of a hospital’s liability
for negligent acts of health professionals. The present case serves as a
perfect platform to test the applicability of these doctrines, thus, enriching
our jurisprudence.
Apparent authority, or what is sometimes referred to as the "holding
out" theory, or doctrine of ostensible agency or agency by estoppel, 29 has
its origin from the law of agency. It imposes liability, not as the result of
the reality of a contractual relationship, but rather because of the actions
of a principal or an employer in somehow misleading the public into
believing that the relationship or the authority exists.30 The concept is
essentially one of estoppel and has been explained in this manner:
"The principal is bound by the acts of his agent with the apparent
authority which he knowingly permits the agent to assume, or which he
holds the agent out to the public as possessing. The question in every
case is whether the principal has by his voluntary act placed the agent in
such a situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified in
presuming that such agent has authority to perform the particular act in
question.31
The applicability of apparent authority in the field of hospital liability was
upheld long time ago in Irving v. Doctor Hospital of Lake Worth,
Inc.32 There, it was explicitly stated that "there does not appear to be any
rational basis for excluding the concept of apparent authority from the
field of hospital liability." Thus, in cases where it can be shown that a
hospital, by its actions, has held out a particular physician as its agent
and/or employee and that a patient has accepted treatment from that
physician in the reasonable belief that it is being rendered in behalf of the
hospital, then the hospital will be liable for the physician’s negligence.
Our jurisdiction recognizes the concept of an agency by implication or
estoppel. Article 1869 of the Civil Code reads:
ART. 1869. Agency may be express, or implied from the acts of the
principal, from his silence or lack of action, or his failure to repudiate the
agency, knowing that another person is acting on his behalf without
authority.
In this case, PSI publicly displays in the lobby of the Medical City Hospital
the names and specializations of the physicians associated or accredited
by it, including those of Dr. Ampil and Dr. Fuentes. We concur with the
Court of Appeals’ conclusion that it "is now estopped from passing all the
blame to the physicians whose names it proudly paraded in the public
directory leading the public to believe that it vouched for their skill and
competence." Indeed, PSI’s act is tantamount to holding out to the public
that Medical City Hospital, through its accredited physicians, offers
quality health care services. By accrediting Dr. Ampil and Dr. Fuentes
and publicly advertising their qualifications, the hospital created the
impression that they were its agents, authorized to perform medical or
surgical services for its patients. As expected, these patients, Natividad
being one of them, accepted the services on the reasonable belief that
such were being rendered by the hospital or its employees, agents, or
servants. The trial court correctly pointed out:
x x x regardless of the education and status in life of the patient, he ought
not be burdened with the defense of absence of employer-employee
relationship between the hospital and the independent physician whose
name and competence are certainly certified to the general public by the
hospital’s act of listing him and his specialty in its lobby directory, as in
the case herein. The high costs of today’s medical and health care
should at least exact on the hospital greater, if not broader, legal
responsibility for the conduct of treatment and surgery within its facility by
its accredited physician or surgeon, regardless of whether he is
independent or employed."33
The wisdom of the foregoing ratiocination is easy to discern. Corporate
entities, like PSI, are capable of acting only through other individuals,
such as physicians. If these accredited physicians do their job well, the
hospital succeeds in its mission of offering quality medical services and
thus profits financially. Logically, where negligence mars the quality of its
services, the hospital should not be allowed to escape liability for the acts
of its ostensible agents.
We now proceed to the doctrine of corporate negligence or corporate
responsibility.
One allegation in the complaint in Civil Case No. Q-43332 for negligence
and malpractice is that PSI as owner, operator and manager of Medical
City Hospital, "did not perform the necessary supervision nor exercise
diligent efforts in the supervision of Drs. Ampil and Fuentes and its
nursing staff, resident doctors, and medical interns who assisted Drs.
Ampil and Fuentes in the performance of their duties as
surgeons."34 Premised on the doctrine of corporate negligence, the trial
court held that PSI is directly liable for such breach of duty.
We agree with the trial court.
Recent years have seen the doctrine of corporate negligence as the
judicial answer to the problem of allocating hospital’s liability for the
negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation
proceeds from the judiciary’s acknowledgment that in these modern
times, the duty of providing quality medical service is no longer the sole
prerogative and responsibility of the physician. The modern hospitals
have changed structure. Hospitals now tend to organize a highly
professional medical staff whose competence and performance need to
be monitored by the hospitals commensurate with their inherent
responsibility to provide quality medical care.35
The doctrine has its genesis in Darling v. Charleston Community
Hospital.36 There, the Supreme Court of Illinois held that "the jury could
have found a hospital negligent, inter alia, in failing to have a sufficient
number of trained nurses attending the patient; failing to require a
consultation with or examination by members of the hospital staff; and
failing to review the treatment rendered to the patient." On the basis of
Darling, other jurisdictions held that a hospital’s corporate negligence
extends to permitting a physician known to be incompetent to practice at
the hospital.37 With the passage of time, more duties were expected from
hospitals, among them: (1) the use of reasonable care in the
maintenance of safe and adequate facilities and equipment; (2) the
selection and retention of competent physicians; (3) the overseeing or
supervision of all persons who practice medicine within its walls; and (4)
the formulation, adoption and enforcement of adequate rules and policies
that ensure quality care for its patients. 38 Thus, in Tucson Medical Center,
Inc. v. Misevich,39 it was held that a hospital, following the doctrine of
corporate responsibility, has the duty to see that it meets the standards of
responsibilities for the care of patients. Such duty includes the proper
supervision of the members of its medical staff. And in Bost v. Riley,40 the
court concluded that a patient who enters a hospital does so with the
reasonable expectation that it will attempt to cure him. The hospital
accordingly has the duty to make a reasonable effort to monitor and
oversee the treatment prescribed and administered by the physicians
practicing in its premises.
In the present case, it was duly established that PSI operates the Medical
City Hospital for the purpose and under the concept of providing
comprehensive medical services to the public. Accordingly, it has the
duty to exercise reasonable care to protect from harm all patients
admitted into its facility for medical treatment. Unfortunately, PSI failed to
perform such duty. The findings of the trial court are convincing, thus:
x x x PSI’s liability is traceable to its failure to conduct an investigation of
the matter reported in the nota bene of the count nurse. Such failure
established PSI’s part in the dark conspiracy of silence and concealment
about the gauzes. Ethical considerations, if not also legal, dictated the
holding of an immediate inquiry into the events, if not for the benefit of the
patient to whom the duty is primarily owed, then in the interest of arriving
at the truth. The Court cannot accept that the medical and the healing
professions, through their members like defendant surgeons, and their
institutions like PSI’s hospital facility, can callously turn their backs on
and disregard even a mere probability of mistake or negligence by
refusing or failing to investigate a report of such seriousness as the one
in Natividad’s case.
It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad
with the assistance of the Medical City Hospital’s staff, composed of
resident doctors, nurses, and interns. As such, it is reasonable to
conclude that PSI, as the operator of the hospital, has actual or
constructive knowledge of the procedures carried out, particularly the
report of the attending nurses that the two pieces of gauze were missing.
In Fridena v. Evans,41 it was held that a corporation is bound by the
knowledge acquired by or notice given to its agents or officers within the
scope of their authority and in reference to a matter to which their
authority extends. This means that the knowledge of any of the staff of
Medical City Hospital constitutes knowledge of PSI. Now, the failure of
PSI, despite the attending nurses’ report, to investigate and inform
Natividad regarding the missing gauzes amounts to callous negligence.
Not only did PSI breach its duties to oversee or supervise all persons
who practice medicine within its walls, it also failed to take an active step
in fixing the negligence committed. This renders PSI, not only vicariously
liable for the negligence of Dr. Ampil under Article 2180 of the Civil Code,
but also directly liable for its own negligence under Article 2176. In
Fridena, the Supreme Court of Arizona held:
x x x In recent years, however, the duty of care owed to the patient by the
hospital has expanded. The emerging trend is to hold the hospital
responsible where the hospital has failed to monitor and review medical
services being provided within its walls. See Kahn Hospital Malpractice
Prevention, 27 De Paul . Rev. 23 (1977).
Among the cases indicative of the ‘emerging trend’ is Purcell v.
Zimbelman, 18 Ariz. App. 75,500 P. 2d 335 (1972). In Purcell, the
hospital argued that it could not be held liable for the malpractice of a
medical practitioner because he was an independent contractor within
the hospital. The Court of Appeals pointed out that the hospital had
created a professional staff whose competence and performance was to
be monitored and reviewed by the governing body of the hospital, and
the court held that a hospital would be negligent where it had knowledge
or reason to believe that a doctor using the facilities was employing a
method of treatment or care which fell below the recognized standard of
care.
Subsequent to the Purcell decision, the Arizona Court of Appeals held
that a hospital has certain inherent responsibilities regarding the quality
of medical care furnished to patients within its walls and it must meet the
standards of responsibility commensurate with this undertaking. Beeck v.
Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This
court has confirmed the rulings of the Court of Appeals that a hospital
has the duty of supervising the competence of the doctors on its staff. x x
x.
x x x x x x
In the amended complaint, the plaintiffs did plead that the operation was
performed at the hospital with its knowledge, aid, and assistance, and
that the negligence of the defendants was the proximate cause of the
patient’s injuries. We find that such general allegations of negligence,
along with the evidence produced at the trial of this case, are sufficient to
support the hospital’s liability based on the theory of negligent
supervision."
Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil
for damages, let it be emphasized that PSI, apart from a general denial of
its responsibility, failed to adduce evidence showing that it exercised the
diligence of a good father of a family in the accreditation and supervision
of the latter. In neglecting to offer such proof, PSI failed to discharge its
burden under the last paragraph of Article 2180 cited earlier, and,
therefore, must be adjudged solidarily liable with Dr. Ampil. Moreover, as
we have discussed, PSI is also directly liable to the Aganas.
One final word. Once a physician undertakes the treatment and care of a
patient, the law imposes on him certain obligations. In order to escape
liability, he must possess that reasonable degree of learning, skill and
experience required by his profession. At the same time, he must apply
reasonable care and diligence in the exercise of his skill and the
application of his knowledge, and exert his best judgment.
WHEREFORE, we DENY all the petitions and AFFIRM the challenged
Decision of the Court of Appeals in CA-G.R. CV No. 42062 and CA-G.R.
SP No. 32198.
Costs against petitioners PSI and Dr. Miguel Ampil.
SO ORDERED.

FIRST DIVISION
G.R. No. 126376 : November 20, 2003
SPOUSES BERNARDO BUENAVENTURA and CONSOLACION
JOAQUIN, SPOUSES JUANITO EDRA and NORA JOAQUIN, SPOUSES
RUFINO VALDOZ and EMMA JOAQUIN, and NATIVIDAD
JOAQUIN, petitioners, vs. COURT OF APPEALS, SPOUSES
LEONARDO JOAQUIN and FELICIANA LANDRITO, SPOUSES FIDEL
JOAQUIN and CONCHITA BERNARDO, SPOUSES TOMAS JOAQUIN
and SOLEDAD ALCORAN, SPOUSES ARTEMIO JOAQUIN and
SOCORRO ANGELES, SPOUSES ALEXANDER MENDOZA and CLARITA
JOAQUIN, SPOUSES TELESFORO CARREON and FELICITAS
JOAQUIN, SPOUSES DANILO VALDOZ and FE JOAQUIN, and
SPOUSES GAVINO JOAQUIN and LEA ASIS, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari1 to annul the Decision2 dated 26
June 1996 of the Court of Appeals in CA-G.R. CV No. 41996. The Court of
Appeals affirmed the Decision3 dated 18 February 1993 rendered by
Branch 65 of the Regional Trial Court of Makati (trial court) in Civil Case
No. 89-5174. The trial court dismissed the case after it found that the
parties executed the Deeds of Sale for valid consideration and that the
plaintiffs did not have a cause of action against the defendants.
The Facts
The Court of Appeals summarized the facts of the case as follows:
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the
parents of plaintiffs Consolacion, Nora, Emma and Natividad as well as of
defendants Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all
surnamed JOAQUIN. The married Joaquin children are joined in this action
by their respective spouses.
Sought to be declared null and void ab initio are certain deeds of sale of
real property executed by defendant parents Leonardo Joaquin and
Feliciana Landrito in favor of their co-defendant children and the
corresponding certificates of title issued in their names, to wit:
1. Deed of Absolute Sale covering Lot 168-C-7 of subdivision plan (LRC)
Psd-256395 executed on 11 July 1978, in favor of defendant Felicitas
Joaquin, for a consideration of P6,000.00 (Exh. C), pursuant to which TCT
No. [36113/T-172] was issued in her name (Exh. C-1);
2. Deed of Absolute Sale covering Lot 168-I-3 of subdivision plan (LRC)
Psd-256394 executed on 7 June 1979, in favor of defendant Clarita
Joaquin, for a consideration of P1[2],000.00  (Exh. D), pursuant to which
TCT No. S-109772 was issued in her name (Exh. D-1);
3 Deed of Absolute Sale covering Lot 168-I-1 of subdivision plan (LRC)
Psd-256394 executed on 12 May 1988, in favor of defendant spouses Fidel
Joaquin and Conchita Bernardo, for a consideration of P54,[3]00.00 (Exh.
E), pursuant to which TCT No. 155329 was issued to them (Exh. E-1);
4. Deed of Absolute Sale covering Lot 168-I-2 of subdivision plan (LRC)
Psd-256394 executed on 12 May 1988, in favor of defendant spouses
Artemio Joaquin and Socorro Angeles, for a consideration of P[54,3]00.00
(Exh. F), pursuant to which TCT No. 155330 was issued to them (Exh. F-
1); and
5. Absolute Sale of Real Property covering Lot 168-C-4 of subdivision plan
(LRC) Psd-256395 executed on 9 September 1988, in favor of Tomas
Joaquin, for a consideration of P20,000.00 (Exh. G), pursuant to which
TCT No. 157203 was issued in her name (Exh. G-1).
[6. Deed of Absolute Sale covering Lot 168-C-1 of subdivision plan (LRC)
Psd-256395 executed on 7 October 1988, in favor of Gavino Joaquin, for a
consideration of P25,000.00 (Exh. K), pursuant to which TCT No. 157779
was issued in his name (Exh. K-1).]
In seeking the declaration of nullity of the aforesaid deeds of sale and
certificates of title, plaintiffs, in their complaint, aver:
- XX-
The deeds of sale, Annexes C, D, E, F, and G, [and K] are simulated as
they are, are NULL AND VOID AB INITIO because
a) Firstly, there was no actual valid consideration for the deeds of sale xxx
over the properties in litis;
b) Secondly, assuming that there was consideration in the sums reflected
in the questioned deeds, the properties are more than three-fold times
more valuable than the measly sums appearing therein;
c) Thirdly, the deeds of sale do not reflect and express the true intent of
the parties (vendors and vendees); and
d) Fourthly, the purported sale of the properties in litis was the result of a
deliberate conspiracy designed to unjustly deprive the rest of the
compulsory heirs (plaintiffs herein) of their legitime.
- XXI -
Necessarily, and as an inevitable consequence, Transfer Certificates of
Title Nos. 36113/T-172, S-109772, 155329, 155330, 157203 [and
157779] issued by the Registrar of Deeds over the properties in litis xxx
are NULL AND VOID AB INITIO.
Defendants, on the other hand aver (1) that plaintiffs do not have a cause
of action against them as well as the requisite standing and interest to
assail their titles over the properties in litis; (2) that the sales were with
sufficient considerations and made by defendants parents voluntarily, in
good faith, and with full knowledge of the consequences of their deeds of
sale; and (3) that the certificates of title were issued with sufficient factual
and legal basis.4 (Emphasis in the original)
The Ruling of the Trial Court
Before the trial, the trial court ordered the dismissal of the case against
defendant spouses Gavino Joaquin and Lea Asis.5 Instead of filing an
Answer with their co-defendants, Gavino Joaquin and Lea Asis filed a
Motion to Dismiss.6 In granting the dismissal to Gavino Joaquin and Lea
Asis, the trial court noted that compulsory heirs have the right to a
legitime but such right is contingent since said right commences only from
the moment of death of the decedent pursuant to Article 777 of the Civil
Code of the Philippines.7cräläwvirtualibräry
After trial, the trial court ruled in favor of the defendants and dismissed
the complaint. The trial court stated:
In the first place, the testimony of the defendants, particularly that of the
xxx father will show that the Deeds of Sale were all executed for valuable
consideration. This assertion must prevail over the negative allegation of
plaintiffs.
And then there is the argument that plaintiffs do not have a valid cause of
action against defendants since there can be no legitime to speak of prior
to the death of their parents. The court finds this contention tenable. In
determining the legitime, the value of the property left at the death of the
testator shall be considered (Art. 908 of the New Civil Code). Hence, the
legitime of a compulsory heir is computed as of the time of the death of
the decedent. Plaintiffs therefore cannot claim an impairment of their
legitime while their parents live.
All the foregoing considered, this case is DISMISSED.
In order to preserve whatever is left of the ties that should bind families
together, the counterclaim is likewise DISMISSED.
No costs.
SO ORDERED.8
The Ruling of the Court of Appeals
The Court of Appeals affirmed the decision of the trial court. The appellate
court ruled:
To the mind of the Court, appellants are skirting the real and decisive
issue in this case, which is, whether xxx they have a cause of action
against appellees.
Upon this point, there is no question that plaintiffs-appellants, like their
defendant brothers and sisters, are compulsory heirs of defendant
spouses, Leonardo Joaquin and Feliciana Landrito, who are their parents.
However, their right to the properties of their defendant parents, as
compulsory heirs, is merely inchoate and vests only upon the latters
death. While still alive, defendant parents are free to dispose of their
properties, provided that such dispositions are not made in fraud of
creditors.
Plaintiffs-appellants are definitely not parties to the deeds of sale in
question. Neither do they claim to be creditors of their defendant parents.
Consequently, they cannot be considered as real parties in interest to
assail the validity of said deeds either for gross inadequacy or lack of
consideration or for failure to express the true intent of the parties. In
point is the ruling of the Supreme Court in Velarde, et al. vs. Paez, et al.,
101 SCRA 376, thus:
The plaintiffs are not parties to the alleged deed of sale and are not
principally or subsidiarily bound thereby; hence, they have no legal
capacity to challenge their validity.
Plaintiffs-appellants anchor their action on the supposed impairment of
their legitime by the dispositions made by their defendant parents in favor
of their defendant brothers and sisters. But, as correctly held by the
court a quo, the legitime of a compulsory heir is computed as of the time
of the death of the decedent. Plaintiffs therefore cannot claim an
impairment of their legitime while their parents live.
With this posture taken by the Court, consideration of the errors assigned
by plaintiffs-appellants is inconsequential.
WHEREFORE, the decision appealed from is hereby AFFIRMED, with costs
against plaintiffs-appellants.
SO ORDERED.9 cräläwvirtualibräry
Hence, the instant petition.
Issues
Petitioners assign the following as errors of the Court of Appeals:
1. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
CONVEYANCE IN QUESTION HAD NO VALID CONSIDERATION.
2. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT EVEN
ASSUMING THAT THERE WAS A CONSIDERATION, THE SAME IS GROSSLY
INADEQUATE.
3. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE DEEDS OF
SALE DO NOT EXPRESS THE TRUE INTENT OF THE PARTIES.
4. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
CONVEYANCE WAS PART AND PARCEL OF A CONSPIRACY AIMED AT
UNJUSTLY DEPRIVING THE REST OF THE CHILDREN OF THE SPOUSES
LEONARDO JOAQUIN AND FELICIANA LANDRITO OF THEIR INTEREST
OVER THE SUBJECT PROPERTIES.
5. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT PETITIONERS
HAVE A GOOD, SUFFICIENT AND VALID CAUSE OF ACTION AGAINST THE
PRIVATE RESPONDENTS.10
The Ruling of the Court
We find the petition without merit.
We will discuss petitioners legal interest over the properties subject of the
Deeds of Sale before discussing the issues on the purported lack of
consideration and gross inadequacy of the prices of the Deeds of Sale.
Whether Petitioners have a legal interest
over the properties subject of the Deeds of  Sale
Petitioners Complaint betrays their motive for filing this case. In their
Complaint, petitioners asserted that the purported sale of the properties in
litis was the result of a deliberate conspiracy designed to unjustly deprive
the rest of the compulsory heirs (plaintiffs herein) of their legitime.
Petitioners strategy was to have the Deeds of Sale declared void so that
ownership of the lots would eventually revert to their respondent parents.
If their parents die still owning the lots, petitioners and their respondent
siblings will then co-own their parents estate by hereditary succession.11 cräläwvirtualibräry
It is evident from the records that petitioners are interested in the
properties subject of the Deeds of Sale, but they have failed to show any
legal right to the properties. The trial and appellate courts should have
dismissed the action for this reason alone. An action must be prosecuted in
the name of the real party-in-interest.12
cräläwvirtualibräry
[T]he question as to real party-in-interest is whether he is the party who
would be benefitted or injured by the judgment, or the party entitled to
the avails of the suit.
xxx
In actions for the annulment of contracts, such as this action, the real
parties are those who are parties to the agreement or are bound either
principally or subsidiarily or are prejudiced in their rights with respect to
one of the contracting parties and can show the detriment which would
positively result to them from the contract even though they did not
intervene in it (Ibaez v. Hongkong & Shanghai Bank, 22 Phil. 572 [1912])
xxx.
These are parties with a present substantial interest, as distinguished from
a mere expectancy or future, contingent, subordinate, or consequential
interest. The phrase present substantial interest more concretely is meant
such interest of a party in the subject matter of the action as will entitle
him, under the substantive law, to recover if the evidence is sufficient, or
that he has the legal title to demand and the defendant will be protected in
a payment to or recovery by him.13 cräläwvirtualibräry
Petitioners do not have any legal interest over the properties subject of the
Deeds of Sale. As the appellate court stated, petitioners right to their
parents properties is merely inchoate and vests only upon their parents
death. While still living, the parents of petitioners are free to dispose of
their properties. In their overzealousness to safeguard their future
legitime, petitioners forget that theoretically, the sale of the lots to their
siblings does not affect the value of their parents estate. While the sale of
the lots reduced the estate, cash of equivalent value replaced the lots
taken from the estate.
Whether the Deeds of  Sale are void
for lack of consideration
Petitioners assert that their respondent siblings did not actually pay the
prices stated in the Deeds of Sale to their respondent father. Thus,
petitioners ask the court to declare the Deeds of Sale void.
A contract of sale is not a real contract, but a consensual contract. As a
consensual contract, a contract of sale becomes a binding and valid
contract upon the meeting of the minds as to price. If there is a meeting of
the minds of the parties as to the price, the contract of sale is valid,
despite the manner of payment, or even the breach of that manner of
payment. If the real price is not stated in the contract, then the contract of
sale is valid but subject to reformation. If there is no meeting of the minds
of the parties as to the price, because the price stipulated in the contract
is simulated, then the contract is void.14 Article 1471 of the Civil Code
states that if the price in a contract of sale is simulated, the sale is void.
It is not the act of payment of price that determines the validity of a
contract of sale. Payment of the price has nothing to do with the perfection
of the contract. Payment of the price goes into the performance of the
contract. Failure to pay the consideration is different from lack of
consideration. The former results in a right to demand the fulfillment or
cancellation of the obligation under an existing valid contract while the
latter prevents the existence of a valid contract.15 cräläwvirtualibräry
Petitioners failed to show that the prices in the Deeds of Sale were
absolutely simulated. To prove simulation, petitioners presented Emma
Joaquin Valdozs testimony stating that their father, respondent Leonardo
Joaquin, told her that he would transfer a lot to her through a deed of sale
without need for her payment of the purchase price.16 The trial court did
not find the allegation of absolute simulation of price credible. Petitioners
failure to prove absolute simulation of price is magnified by their lack of
knowledge of their respondent siblings financial capacity to buy the
questioned lots.17 On the other hand, the Deeds of Sale which petitioners
presented as evidence plainly showed the cost of each lot sold. Not only
did respondents minds meet as to the purchase price, but the real price
was also stated in the Deeds of Sale. As of the filing of the complaint,
respondent siblings have also fully paid the price to their respondent
father.18
Whether the Deeds of  Sale are void
for gross inadequacy of price
Petitioners ask that assuming that there is consideration, the same is
grossly inadequate as to invalidate the Deeds of Sale.
Articles 1355 of the Civil Code states:
Art. 1355. Except in cases specified by law, lesion or inadequacy of
cause shall not invalidate a contract, unless there has been fraud,
mistake or undue influence. (Emphasis supplied)
Article 1470 of the Civil Code further provides:
Art. 1470. Gross inadequacy of price does not affect a contract of
sale, except as may indicate a defect in the consent, or that the parties
really intended a donation or some other act or contract. (Emphasis
supplied)
Petitioners failed to prove any of the instances mentioned in Articles 1355
and 1470 of the Civil Code which would invalidate, or even affect, the
Deeds of Sale. Indeed, there is no requirement that the price be equal to
the exact value of the subject matter of sale. All the respondents believed
that they received the commutative value of what they gave. As we stated
in Vales v. Villa:19
cräläwvirtualibräry
Courts cannot follow one every step of his life and extricate him from bad
bargains, protect him from unwise investments, relieve him from one-
sided contracts, or annul the effects of foolish acts. Courts cannot
constitute themselves guardians of persons who are not legally
incompetent. Courts operate not because one person has been defeated or
overcome by another, but because he has been defeated or
overcome illegally. Men may do foolish things, make ridiculous contracts,
use miserable judgment, and lose money by them indeed, all they have in
the world; but not for that alone can the law intervene and restore. There
must be, in addition, a violation of the law, the commission of what the
law knows as an actionable wrong, before the courts are authorized to lay
hold of the situation and remedy it. (Emphasis in the original)
Moreover, the factual findings of the appellate court are conclusive on the
parties and carry greater weight when they coincide with the factual
findings of the trial court. This Court will not weigh the evidence all over
again unless there has been a showing that the findings of the lower court
are totally devoid of support or are clearly erroneous so as to constitute
serious abuse of discretion.20 In the instant case, the trial court found that
the lots were sold for a valid consideration, and that the defendant
children actually paid the purchase price stipulated in their respective
Deeds of Sale. Actual payment of the purchase price by the buyer to the
seller is a factual finding that is now conclusive upon us.
WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto.
SO ORDERED.
Davide, Jr., C.J.,  (Chairman), Panganiban, Ynares-Santiago, and
Azcuna, JJ., concur.
REN TRANSPORT CORP. AND/OR REYNALDO PAZCOGUIN
III, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION (2ND DIVISION), SAMAHANG
MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF
DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO)
REPRESENTED BY ITS PRESIDENT NESTOR
FULMINAR, Respondents.
G.R. No. 188252
SAMAHANG MANGGAGAWA SA REN TRANSPORT-
ASSOCIATION OF DEMOCRATIC LABOR ASSOCIATIONS
(SMART-ADLO) REPRESENTED BY NESTOR
FULMINAR, Petitioner, v. REN TRANSPORT CORP. AND/OR
REYNALDO PAZCOGUIN III, Respondents.
DECISION
SERENO, C.J.:
Before this Court are consolidated Rule 45 petitions challenging
the Decision1 and the Resolution2 issued by the Court of Appeals
(CA) in CA-G.R. SP No. 100722.
THE FACTS
Samahan ng Manggagawa sa Ren Transport (SMART) is a
registered union, which had a five-year collective bargaining
agreement (CBA) with Ren Transport Corp. (Ren Transport) set
to expire on 31 December 2004.3 The 60-day freedom period of
the CBA passed without a challenge to SMART'S majority status
as bargaining agent.4 SMART thereafter conveyed its willingness
to bargain with Ren Transport, to which it sent bargaining
proposals. Ren Transport, however, failed to reply to the
demand.5 chanrobleslaw
Subsequently, two members of SMART wrote to the Department
of Labor and Employment - National Capital Region (DOLE-
NCR). The office was informed that a majority of the members
of SMART had decided to disaffiliate from their mother
federation to form another union, Ren Transport Employees
Association (RTEA).6 SMART contested the alleged disaffiliation
through a letter dated 4 April 2005.7 chanrobleslaw
During the pendency of the disaffiliation dispute at the DOLE-
NCR, Ren Transport stopped the remittance to SMART of the
union dues that had been checked off from the salaries of union
workers as provided under the CBA.8 Further, on 19 April 2005,
Ren Transport voluntarily recognized RTEA as the sole and
exclusive bargaining agent of the rank-and-file employees of
their company.9 chanrobleslaw
On 6 July 2005, SMART filed with the labor arbiter a complaint
for unfair labor practice against Ren Transport.10
THE LABOR ARBITER'S RULING
The labor arbiter rendered a decision11 finding Ren Transport
guilty of acts of unfair labor practice. The former explained that
since the disaffiliation issue remained pending, SMART
continued to be the certified collective bargaining agent; hence,
Ren Transport's refusal to send a counter-proposal to SMART
was not justified. The labor arbiter also held that the company's
failure to remit the union dues to SMART and the voluntary
recognition of RTEA were clear indications of interference with
the employees' exercise of the right to self-organize.
Both parties elevated the case to the National Labor Relations
Commission (NLRC). SMART contested only the failure of the
labor arbiter to award damages.
Ren Transport challenged the entire Decision, assigning four
errors in its Memorandum of Appeal, namely: (1) SMART was
no longer the exclusive bargaining agent; (2) Ren Transport did
not fail to bargain collectively with SMART; (3) Ren Transport
was not obliged to remit dues to SMART; and (4) SMART lacked
the personality to sue Ren Transport.12 All the assigned errors
were based on the assertion that SMART had lost its majority
status.
The appeals were consolidated.
THE NLRC RULING
The NLRC issued a decision13 affirming the labor arbiter's finding
of unfair labor practice on the part of Ren Transport. Union dues
were ordered remitted to SMART.
The NLRC also awarded moral damages to SMART, saying that
Ren transport's refusal to bargain was inspired by malice or bad
faith. The precipitate recognition of RTEA evidenced such bad
faith, considering that it was done despite the pendency of the
disaffiliation dispute at the DOLE-NCR.
Ren Transport filed a motion for reconsideration14 alleging,
among others, that the NLRC failed to resolve all the arguments
the former had raised in its memorandum of appeal.
The NLRC denied the motion for reconsideration,15 prompting
Ren Transport to file a Rule 65 petition with the CA.16
chanrobleslaw
THE CA RULING
On 30 January 2009, the CA rendered a decision17 partially
granting the petition. It deleted the award of moral damages to
SMART, but affirmed the NLRC decision on all other matters.
The CA ruled that SMART, as a corporation, was not entitled to
moral damages.18 chanrobleslaw
On the contention that the NLRC decided the case without
considering all the arguments of Ren Transport, the CA found
that the latter had passed upon the principal issue of the
existence of unfair labor practice.
Hence, both parties appealed to this Court.
THE ISSUES
Based on the foregoing facts and arguments raised in the
petitions, the threshold issues to be resolved are the following:
(1) whether Ren Transport committed acts of unfair labor
practice; (2) whether the decision rendered by the NLRC is valid
on account of its failure to pass upon all the errors assigned by
Ren Transport; and (3) whether SMART is entitled to moral
damages.
OUR RULING
We deny the petitions for lack of merit.
I
Ren Transport committed acts of unfair labor practice.
Ren Transport violated its duty to bargain collectively
with SMART.
Ren Transport concedes that it refused to bargain collectively
with SMART. It claims, though, that the latter ceased to be the
exclusive bargaining agent of the rank-and-file employees
because of the disaffiliation of the majority of its members.19
chanrobleslaw
The argument deserves no consideration.
Violation of the duty to bargain collectively is an unfair labor
practice under Article 258(g) of the Labor Code. An instance of
this practice is the refusal to bargain collectively as held
in General Milling Corp. v. CA.20 In that case, the employer
anchored its refusal to bargain with and recognize the union on
several letters received by the former regarding the withdrawal
of the workers' membership from the union. We rejected the
defense, saying that the employer had devised a flimsy excuse
by attacking the existence of the union and the status of the
union's membership to prevent any negotiation.21 chanrobleslaw
It bears stressing that Ren Transport had a duty to bargain
collectively with SMART. Under Article 263 in relation to Article
267 of the Labor Code, it is during the freedom period — or the
last 60 days before the expiration of the CBA — when another
union may challenge the majority status of the bargaining agent
through the filing of a petition for a certification election. If
there is no such petition filed during the freedom period, then
the employer "shall continue to recognize the majority status of
the incumbent bargaining agent where no petition for
certification election is filed."22
chanrobleslaw
In the present case, the facts are not up for debate. No petition
for certification election challenging the majority status of
SMART was filed during the freedom period, which was from
November 1 to December 31, 2004 — the 60-day period prior
to the expiration of the five-year CBA. SMART therefore
remained the exclusive bargaining agent of the rank-and-file
employees.
Given that SMART continued to be the workers' exclusive
bargaining agent, Ren Transport had the corresponding duty to
bargain collectively with the former. Ren Transport's refusal to
do so constitutes an unfair labor practice.
Consequently, Ren Transport cannot avail itself of the defense
that SMART no longer represents the majority of the workers.
The fact that no petition for certification election was filed within
the freedom period prevented Ren Transport from challenging
SMART'S existence and membership.
Moreover, it must be stressed that, according to the labor
arbiter, the purported disaffiliation from SMART was nothing but
a convenient, self-serving excuse.23 This factual finding, having
been affirmed by both the CA and the NLRC, is now conclusive
upon the Court.24 We do not see any patent error that would
take the instant case out of the general rule.
Ren Transport interfered with the exercise of the
employees' right to self-organize.
Interference with the employees' right to self-organization is
considered an unfair labor practice under Article 258 (a) of the
Labor Code. In this case, the labor arbiter found that the failure
to remit the union dues to SMART and the voluntary recognition
of RTEA were clear indications of interference with the
employees' right to self-organization.25  It must be stressed that
cralawred
this finding was affirmed by the NLRC and the CA; as such, it is
binding on the Court, especially when we consider that it is not
tainted with any blatant error. As aptly pointed out by the labor
arbiter, these acts were ill-timed in view of the existence of a
labor controversy over membership in the union.26 chanrobleslaw
Ren Transport also uses the supposed disaffiliation from SMART
to justify the failure to remit union dues to the latter and the
voluntary recognition of RTEA. However, for reasons already
discussed, this claim is considered a lame excuse that cannot
validate those acts.
II.
The NLRC decision is valid.
Ren Transport next argues that the decision rendered by the
NLRC is defective considering that it has failed to resolve all the
issues in its Memorandum of Appeal.27 chanrobleslaw
We do not agree.
Section 14, Article VIII of the 1987 Constitution, states that
"[n]o decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the law on
which it is based." It has been held that the constitutional
provision does not require a "point-by-point consideration and
resolution of the issues raised by the parties."28 chanrobleslaw
In the present case, the decision shows that the NLRC resolved
the focal issue raised by Ren Transport: whether or not SMART
remained the exclusive bargaining agent, such that Ren
Transport could be found guilty of acts of unfair labor practice.
We quote the NLRC discussion: ChanRoblesVirtualawlibrary
At the outset, let it be stated that insofar as the principal issue
of whether unfair labor practice was committed by respondents,
there is no occasion to find, or even entertain, doubts that the
findings and conclusion of the Labor Arbiter that unfair labor
practice (ULP) was committed against the complainants, are
infused with serious errors. We quote: ChanRoblesVirtualawlibrary
[I]t is our considered view that the respondents committed acts
of unfair labor practice even if the CBA between the
complainant union and respondent company already expired
and majority of the workers of the existing bargaining agent
disaffiliated therefrom, formed its own union and have it
registered as an independent one, still the respondent Company
has the duty to bargain collectively with the existing bargaining
agent. It bears stressing that the disaffiliation issue of the
members of the complainant union is still pending before the
DOLE and has not yet attained its finality; that there is no new
bargaining agent certified yet by the DOLE, there is no legal
basis yet for the respondent company to disregard the
personality of the complainant union and refused or ignored the
agent for renewal of its CBA. It is still the certified collective
bargaining agent of the workers, because there was no new
[u]nion yet being certified by the DOLE as the new bargaining
agent of the workers.
The above discourse shows the factual and legal bases for the
NLRC's resolution of the issue of whether Ren Transport
committed unfair labor practice and thereby satisfies the
constitutional provision on the contents of a decision. The NLRC
succeeded in disposing of all the arguments raised by Ren
Transport without going through every argument, as all the
assigned errors hinged on the majority status of SMART.29 All of
these errors were addressed and settled by the NLRC by finding
that SMART was still the exclusive bargaining agent of the
employees of Ren Transport.
As aptly stated by the CA, a court or any other tribunal is not
required to pass upon all the errors assigned by Ren Transport;
the resolution of the main question renders the other issues
academic or inconsequential.30 chanrobleslaw
At this juncture, it is well to note that addressing every one of
the errors assigned would not be in keeping with the policy of
judicial economy. Judicial economy refers to "efficiency in the
operation of the courts and the judicial system; especially the
efficient management of litigation so as to minimize duplication
of effort and to avoid wasting the judiciary's time and
resources."31 In Salud v. Court of Appeals,32 the Court remarked
that judicial economy is a "strong [norm] in a society in need of
swift justice."33 Now, more than ever, the value of brevity in the
writing of a decision assumes greater significance, as we belong
to an age in which dockets of the courts are congested and their
resources limited.
III.
SMART is not entitled to an award of moral damages.
We now address the petition of SMART, which faults the CA for
deleting the grant of moral damages.34 chanrobleslaw
We hold that the CA correctly dropped the NLRC's award of
moral damages to SMART. Indeed, a corporation is not, as a
general rule, entitled to moral damages. Being a mere artificial
being, it is incapable of experiencing physical suffering or
sentiments like wounded feelings, serious anxiety, mental
anguish or moral shock.35 chanrobleslaw
Although this Court has allowed the grant of moral damages to
corporations in certain situations,36 it must be remembered that
the grant is not automatic. The claimant must still prove the
factual basis of the damage and the causal relation to the
defendant's acts.37 In this case, while there is a showing of bad
faith on the part of the employer in the commission of acts of
unfair labor practice, there is no evidence establishing the
factual basis of the damage on the part of SMART.
WHEREFORE, premises considered, the petitions are DENIED.
The Decision dated 30 January 2009 and the Resolution dated
20 May 2009 issued by the Court of Appeals in CA-G.R. SP No.
100722 are AFFIRMED.

SO ORDERED. chanRoblesvirtualLawlib
G.R. No. 190601               February 7, 2011
SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-
GUANIO, Petitioners,
vs.
MAKATI SHANGRI-LA HOTEL and RESORT, INC., also doing
business under the name of SHANGRI-LA HOTEL
MANILA, Respondent.
DECISION
CARPIO MORALES, J.:
For their wedding reception on July 28, 2001, spouses Luigi M. Guanio
and Anna Hernandez-Guanio (petitioners) booked at the Shangri-la Hotel
Makati (the hotel).
Prior to the event, Makati Shangri-La Hotel & Resort, Inc. (respondent)
scheduled an initial food tasting. Petitioners claim that they requested the
hotel to prepare for seven persons ─ the two of them, their respective
parents, and the wedding coordinator. At the scheduled food tasting,
however, respondent prepared for only six.
Petitioners initially chose a set menu which included black cod, king
prawns and angel hair pasta with wild mushroom sauce for the main
course which cost ₱1,000.00 per person. They were, however, given an
option in which salmon, instead of king prawns, would be in the menu at
₱950.00 per person. They in fact partook of the salmon.
Three days before the event, a final food tasting took place. Petitioners
aver that the salmon served was half the size of what they were served
during the initial food tasting; and when queried about it, the hotel quoted
a much higher price (₱1,200.00) for the size that was initially served to
them. The parties eventually agreed on a final price ─ ₱1,150 per person.
A day before the event or on July 27, 2001, the parties finalized and
forged their contract.1
Petitioners claim that during the reception, respondent’s representatives,
Catering Director Bea Marquez and Sales Manager Tessa Alvarez, did
not show up despite their assurance that they would; their guests
complained of the delay in the service of the dinner; certain items listed in
the published menu were unavailable; the hotel’s waiters were rude and
unapologetic when confronted about the delay; and despite Alvarez’s
promise that there would be no charge for the extension of the reception
beyond 12:00 midnight, they were billed and paid ₱8,000 per hour for the
three-hour extension of the event up to 4:00 A.M. the next day.
Petitioners further claim that they brought wine and liquor in accordance
with their open bar arrangement, but these were not served to the guests
who were forced to pay for their drinks.
Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and
Resort, Inc. (respondent) and received an apologetic reply from Krister
Svensson, the hotel’s Executive Assistant Manager in charge of Food
and Beverage. They nevertheless filed a complaint for breach of contract
and damages before the Regional Trial Court (RTC) of Makati City.
In its Answer, respondent claimed that petitioners requested a
combination of king prawns and salmon, hence, the price was increased
to ₱1,200.00 per person, but discounted at ₱1,150.00; that contrary to
petitioners’ claim, Marquez and Alvarez were present during the event,
albeit they were not permanently stationed thereat as there were three
other hotel functions; that while there was a delay in the service of the
meals, the same was occasioned by the sudden increase of guests to
470 from the guaranteed expected minimum number of guests of 350 to
a maximum of 380, as stated in the Banquet Event Order (BEO);2 and
that Isaac Albacea, Banquet Service Director, in fact relayed the delay in
the service of the meals to petitioner Luigi’s father, Gil Guanio.
Respecting the belated service of meals to some guests, respondent
attributed it to the insistence of petitioners’ wedding coordinator that
certain guests be served first.
On Svensson’s letter, respondent, denying it as an admission of liability,
claimed that it was meant to maintain goodwill to its customers.
By Decision of August 17, 2006, Branch 148 of the Makati RTC rendered
judgment in favor of petitioners, disposing as follows:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs and against the defendant ordering the defendants
to pay the plaintiff the following:
1) The amount of ₱350,000.00 by way of actual damages;
2) The amount of ₱250,000.00 for and as moral damages;
3) The amount of ₱100,000.00 as exemplary damages;
4) The amount of ₱100,000.00 for and as attorney’s fees.
With costs against the defendant.
SO ORDERED.3
In finding for petitioners, the trial court relied heavily on the letter of
Svensson which is partly quoted below:
Upon receiving your comments on our service rendered during your
reception here with us, we are in fact, very distressed. Right from minor
issues pappadums served in the soup instead of the creutons, lack of
valet parkers, hard rolls being too hard till a major one – slow service,
rude and arrogant waiters, we have disappointed you in all means.
Indeed, we feel as strongly as you do that the services you received
were unacceptable and definitely not up to our standards. We understand
that it is our job to provide excellent service and in this instance, we have
fallen short of your expectations. We ask you please to accept our
profound apologies for causing such discomfort and
annoyance. 4 (underscoring supplied)
The trial court observed that from "the tenor of the letter . . . the
defendant[-herein respondent] admits that the services the plaintiff[-
herein petitioners] received were unacceptable and definitely not up to
their standards."5
On appeal, the Court of Appeals, by Decision of July 27, 2009, 6 reversed
the trial court’s decision, it holding that the proximate cause of petitioners’
injury was an unexpected increase in their guests:
x x x Hence, the alleged damage or injury brought about by the
confusion, inconvenience and disarray during the wedding reception may
not be attributed to defendant-appellant Shangri-la.
We find that the said proximate cause, which is entirely attributable to
plaintiffs-appellants, set the chain of events which resulted in the alleged
inconveniences, to the plaintiffs-appellants. Given the circumstances that
obtained, only the Sps. Guanio may bear whatever consequential
damages that they may have allegedly suffered. 7 (underscoring supplied)
Petitioners’ motion for reconsideration having been denied by Resolution
of November 19, 2009, the present petition for review was filed.
The Court finds that since petitioners’ complaint arose from a contract,
the doctrine of proximate cause finds no application to it:
The doctrine of proximate cause is applicable only in actions for quasi-
delicts, not in actions involving breach of contract. x x x The doctrine is a
device for imputing liability to a person where there is no relation between
him and another party. In such a case, the obligation is created by law
itself. But, where there is a pre-existing contractual relation between the
parties, it is the parties themselves who create the obligation, and the
function of the law is merely to regulate the relation thus
created.8 (emphasis and underscoring supplied)
What applies in the present case is Article 1170 of the Civil Code which
reads:
Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence or delay, and those who in any manner contravene the
tenor thereof, are liable for damages.
RCPI v. Verchez, et al. 9 enlightens:
In culpa contractual x x x the mere proof of the existence of the contract
and the failure of its compliance justify, prima facie, a corresponding right
of relief. The law, recognizing the obligatory force of contracts, will not
permit a party to be set free from liability for any kind of misperformance
of the contractual undertaking or a contravention of the tenor thereof. A
breach upon the contract confers upon the injured party a valid cause for
recovering that which may have been lost or suffered. The remedy
serves to preserve the interests of the promissee that may include
his "expectation interest," which is his interest in having the benefit of
his bargain by being put in as good a position as he would have been in
had the contract been performed, or his "reliance interest," which is his
interest in being reimbursed for loss caused by reliance on the contract
by being put in as good a position as he would have been in had the
contract not been made; or his "restitution interest," which is his
interest in having restored to him any benefit that he has conferred on the
other party. Indeed, agreements can accomplish little, either for their
makers or for society, unless they are made the basis for action. The
effect of every infraction is to create a new duty, that is, to make
RECOMPENSE to the one who has been injured by the failure of another
to observe his contractual obligation unless he can show extenuating
circumstances, like proof of his exercise of due diligence x x x or of
the attendance of fortuitous event, to excuse him from his ensuing
liability. (emphasis and underscoring in the original; capitalization
supplied)
The pertinent provisions of the Banquet and Meeting Services Contract
between the parties read:
4.3 The ENGAGER shall be billed in accordance with the prescribed rate
for the minimum guaranteed number of persons contracted for,
regardless of under attendance or non-appearance of the expected
number of guests, except where the ENGAGER cancels the Function in
accordance with its Letter of Confirmation with the HOTEL. Should the
attendance exceed the minimum guaranteed attendance, the ENGAGER
shall also be billed at the actual rate per cover in excess of the minimum
guaranteed attendance.
xxxx
4.5. The ENGAGER must inform the HOTEL at least forty eight (48)
hours before the scheduled date and time of the Function of any change
in the minimum guaranteed covers. In the absence of such notice,
paragraph 4.3 shall apply in the event of under attendance. In case the
actual number of attendees exceed the minimum guaranteed
number
by ten percent (10%), the HOTEL shall not in any way be held liable
for any damage or inconvenience which may be caused thereby.
The ENGAGER shall also undertake to advise the guests of the
situation and take positive steps to remedy the same.10 (emphasis,
italics and underscoring supplied)
Breach of contract is defined as the failure without legal reason to comply
with the terms of a contract. It is also defined as the [f]ailure, without legal
excuse, to perform any promise which forms the whole or part of the
contract.11
The appellate court, and even the trial court, observed that petitioners
were remiss in their obligation to inform respondent of the change in the
expected number of guests. The observation is reflected in the records of
the case. Petitioners’ failure to discharge such obligation thus excused,
as the above-quoted paragraph 4.5 of the parties’ contract provide,
respondent from liability for "any damage or inconvenience" occasioned
thereby.
As for petitioners’ claim that respondent departed from its verbal
agreement with petitioners, the same fails, given that the written contract
which the parties entered into the day before the event, being the law
between them.
Respecting the letter of Svensson on which the trial court heavily relied
as admission of respondent’s liability but which the appellate court
brushed aside, the Court finds the appellate court’s stance in order. It is
not uncommon in the hotel industry to receive comments, criticisms or
feedback on the service it delivers. It is also customary for hotel
management to try to smooth ruffled feathers to preserve goodwill among
its clientele.
Kalalo v. Luz holds:12
Statements which are not estoppels nor judicial admissions have no
quality of conclusiveness, and an opponent whose admissions have been
offered against him may offer any evidence which serves as an
explanation for his former assertion of what he now denies as a fact.
Respondent’s Catering Director, Bea Marquez, explained the hotel’s
procedure on receiving and processing complaints, viz:
ATTY. CALMA:
Q You mentioned that the letter indicates an acknowledgement of
the concern and that there was-the first letter there was an
acknowledgment of the concern and an apology, not necessarily
indicating that such or admitting fault?
A Yes.
Q Is this the letter that you are referring to?
If I may, Your Honor, that was the letter dated August 4, 2001,
previously marked as plaintiff’s exhibits, Your Honor. What is the
procedure of the hotel with respect to customer concern?
A Upon receipt of the concern from the guest or client, we
acknowledge receipt of such concern, and as part of procedure in
service industry particularly Makati Shangri-la we apologize for
whatever inconvenience but at the same time saying, that of
course, we would go through certain investigation and get back to
them for the feedback with whatever concern they may have.
Q Your Honor, I just like at this point mark the exhibits, Your
Honor, the letter dated August 4, 2001 identified by the witness,
Your Honor, to be marked as Exhibit 14 and the signature of Mr.
Krister Svensson be marked as Exhibit 14-A.13
xxxx
Q In your opinion, you just mentioned that there is a procedure
that the hotel follows with respect to the complaint, in your opinion
was this procedure followed in this particular concern?
A Yes, ma’am.
Q What makes you say that this procedure was followed?
A As I mentioned earlier, we proved that we did acknowledge the
concern of the client in this case and we did emphatize from the
client and apologized, and at the same time got back to them in
whatever investigation we have.
Q You said that you apologized, what did you apologize for?
A Well, first of all it is a standard that we apologize, right? Being in the
service industry, it is a practice that we apologize if there is any
inconvenience, so the purpose for apologizing is mainly to show empathy
and to ensure the client that we are hearing them out and that we will do
a better investigation and it is not in any way that we are admitting any
fault.14 (underscoring supplied)
To the Court, the foregoing explanation of the hotel’s Banquet Director
overcomes any presumption of admission of breach which Svensson’s
letter might have conveyed.
The exculpatory clause notwithstanding, the Court notes that respondent
could have managed the "situation" better, it being held in high esteem in
the hotel and service industry. Given respondent’s vast experience, it is
safe to presume that this is not its first encounter with booked events
exceeding the guaranteed cover. It is not audacious to expect that certain
measures have been placed in case this predicament crops up. That
regardless of these measures, respondent still received complaints as in
the present case, does not amuse. 1avvphil
Respondent admitted that three hotel functions coincided with petitioners’
reception. To the Court, the delay in service might have been avoided or
minimized if respondent exercised prescience in scheduling events. No
less than quality service should be delivered especially in events which
possibility of repetition is close to nil. Petitioners are not expected to get
married twice in their lifetimes.
In the present petition, under considerations of equity, the Court deems it
just to award the amount of ₱50,000.00 by way of nominal damages to
petitioners, for the discomfiture that they were subjected to during to the
event.15 The Court recognizes that every person is entitled to respect of
his dignity, personality, privacy and peace of mind. 16 Respondent’s lack of
prudence is an affront to this right.
WHEREFORE, the Court of Appeals Decision dated July 28, 2009
is PARTIALLY REVERSED. Respondent is, in light of the foregoing
discussion, ORDERED to pay the amount of ₱50,000.00 to petitioners by
way of nominal damages.
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice
WE CONCUR: