THIRD DIVISION

[G.R. NO. 177056 : September 18, 2009]

THE OFFICE OF THE SOLICITOR GENERAL, Petitioner, v. AYALA LAND

INCORPORATED, ROBINSON'S LAND CORPORATION, SHANGRI-LA PLAZA
CORPORATION and SM PRIME HOLDINGS, INC., Respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari,1 under Rule 45 of the Revised
Rules of Court, filed by petitioner Office of the Solicitor General (OSG), seeking the
reversal and setting aside of the Decision2 dated 25 January 2007 of the Court of
Appeals in CA-G.R. CV No. 76298, which affirmed in toto the Joint Decision3 dated 29
May 2002 of the Regional Trial Court (RTC) of Makati City, Branch 138, in Civil Cases
No. 00-1208 and No. 00-1210; and (2) the Resolution4 dated 14 March 2007 of the
appellate court in the same case which denied the Motion for Reconsideration of the
OSG. The RTC adjudged that respondents Ayala Land Incorporated (Ayala Land),
Robinsons Land Corporation (Robinsons), Shangri-la Plaza Corporation (Shangri-la),
and SM Prime Holdings, Inc. (SM Prime) could not be obliged to provide free parking
spaces in their malls to their patrons and the general public.

Respondents Ayala Land, Robinsons, and Shangri-la maintain and operate shopping
malls in various locations in Metro Manila. Respondent SM Prime constructs, operates,
and leases out commercial buildings and other structures, among which, are SM City,
Manila; SM Centerpoint, Sta. Mesa, Manila; SM City, North Avenue, Quezon City; and
SM Southmall, Las Piñas.

The shopping malls operated or leased out by respondents have parking facilities for all
kinds of motor vehicles, either by way of parking spaces inside the mall buildings or in
separate buildings and/or adjacent lots that are solely devoted for use as parking
spaces. Respondents Ayala Land, Robinsons, and SM Prime spent for the construction of
their own parking facilities. Respondent Shangri-la is renting its parking facilities,
consisting of land and building specifically used as parking spaces, which were
constructed for the lessor's account.

Respondents expend for the maintenance and administration of their respective parking
facilities. They provide security personnel to protect the vehicles parked in their parking
facilities and maintain order within the area. In turn, they collect the following parking
fees from the persons making use of their parking facilities, regardless of whether said
persons are mall patrons or not:

Respondent Parking Fees

Ayala Land On weekdays, P25.00 for the first four hours
and P10.00 for every succeeding hour; on weekends,
flat rate of P25.00 per day
Robinsons P20.00 for the first three hours and P10.00 for every
succeeding hour
Shangri-la Flat rate of P30.00 per day
SM Prime P10.00 to P20.00 (depending on whether the parking
space is outdoors or indoors) for the first three hours
and 59 minutes, and P10.00 for every succeeding
hour or fraction thereof

The parking tickets or cards issued by respondents to vehicle owners contain the
stipulation that respondents shall not be responsible for any loss or damage to the
vehicles parked in respondents' parking facilities.

In 1999, the Senate Committees on Trade and Commerce and on Justice and Human
Rights conducted a joint investigation for the following purposes: (1) to inquire into the
legality of the prevalent practice of shopping malls of charging parking fees; (2)
assuming arguendo that the collection of parking fees was legally authorized, to find
out the basis and reasonableness of the parking rates charged by shopping malls; and
(3) to determine the legality of the policy of shopping malls of denying liability in cases
of theft, robbery, or carnapping, by invoking the waiver clause at the back of the
parking tickets. Said Senate Committees invited the top executives of respondents, who
operate the major malls in the country; the officials from the Department of Trade and
Industry (DTI), Department of Public Works and Highways (DPWH), Metro Manila
Development Authority (MMDA), and other local government officials; and the
Philippine Motorists Association (PMA) as representative of the consumers' group.

After three public hearings held on 30 September, 3 November, and 1 December 1999,
the afore-mentioned Senate Committees jointly issued Senate Committee Report No.
2255 on 2 May 2000, in which they concluded:

In view of the foregoing, the Committees find that the collection of parking fees by
shopping malls is contrary to the National Building Code and is therefor [sic] illegal.
While it is true that the Code merely requires malls to provide parking spaces, without
specifying whether it is free or not, both Committees believe that the reasonable and
logical interpretation of the Code is that the parking spaces are for free. This
interpretation is not only reasonable and logical but finds support in the actual practice
in other countries like the United States of America where parking spaces owned and
operated by mall owners are free of charge.

Figuratively speaking, the Code has "expropriated" the land for parking - something
similar to the subdivision law which require developers to devote so much of the land
area for parks.

Moreover, Article II of R.A. No. 9734 (Consumer Act of the Philippines) provides that "it
is the policy of the State to protect the interest of the consumers, promote the general
welfare and establish standards of conduct for business and industry." Obviously, a
contrary interpretation (i.e., justifying the collection of parking fees) would be going
against the declared policy of R.A. 7394.
Section 201 of the National Building Code gives the responsibility for the administration
and enforcement of the provisions of the Code, including the imposition of penalties for
administrative violations thereof to the Secretary of Public Works. This set up, however,
is not being carried out in reality.

In the position paper submitted by the Metropolitan Manila Development Authority

(MMDA), its chairman, Jejomar C. Binay, accurately pointed out that the Secretary of
the DPWH is responsible for the implementation/enforcement of the National Building
Code. After the enactment of the Local Government Code of 1991, the local
government units (LGU's) were tasked to discharge the regulatory powers of the DPWH.
Hence, in the local level, the Building Officials enforce all rules/ regulations formulated
by the DPWH relative to all building plans, specifications and designs including parking
space requirements. There is, however, no single national department or agency
directly tasked to supervise the enforcement of the provisions of the Code on parking,
notwithstanding the national character of the law.6

Senate Committee Report No. 225, thus, contained the following recommendations:

In light of the foregoing, the Committees on Trade and Commerce and Justice and
Human Rights hereby recommend the following:

1. The Office of the Solicitor General should institute the necessary action to enjoin the
collection of parking fees as well as to enforce the penal sanction provisions of the
National Building Code. The Office of the Solicitor General should likewise study how
refund can be exacted from mall owners who continue to collect parking fees.

2. The Department of Trade and Industry pursuant to the provisions of R.A. No. 7394,
otherwise known as the Consumer Act of the Philippines should enforce the provisions
of the Code relative to parking. Towards this end, the DTI should formulate the
necessary implementing rules and regulations on parking in shopping malls, with prior
consultations with the local government units where these are located. Furthermore,
the DTI, in coordination with the DPWH, should be empowered to regulate and
supervise the construction and maintenance of parking establishments.

3. Finally, Congress should amend and update the National Building Code to expressly
prohibit shopping malls from collecting parking fees by at the same time, prohibit them
from invoking the waiver of liability.7

Respondent SM Prime thereafter received information that, pursuant to Senate

Committee Report No. 225, the DPWH Secretary and the local building officials of
Manila, Quezon City, and Las Piñas intended to institute, through the OSG, an action
to enjoin respondent SM Prime and similar establishments from collecting parking fees,
and to impose upon said establishments penal sanctions under Presidential Decree No.
1096, otherwise known as the National Building Code of the Philippines (National
Building Code), and its Implementing Rules and Regulations (IRR). With the threatened
action against it, respondent SM Prime filed, on 3 October 2000, a Petition for
Declaratory Relief8 under Rule 63 of the Revised Rules of Court, against the DPWH
Secretary and local building officials of Manila, Quezon City, and Las Piñas. Said
Petition was docketed as Civil Case No. 00-1208 and assigned to the RTC of Makati
City, Branch 138, presided over by Judge Sixto Marella, Jr. (Judge Marella). In its
Petition, respondent SM Prime prayed for judgment:

a) Declaring Rule XIX of the Implementing Rules and Regulations of the National
Building Code as ultra vires, hence, unconstitutional and void;

b) Declaring [herein respondent SM Prime]'s clear legal right to lease parking spaces
appurtenant to its department stores, malls, shopping centers and other commercial
establishments; and cralawlibrary

c) Declaring the National Building Code of the Philippines Implementing Rules and
Regulations as ineffective, not having been published once a week for three (3)
consecutive weeks in a newspaper of general circulation, as prescribed by Section 211
of Presidential Decree No. 1096.

[Respondent SM Prime] further prays for such other reliefs as may be deemed just and
equitable under the premises.9

The very next day, 4 October 2000, the OSG filed a Petition for Declaratory Relief and
Injunction (with Prayer for Temporary Restraining Order and Writ of Preliminary
Injunction)10 against respondents. This Petition was docketed as Civil Case No. 00-1210
and raffled to the RTC of Makati, Branch 135, presided over by Judge Francisco B. Ibay
(Judge Ibay). Petitioner prayed that the RTC:

1. After summary hearing, a temporary restraining order and a writ of preliminary

injunction be issued restraining respondents from collecting parking fees from their
customers; and cralawlibrary

2. After hearing, judgment be rendered declaring that the practice of respondents in

charging parking fees is violative of the National Building Code and its Implementing
Rules and Regulations and is therefore invalid, and making permanent any injunctive
writ issued in this case.

Other reliefs just and equitable under the premises are likewise prayed for.11

On 23 October 2000, Judge Ibay of the RTC of Makati City, Branch 135, issued an Order
consolidating Civil Case No. 00-1210 with Civil Case No. 00-1208 pending before Judge
Marella of RTC of Makati, Branch 138.

As a result of the pre-trial conference held on the morning of 8 August 2001, the RTC
issued a Pre-Trial Order12 of even date which limited the issues to be resolved in Civil
Cases No. 00-1208 and No. 00-1210 to the following:

1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210 to institute the present
proceedings and relative thereto whether the controversy in the collection of parking
fees by mall owners is a matter of public welfare.

2. Whether declaratory relief is proper.

3. Whether respondent Ayala Land, Robinsons, Shangri-La and SM Prime are obligated
to provide parking spaces in their malls for the use of their patrons or the public in
general, free of charge.

4. Entitlement of the parties of [sic] award of damages.13

On 29 May 2002, the RTC rendered its Joint Decision in Civil Cases No. 00-1208 and
No. 00-1210.

The RTC resolved the first two issues affirmatively. It ruled that the OSG can initiate
Civil Case No. 00-1210 under Presidential Decree No. 478 and the Administrative Code
of 1987.14 It also found that all the requisites for an action for declaratory relief were
present, to wit:

The requisites for an action for declaratory relief are: (a) there is a justiciable
controversy; (b) the controversy is between persons whose interests are adverse; (c)
the party seeking the relief has a legal interest in the controversy; and (d) the issue
involved is ripe for judicial determination.

SM, the petitioner in Civil Case No. 001-1208 [sic] is a mall operator who stands to be
affected directly by the position taken by the government officials sued namely the
Secretary of Public Highways and the Building Officials of the local government units
where it operates shopping malls. The OSG on the other hand acts on a matter of public
interest and has taken a position adverse to that of the mall owners whom it sued. The
construction of new and bigger malls has been announced, a matter which the Court
can take judicial notice and the unsettled issue of whether mall operators should
provide parking facilities, free of charge needs to be resolved.15

As to the third and most contentious issue, the RTC pronounced that:

The Building Code, which is the enabling law and the Implementing Rules and
Regulations do not impose that parking spaces shall be provided by the mall owners
free of charge. Absent such directive[,] Ayala Land, Robinsons, Shangri-la and SM
[Prime] are under no obligation to provide them for free. Article 1158 of the Civil Code
is clear:

"Obligations derived from law are not presumed. Only those expressly determined in
this Code or in special laws are demandable and shall be regulated by the precepts of
the law which establishes them; and as to what has not been foreseen, by the
provisions of this Book (1090).["]

xxx

The provision on ratios of parking slots to several variables, like shopping floor area or
customer area found in Rule XIX of the Implementing Rules and Regulations cannot be
construed as a directive to provide free parking spaces, because the enabling law, the
Building Code does not so provide. x x x.
To compel Ayala Land, Robinsons, Shangri-La and SM [Prime] to provide parking
spaces for free can be considered as an unlawful taking of property right without just
compensation.

Parking spaces in shopping malls are privately owned and for their use, the mall
operators collect fees. The legal relationship could be either lease or deposit. In either
case[,] the mall owners have the right to collect money which translates into income.
Should parking spaces be made free, this right of mall owners shall be gone. This,
without just compensation. Further, loss of effective control over their property will
ensue which is frowned upon by law.

The presence of parking spaces can be viewed in another light. They can be looked at
as necessary facilities to entice the public to increase patronage of their malls because
without parking spaces, going to their malls will be inconvenient. These are[,]
however[,] business considerations which mall operators will have to decide for
themselves. They are not sufficient to justify a legal conclusion, as the OSG would like
the Court to adopt that it is the obligation of the mall owners to provide parking spaces
for free.16

The RTC then held that there was no sufficient evidence to justify any award for
damages.

The RTC finally decreed in its 29 May 2002 Joint Decision in Civil Cases No. 00-1208
and No. 00-1210 that:

FOR THE REASONS GIVEN, the Court declares that Ayala Land[,] Inc., Robinsons Land
Corporation, Shangri-la Plaza Corporation and SM Prime Holdings[,] Inc. are not
obligated to provide parking spaces in their malls for the use of their patrons or public
in general, free of charge.

All counterclaims in Civil Case No. 00-1210 are dismissed.

No pronouncement as to costs.17

CA-G.R. CV No. 76298 involved the separate appeals of the OSG18 and respondent SM
Prime19 filed with the Court of Appeals. The sole assignment of error of the OSG in its
Appellant's Brief was:

THE TRIAL COURT ERRED IN HOLDING THAT THE NATIONAL BUILDING CODE DID NOT
INTEND MALL PARKING SPACES TO BE FREE OF CHARGE[;]20

while the four errors assigned by respondent SM Prime in its Appellant's Brief were:

THE TRIAL COURT ERRED IN FAILING TO DECLARE RULE XIX OF THE IMPLEMENTING
RULES AS HAVING BEEN ENACTED ULTRA VIRES, HENCE, UNCONSTITUTIONAL AND
VOID.
 II

THE TRIAL COURT ERRED IN FAILING TO DECLARE THE IMPLEMENTING RULES

INEFFECTIVE FOR NOT HAVING BEEN PUBLISHED AS REQUIRED BY LAW.

III

THE TRIAL COURT ERRED IN FAILING TO DISMISS THE OSG'S PETITION FOR
DECLARATORY RELIEF AND INJUNCTION FOR FAILURE TO EXHAUST ADMINISTRATIVE
REMEDIES.

IV

THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT THE OSG HAS NO LEGAL
CAPACITY TO SUE AND/OR THAT IT IS NOT A REAL PARTY-IN-INTEREST IN THE
INSTANT CASE.21

Respondent Robinsons filed a Motion to Dismiss Appeal of the OSG on the ground that
the lone issue raised therein involved a pure question of law, not reviewable by the
Court of Appeals.

The Court of Appeals promulgated its Decision in CA-G.R. CV No. 76298 on 25 January
2007. The appellate court agreed with respondent Robinsons that the appeal of the
OSG should suffer the fate of dismissal, since "the issue on whether or not the National
Building Code and its implementing rules require shopping mall operators to provide
parking facilities to the public for free" was evidently a question of law. Even so, since
CA-G.R. CV No. 76298 also included the appeal of respondent SM Prime, which raised
issues worthy of consideration, and in order to satisfy the demands of substantial
justice, the Court of Appeals proceeded to rule on the merits of the case.

In its Decision, the Court of Appeals affirmed the capacity of the OSG to initiate Civil
Case No. 00-1210 before the RTC as the legal representative of the government,22 and
as the one deputized by the Senate of the Republic of the Philippines through Senate
Committee Report No. 225.

The Court of Appeals rejected the contention of respondent SM Prime that the OSG
failed to exhaust administrative remedies. The appellate court explained that an
administrative review is not a condition precedent to judicial relief where the question
in dispute is purely a legal one, and nothing of an administrative nature is to be or can
be done.

The Court of Appeals likewise refused to rule on the validity of the IRR of the National
Building Code, as such issue was not among those the parties had agreed to be
resolved by the RTC during the pre-trial conference for Civil Cases No. 00-1208 and No.
00-1210. Issues cannot be raised for the first time on appeal. Furthermore, the
appellate court found that the controversy could be settled on other grounds, without
touching on the issue of the validity of the IRR. It referred to the settled rule that
courts should refrain from passing upon the constitutionality of a law or implementing
rules, because of the principle that bars judicial inquiry into a constitutional question,
unless the resolution thereof is indispensable to the determination of the case.

Lastly, the Court of Appeals declared that Section 803 of the National Building Code and
Rule XIX of the IRR were clear and needed no further construction. Said provisions
were only intended to control the occupancy or congestion of areas and structures. In
the absence of any express and clear provision of law, respondents could not be obliged
and expected to provide parking slots free of charge.

The fallo of the 25 January 2007 Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the instant appeals are DENIED. Accordingly,

appealed Decision is hereby AFFIRMED in toto.23

In its Resolution issued on 14 March 2007, the Court of Appeals denied the Motion for
Reconsideration of the OSG, finding that the grounds relied upon by the latter had
already been carefully considered, evaluated, and passed upon by the appellate court,
and there was no strong and cogent reason to modify much less reverse the assailed
judgment.

The OSG now comes before this Court, via the instant Petition for Review, with a single
assignment of error:

THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE RULING OF THE

LOWER COURT THAT RESPONDENTS ARE NOT OBLIGED TO PROVIDE FREE PARKING
SPACES TO THEIR CUSTOMERS OR THE PUBLIC.24

The OSG argues that respondents are mandated to provide free parking by Section 803
of the National Building Code and Rule XIX of the IRR.

According to Section 803 of the National Building Code:

SECTION 803. Percentage of Site Occupancy

(a) Maximum site occupancy shall be governed by the use, type of construction, and
height of the building and the use, area, nature, and location of the site; and subject to
the provisions of the local zoning requirements and in accordance with the rules and
regulations promulgated by the Secretary.

In connection therewith, Rule XIX of the old IRR,25 provides:

RULE XIX - PARKING AND LOADING SPACE REQUIREMENTS

Pursuant to Section 803 of the National Building Code (PD 1096) providing for
maximum site occupancy, the following provisions on parking and loading space
requirements shall be observed:

1. The parking space ratings listed below are minimum off-street requirements for
specific uses/occupancies for buildings/structures:
1.1 The size of an average automobile parking slot shall be computed as 2.4 meters by
5.00 meters for perpendicular or diagonal parking, 2.00 meters by 6.00 meters for
parallel parking. A truck or bus parking/loading slot shall be computed at a minimum of
3.60 meters by 12.00 meters. The parking slot shall be drawn to scale and the total
number of which shall be indicated on the plans and specified whether or not parking
accommodations, are attendant-managed. (See Section 2 for computation of parking
requirements).

xxx

1.7 Neighborhood shopping center - 1 slot/100 sq. m. of shopping floor area

The OSG avers that the aforequoted provisions should be read together with Section
102 of the National Building Code, which declares:

SECTION 102. Declaration of Policy

It is hereby declared to be the policy of the State to safeguard life, health, property,
and public welfare, consistent with the principles of sound environmental management
and control; and to this end, make it the purpose of this Code to provide for all
buildings and structures, a framework of minimum standards and requirements to
regulate and control their location, site, design, quality of materials, construction, use,
occupancy, and maintenance.

The requirement of free-of-charge parking, the OSG argues, greatly contributes to the
aim of safeguarding "life, health, property, and public welfare, consistent with the
principles of sound environmental management and control." Adequate parking spaces
would contribute greatly to alleviating traffic congestion when complemented by quick
and easy access thereto because of free-charge parking. Moreover, the power to
regulate and control the use, occupancy, and maintenance of buildings and structures
carries with it the power to impose fees and, conversely, to control - - partially or, as in
this case, absolutely - - the imposition of such fees.

The Court finds no merit in the present Petition.

The explicit directive of the afore-quoted statutory and regulatory provisions, garnered
from a plain reading thereof, is that respondents, as operators/lessors of neighborhood
shopping centers, should provide parking and loading spaces, in accordance with the
minimum ratio of one slot per 100 square meters of shopping floor area. There is
nothing therein pertaining to the collection (or non-collection) of parking fees by
respondents. In fact, the term "parking fees" cannot even be found at all in the entire
National Building Code and its IRR.

Statutory construction has it that if a statute is clear and unequivocal, it must be given
its literal meaning and applied without any attempt at interpretation.26 Since Section
803 of the National Building Code and Rule XIX of its IRR do not mention parking fees,
then simply, said provisions do not regulate the collection of the same. The RTC and the
Court of Appeals correctly applied Article 1158 of the New Civil Code, which states:
Art. 1158. Obligations derived from law are not presumed. Only those expressly
determined in this Code or in special laws are demandable, and shall be regulated by
the precepts of the law which establishes them; and as to what has not been foreseen,
by the provisions of this Book. (Emphasis ours.)

Hence, in order to bring the matter of parking fees within the ambit of the National
Building Code and its IRR, the OSG had to resort to specious and feeble argumentation,
in which the Court cannot concur.

The OSG cannot rely on Section 102 of the National Building Code to expand the
coverage of Section 803 of the same Code and Rule XIX of the IRR, so as to include the
regulation of parking fees. The OSG limits its citation to the first part of Section 102 of
the National Building Code declaring the policy of the State "to safeguard life, health,
property, and public welfare, consistent with the principles of sound environmental
management and control"; but totally ignores the second part of said provision, which
reads, "and to this end, make it the purpose of this Code to provide for all buildings and
structures, a framework of minimum standards and requirements to regulate and
control their location, site, design, quality of materials, construction, use, occupancy,
and maintenance." While the first part of Section 102 of the National Building Code lays
down the State policy, it is the second part thereof that explains how said policy shall
be carried out in the Code. Section 102 of the National Building Code is not an all-
encompassing grant of regulatory power to the DPWH Secretary and local building
officials in the name of life, health, property, and public welfare. On the contrary, it
limits the regulatory power of said officials to ensuring that the minimum standards and
requirements for all buildings and structures, as set forth in the National Building Code,
are complied with.

Consequently, the OSG cannot claim that in addition to fixing the minimum
requirements for parking spaces for buildings, Rule XIX of the IRR also mandates that
such parking spaces be provided by building owners free of charge. If Rule XIX is not
covered by the enabling law, then it cannot be added to or included in the
implementing rules. The rule-making power of administrative agencies must be
confined to details for regulating the mode or proceedings to carry into effect the law as
it has been enacted, and it cannot be extended to amend or expand the statutory
requirements or to embrace matters not covered by the statute. Administrative
regulations must always be in harmony with the provisions of the law because any
resulting discrepancy between the two will always be resolved in favor of the basic
law.27

From the RTC all the way to this Court, the OSG repeatedly referred to Republic v.
Gonzales28 and City of Ozamis v. Lumapas29 to support its position that the State has
the power to regulate parking spaces to promote the health, safety, and welfare of the
public; and it is by virtue of said power that respondents may be required to provide
free parking facilities. The OSG, though, failed to consider the substantial differences in
the factual and legal backgrounds of these two cases from those of the Petition at bar.

In Republic, the Municipality of Malabon sought to eject the occupants of two parcels of
land of the public domain to give way to a road-widening project. It was in this context
that the Court pronounced:
Indiscriminate parking along F. Sevilla Boulevard and other main thoroughfares was
prevalent; this, of course, caused the build up of traffic in the surrounding area to the
great discomfort and inconvenience of the public who use the streets. Traffic congestion
constitutes a threat to the health, welfare, safety and convenience of the people and it
can only be substantially relieved by widening streets and providing adequate parking
areas.

The Court, in City of Ozamis, declared that the City had been clothed with full power to
control and regulate its streets for the purpose of promoting public health, safety and
welfare. The City can regulate the time, place, and manner of parking in the streets and
public places; and charge minimal fees for the street parking to cover the expenses for
supervision, inspection and control, to ensure the smooth flow of traffic in the environs
of the public market, and for the safety and convenience of the public.

Republic and City of Ozamis involved parking in the local streets; in contrast, the
present case deals with privately owned parking facilities available for use by the
general public. In Republic and City of Ozamis, the concerned local governments
regulated parking pursuant to their power to control and regulate their streets; in the
instant case, the DPWH Secretary and local building officials regulate parking pursuant
to their authority to ensure compliance with the minimum standards and requirements
under the National Building Code and its IRR. With the difference in subject matters and
the bases for the regulatory powers being invoked, Republic and City of Ozamis do not
constitute precedents for this case.

Indeed, Republic and City of Ozamis both contain pronouncements that weaken the
position of the OSG in the case at bar. In Republic, the Court, instead of placing the
burden on private persons to provide parking facilities to the general public, mentioned
the trend in other jurisdictions wherein the municipal governments themselves took the
initiative to make more parking spaces available so as to alleviate the traffic problems,
thus:

Under the Land Transportation and Traffic Code, parking in designated areas along
public streets or highways is allowed which clearly indicates that provision for parking
spaces serves a useful purpose. In other jurisdictions where traffic is at least as
voluminous as here, the provision by municipal governments of parking space is not
limited to parking along public streets or highways. There has been a marked trend to
build off-street parking facilities with the view to removing parked cars from the
streets. While the provision of off-street parking facilities or carparks has been
commonly undertaken by private enterprise, municipal governments have been
constrained to put up carparks in response to public necessity where private enterprise
had failed to keep up with the growing public demand. American courts have upheld the
right of municipal governments to construct off-street parking facilities as clearly
redounding to the public benefit.30

In City of Ozamis, the Court authorized the collection by the City of minimal fees for the
parking of vehicles along the streets: so why then should the Court now preclude
respondents from collecting from the public a fee for the use of the mall parking
facilities? Undoubtedly, respondents also incur expenses in the maintenance and
operation of the mall parking facilities, such as electric consumption, compensation for
parking attendants and security, and upkeep of the physical structures.
It is not sufficient for the OSG to claim that "the power to regulate and control the use,
occupancy, and maintenance of buildings and structures carries with it the power to
impose fees and, conversely, to control, partially or, as in this case, absolutely, the
imposition of such fees." Firstly, the fees within the power of regulatory agencies to
impose are regulatory fees. It has been settled law in this jurisdiction that this broad
and all-compassing governmental competence to restrict rights of liberty and property
carries with it the undeniable power to collect a regulatory fee. It looks to the
enactment of specific measures that govern the relations not only as between
individuals but also as between private parties and the political society.31 True, if the
regulatory agencies have the power to impose regulatory fees, then conversely, they
also have the power to remove the same. Even so, it is worthy to note that the present
case does not involve the imposition by the DPWH Secretary and local building officials
of regulatory fees upon respondents; but the collection by respondents of parking fees
from persons who use the mall parking facilities. Secondly, assuming arguendo that the
DPWH Secretary and local building officials do have regulatory powers over the
collection of parking fees for the use of privately owned parking facilities, they cannot
allow or prohibit such collection arbitrarily or whimsically. Whether allowing or
prohibiting the collection of such parking fees, the action of the DPWH Secretary and
local building officials must pass the test of classic reasonableness and propriety of the
measures or means in the promotion of the ends sought to be accomplished.32

Keeping in mind the aforementioned test of reasonableness and propriety of measures

or means, the Court notes that Section 803 of the National Building Code falls under
Chapter 8 on Light and Ventilation. Evidently, the Code deems it necessary to regulate
site occupancy to ensure that there is proper lighting and ventilation in every building.
Pursuant thereto, Rule XIX of the IRR requires that a building, depending on its specific
use and/or floor area, should provide a minimum number of parking spaces. The Court,
however, fails to see the connection between regulating site occupancy to ensure
proper light and ventilation in every building vis - à-vis regulating the collection by
building owners of fees for the use of their parking spaces. Contrary to the averment of
the OSG, the former does not necessarily include or imply the latter. It totally escapes
this Court how lighting and ventilation conditions at the malls could be affected by the
fact that parking facilities thereat are free or paid for.

The OSG attempts to provide the missing link by arguing that:

Under Section 803 of the National Building Code, complimentary parking spaces are
required to enhance light and ventilation, that is, to avoid traffic congestion in areas
surrounding the building, which certainly affects the ventilation within the building
itself, which otherwise, the annexed parking spaces would have served. Free-of-charge
parking avoids traffic congestion by ensuring quick and easy access of legitimate
shoppers to off-street parking spaces annexed to the malls, and thereby removing the
vehicles of these legitimate shoppers off the busy streets near the commercial
establishments.33

The Court is unconvinced. The National Building Code regulates buildings, by setting the
minimum specifications and requirements for the same. It does not concern itself with
traffic congestion in areas surrounding the building. It is already a stretch to say that
the National Building Code and its IRR also intend to solve the problem of traffic
congestion around the buildings so as to ensure that the said buildings shall have
adequate lighting and ventilation. Moreover, the Court cannot simply assume, as the
OSG has apparently done, that the traffic congestion in areas around the malls is due to
the fact that respondents charge for their parking facilities, thus, forcing vehicle owners
to just park in the streets. The Court notes that despite the fees charged by
respondents, vehicle owners still use the mall parking facilities, which are even fully
occupied on some days. Vehicle owners may be parking in the streets only because
there are not enough parking spaces in the malls, and not because they are deterred by
the parking fees charged by respondents. Free parking spaces at the malls may even
have the opposite effect from what the OSG envisioned: more people may be
encouraged by the free parking to bring their own vehicles, instead of taking public
transport, to the malls; as a result, the parking facilities would become full sooner,
leaving more vehicles without parking spaces in the malls and parked in the streets
instead, causing even more traffic congestion.

Without using the term outright, the OSG is actually invoking police power to justify the
regulation by the State, through the DPWH Secretary and local building officials, of
privately owned parking facilities, including the collection by the owners/operators of
such facilities of parking fees from the public for the use thereof. The Court finds,
however, that in totally prohibiting respondents from collecting parking fees from the
public for the use of the mall parking facilities, the State would be acting beyond the
bounds of police power.

Police power is the power of promoting the public welfare by restraining and regulating
the use of liberty and property. It is usually exerted in order to merely regulate the use
and enjoyment of the property of the owner. The power to regulate, however, does not
include the power to prohibit. A fortiori, the power to regulate does not include the
power to confiscate. Police power does not involve the taking or confiscation of
property, with the exception of a few cases where there is a necessity to confiscate
private property in order to destroy it for the purpose of protecting peace and order and
of promoting the general welfare; for instance, the confiscation of an illegally possessed
article, such as opium and firearms.34

When there is a taking or confiscation of private property for public use, the State is no
longer exercising police power, but another of its inherent powers, namely, eminent
domain. Eminent domain enables the State to forcibly acquire private lands intended for
public use upon payment of just compensation to the owner.35

Normally, of course, the power of eminent domain results in the taking or appropriation
of title to, and possession of, the expropriated property; but no cogent reason appears
why the said power may not be availed of only to impose a burden upon the owner of
condemned property, without loss of title and possession.36 It is a settled rule that
neither acquisition of title nor total destruction of value is essential to taking. It is
usually in cases where title remains with the private owner that inquiry should be made
to determine whether the impairment of a property is merely regulated or amounts to a
compensable taking. A regulation that deprives any person of the profitable use of his
property constitutes a taking and entitles him to compensation, unless the invasion of
rights is so slight as to permit the regulation to be justified under the police power.
Similarly, a police regulation that unreasonably restricts the right to use business
property for business purposes amounts to a taking of private property, and the owner
may recover therefor.37 Ï‚ηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ
Although in the present case, title to and/or possession of the parking facilities
remain/s with respondents, the prohibition against their collection of parking fees from
the public, for the use of said facilities, is already tantamount to a taking or confiscation
of their properties. The State is not only requiring that respondents devote a portion of
the latter's properties for use as parking spaces, but is also mandating that they give
the public access to said parking spaces for free. Such is already an excessive intrusion
into the property rights of respondents. Not only are they being deprived of the right to
use a portion of their properties as they wish, they are further prohibited from profiting
from its use or even just recovering therefrom the expenses for the maintenance and
operation of the required parking facilities.

The ruling of this Court in City Government of Quezon City v. Judge Ericta38 is edifying.
Therein, the City Government of Quezon City passed an ordinance obliging private
cemeteries within its jurisdiction to set aside at least six percent of their total area for
charity, that is, for burial grounds of deceased paupers. According to the Court, the
ordinance in question was null and void, for it authorized the taking of private property
without just compensation:

There is no reasonable relation between the setting aside of at least six (6) percent of
the total area of all private cemeteries for charity burial grounds of deceased paupers
and the promotion of' health, morals, good order, safety, or the general welfare of the
people. The ordinance is actually a taking without compensation of a certain area from
a private cemetery to benefit paupers who are charges of the municipal corporation.
Instead of' building or maintaining a public cemetery for this purpose, the city passes
the burden to private cemeteries.

'The expropriation without compensation of a portion of private cemeteries is not

covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City which
empowers the city council to prohibit the burial of the dead within the center of
population of the city and to provide for their burial in a proper place subject to the
provisions of general law regulating burial grounds and cemeteries. When the Local
Government Code, Batas Pambansa Blg. 337 provides in Section 177(q) that a
sangguniang panlungsod may "provide for the burial of the dead in such place and in
such manner as prescribed by law or ordinance" it simply authorizes the city to provide
its own city owned land or to buy or expropriate private properties to construct public
cemeteries. This has been the law, and practise in the past. It continues to the present.
Expropriation, however, requires payment of just compensation. The questioned
ordinance is different from laws and regulations requiring owners of subdivisions to set
aside certain areas for streets, parks, playgrounds, and other public facilities from the
land they sell to buyers of subdivision lots. The necessities of public safety, health, and
convenience are very clear from said requirements which are intended to insure the
development of communities with salubrious and wholesome environments. The
beneficiaries of the regulation, in turn, are made to pay by the subdivision developer
when individual lots are sold to homeowners.

In conclusion, the total prohibition against the collection by respondents of parking fees
from persons who use the mall parking facilities has no basis in the National Building
Code or its IRR. The State also cannot impose the same prohibition by generally
invoking police power, since said prohibition amounts to a taking of respondents'
property without payment of just compensation.
Given the foregoing, the Court finds no more need to address the issue persistently
raised by respondent SM Prime concerning the unconstitutionality of Rule XIX of the
IRR. In addition, the said issue was not among those that the parties, during the pre-
trial conference for Civil Cases No. 12-08 and No. 00-1210, agreed to submit for
resolution of the RTC. It is likewise axiomatic that the constitutionality of a law, a
regulation, an ordinance or an act will not be resolved by courts if the controversy can
be, as in this case it has been, settled on other grounds.39

WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED. The
Decision dated 25 January 2007 and Resolution dated 14 March 2007 of the Court of
Appeals in CA-G.R. CV No. 76298, affirming in toto the Joint Decision dated 29 May
2002 of the Regional Trial Court of Makati City, Branch 138, in Civil Cases No. 00-1208
and No. 00-1210 are hereby AFFIRMED. No costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 84698 February 4, 1992

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN P.

PAULINO, ANTONIO M. MAGTALAS, COL. PEDRO SACRO and LT. M. SORIANO, petitioners, 
vs.
COURT OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, in her capacity as Presiding Judge
of Branch 47, Regional Trial Court, Manila, SEGUNDA R. BAUTISTA and ARSENIA D.
BAUTISTA, respondents.

Balgos and Perez for petitioners.

Collantes, Ramirez & Associates for private respondents.

PADILLA, J.:

A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the
second-floor premises of the Philippine School of Business Administration (PSBA) prompted the
parents of the deceased to file suit in the Regional Trial Court of Manila (Branch 47) presided over
by Judge (now Court of Appeals justice) Regina Ordoñez-Benitez, for damages against the said
PSBA and its corporate officers. At the time of his death, Carlitos was enrolled in the third year
commerce course at the PSBA. It was established that his assailants were not members of the
school's academic community but were elements from outside the school.

Specifically, the suit impleaded the PSBA and the following school authorities: Juan D. Lim
(President), Benjamin P. Paulino (Vice-President), Antonio M. Magtalas (Treasurer/Cashier), Col.
Pedro Sacro (Chief of Security) and a Lt. M. Soriano (Assistant Chief of Security). Substantially, the
plaintiffs (now private respondents) sought to adjudge them liable for the victim's untimely demise
due to their alleged negligence, recklessness and lack of security precautions, means and methods
before, during and after the attack on the victim. During the proceedings a quo, Lt. M. Soriano
terminated his relationship with the other petitioners by resigning from his position in the school.

Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they are
presumably sued under Article 2180 of the Civil Code, the complaint states no cause of action
against them, as jurisprudence on the subject is to the effect that academic institutions, such as the
PSBA, are beyond the ambit of the rule in the afore-stated article.

The respondent trial court, however, overruled petitioners' contention and thru an order dated 8
December 1987, denied their motion to dismiss. A subsequent motion for reconsideration was
similarly dealt with by an order dated 25 January 1988. Petitioners then assailed the trial court's
disposition before the respondent appellate court which, in a decision * promulgated on 10 June
1988, affirmed the trial court's orders. On 22 August 1988, the respondent appellate court resolved
to deny the petitioners' motion for reconsideration. Hence, this petition.

At the outset, it is to be observed that the respondent appellate court primarily anchored its decision
on the law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil Code.   Pertinent
1

portions of the appellate court's now assailed ruling state:

Article 2180 (formerly Article 1903) of the Civil Code is an adoption from the old
Spanish Civil Code. The comments of Manresa and learned authorities on its
meaning should give way to present day changes. The law is not fixed and flexible
(sic); it must be dynamic. In fact, the greatest value and significance of law as a rule
of conduct in (sic) its flexibility to adopt to changing social conditions and its capacity
to meet the new challenges of progress.

Construed in the light of modern day educational system, Article 2180 cannot be
construed in its narrow concept as held in the old case of Exconde
vs. Capuno   and Mercado vs. Court of Appeals;  hence, the ruling in
2 3

the Palisoc   case that it should apply to all kinds of educational institutions,

4

academic or vocational.

At any rate, the law holds the teachers and heads of the school staff liable unless
they relieve themselves of such liability pursuant to the last paragraph of Article 2180
by "proving that they observed all the diligence to prevent damage." This can only be
done at a trial on the merits of the case. 5

While we agree with the respondent appellate court that the motion to dismiss the complaint was
correctly denied and the complaint should be tried on the merits, we do not however agree with the
premises of the appellate court's ruling.
Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco
parentis. This Court discussed this doctrine in the afore-cited cases of Exconde, Mendoza,
Palisoc and, more recently, in Amadora vs.Court of Appeals.   In all such cases, it had been stressed
6

that the law (Article 2180) plainly provides that the damage should have been caused or inflicted
by pupils or students of he educational institution sought to be held liable for the acts of its pupils or
students while in its custody. However, this material situation does not exist in the present case for,
as earlier indicated, the assailants of Carlitos were not students of the PSBA, for whose acts the
school could be made liable.

However, does the appellate court's failure to consider such material facts mean the exculpation of
the petitioners from liability? It does not necessarily follow.

When an academic institution accepts students for enrollment, there is established

a contract between them, resulting in bilateral obligations which both parties are bound to comply
with.   For its part, the school undertakes to provide the student with an education that would
7

presumably suffice to equip him with the necessary tools and skills to pursue higher education or a
profession. On the other hand, the student covenants to abide by the school's academic
requirements and observe its rules and regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of providing their students
with an atmosphere that promotes or assists in attaining its primary undertaking of imparting
knowledge. Certainly, no student can absorb the intricacies of physics or higher mathematics or
explore the realm of the arts and other sciences when bullets are flying or grenades exploding in the
air or where there looms around the school premises a constant threat to life and limb. Necessarily,
the school must ensure that adequate steps are taken to maintain peace and order within the
campus premises and to prevent the breakdown thereof.

Because the circumstances of the present case evince a contractual relation between the PSBA and
Carlitos Bautista, the rules on quasi-delict do not really govern. 8 A perusal of Article 2176 shows that obligations
arising from quasi-delicts or tort, also known as extra-contractual obligations, arise only between parties not otherwise bound by contract,
whether express or implied. However, this impression has not prevented this Court from determining the existence of a tort even when there
obtains a contract. In Air France vs. Carrascoso (124 Phil. 722), the private respondent was awarded damages for his unwarranted
expulsion from a first-class seat aboard the petitioner airline. It is noted, however, that the Court referred to the petitioner-airline's liability as
one arising from tort, not one arising from a contract of carriage. In effect, Air France is authority for the view that liability from tort may exist
even if there is a contract, for the act that breaks the contract may be also a tort. (Austro-America S.S. Co. vs. Thomas, 248 Fed. 231).

This view was not all that revolutionary, for even as early as 1918, this Court was already of a similar
mind. In Cangco vs. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus:

The field of non-contractual obligation is much broader than that of contractual

obligation, comprising, as it does, the whole extent of juridical human relations.
These two fields, figuratively speaking, concentric; that is to say, the mere fact that a
person is bound to another by contract does not relieve him from extra-contractual
liability to such person. When such a contractual relation exists the obligor may break
the contract under such conditions that the same act which constitutes a breach of
the contract would have constituted the source of an extra-contractual obligation had
no contract existed between the parties.

Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly
Article 21, which provides:

Any person who wilfully causes loss or injury to another in a manner that is contrary

to morals, good custom or public policy shall compensate the latter for the damage.
(emphasis supplied).
Air France penalized the racist policy of the airline which emboldened the petitioner's employee to
forcibly oust the private respondent to cater to the comfort of a white man who allegedly "had a
better right to the seat." In Austro-American, supra, the public embarrassment caused to the
passenger was the justification for the Circuit Court of Appeals, (Second Circuit), to award damages
to the latter. From the foregoing, it can be concluded that should the act which breaches a contract
be done in bad faith and be violative of Article 21, then there is a cause to view the act as
constituting a quasi-delict.

In the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the
contract between the school and Bautista had been breached thru the former's negligence in
providing proper security measures. This would be for the trial court to determine. And, even if there
be a finding of negligence, the same could give rise generally to a breach of contractual obligation
only. Using the test of Cangco, supra, the negligence of the school would not be relevant absent a
contract. In fact, that negligence becomes material only because of the contractual relation between
PSBA and Bautista. In other words, a contractual relation is a condition sine qua non to the school's
liability. The negligence of the school cannot exist independently of the contract, unless the
negligence occurs under the circumstances set out in Article 21 of the Civil Code.

This Court is not unmindful of the attendant difficulties posed by the obligation of schools, above-
mentioned, for conceptually a school, like a common carrier, cannot be an insurer of its students
against all risks. This is specially true in the populous student communities of the so-called
"university belt" in Manila where there have been reported several incidents ranging from gang wars
to other forms of hooliganism. It would not be equitable to expect of schools to anticipate all types of
violent trespass upon their premises, for notwithstanding the security measures installed, the same
may still fail against an individual or group determined to carry out a nefarious deed inside school
premises and environs. Should this be the case, the school may still avoid liability by proving that the
breach of its contractual obligation to the students was not due to its negligence, here statutorily
defined to be the omission of that degree of diligence which is required by the nature of the
obligation and corresponding to the circumstances of persons, time and place.  9

As the proceedings a quo have yet to commence on the substance of the private respondents'
complaint, the record is bereft of all the material facts. Obviously, at this stage, only the trial court
can make such a determination from the evidence still to unfold.

WHEREFORE, the foregoing premises considered, the petition is DENIED. The court of origin (RTC,
Manila, Br. 47) is hereby ordered to continue proceedings consistent with this ruling of the Court.
Costs against the petitioners.

SO ORDERED.

Melencio-Herrera, Paras, Regalado and Nocon, JJ., concur.

G.R. No. 126780             February 17, 2005

YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM, petitioners, 

vs.
THE COURT OF APPEALS and MAURICE McLOUGHLIN, respondents.

DECISION

TINGA, J.:

The primary question of interest before this Court is the only legal issue in the case: It is whether a
hotel may evade liability for the loss of items left with it for safekeeping by its guests, by having these
guests execute written waivers holding the establishment or its employees free from blame for such
loss in light of Article 2003 of the Civil Code which voids such waivers.

Before this Court is a Rule 45 petition for review of the Decision dated 19 October 1995 of the Court
1 

of Appeals which affirmed the Decision dated 16 December 1991 of the Regional Trial Court (RTC),
2 

Branch 13, of Manila, finding YHT Realty Corporation, Brunhilda Mata-Tan (Tan), Erlinda Lainez
(Lainez) and Anicia Payam (Payam) jointly and solidarily liable for damages in an action filed by
Maurice McLoughlin (McLoughlin) for the loss of his American and Australian dollars deposited in
the safety deposit box of Tropicana Copacabana Apartment Hotel, owned and operated by YHT
Realty Corporation.

The factual backdrop of the case follow.

Private respondent McLoughlin, an Australian businessman-philanthropist, used to stay at Sheraton

Hotel during his trips to the Philippines prior to 1984 when he met Tan. Tan befriended McLoughlin
by showing him around, introducing him to important people, accompanying him in visiting
impoverished street children and assisting him in buying gifts for the children and in distributing the
same to charitable institutions for poor children. Tan convinced McLoughlin to transfer from Sheraton
Hotel to Tropicana where Lainez, Payam and Danilo Lopez were employed. Lopez served as
manager of the hotel while Lainez and Payam had custody of the keys for the safety deposit boxes
of Tropicana. Tan took care of McLoughlin's booking at the Tropicana where he started staying
during his trips to the Philippines from December 1984 to September 1987. 3

On 30 October 1987, McLoughlin arrived from Australia and registered with Tropicana. He rented a
safety deposit box as it was his practice to rent a safety deposit box every time he registered at
Tropicana in previous trips. As a tourist, McLoughlin was aware of the procedure observed by
Tropicana relative to its safety deposit boxes. The safety deposit box could only be opened through
the use of two keys, one of which is given to the registered guest, and the other remaining in the
possession of the management of the hotel. When a registered guest wished to open his safety
deposit box, he alone could personally request the management who then would assign one of its
employees to accompany the guest and assist him in opening the safety deposit box with the two
keys.4

McLoughlin allegedly placed the following in his safety deposit box: Fifteen Thousand US Dollars
(US$15,000.00) which he placed in two envelopes, one envelope containing Ten Thousand US
Dollars (US$10,000.00) and the other envelope Five Thousand US Dollars (US$5,000.00); Ten
Thousand Australian Dollars (AUS$10,000.00) which he also placed in another envelope; two (2)
other envelopes containing letters and credit cards; two (2) bankbooks; and a checkbook, arranged
side by side inside the safety deposit box. 5
On 12 December 1987, before leaving for a brief trip to Hongkong, McLoughlin opened his safety
deposit box with his key and with the key of the management and took therefrom the envelope
containing Five Thousand US Dollars (US$5,000.00), the envelope containing Ten Thousand
Australian Dollars (AUS$10,000.00), his passports and his credit cards. McLoughlin left the other
6 

items in the box as he did not check out of his room at the Tropicana during his short visit to
Hongkong. When he arrived in Hongkong, he opened the envelope which contained Five Thousand
US Dollars (US$5,000.00) and discovered upon counting that only Three Thousand US Dollars
(US$3,000.00) were enclosed therein. Since he had no idea whether somebody else had tampered
7 

with his safety deposit box, he thought that it was just a result of bad accounting since he did not
spend anything from that envelope. 8

After returning to Manila, he checked out of Tropicana on 18 December 1987 and left for Australia.
When he arrived in Australia, he discovered that the envelope with Ten Thousand US Dollars
(US$10,000.00) was short of Five Thousand US Dollars (US$5,000). He also noticed that the jewelry
which he bought in Hongkong and stored in the safety deposit box upon his return to Tropicana was
likewise missing, except for a diamond bracelet.9

When McLoughlin came back to the Philippines on 4 April 1988, he asked Lainez if some money
and/or jewelry which he had lost were found and returned to her or to the management. However,
Lainez told him that no one in the hotel found such things and none were turned over to the
management. He again registered at Tropicana and rented a safety deposit box. He placed therein
one (1) envelope containing Fifteen Thousand US Dollars (US$15,000.00), another envelope
containing Ten Thousand Australian Dollars (AUS$10,000.00) and other envelopes containing his
traveling papers/documents. On 16 April 1988, McLoughlin requested Lainez and Payam to open his
safety deposit box. He noticed that in the envelope containing Fifteen Thousand US Dollars
(US$15,000.00), Two Thousand US Dollars (US$2,000.00) were missing and in the envelope
previously containing Ten Thousand Australian Dollars (AUS$10,000.00), Four Thousand Five
Hundred Australian Dollars (AUS$4,500.00) were missing. 10

When McLoughlin discovered the loss, he immediately confronted Lainez and Payam who admitted
that Tan opened the safety deposit box with the key assigned to him. McLoughlin went up to his
11 

room where Tan was staying and confronted her. Tan admitted that she had stolen McLoughlin's key
and was able to open the safety deposit box with the assistance of Lopez, Payam and
Lainez. Lopez also told McLoughlin that Tan stole the key assigned to McLoughlin while the latter
12 

was asleep. 13

McLoughlin requested the management for an investigation of the incident. Lopez got in touch with
Tan and arranged for a meeting with the police and McLoughlin. When the police did not arrive,
Lopez and Tan went to the room of McLoughlin at Tropicana and thereat, Lopez wrote on a piece of
paper a promissory note dated 21 April 1988. The promissory note reads as follows:

I promise to pay Mr. Maurice McLoughlin the amount of AUS$4,000.00 and US$2,000.00 or its
equivalent in Philippine currency on or before May 5, 1988.14

Lopez requested Tan to sign the promissory note which the latter did and Lopez also signed as a
witness. Despite the execution of promissory note by Tan, McLoughlin insisted that it must be the
hotel who must assume responsibility for the loss he suffered. However, Lopez refused to accept the
responsibility relying on the conditions for renting the safety deposit box entitled "Undertaking For
the Use Of Safety Deposit Box," specifically paragraphs (2) and (4) thereof, to wit:
15 

2. To release and hold free and blameless TROPICANA APARTMENT HOTEL from any liability
arising from any loss in the contents and/or use of the said deposit box for any cause whatsoever,
including but not limited to the presentation or use thereof by any other person should the key be
lost;

...

4. To return the key and execute the RELEASE in favor of TROPICANA APARTMENT HOTEL upon
giving up the use of the box.16

On 17 May 1988, McLoughlin went back to Australia and he consulted his lawyers as to the validity
of the abovementioned stipulations. They opined that the stipulations are void for being violative of
universal hotel practices and customs. His lawyers prepared a letter dated 30 May 1988 which was
signed by McLoughlin and sent to President Corazon Aquino. The Office of the President referred
17 

the letter to the Department of Justice (DOJ) which forwarded the same to the Western Police
District (WPD). 18

After receiving a copy of the indorsement in Australia, McLoughlin came to the Philippines and
registered again as a hotel guest of Tropicana. McLoughlin went to Malacaňang to follow up on his
letter but he was instructed to go to the DOJ. The DOJ directed him to proceed to the WPD for
documentation. But McLoughlin went back to Australia as he had an urgent business matter to
attend to.

For several times, McLoughlin left for Australia to attend to his business and came back to the
Philippines to follow up on his letter to the President but he failed to obtain any concrete assistance. 19

McLoughlin left again for Australia and upon his return to the Philippines on 25 August 1989 to
pursue his claims against petitioners, the WPD conducted an investigation which resulted in the
preparation of an affidavit which was forwarded to the Manila City Fiscal's Office. Said affidavit
became the basis of preliminary investigation. However, McLoughlin left again for Australia without
receiving the notice of the hearing on 24 November 1989. Thus, the case at the Fiscal's Office was
dismissed for failure to prosecute. Mcloughlin requested the reinstatement of the criminal charge for
theft. In the meantime, McLoughlin and his lawyers wrote letters of demand to those having
responsibility to pay the damage. Then he left again for Australia.

Upon his return on 22 October 1990, he registered at the Echelon Towers at Malate, Manila.
Meetings were held between McLoughlin and his lawyer which resulted to the filing of a complaint for
damages on 3 December 1990 against YHT Realty Corporation, Lopez, Lainez, Payam and Tan
(defendants) for the loss of McLoughlin's money which was discovered on 16 April 1988. After filing
the complaint, McLoughlin left again for Australia to attend to an urgent business matter. Tan and
Lopez, however, were not served with summons, and trial proceeded with only Lainez, Payam and
YHT Realty Corporation as defendants.

After defendants had filed their Pre-Trial Brief admitting that they had previously allowed and
assisted Tan to open the safety deposit box, McLoughlin filed an Amended/Supplemental
Complaint dated 10 June 1991 which included another incident of loss of money and jewelry in the
20 

safety deposit box rented by McLoughlin in the same hotel which took place prior to 16 April
1988. The trial court admitted the Amended/Supplemental Complaint.
21 

During the trial of the case, McLoughlin had been in and out of the country to attend to urgent
business in Australia, and while staying in the Philippines to attend the hearing, he incurred
expenses for hotel bills, airfare and other transportation expenses, long distance calls to Australia,
Meralco power expenses, and expenses for food and maintenance, among others. 22
After trial, the RTC of Manila rendered judgment in favor of McLoughlin, the dispositive portion of
which reads:

WHEREFORE, above premises considered, judgment is hereby rendered by this Court in favor of
plaintiff and against the defendants, to wit:

1. Ordering defendants, jointly and severally, to pay plaintiff the sum of US$11,400.00 or its
equivalent in Philippine Currency of ₱342,000.00, more or less, and the sum of
AUS$4,500.00 or its equivalent in Philippine Currency of ₱99,000.00, or a total of
₱441,000.00, more or less, with 12% interest from April 16 1988 until said amount has been
paid to plaintiff (Item 1, Exhibit CC);

2. Ordering defendants, jointly and severally to pay plaintiff the sum of ₱3,674,238.00 as
actual and consequential damages arising from the loss of his Australian and American
dollars and jewelries complained against and in prosecuting his claim and rights
administratively and judicially (Items II, III, IV, V, VI, VII, VIII, and IX, Exh. "CC");

3. Ordering defendants, jointly and severally, to pay plaintiff the sum of ₱500,000.00 as
moral damages (Item X, Exh. "CC");

4. Ordering defendants, jointly and severally, to pay plaintiff the sum of ₱350,000.00 as
exemplary damages (Item XI, Exh. "CC");

5. And ordering defendants, jointly and severally, to pay litigation expenses in the sum of
₱200,000.00 (Item XII, Exh. "CC");

6. Ordering defendants, jointly and severally, to pay plaintiff the sum of ₱200,000.00 as
attorney's fees, and a fee of ₱3,000.00 for every appearance; and

7. Plus costs of suit.

SO ORDERED. 23

The trial court found that McLoughlin's allegations as to the fact of loss and as to the amount of
money he lost were sufficiently shown by his direct and straightforward manner of testifying in court
and found him to be credible and worthy of belief as it was established that McLoughlin's money,
kept in Tropicana's safety deposit box, was taken by Tan without McLoughlin's consent. The taking
was effected through the use of the master key which was in the possession of the management.
Payam and Lainez allowed Tan to use the master key without authority from McLoughlin. The trial
court added that if McLoughlin had not lost his dollars, he would not have gone through the trouble
and personal inconvenience of seeking aid and assistance from the Office of the President, DOJ,
police authorities and the City Fiscal's Office in his desire to recover his losses from the hotel
management and Tan. 24

As regards the loss of Seven Thousand US Dollars (US$7,000.00) and jewelry worth approximately
One Thousand Two Hundred US Dollars (US$1,200.00) which allegedly occurred during his stay at
Tropicana previous to 4 April 1988, no claim was made by McLoughlin for such losses in his
complaint dated 21 November 1990 because he was not sure how they were lost and who the
responsible persons were. But considering the admission of the defendants in their pre-trial brief that
on three previous occasions they allowed Tan to open the box, the trial court opined that it was
logical and reasonable to presume that his personal assets consisting of Seven Thousand US
Dollars (US$7,000.00) and jewelry were taken by Tan from the safety deposit box without
McLoughlin's consent through the cooperation of Payam and Lainez. 25

The trial court also found that defendants acted with gross negligence in the performance and
exercise of their duties and obligations as innkeepers and were therefore liable to answer for the
losses incurred by McLoughlin. 26

Moreover, the trial court ruled that paragraphs (2) and (4) of the "Undertaking For The Use Of Safety
Deposit Box" are not valid for being contrary to the express mandate of Article 2003 of the New Civil
Code and against public policy. Thus, there being fraud or wanton conduct on the part of
27 

defendants, they should be responsible for all damages which may be attributed to the non-
performance of their contractual obligations.28

The Court of Appeals affirmed the disquisitions made by the lower court except as to the amount of
damages awarded. The decretal text of the appellate court's decision reads:

THE FOREGOING CONSIDERED, the appealed Decision is hereby AFFIRMED but modified as
follows:

The appellants are directed jointly and severally to pay the plaintiff/appellee the following amounts:

1) ₱153,200.00 representing the peso equivalent of US$2,000.00 and AUS$4,500.00;

2) ₱308,880.80, representing the peso value for the air fares from Sidney [sic] to Manila and
back for a total of eleven (11) trips;

3) One-half of ₱336,207.05 or ₱168,103.52 representing payment to Tropicana Apartment

Hotel;

4) One-half of ₱152,683.57 or ₱76,341.785 representing payment to Echelon Tower;

5) One-half of ₱179,863.20 or ₱89,931.60 for the taxi xxx transportation from the residence
to Sidney [sic] Airport and from MIA to the hotel here in Manila, for the eleven (11) trips;

6) One-half of ₱7,801.94 or ₱3,900.97 representing Meralco power expenses;

7) One-half of ₱356,400.00 or ₱178,000.00 representing expenses for food and

maintenance;

8) ₱50,000.00 for moral damages;

9) ₱10,000.00 as exemplary damages; and

10) ₱200,000 representing attorney's fees.

With costs.

SO ORDERED. 29
Unperturbed, YHT Realty Corporation, Lainez and Payam went to this Court in this appeal
by certiorari.

Petitioners submit for resolution by this Court the following issues: (a) whether the appellate court's
conclusion on the alleged prior existence and subsequent loss of the subject money and jewelry is
supported by the evidence on record; (b) whether the finding of gross negligence on the part of
petitioners in the performance of their duties as innkeepers is supported by the evidence on record;
(c) whether the "Undertaking For The Use of Safety Deposit Box" admittedly executed by private
respondent is null and void; and (d) whether the damages awarded to private respondent, as well as
the amounts thereof, are proper under the circumstances. 30

The petition is devoid of merit.

It is worthy of note that the thrust of Rule 45 is the resolution only of questions of law and any
peripheral factual question addressed to this Court is beyond the bounds of this mode of review.

Petitioners point out that the evidence on record is insufficient to prove the fact of prior existence of
the dollars and the jewelry which had been lost while deposited in the safety deposit boxes of
Tropicana, the basis of the trial court and the appellate court being the sole testimony of McLoughlin
as to the contents thereof. Likewise, petitioners dispute the finding of gross negligence on their part
as not supported by the evidence on record.

We are not persuaded.  We adhere to the findings of the trial court as affirmed by the appellate
l^vvphi1.net

court that the fact of loss was established by the credible testimony in open court by McLoughlin.
Such findings are factual and therefore beyond the ambit of the present petition. 1awphi1.nét

The trial court had the occasion to observe the demeanor of McLoughlin while testifying which
reflected the veracity of the facts testified to by him. On this score, we give full credence to the
appreciation of testimonial evidence by the trial court especially if what is at issue is the credibility of
the witness. The oft-repeated principle is that where the credibility of a witness is an issue, the
established rule is that great respect is accorded to the evaluation of the credibility of witnesses by
the trial court. The trial court is in the best position to assess the credibility of witnesses and their
31 

testimonies because of its unique opportunity to observe the witnesses firsthand and note their
demeanor, conduct and attitude under grilling examination. 32

We are also not impressed by petitioners' argument that the finding of gross negligence by the lower
court as affirmed by the appellate court is not supported by evidence. The evidence reveals that two
keys are required to open the safety deposit boxes of Tropicana. One key is assigned to the guest
while the other remains in the possession of the management. If the guest desires to open his safety
deposit box, he must request the management for the other key to open the same. In other words,
the guest alone cannot open the safety deposit box without the assistance of the management or its
employees. With more reason that access to the safety deposit box should be denied if the one
requesting for the opening of the safety deposit box is a stranger. Thus, in case of loss of any item
deposited in the safety deposit box, it is inevitable to conclude that the management had at least a
hand in the consummation of the taking, unless the reason for the loss is force majeure.

Noteworthy is the fact that Payam and Lainez, who were employees of Tropicana, had custody of
the master key of the management when the loss took place. In fact, they even admitted that they
assisted Tan on three separate occasions in opening McLoughlin's safety deposit box. This only 33 

proves that Tropicana had prior knowledge that a person aside from the registered guest had access
to the safety deposit box. Yet the management failed to notify McLoughlin of the incident and waited
for him to discover the taking before it disclosed the matter to him. Therefore, Tropicana should be
held responsible for the damage suffered by McLoughlin by reason of the negligence of its
employees.

The management should have guarded against the occurrence of this incident considering that
Payam admitted in open court that she assisted Tan three times in opening the safety deposit box of
McLoughlin at around 6:30 A.M. to 7:30 A.M. while the latter was still asleep. In light of the
34 

circumstances surrounding this case, it is undeniable that without the acquiescence of the
employees of Tropicana to the opening of the safety deposit box, the loss of McLoughlin's money
could and should have been avoided.

The management contends, however, that McLoughlin, by his act, made its employees believe that
Tan was his spouse for she was always with him most of the time. The evidence on record,
however, is bereft of any showing that McLoughlin introduced Tan to the management as his wife.
Such an inference from the act of McLoughlin will not exculpate the petitioners from liability in the
absence of any showing that he made the management believe that Tan was his wife or was duly
authorized to have access to the safety deposit box. Mere close companionship and intimacy are not
enough to warrant such conclusion considering that what is involved in the instant case is the very
safety of McLoughlin's deposit. If only petitioners exercised due diligence in taking care of
McLoughlin's safety deposit box, they should have confronted him as to his relationship with Tan
considering that the latter had been observed opening McLoughlin's safety deposit box a number of
times at the early hours of the morning. Tan's acts should have prompted the management to
investigate her relationship with McLoughlin. Then, petitioners would have exercised due diligence
required of them. Failure to do so warrants the conclusion that the management had been remiss in
complying with the obligations imposed upon hotel-keepers under the law.

Under Article 1170 of the New Civil Code, those who, in the performance of their obligations, are
guilty of negligence, are liable for damages. As to who shall bear the burden of paying damages,
Article 2180, paragraph (4) of the same Code provides that 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. Also,
this Court has ruled that if an employee is found negligent, it is presumed that the employer was
negligent in selecting and/or supervising him for it is hard for the victim to prove the negligence of
such employer. Thus, given the fact that the loss of McLoughlin's money was consummated through
35 

the negligence of Tropicana's employees in allowing Tan to open the safety deposit box without the
guest's consent, both the assisting employees and YHT Realty Corporation itself, as owner and
operator of Tropicana, should be held solidarily liable pursuant to Article 2193. 36

The issue of whether the "Undertaking For The Use of Safety Deposit Box" executed by McLoughlin
is tainted with nullity presents a legal question appropriate for resolution in this petition. Notably, both
the trial court and the appellate court found the same to be null and void. We find no reason to
reverse their common conclusion. Article 2003 is controlling, thus:

Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect
that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper
and the guest whereby the responsibility of the former as set forth in Articles 1998 to 2001 is 37 

suppressed or diminished shall be void.

Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to
apply to situations such as that presented in this case. The hotel business like the common carrier's
business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide not
only lodging for hotel guests and security to their persons and belongings. The twin duty constitutes
the essence of the business. The law in turn does not allow such duty to the public to be negated or
diluted by any contrary stipulation in so-called "undertakings" that ordinarily appear in prepared
forms imposed by hotel keepers on guests for their signature.

In an early case, the Court of Appeals through its then Presiding Justice (later Associate Justice of
38 

the Court) Jose P. Bengzon, ruled that to hold hotelkeepers or innkeeper liable for the effects of their
guests, it is not necessary that they be actually delivered to the innkeepers or their employees. It is
enough that such effects are within the hotel or inn. With greater reason should the liability of the
39 

hotelkeeper be enforced when the missing items are taken without the guest's knowledge and
consent from a safety deposit box provided by the hotel itself, as in this case.

Paragraphs (2) and (4) of the "undertaking" manifestly contravene Article 2003 of the New Civil
Code for they allow Tropicana to be released from liability arising from any loss in the contents
and/or use of the safety deposit box for any cause whatsoever. Evidently, the undertaking was
40 

intended to bar any claim against Tropicana for any loss of the contents of the safety deposit box
whether or not negligence was incurred by Tropicana or its employees. The New Civil Code is
explicit that the responsibility of the hotel-keeper shall extend to loss of, or injury to, the personal
property of the guests even if caused by servants or employees of the keepers of hotels or inns as
well as by strangers, except as it may proceed from any force majeure. It is the loss through force
41 

majeure that may spare the hotel-keeper from liability. In the case at bar, there is no showing that
the act of the thief or robber was done with the use of arms or through an irresistible force to qualify
the same as force majeure. 42

Petitioners likewise anchor their defense on Article 2002 which exempts the hotel-keeper from
43 

liability if the loss is due to the acts of his guest, his family, or visitors. Even a cursory reading of the
provision would lead us to reject petitioners' contention. The justification they raise would render
nugatory the public interest sought to be protected by the provision. What if the negligence of the
employer or its employees facilitated the consummation of a crime committed by the registered
guest's relatives or visitor? Should the law exculpate the hotel from liability since the loss was due to
the act of the visitor of the registered guest of the hotel? Hence, this provision presupposes that the
hotel-keeper is not guilty of concurrent negligence or has not contributed in any degree to the
occurrence of the loss. A depositary is not responsible for the loss of goods by theft, unless his
actionable negligence contributes to the loss. 44

In the case at bar, the responsibility of securing the safety deposit box was shared not only by the
guest himself but also by the management since two keys are necessary to open the safety deposit
box. Without the assistance of hotel employees, the loss would not have occurred. Thus, Tropicana
was guilty of concurrent negligence in allowing Tan, who was not the registered guest, to open the
safety deposit box of McLoughlin, even assuming that the latter was also guilty of negligence in
allowing another person to use his key. To rule otherwise would result in undermining the safety of
the safety deposit boxes in hotels for the management will be given imprimatur to allow any person,
under the pretense of being a family member or a visitor of the guest, to have access to the safety
deposit box without fear of any liability that will attach thereafter in case such person turns out to be
a complete stranger. This will allow the hotel to evade responsibility for any liability incurred by its
employees in conspiracy with the guest's relatives and visitors.

Petitioners contend that McLoughlin's case was mounted on the theory of contract, but the trial court
and the appellate court upheld the grant of the claims of the latter on the basis of tort. There is
45 

nothing anomalous in how the lower courts decided the controversy for this Court has pronounced a
jurisprudential rule that tort liability can exist even if there are already contractual relations. The act
that breaks the contract may also be tort. 46
As to damages awarded to McLoughlin, we see no reason to modify the amounts awarded by the
appellate court for the same were based on facts and law. It is within the province of lower courts to
settle factual issues such as the proper amount of damages awarded and such finding is binding
upon this Court especially if sufficiently proven by evidence and not unconscionable or excessive.
Thus, the appellate court correctly awarded McLoughlin Two Thousand US Dollars (US$2,000.00)
and Four Thousand Five Hundred Australian dollars (AUS$4,500.00) or their peso equivalent at the
time of payment, being the amounts duly proven by evidence. The alleged loss that took place prior
47  48 

to 16 April 1988 was not considered since the amounts alleged to have been taken were not
sufficiently established by evidence. The appellate court also correctly awarded the sum of
₱308,880.80, representing the peso value for the air fares from Sydney to Manila and back for a
total of eleven (11) trips; one-half of ₱336,207.05 or ₱168,103.52 representing payment to
49 

Tropicana; one-half of ₱152,683.57 or ₱76,341.785 representing payment to Echelon Tower; one-

50  51 

half of ₱179,863.20 or ₱89,931.60 for the taxi or transportation expenses from McLoughlin's
residence to Sydney Airport and from MIA to the hotel here in Manila, for the eleven (11) trips; one- 52 

half of ₱7,801.94 or ₱3,900.97 representing Meralco power expenses; one-half of ₱356,400.00 or 53 

₱178,000.00 representing expenses for food and maintenance. 54

The amount of ₱50,000.00 for moral damages is reasonable. Although trial courts are given
discretion to determine the amount of moral damages, the appellate court may modify or change the
amount awarded when it is palpably and scandalously excessive.  Moral damages are not intended
l^vvphi1.net

to enrich a complainant at the expense of a defendant.  They are awarded only to enable the injured
l^vvphi1.net

party to obtain means, diversion or amusements that will serve to alleviate the moral suffering he
has undergone, by reason of defendants' culpable action. 55

The awards of ₱10,000.00 as exemplary damages and ₱200,000.00 representing attorney's fees are
likewise sustained.

WHEREFORE, foregoing premises considered, the Decision of the Court of Appeals dated 19

October 1995 is hereby AFFIRMED. Petitioners are directed, jointly and severally, to pay private
respondent the following amounts:

(1) US$2,000.00 and AUS$4,500.00 or their peso equivalent at the time of payment;

(2) ₱308,880.80, representing the peso value for the air fares from Sydney to Manila and
back for a total of eleven (11) trips;

(3) One-half of ₱336,207.05 or ₱168,103.52 representing payment to Tropicana

Copacabana Apartment Hotel;

(4) One-half of ₱152,683.57 or ₱76,341.785 representing payment to Echelon Tower;

(5) One-half of ₱179,863.20 or ₱89,931.60 for the taxi or transportation expense from
McLoughlin's residence to Sydney Airport and from MIA to the hotel here in Manila, for the
eleven (11) trips;

(6) One-half of ₱7,801.94 or ₱3,900.97 representing Meralco power expenses;

(7) One-half of ₱356,400.00 or ₱178,200.00 representing expenses for food and

maintenance;

(8) ₱50,000.00 for moral damages;

 (9) ₱10,000.00 as exemplary damages; and

(10) ₱200,000 representing attorney's fees.

With costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 150157             January 25, 2007

MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES, INC., Petitioners, 

vs.
MODESTO CALAUNAN, Respondent.

DECISION

CHICO-NAZARIO, J.:

Assailed before Us is the decision1 of the Court of Appeals in CA-G.R. CV No. 55909 which affirmed
in toto the decision2 of the Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No.
D-10086, finding petitioners Mauricio Manliclic and Philippine Rabbit Bus Lines, Inc. (PRBLI)
solidarily liable to pay damages and attorney’s fees to respondent Modesto Calaunan.

The factual antecedents are as follows:

The vehicles involved in this case are: (1) Philippine Rabbit Bus No. 353 with plate number CVD-
478, owned by petitioner PRBLI and driven by petitioner Mauricio Manliclic; and (2) owner-type jeep
with plate number PER-290, owned by respondent Modesto Calaunan and driven by Marcelo
Mendoza.

At around 6:00 to 7:00 o’clock in the morning of 12 July 1988, respondent Calaunan, together with
Marcelo Mendoza, was on his way to Manila from Pangasinan on board his owner-type jeep. The
Philippine Rabbit Bus was likewise bound for Manila from Concepcion, Tarlac. At approximately
Kilometer 40 of the North Luzon Expressway in Barangay Lalangan, Plaridel, Bulacan, the two
vehicles collided. The front right side of the Philippine Rabbit Bus hit the rear left side of the jeep
causing the latter to move to the shoulder on the right and then fall on a ditch with water resulting to
further extensive damage. The bus veered to the left and stopped 7 to 8 meters from point of
collision.
Respondent suffered minor injuries while his driver was unhurt. He was first brought for treatment to
the Manila Central University Hospital in Kalookan City by Oscar Buan, the conductor of the
Philippine Rabbit Bus, and was later transferred to the Veterans Memorial Medical Center.

By reason of such collision, a criminal case was filed before the RTC of Malolos, Bulacan, charging
petitioner Manliclic with Reckless Imprudence Resulting in Damage to Property with Physical
Injuries, docketed as Crim. Case No. 684-M-89. Subsequently on 2 December 1991, respondent
filed a complaint for damages against petitioners Manliclic and PRBLI before the RTC of Dagupan
City, docketed as Civil Case No. D-10086. The criminal case was tried ahead of the civil case.
Among those who testified in the criminal case were respondent Calaunan, Marcelo Mendoza and
Fernando Ramos.

In the civil case (now before this Court), the parties admitted the following:

1. The parties agreed on the capacity of the parties to sue and be sued as well as the venue
and the identities of the vehicles involved;

2. The identity of the drivers and the fact that they are duly licensed;

3. The date and place of the vehicular collision;

4. The extent of the injuries suffered by plaintiff Modesto Calaunan and the existence of the
medical certificate;

5. That both vehicles were going towards the south; the private jeep being ahead of the bus;

6. That the weather was fair and the road was well paved and straight, although there was a
ditch on the right side where the jeep fell into. 3

When the civil case was heard, counsel for respondent prayed that the transcripts of stenographic
notes (TSNs)4 of the testimonies of respondent Calaunan, Marcelo Mendoza and Fernando Ramos
in the criminal case be received in evidence in the civil case in as much as these witnesses are not
available to testify in the civil case.

Francisco Tuliao testified that his brother-in-law, respondent Calaunan, left for abroad sometime in
November, 1989 and has not returned since then. Rogelio Ramos took the stand and said that his
brother, Fernando Ramos, left for Amman, Jordan, to work. Rosalia Mendoza testified that her
husband, Marcelo Mendoza, left their residence to look for a job. She narrated that she thought her
husband went to his hometown in Panique, Tarlac, when he did not return after one month. She
went to her husband’s hometown to look for him but she was informed that he did not go there. 1awphil.net

The trial court subpoenaed the Clerk of Court of Branch 8, RTC, Malolos, Bulacan, the court where
Criminal Case No. 684-M-89 was tried, to bring the TSNs of the testimonies of respondent
Calaunan,5 Marcelo Mendoza6 and Fernando Ramos7 in said case, together with other documentary
evidence marked therein. Instead of the Branch Clerk of Court, it was Enrique Santos Guevara,
Court Interpreter, who appeared before the court and identified the TSNs of the three afore-named
witnesses and other pertinent documents he had brought. 8 Counsel for respondent wanted to mark
other TSNs and documents from the said criminal case to be adopted in the instant case, but since
the same were not brought to the trial court, counsel for petitioners compromised that said TSNs and
documents could be offered by counsel for respondent as rebuttal evidence.
For the defendants, petitioner Manliclic and bus conductor Oscar Buan testified. The TSN 9 of the
testimony of Donato Ganiban, investigator of the PRBLI, in Criminal Case No. 684-M-89 was marked
and allowed to be adopted in the civil case on the ground that he was already dead.

Respondent further marked, among other documents, as rebuttal evidence, the TSNs 10 of the
testimonies of Donato Ganiban, Oscar Buan and petitioner Manliclic in Criminal Case No. 684-M-89.

The disagreement arises from the question: Who is to be held liable for the collision?

Respondent insists it was petitioner Manliclic who should be liable while the latter is resolute in
saying it was the former who caused the smash up.

The versions of the parties are summarized by the trial court as follows:

The parties differed only on the manner the collision between the two (2) vehicles took place.
According to the plaintiff and his driver, the jeep was cruising at the speed of 60 to 70 kilometers per
hour on the slow lane of the expressway when the Philippine Rabbit Bus overtook the jeep and in
the process of overtaking the jeep, the Philippine Rabbit Bus hit the rear of the jeep on the left side.
At the time the Philippine Rabbit Bus hit the jeep, it was about to overtake the jeep. In other words,
the Philippine Rabbit Bus was still at the back of the jeep when the jeep was hit. Fernando Ramos
corroborated the testimony of the plaintiff and Marcelo Mendoza. He said that he was on another
jeep following the Philippine Rabbit Bus and the jeep of plaintiff when the incident took place. He
said, the jeep of the plaintiff overtook them and the said jeep of the plaintiff was followed by the
Philippine Rabbit Bus which was running very fast. The bus also overtook the jeep in which he was
riding. After that, he heard a loud sound. He saw the jeep of the plaintiff swerved to the right on a
grassy portion of the road. The Philippine Rabbit Bus stopped and they overtook the Philippine
Rabbit Bus so that it could not moved (sic), meaning they stopped in front of the Philippine Rabbit
Bus. He testified that the jeep of plaintiff swerved to the right because it was bumped by the
Philippine Rabbit bus from behind.

Both Mauricio Manliclic and his driver, Oscar Buan admitted that the Philippine Rabbit Bus bumped
the jeep in question. However, they explained that when the Philippine Rabbit bus was about to go
to the left lane to overtake the jeep, the latter jeep swerved to the left because it was to overtake
another jeep in front of it. Such was their testimony before the RTC in Malolos in the criminal case
and before this Court in the instant case. [Thus, which of the two versions of the manner how the
collision took place was correct, would be determinative of who between the two drivers was
negligent in the operation of their respective vehicles.] 11

Petitioner PRBLI maintained that it observed and exercised the diligence of a good father of a family
in the selection and supervision of its employee, specifically petitioner Manliclic.

On 22 July 1996, the trial court rendered its decision in favor of respondent Calaunan and against
petitioners Manliclic and PRBLI. The dispositive portion of its decision reads:

WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants ordering the
said defendants to pay plaintiff jointly and solidarily the amount of P40,838.00 as actual damages for
the towing as well as the repair and the materials used for the repair of the jeep in
question; P100,000.00 as moral damages and another P100,000.00 as exemplary damages
and P15,000.00 as attorney’s fees, including appearance fees of the lawyer. In addition, the
defendants are also to pay costs.12
Petitioners appealed the decision via Notice of Appeal to the Court of Appeals. 13

In a decision dated 28 September 2001, the Court of Appeals, finding no reversible error in the
decision of the trial court, affirmed it in all respects.14

Petitioners are now before us by way of petition for review assailing the decision of the Court of
Appeals. They assign as errors the following:

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S QUESTIONABLE ADMISSION IN EVIDENCE OF THE TSN’s AND OTHER
DOCUMENTS PRESENTED IN THE CRIMINAL CASE.

II

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S RELIANCE ON THE VERSION OF THE RESPONDENT ON HOW THE ACCIDENT
SUPPOSEDLY OCCURRED.

III

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S UNFAIR DISREGARD OF HEREIN PETITIONER PRBL’s DEFENSE OF EXERCISE OF
DUE DILIGENCE IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES.

IV

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL

COURT’S QUESTIONABLE AWARD OF DAMAGES AND ATTORNEY’S FEE.

With the passing away of respondent Calaunan during the pendency of this appeal with this Court,
we granted the Motion for the Substitution of Respondent filed by his wife, Mrs. Precila Zarate Vda.
De Calaunan, and children, Virgilio Calaunan, Carmelita Honeycomb, Evelyn Calaunan, Marko
Calaunan and Liwayway Calaunan. 15

In their Reply to respondent’s Comment, petitioners informed this Court of a Decision 16 of the Court
of Appeals acquitting petitioner Manliclic of the charge 17 of Reckless Imprudence Resulting in
Damage to Property with Physical Injuries attaching thereto a photocopy thereof.

On the first assigned error, petitioners argue that the TSNs containing the testimonies of respondent
Calaunan,18Marcelo Mendoza19 and Fernando Ramos20 should not be admitted in evidence for failure
of respondent to comply with the requisites of Section 47, Rule 130 of the Rules of Court.

For Section 47, Rule 13021 to apply, the following requisites must be satisfied: (a) the witness is dead
or unable to testify; (b) his testimony or deposition was given in a former case or proceeding, judicial
or administrative, between the same parties or those representing the same interests; (c) the former
case involved the same subject as that in the present case, although on different causes of action;
(d) the issue testified to by the witness in the former trial is the same issue involved in the present
case; and (e) the adverse party had an opportunity to cross-examine the witness in the former
case.22
Admittedly, respondent failed to show the concurrence of all the requisites set forth by the Rules for
a testimony given in a former case or proceeding to be admissible as an exception to the hearsay
rule. Petitioner PRBLI, not being a party in Criminal Case No. 684-M-89, had no opportunity to
cross-examine the three witnesses in said case. The criminal case was filed exclusively against
petitioner Manliclic, petitioner PRBLI’s employee. The cases dealing with the subsidiary liability of
employers uniformly declare that, strictly speaking, they are not parties to the criminal cases
instituted against their employees.23

Notwithstanding the fact that petitioner PRBLI was not a party in said criminal case, the testimonies
of the three witnesses are still admissible on the ground that petitioner PRBLI failed to object on their
admissibility.

It is elementary that an objection shall be made at the time when an alleged inadmissible document
is offered in evidence; otherwise, the objection shall be treated as waived, since the right to object is
merely a privilege which the party may waive. Thus, a failure to except to the evidence because it
does not conform to the statute is a waiver of the provisions of the law. Even assuming ex gratia
argumenti that these documents are inadmissible for being hearsay, but on account of failure to
object thereto, the same may be admitted and considered as sufficient to prove the facts therein
asserted.24 Hearsay evidence alone may be insufficient to establish a fact in a suit but, when no
objection is made thereto, it is, like any other evidence, to be considered and given the importance it
deserves.25

In the case at bar, petitioner PRBLI did not object to the TSNs containing the testimonies of
respondent Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case when the same
were offered in evidence in the trial court. In fact, the TSNs of the testimonies of Calaunan and
Mendoza were admitted by both petitioners.26 Moreover, petitioner PRBLI even offered in evidence
the TSN containing the testimony of Donato Ganiban in the criminal case. If petitioner PRBLI argues
that the TSNs of the testimonies of plaintiff’s witnesses in the criminal case should not be admitted in
the instant case, why then did it offer the TSN of the testimony of Ganiban which was given in the
criminal case? It appears that petitioner PRBLI wants to have its cake and eat it too. It cannot argue
that the TSNs of the testimonies of the witnesses of the adverse party in the criminal case should not
be admitted and at the same time insist that the TSN of the testimony of the witness for the accused
be admitted in its favor. To disallow admission in evidence of the TSNs of the testimonies of
Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case and to admit the TSN of the
testimony of Ganiban would be unfair.

We do not subscribe to petitioner PRBLI’s argument that it will be denied due process when the
TSNs of the testimonies of Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case
are to be admitted in the civil case. It is too late for petitioner PRBLI to raise denial of due process in
relation to Section 47, Rule 130 of the Rules of Court, as a ground for objecting to the admissibility of
the TSNs. For failure to object at the proper time, it waived its right to object that the TSNs did not
comply with Section 47.

In Mangio v. Court of Appeals,27 this Court, through Associate Justice Reynato S. Puno, 28 admitted in
evidence a TSN of the testimony of a witness in another case despite therein petitioner’s assertion
that he would be denied due process. In admitting the TSN, the Court ruled that the raising of denial
of due process in relation to Section 47, Rule 130 of the Rules of Court, as a ground for objecting to
the admissibility of the TSN was belatedly done. In so doing, therein petitioner waived his right to
object based on said ground.

Petitioners contend that the documents in the criminal case should not have been admitted in the
instant civil case because Section 47 of Rule 130 refers only to "testimony or deposition." We find
such contention to be untenable. Though said section speaks only of testimony and deposition, it
does not mean that documents from a former case or proceeding cannot be admitted. Said
documents can be admitted they being part of the testimonies of witnesses that have been admitted.
Accordingly, they shall be given the same weight as that to which the testimony may be entitled. 29

On the second assigned error, petitioners contend that the version of petitioner Manliclic as to how
the accident occurred is more credible than respondent’s version. They anchor their contention on
the fact that petitioner Manliclic was acquitted by the Court of Appeals of the charge of Reckless
Imprudence Resulting in Damage to Property with Physical Injuries.

To be resolved by the Court is the effect of petitioner Manliclic’s acquittal in the civil case.

From the complaint, it can be gathered that the civil case for damages was one arising from, or
based on, quasi-delict.30 Petitioner Manliclic was sued for his negligence or reckless imprudence in
causing the collision, while petitioner PRBLI was sued for its failure to exercise the diligence of a
good father in the selection and supervision of its employees, particularly petitioner Manliclic. The
allegations read:

"4. That sometime on July 12, 1988 at around 6:20 A.M. plaintiff was on board the above-
described motor vehicle travelling at a moderate speed along the North Luzon Expressway
heading South towards Manila together with MARCELO MENDOZA, who was then driving
the same;

"5. That approximately at kilometer 40 of the North Luzon Express Way, the above-described
motor vehicle was suddenly bumped from behind by a Philippine Rabbit Bus with Body No.
353 and with plate No. CVD 478 then being driven by one Mauricio Manliclic of San Jose,
Concepcion, Tarlac, who was then travelling recklessly at a very fast speed and had
apparently lost control of his vehicle;

"6. That as a result of the impact of the collision the above-described motor vehicle was
forced off the North Luzon Express Way towards the rightside where it fell on its driver’s side
on a ditch, and that as a consequence, the above-described motor vehicle which maybe
valued at EIGHTY THOUSAND PESOS (P80,000) was rendered a total wreck as shown by
pictures to be presented during the pre-trial and trial of this case;

"7. That also as a result of said incident, plaintiff sustained bodily injuries which compounded
plaintiff’s frail physical condition and required his hospitalization from July 12, 1988 up to and
until July 22, 1988, copy of the medical certificate is hereto attached as Annex "A" and made
an integral part hereof;

"8. That the vehicular collision resulting in the total wreckage of the above-described motor
vehicle as well as bodily (sic) sustained by plaintiff, was solely due to the reckless
imprudence of the defendant driver Mauricio Manliclic who drove his Philippine Rabbit Bus
No. 353 at a fast speed without due regard or observance of existing traffic rules and
regulations;

"9. That defendant Philippine Rabbit Bus Line Corporation failed to exercise the diligence of
a good father of (sic) family in the selection and supervision of its drivers; x x x" 31

Can Manliclic still be held liable for the collision and be found negligent notwithstanding the
declaration of the Court of Appeals that there was an absence of negligence on his part?
In exonerating petitioner Manliclic in the criminal case, the Court of Appeals said:

To the following findings of the court a quo, to wit: that accused-appellant was negligent "when the
bus he was driving bumped the jeep from behind"; that "the proximate cause of the accident was his
having driven the bus at a great speed while closely following the jeep"; x x x

We do not agree.

The swerving of Calaunan’s jeep when it tried to overtake the vehicle in front of it was beyond the
control of accused-appellant.

xxxx

Absent evidence of negligence, therefore, accused-appellant cannot be held liable for Reckless
Imprudence Resulting in Damage to Property with Physical Injuries as defined in Article 365 of the
Revised Penal Code.32

From the foregoing declaration of the Court of Appeals, it appears that petitioner Manliclic was
acquitted not on reasonable doubt, but on the ground that he is not the author of the act complained
of which is based on Section 2(b) of Rule 111 of the Rules of Criminal Procedure which reads:

(b) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment that the fact from which the civil might arise did not
exist.

In spite of said ruling, petitioner Manliclic can still be held liable for the mishap. The afore-quoted
section applies only to a civil action arising from crime or ex delicto and not to a civil action arising
from quasi-delict or culpa aquiliana. The extinction of civil liability referred to in Par. (e) of Section 3,
Rule 111 [now Section 2 (b) of 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 extinguished even by a declaration in the criminal case that the criminal act
charged has not happened or has not been committed by the accused. 33

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 a delict or crime
– a distinction exists between the civil liability arising from a crime and the responsibility for quasi-
delicts or culpa extra-contractual. The same negligence causing damages may produce civil liability
arising from a crime under the Penal Code, or create an action for quasi-delicts or culpa extra-
contractual under the Civil Code.34 It is now settled that acquittal of the accused, even if based on a
finding that he is not guilty, does not carry with it the extinction of the civil liability based on quasi
delict.35

In other words, if an accused is acquitted based on reasonable doubt on his guilt, his civil liability
arising from the crime may be proved by preponderance of evidence only. However, if an accused is
acquitted on the basis that he was not the author of the act or omission complained of (or that there
is declaration in a final judgment that the fact from which the civil might arise did not exist), said
acquittal closes the door to civil liability based on the crime or ex delicto. In this second instance,
there being no crime or delict to speak of, civil liability based thereon or ex delicto is not possible. In
this case, a civil action, if any, may be instituted on grounds other than the delict complained of.
As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be extinguished by
an acquittal, whether it be on ground of reasonable doubt or that accused was not the author of the
act or omission complained of (or that there is declaration in a final judgment that the fact from which
the civil liability might arise did not exist). The responsibility arising from fault or negligence in
a quasi-delict is entirely separate and distinct from the civil liability arising from negligence under the
Penal Code.36 An acquittal or conviction in the criminal case is entirely irrelevant in the civil
case37 based on quasi-delict or culpa aquiliana.

Petitioners ask us to give credence to their version of how the collision occurred and to disregard
that of respondent’s. Petitioners insist that while the PRBLI bus was in the process of overtaking
respondent’s jeep, the latter, without warning, suddenly swerved to the left (fast) lane in order to
overtake another jeep ahead of it, thus causing the collision.

As a general rule, questions of fact may not be raised in a petition for review. The factual findings of
the trial court, especially when affirmed by the appellate court, are binding and conclusive on the
Supreme Court.38 Not being a trier of facts, this Court will not allow a review thereof unless:

(1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the
inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals
went beyond the issues of the case and its findings are contrary to the admissions of both appellant
and appellees; (7) the findings of fact of the Court of Appeals are contrary to those of the trial court;
(8) said findings of fact are conclusions without citation of specific evidence on which they are
based; (9) the facts set forth in the petition as well as in the petitioner's main and reply briefs are not
disputed by the respondents; and (10) the findings of fact of the Court of Appeals are premised on
the supposed absence of evidence and contradicted by the evidence on record. 39

After going over the evidence on record, we do not find any of the exceptions that would warrant our
departure from the general rule. We fully agree in the finding of the trial court, as affirmed by the
Court of Appeals, that it was petitioner Manliclic who was negligent in driving the PRBLI bus which
was the cause of the collision. In giving credence to the version of the respondent, the trial court has
this say:

x x x Thus, which of the two versions of the manner how the collision took place was correct, would
be determinative of who between the two drivers was negligent in the operation of their respective
vehicle.

In this regard, it should be noted that in the statement of Mauricio Manliclic (Exh. 15) given to the
Philippine Rabbit Investigator CV Cabading no mention was made by him about the fact that the
driver of the jeep was overtaking another jeep when the collision took place. The allegation that
another jeep was being overtaken by the jeep of Calaunan was testified to by him only in Crim. Case
No. 684-M-89 before the Regional Trial Court in Malolos, Bulacan and before this Court. Evidently, it
was a product of an afterthought on the part of Mauricio Manliclic so that he could explain why he
should not be held responsible for the incident. His attempt to veer away from the truth was also
apparent when it would be considered that in his statement given to the Philippine Rabbit
Investigator CV Cabading (Exh. 15), he alleged that the Philippine Rabbit Bus bumped the jeep of
Calaunan while the Philippine Rabbit Bus was behind the said jeep. In his testimony before the
Regional Trial Court in Malolos, Bulacan as well as in this Court, he alleged that the Philippine
Rabbit Bus was already on the left side of the jeep when the collision took place. For this
inconsistency between his statement and testimony, his explanation regarding the manner of how
the collision between the jeep and the bus took place should be taken with caution. It might be true
that in the statement of Oscar Buan given to the Philippine Rabbit Investigator CV Cabading, it was
mentioned by the former that the jeep of plaintiff was in the act of overtaking another jeep when the
collision between the latter jeep and the Philippine Rabbit Bus took place. But the fact, however, that
his statement was given on July 15, 1988, one day after Mauricio Manliclic gave his statement
should not escape attention. The one-day difference between the giving of the two statements would
be significant enough to entertain the possibility of Oscar Buan having received legal advise before
giving his statement. Apart from that, as between his statement and the statement of Manliclic
himself, the statement of the latter should prevail. Besides, in his Affidavit of March 10, 1989, (Exh.
14), the unreliability of the statement of Oscar Buan (Exh. 13) given to CV Cabading rear its "ugly
head" when he did not mention in said affidavit that the jeep of Calaunan was trying to overtake
another jeep when the collision between the jeep in question and the Philippine Rabbit bus took
place.

xxxx

If one would believe the testimony of the defendant, Mauricio Manliclic, and his conductor, Oscar
Buan, that the Philippine Rabbit Bus was already somewhat parallel to the jeep when the collision
took place, the point of collision on the jeep should have been somewhat on the left side thereof
rather than on its rear. Furthermore, the jeep should have fallen on the road itself rather than having
been forced off the road. Useless, likewise to emphasize that the Philippine Rabbit was running very
fast as testified to by Ramos which was not controverted by the defendants. 40

Having ruled that it was petitioner Manliclic’s negligence that caused the smash up, there arises the
juris tantum presumption that the employer is negligent, rebuttable only by proof of observance of
the diligence of a good father of a family.41 Under Article 218042 of the New Civil Code, when an
injury is caused by the negligence of the employee, there instantly arises a presumption of law that
there was negligence on the part of the master or employer either in the selection of the servant or
employee, or in supervision over him after selection or both. The liability of the employer under
Article 2180 is direct and immediate; it is not conditioned upon prior recourse against the negligent
employee and a prior showing of the insolvency of such employee. Therefore, it is incumbent upon
the private respondents to prove that they exercised the diligence of a good father of a family in the
selection and supervision of their employee. 43

In the case at bar, petitioner PRBLI maintains that it had shown that it exercised the required
diligence in the selection and supervision of its employees, particularly petitioner Manliclic. In the
matter of selection, it showed the screening process that petitioner Manliclic underwent before he
became a regular driver. As to the exercise of due diligence in the supervision of its employees, it
argues that presence of ready investigators (Ganiban and Cabading) is sufficient proof that it
exercised the required due diligence in the supervision of its employees.

In the selection of prospective employees, employers are required to examine them as to their
qualifications, experience and service records. In the supervision of employees, the employer must
formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for the breach thereof. To fend off vicarious liability, employers must submit concrete
proof, including documentary evidence, that they complied with everything that was incumbent on
them.44

In Metro Manila Transit Corporation v. Court of Appeals, 45 it was explained that:

Due diligence in the supervision of employees on the other hand, includes the formulation of suitable
rules and regulations for the guidance of employees and the issuance of proper instructions intended
for the protection of the public and persons with whom the employer has relations through his or its
employees and the imposition of necessary disciplinary measures upon employees in case of
breach or as may be warranted to ensure the performance of acts indispensable to the business of
and beneficial to their employer. To this, we add that actual implementation and monitoring of
consistent compliance with said rules should be the constant concern of the employer, acting
through dependable supervisors who should regularly report on their supervisory functions.

In order that the defense of due diligence in the selection and supervision of employees may be
deemed sufficient and plausible, it is not enough to emptily invoke the existence of said company
guidelines and policies on hiring and supervision. As the negligence of the employee gives rise to
the presumption of negligence on the part of the employer, the latter has the burden of proving that it
has been diligent not only in the selection of employees but also in the actual supervision of their
work. The mere allegation of the existence of hiring procedures and supervisory policies, without
anything more, is decidedly not sufficient to overcome such presumption.

We emphatically reiterate our holding, as a warning to all employers, that "the formulation of various
company policies on safety without showing that they were being complied with is not sufficient to
exempt petitioner from liability arising from negligence of its employees. It is incumbent upon
petitioner to show that in recruiting and employing the erring driver the recruitment procedures and
company policies on efficiency and safety were followed." x x x.

The trial court found that petitioner PRBLI exercised the diligence of a good father of a family in the
selection but not in the supervision of its employees. It expounded as follows:

From the evidence of the defendants, it seems that the Philippine Rabbit Bus Lines has a very good
procedure of recruiting its driver as well as in the maintenance of its vehicles. There is no evidence
though that it is as good in the supervision of its personnel. There has been no iota of evidence
introduced by it that there are rules promulgated by the bus company regarding the safe operation of
its vehicle and in the way its driver should manage and operate the vehicles assigned to them. There
is no showing that somebody in the bus company has been employed to oversee how its driver
should behave while operating their vehicles without courting incidents similar to the herein case. In
regard to supervision, it is not difficult to observe that the Philippine Rabbit Bus Lines, Inc. has been
negligent as an employer and it should be made responsible for the acts of its employees,
particularly the driver involved in this case.

We agree. The presence of ready investigators after the occurrence of the accident is not enough to
exempt petitioner PRBLI from liability arising from the negligence of petitioner Manliclic. Same does
not comply with the guidelines set forth in the cases above-mentioned. The presence of the
investigators after the accident is not enough supervision. Regular supervision of employees, that is,
prior to any accident, should have been shown and established. This, petitioner failed to do. The lack
of supervision can further be seen by the fact that there is only one set of manual containing the
rules and regulations for all the drivers of PRBLI. 46 How then can all the drivers of petitioner PRBLI
know and be continually informed of the rules and regulations when only one manual is being lent to
all the drivers?

For failure to adduce proof that it exercised the diligence of a good father of a family in the selection
and supervision of its employees, petitioner PRBLI is held solidarily responsible for the damages
caused by petitioner Manliclic’s negligence.

We now go to the award of damages. The trial court correctly awarded the amount of P40,838.00 as
actual damages representing the amount paid by respondent for the towing and repair of his
jeep.47 As regards the awards for moral and exemplary damages, same, under the circumstances,
must be modified. The P100,000.00 awarded by the trial court as moral damages must be reduced
to P50,000.00.48 Exemplary damages are imposed by way of example or correction for the public
good.49 The amount awarded by the trial court must, likewise, be lowered to P50,000.00.50 The award
of P15,000.00 for attorney’s fees and expenses of litigation is in order and authorized by law. 51

WHEREFORE, premises considered, the instant petition for review is DENIED. The decision of the
Court of Appeals in CA-G.R. CV No. 55909 is AFFIRMED with the MODIFICATION that (1) the
award of moral damages shall be reduced to P50,000.00; and (2) the award of exemplary damages
shall be lowered to P50,000.00. Costs against petitioners.

SO ORDERED.

MINITA V. CHICO-NAZARIO 
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

Associate Justice Asscociate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it
is hereby certified that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

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 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 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.

Yulo, C.J., Moran, Ozaeta and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-32599 June 29, 1979

EDGARDO E. MENDOZA, petitioner 
vs.
HON. ABUNDIO Z. ARRIETA, Presiding Judge of Branch VIII, Court of First Instance of Manila,
FELINO TIMBOL, and RODOLFO SALAZAR, respondents.

David G. Nitafan for petitioner.

Arsenio R. Reyes for respondent Timbol.

Armando M. Pulgado for respondent Salazar.

MELENCIO-HERRERA, J:

Petitioner, Edgardo Mendoza, seeks a review on certiorari of the Orders of respondent Judge in Civil
Case No. 80803 dismissing his Complaint for Damages based on quasi-delict against respondents
Felino Timbol and Rodolfo Salazar.

The facts which spawned the present controversy may be summarized as follows:
On October 22, 1969, at about 4:00 o'clock in the afternoon, a three- way vehicular accident
occurred along Mac-Arthur Highway, Marilao, Bulacan, involving a Mercedes Benz owned and
driven by petitioner; a private jeep owned and driven by respondent Rodolfo Salazar; and a gravel
and sand truck owned by respondent Felipino Timbol and driven by Freddie Montoya. As a
consequence of said mishap, two separate Informations for Reckless Imprudence Causing Damage
to Property were filed against Rodolfo Salazar and Freddie Montoya with the Court of First Instance
of Bulacan. The race against truck-driver Montoya, docketed as Criminal Case No. SM-227, was for
causing damage to the jeep owned by Salazar, in the amount of Pl,604.00, by hitting it at the right
rear portion thereby causing said jeep to hit and bump an oncoming car, which happened to be
petitioner's Mercedes Benz. The case against jeep-owner-driver Salazar, docketed as Criminal Case
No. SM 228, was for causing damage to the Mercedes Benz of petitioner in the amount of P8,890.00

At the joint trial of the above cases, petitioner testified that jeep-owner- driver Salazar overtook the
truck driven by Montoya, swerved to the left going towards the poblacion of Marilao, and hit his car
which was bound for Manila. Petitioner further testified that before the impact, Salazar had jumped
from the jeep and that he was not aware that Salazar's jeep was bumped from behind by the truck
driven by Montoya. Petitioner's version of the accident was adopted by truck driver Montoya. Jeep-
owner-driver Salazar, on the other hand, tried to show that, after overtaking the truck driven by
Montoya, he flashed a signal indicating his intention to turn left towards the poblacion of Marilao but
was stopped at the intersection by a policeman who was directing traffic; that while he was at a stop
position, his jeep was bumped at the rear by the truck driven by Montova causing him to be thrown
out of the jeep, which then swerved to the left and hit petitioner's car, which was coming from the
opposite direction.

On July 31, 1970, the Court of First Instance of Bulacan, Branch V, Sta. Maria, rendered judgment,
stating in its decretal portion:

IN VIEW OF THE FOREGOING, this Court finds the accused Freddie Montoya
GUILTY beyond reasonable doubt of the crime of damage to property thru reckless
imprudence in Crime. Case No. SM-227, and hereby sentences him to pay a fine of
P972.50 and to indemnify Rodolfo Salazar in the same amount of P972.50 as actual
damages, with subsidiary imprisonment in case of insolvency, both as to fine and
indemnity, with costs.

Accused Rodolfo Salazar is hereby ACQUITTED from the offense charged in Crime.
Case No. SM-228, with costs de oficio, and his bond is ordered canceled

SO ORDERED.  1

Thus, the trial Court absolved jeep-owner-driver Salazar of any liability, civil and criminal, in view of
its findings that the collision between Salazar's jeep and petitioner's car was the result of the former
having been bumped from behind by the truck driven by Montoya. Neither was petitioner awarded
damages as he was not a complainant against truck-driver Montoya but only against jeep-owner-
driver Salazar.

On August 22, 1970, or after the termination of the criminal cases, petitioner filed Civil Case No.
80803 with the Court of First Instance of Manila against respondents jeep-owner-driver Salazar and
Felino Timbol, the latter being the owner of the gravel and sand truck driven by Montoya, for
indentification for the damages sustained by his car as a result of the collision involving their
vehicles. Jeep-owner-driver Salazar and truck-owner Timbol were joined as defendants, either in the
alternative or in solidum allegedly for the reason that petitioner was uncertain as to whether he was
entitled to relief against both on only one of them.
On September 9, 1970, truck-owner Timbol filed a Motion to Dismiss Civil Case No. 80803 on the
grounds that the Complaint is barred by a prior judgment in the criminal cases and that it fails to
state a cause of action. An Opposition thereto was filed by petitioner.

In an Order dated September 12, 1970, respondent Judge dismissed the Complaint against truck-
owner Timbol for reasons stated in the afore- mentioned Motion to Dismiss On September 30, 1970,
petitioner sought before this Court the review of that dismissal, to which petition we gave due
course.

On January 30, 1971, upon motion of jeep-owner-driver Salazar, respondent Judge also dismissed
the case as against the former. Respondent Judge reasoned out that "while it is true that an
independent civil action for liability under Article 2177 of the Civil Code could be prosecuted
independently of the criminal action for the offense from which it arose, the New Rules of Court,
which took effect on January 1, 1964, requires an express reservation of the civil action to be made
in the criminal action; otherwise, the same would be barred pursuant to Section 2, Rule
111 ...   Petitioner's Motion for Reconsideration thereof was denied in the order dated February 23,
2

1971, with respondent Judge suggesting that the issue be raised to a higher Court "for a more
decisive interpretation of the rule. 
3

On March 25, 1971, petitioner then filed a Supplemental Petition before us, also to review the last
two mentioned Orders, to which we required jeep-owner-driver Salazar to file an Answer.

The Complaint against

truck-owner Timbol

We shall first discuss the validity of the Order, dated September 12, 1970, dismissing petitioner's
Complaint against truck-owner Timbol.

In dismissing the Complaint against the truck-owner, respondent Judge sustained Timbol's
allegations that the civil suit is barred by the prior joint judgment in Criminal Cases Nos. SM-227 and
SM-228, wherein no reservation to file a separate civil case was made by petitioner and where the
latter actively participated in the trial and tried to prove damages against jeep-driver-Salazar only;
and that the Complaint does not state a cause of action against truck-owner Timbol inasmuch as
petitioner prosecuted jeep-owner-driver Salazar as the one solely responsible for the damage
suffered by his car.

Well-settled is the rule that for a prior judgment to constitute a bar to a subsequent case, the
following requisites must concur: (1) it must be a final judgment; (2) it must have been rendered by a
Court having jurisdiction over the subject matter and over the parties; (3) it must be a judgment on
the merits; and (4) there must be, between the first and second actions, Identity of parties, Identity of
subject matter and Identity of cause of action.

It is conceded that the first three requisites of res judicata are present. However, we agree with
petitioner that there is no Identity of cause of action between Criminal Case No. SM-227 and Civil
Case No. 80803. Obvious is the fact that in said criminal case truck-driver Montoya was not
prosecuted for damage to petitioner's car but for damage to the jeep. Neither was truck-owner
Timbol a party in said case. In fact as the trial Court had put it "the owner of the Mercedes Benz
cannot recover any damages from the accused Freddie Montoya, he (Mendoza) being a
complainant only against Rodolfo Salazar in Criminal Case No. SM-228.   And more importantly, in
4

the criminal cases, the cause of action was the enforcement of the civil liability arising from criminal
negligence under Article l of the Revised Penal Code, whereas Civil Case No. 80803 is based
on quasi-delict under Article 2180, in relation to Article 2176 of the Civil Code As held in Barredo vs.
Garcia, et al. 
5

The foregoing authorities clearly demonstrate the separate in. 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.

That petitioner's cause of action against Timbol in the civil case is based on quasi-delict is evident
from the recitals in the complaint to wit: that while petitioner was driving his car along MacArthur
Highway at Marilao, Bulacan, a jeep owned and driven by Salazar suddenly swerved to his
(petitioner's) lane and collided with his car That the sudden swerving of Salazar's jeep was caused
either by the negligence and lack of skill of Freddie Montoya, Timbol's employee, who was then
driving a gravel and sand truck iii the same direction as Salazar's jeep; and that as a consequence of
the collision, petitioner's car suffered extensive damage amounting to P12,248.20 and that he
likewise incurred actual and moral damages, litigation expenses and attorney's fees. Clearly,
therefore, the two factors that a cause of action must consist of, namely: (1) plaintiff's primary right,
i.e., that he is the owner of a Mercedes Benz, and (2) defendant's delict or wrongful act or omission
which violated plaintiff's primary right, i.e., the negligence or lack of skill either of jeep-owner Salazar
or of Timbol's employee, Montoya, in driving the truck, causing Salazar's jeep to swerve and collide
with petitioner's car, were alleged in the Complaint.  6

Consequently, petitioner's cause of action being based on quasi-delict, respondent Judge committed

reversible error when he dismissed the civil suit against the truck-owner, as said case may proceed
independently of the criminal proceedings and regardless of the result of the latter.

Art. 31. When the civil action is based on an obligation not arising from the act or
omission complained of as a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of the latter.

But it is truck-owner Timbol's submission (as well as that of jeep-owner-driver Salazar) that
petitioner's failure to make a reservation in the criminal action of his right to file an independent civil
action bars the institution of such separate civil action, invoking section 2, Rule 111, Rules of Court,
which says:

Section 2. — Independent civil action. — In the cases provided for in Articles 31, 32,
33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action
entirely separate and distinct from the criminal action may be brought by the injured
party during the pendency of the criminal case, provided the right is reserved as
required in the preceding section. Such civil action shau proceed independently of
the criminal prosecution, and shall require only a preponderance of evidence.

Interpreting the above provision, this Court, in Garcia vs. Florida   said:
7

As we have stated at the outset, the same negligent act causing damages may
produce a civil liability arising from crime or create an action for quasi-delict or culpa
 extra-contractual. The former is a violation of the criminal law, while the latter is a
distinct and independent negligence, having always had its own foundation and
individuality. Some legal writers are of the view that in accordance with Article 31, the
civil action based upon quasi-delict may proceed independently of the criminal
proceeding for criminal negligence and regardless of the result of the latter. Hence,
'the proviso in Section 2 of Rule 111 with reference to ... Articles 32, 33 and 34 of the
Civil Code is contrary to the letter and spirit of the said articles, for these articles
were drafted ... and are intended to constitute as exceptions to the general rule
stated in what is now Section 1 of Rule 111. The proviso, which is procedural, may
also be regarded as an unauthorized amendment of substantive law, Articles 32, 33
and 34 of the Civil Code, which do not provide for the reservation required in the
proviso ... .

In his concurring opinion in the above case, Mr. Justice Antonio Barredo further observed that
inasmuch as Articles 2176 and 2177 of the Civil Code create a civil liability distinct and different from
the civil action arising from the offense of negligence under the Revised Penal Code, no reservation,
therefore, need be made in the criminal case; that Section 2 of Rule 111 is inoperative, "it being
substantive in character and is not within the power of the Supreme Court to promulgate; and even if
it were not substantive but adjective, it cannot stand because of its inconsistency with Article 2177,
an enactment of the legislature superseding the Rules of 1940."

We declare, therefore, that in so far as truck-owner Timbol is concerned, Civil Case No. 80803 is not
barred by the fact that petitioner failed to reserve, in the criminal action, his right to file an
independent civil action based on quasi-delict.

The suit against

jeep-owner-driver Salazar

The case as against jeep-owner-driver Salazar, who was acquitted in Criminal Case No. SM-228,
presents a different picture altogether.

At the outset it should be clarified that inasmuch as civil liability co-exists with criminal responsibility
in negligence cases, the offended party has the option between an action for enforcement of civil
liability based on culpa criminalunder Article 100 of the Revised Penal Code, and an action for
recovery of damages based on culpa aquiliana under Article 2177 of the Civil Code. The action for
enforcement of civil liability based on culpa criminal under section 1 of Rule 111 of the Rules of
Court is deemed simultaneously instituted with the criminal action, unless expressly waived or
reserved for separate application by the offended party.  8

The circumstances attendant to the criminal case yields the conclusion that petitioner had opted to
base his cause of action against jeep-owner-driver Salazar on culpa criminal and not on culpa
aquiliana as evidenced by his active participation and intervention in the prosecution of the criminal
suit against said Salazar. The latter's civil liability continued to be involved in the criminal action until
its termination. Such being the case, there was no need for petitioner to have reserved his right to
file a separate civil action as his action for civil liability was deemed impliedly instituted in Criminal
Case No. SM-228.

Neither would an independent civil action he. Noteworthy is the basis of the acquittal of jeep-owner-
driver Salazar in the criminal case, expounded by the trial Court in this wise:
 In view of what has been proven and established during the trial, accused Freddie
Montoya would be held able for having bumped and hit the rear portion of the jeep
driven by the accused Rodolfo Salazar,

Considering that the collision between the jeep driven by Rodolfo Salazar and the car
owned and driven by Edgardo Mendoza was the result of the hitting on the rear of
the jeep by the truck driven by Freddie Montoya, this Court behaves that accused
Rodolfo Salazar cannot be held able for the damages sustained by Edgardo
Mendoza's car.  9

Crystal clear is the trial Court's pronouncement that under the facts of the case, jeep-owner-driver
Salazar cannot be held liable for the damages sustained by petitioner's car. In other words, "the fact
from which the civil might arise did not exist. " Accordingly, inasmuch as petitioner's cause of action
as against jeep-owner-driver Salazar is ex- delictu, founded on Article 100 of the Revised Penal
Code, the civil action must be held to have been extinguished in consonance with Section 3(c), Rule
111 of the Rules of Court   which provides:
10

Sec. 3. Other civil actions arising from offenses. — In all cases not included in the
preceding section the following rules shall be observed:

xxx xxx xxx

c) Extinction of the penal action does not carry with it extinction of the civil, unless the
extinction proceeds from a declaration in a final judgment that the fact from which the
civil night arise did not exist. ...

And even if petitioner's cause of action as against jeep-owner-driver Salazar were not ex-delictu, the
end result would be the same, it being clear from the judgment in the criminal case that Salazar's
acquittal was not based upon reasonable doubt, consequently, a civil action for damages can no
longer be instituted. This is explicitly provided for in Article 29 of the Civil Code quoted here under:

Art. 29. When the accused in a criminal prosecution is acquitted on the ground that
his guilt has not been proved beyond reasonable doubt, a civil action for damages for
the same act or omission may be instituted. Such action requires only a
preponderance of evidence ...

If in a criminal case the judgment of acquittal is based upon reasonable doubt, the
court shall so declare. In the absence of any declaration to that effect, it may be
inferred from the text of the decision whether or not the acquittal is due to that
ground.

In so far as the suit against jeep-owner-driver Salazar is concerned, therefore, we sustain

respondent Judge's Order dated January 30, 1971 dismissing the complaint, albeit on different
grounds.

WHEREFORE, 1) the Order dated September 12, 1970 dismissing Civil Case No. 80803 against
private respondent Felino Timbol is set aside, and respondent Judge, or his successor, hereby
ordered to proceed with the hearing on the merits; 2) but the Orders dated January 30, 1971 and
February 23, 1971 dismissing the Complaint in Civil Case No. 80803 against respondent Rodolfo
Salazar are hereby upheld.
No costs.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Fernandez, Guerrero and De Castro, JJ., concur.

#Footnotes

G.R. No. 84698

PADILLA, J.:
A stabbing incident on 30 August 1985 which caused the death of Carlitos
Bautista while on the second-floor premises of the Philippine School of
Business Administration (PSBA) prompted the parents of the deceased to
file suit in the Regional Trial Court of Manila (Branch 47) presided over by
Judge (now Court of Appeals justice) Regina Ordoñez-Benitez, for damages
against the said PSBA and its corporate officers. At the time of his death,
Carlitos was enrolled in the third year commerce course at the PSBA. It was
established that his assailants were not members of the school's academic
community but were elements from outside the school.
Specifically, the suit impleaded the PSBA and the following school
authorities: Juan D. Lim (President), Benjamin P. Paulino (Vice-President),
Antonio M. Magtalas (Treasurer/Cashier), Col. Pedro Sacro (Chief of
Security) and a Lt. M. Soriano (Assistant Chief of Security). Substantially,
the plaintiffs (now private respondents) sought to adjudge them liable for
the victim's untimely demise due to their alleged negligence, recklessness
and lack of security precautions, means and methods before, during and
after the attack on the victim. During the proceedings a quo, Lt. M. Soriano
terminated his relationship with the other petitioners by resigning from his
position in the school.
Defendants a quo (now petitioners) sought to have the suit dismissed,
alleging that since they are presumably sued under Article 2180 of the Civil
Code, the complaint states no cause of action against them, as
jurisprudence on the subject is to the effect that academic institutions, such
as the PSBA, are beyond the ambit of the rule in the afore-stated article.
The respondent trial court, however, overruled petitioners' contention and
thru an order dated 8 December 1987, denied their motion to dismiss. A
subsequent motion for reconsideration was similarly dealt with by an order
dated 25 January 1988. Petitioners then assailed the trial court's
dispositions before the respondent appellate court which, in a decision*
promulgated on 10 June 1988, affirmed the trial court's orders. On 22
August 1988, the respondent appellate court resolved to deny the
petitioners' motion for reconsideration. Hence, this petition.
At the outset, it is to be observed that the respondent appellate court
primarily anchored its decision on the law of quasi-delicts, as enunciated in
Articles 2176 and 2180 of the Civil Code.[1] Pertinent portions of the
appellate court's now assailed ruling state:
"Article 2180 (formerly Article 1903) of the Civil Code is an adoptation
from the old Spanish Civil Code. The comments of Manresa and learned
authorities on its meaning should give way to present day changes. The law
is not fixed and flexible (sic); it must be dynamic. In fact, the greatest value
and significance of law as a rule of conduct in (sic) its flexibility to adopt to
changing social conditions and its capacity to meet the new challenges of
progress.
Construed in the light of modern day educational systems, Article 2180
cannot be construed in its narrow concept as held in the old case of
Exconde vs. Capuno[2] and Mercado vs. Court of Appeals[3] ; hence, the
ruling in the Palisoc[4] case that it should apply to all kinds of educational
institutions, academic or vocational.
At any rate, the law holds the teachers and heads of the school staff liable
unless they relieve themselves of such liability pursuant to the last
paragraph of Article 2180 by 'proving that they observed all the diligence to
prevent damage.' This can only be done at a trial on the merits of the
case."[5]
While we agree with the respondent appellate court that the motion to
dismiss the complaint was correctly denied and the complaint should be
tried on the merits, we do not however agree with the premises of the
appellate court's ruling.
Article 2180, in conjunction with Article 2176 of the Civil Code, establishes
the rule of in loco parentis. This Court discussed this doctrine in the afore-
cited cases of Exconde, Mendoza, Palisoc and, more recently, in Amadora
vs. Court of Appeals.[6] In all such cases, it had been stressed that the law
(Article 2180) plainly provides that the damage should have been caused or
inflicted by pupils or students of the educational institution sought to be
held liable for the acts of its pupils or students while in its custody.
However, this material situation does not exist in the present case for, as
earlier indicated, the assailants of Carlitos were not students of the PSBA,
for whose acts the school could be made liable.
However, does the appellate court's failure to consider such material facts
mean the exculpation of the petitioners from liability? It does not
necessarily follow.
When an academic institution accepts students for enrollment, there is
established a contract between them, resulting in bilateral obligations
which both parties are bound to comply with.[7] For its part, the school
undertakes to provide the student with an education that would
presumably suffice to equip him with the necessary tools and skills to
pursue higher education or a profession. On the other hand, the student
covenants to abide by the school's academic requirements and observe its
rules and regulations.
Institutions of learning must also meet the implicit or "built-in" obligation
of providing their students with an atmosphere that promotes or assists in
attaining its primary undertaking of imparting knowledge. Certainly, no
student can absorb the intricacies of physics or higher mathematics or
explore the realm of the arts and other sciences when bullets are flying or
grenades exploding in the air or where there looms around the school
premises a constant threat to life and limb. Necessarily, the school must
ensure that adequate steps are taken to maintain peace and order within
the campus premises and to prevent the breakdown thereof.
Because the circumstances of the present case evince a contractual relation
between the PSBA and Carlitos Bautista, the rules on quasi-delict do not
really govern.[8] A perusal of Article 2176 shows that obligations arising
from quasi-delicts or tort, also known as extra-contractual obligations, arise
only between parties not otherwise bound by contract, whether express or
implied. However, this impression has not prevented this Court from
determining the existence of a tort even when there obtains a contract. In
Air France vs. Carrascoso (124 Phil. 722), the private respondent was
awarded damages for his unwarranted expulsion from a first-class seat
aboard the petitioner airline. It is noted, however, that the Court referred to
the petitioner-airline's liability as one arising from tort, not one arising
from a contract of carriage. In effect, Air France is authority for the view
that liability from tort may exist even if there is a contract, for the act that
breaks the contract may be also a tort. (Austro-America S.S. Co. vs.
Thomas, 248 Fed 231).
This view was not all that revolutionary, for even as early as 1918, this Court
was already of a similar mind. In Cangco vs. Manila Railroad (38 Phil. 780),
Mr. Justice Fisher elucidated thus:
"The field of non-contractual obligation is much more broader than that of
contractual obligation, comprising, as it does, the whole extent of juridical
human relations. These two fields, figuratively speaking, concentric; that is
to say, the mere fact that a person is bound to another by contract does not
relieve him from extra-contractual liability to such person. When such a
contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes a breach of the contract
would have constituted the source of an extra-contractual obligation had no
contract existed between the parties."
Immediately what comes to mind is the chapter of the Civil Code on
Human Relations, particularly Article 21, which provides:
"Any person who wilfully 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." (emphasis supplied).
Air France penalized the racist policy of the airline which emboldened the
petitioner's employee to forcibly oust the private respondent to cater to the
comfort of a white man who allegedly "had a better right to the seat."
In Austro-American, supra, the public embarrassment caused to the
passenger was the justification for the Circuit Court of Appeals, (Second
Circuit), to award damages to the latter. From the foregoing, it can be
concluded that should the act which breaches a contract be done in bad
faith and be violative of Article 21, then there is a cause to view the act as
constituting a quasi-delict.
In the circumstances obtaining in the case at bar, however, there is, as yet,
no finding that the contract between the school and Bautista had been
breached thru the former's negligence in providing proper security
measures. This would be for the trial court to determine. And, even if there
be a finding of negligence, the same could give rise generally to a breach of
contractual obligation only. Using the test of Cangco, supra, the negligence
of the school would not be relevant absent a contract. In fact, that
negligence becomes material only because of the contractual relation
between PSBA and Bautista. In other words, a contractual relation is a
condition sine qua non to the school's liability. The negligence of the school
cannot exist independently on the contract, unless the negligence occurs
under the circumstances set out in Article 21 of the Civil Code.
This Court is not unmindful of the attendant difficulties posed by the
obligation of schools, above-mentioned, for conceptually a school, like a
common carrier, cannot be an insurer of its students against all risks. This
is specially true in the populous student communities of the so-called
"university belt" in Manila where there have been reported several
incidents ranging from gang wars to other forms of hooliganism. It would
not be equitable to expect of schools to anticipate all types of violent
trespass upon their premises, for notwithstanding the security measures
installed, the same may still fail against an individual or group determined
to carry out a nefarious deed inside school premises and environs. Should
this be the case, the school may still avoid liability by proving that the
breach of its contractual obligation to the students was not due to its
negligence, here statutorily defined to be the omission of that degree of
diligence which is required by the nature of the obligation and
corresponding to the circumstances of persons, time and place.[9]
As the proceedings a quo have yet to commence on the substance of the
private respondents' complaint, the record is bereft of all the material facts.
Obviously, at this stage, only the trial court can make such a determination
from the evidence still to unfold.
WHEREFORE, the foregoing premises considered, the petition is
DENIED. The court of origin (RTC, Manila, Br. 47) is hereby ordered to
continue proceedings consistent with this ruling of the Court. Costs against
the petitioners.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-47745 April 15, 1988

JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA

PANTALEON A. AMADORA, JOSE A. AMADORA III, LUCY A. AMADORA, ROSALINDA A.
AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A. AMADORA and
MARIA TISCALINA A. AMADORA, petitioners 
vs.
HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR LLUCH
SERGIO P. DLMASO JR., CELESTINO DICON, ANIANO ABELLANA, PABLITO DAFFON thru
his parents and natural guardians, MR. and MRS. NICANOR GUMBAN, and ROLANDO
VALENCIA, thru his guardian, A. FRANCISCO ALONSO, respondents.
Jose S. Amadora & Associates for petitioners.

Padilla Law Office for respondents.

CRUZ, J.:

Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exercises where he would ascend the stage and
in the presence of his relatives and friends receive his high school diploma. These ceremonies were scheduled on April 16, 1972. As it
turned out, though, fate would intervene and deny him that awaited experience. On April 13, 1972, while they were in the auditorium of their
school, the Colegio de San Jose-Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo, ending all his expectations and
his life as well. The victim was only seventeen years old. 1

Daffon was convicted of homicide thru reckless imprudence .   Additionally, the herein petitioners, as
2

the victim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the
Colegio de San Jose-Recoletos, its rector the high school principal, the dean of boys, and the
physics teacher, together with Daffon and two other students, through their respective parents. The
complaint against the students was later dropped. After trial, the Court of First Instance of Cebu held
the remaining defendants liable to the plaintiffs in the sum of P294,984.00, representing death
compensation, loss of earning capacity, costs of litigation, funeral expenses, moral damages,
exemplary damages, and attorney's fees .  On appeal to the respondent court, however, the decision
3

was reversed and all the defendants were completely absolved . 4

In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of
Court, the respondent court found that Article 2180 was not applicable as the Colegio de San Jose-
Recoletos was not a school of arts and trades but an academic institution of learning. It also held
that the students were not in the custody of the school at the time of the incident as the semester
had already ended, that there was no clear identification of the fatal gun and that in any event the
defendant, had exercised the necessary diligence in preventing the injury.  5

The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on April 13,
1972, and while in its auditorium was shot to death by Pablito Daffon, a classmate. On the
implications and consequences of these facts, the parties sharply disagree.

The petitioners contend that their son was in the school to show his physics experiment as a
prerequisite to his graduation; hence, he was then under the custody of the private respondents. The
private respondents submit that Alfredo Amadora had gone to the school only for the purpose of
submitting his physics report and that he was no longer in their custody because the semester had
already ended.

There is also the question of the identity of the gun used which the petitioners consider important
because of an earlier incident which they claim underscores the negligence of the school and at
least one of the private respondents. It is not denied by the respondents that on April 7, 1972, Sergio
Damaso, Jr., the dean of boys, confiscated from Jose Gumban an unlicensed pistol but later
returned it to him without making a report to the principal or taking any further action .  As Gumban 6

was one of the companions of Daffon when the latter fired the gun that killed Alfredo, the petitioners
contend that this was the same pistol that had been confiscated from Gumban and that their son
would not have been killed if it had not been returned by Damaso. The respondents say, however,
that there is no proof that the gun was the same firearm that killed Alfredo.
Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as it
happens, is invoked by both parties in support of their conflicting positions. The pertinent part of this
article reads as follows:

Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices so long as they remain
in their custody.

Three cases have so far been decided by the Court in connection with the above-quoted provision,
to wit: Exconde v. Capuno   Mercado v. Court of Appeals,   and Palisoc v. Brillantes.   These will be
7 8 9

briefly reviewed in this opinion for a better resolution of the case at bar.

In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a Boy
Scout, attended a Rizal Day parade on instructions of the city school supervisor. After the parade,
the boy boarded a jeep, took over its wheel and drove it so recklessly that it turned turtle, resulting in
the death of two of its passengers. Dante was found guilty of double homicide with reckless
imprudence. In the separate civil action flied against them, his father was held solidarily liable with
him in damages under Article 1903 (now Article 2180) of the Civil Code for the tort committed by the
15-year old boy.

This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated the
school in an obiter dictum (as it was not a party to the case) on the ground that it was riot a school of
arts and trades. Justice J.B.L. Reyes, with whom Justices Sabino Padilla and Alex Reyes concurred,
dissented, arguing that it was the school authorities who should be held liable Liability under this
rule, he said, was imposed on (1) teachers in general; and (2) heads of schools of arts and trades in
particular. The modifying clause "of establishments of arts and trades" should apply only to "heads"
and not "teachers."

Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a classmate
with a razor blade during recess time at the Lourdes Catholic School in Quezon City, and the
parents of the victim sued the culprits parents for damages. Through Justice Labrador, the Court
declared in another obiter (as the school itself had also not been sued that the school was not liable
because it was not an establishment of arts and trades. Moreover, the custody requirement had not
been proved as this "contemplates a situation where the student lives and boards with the teacher,
such that the control, direction and influences on the pupil supersede those of the parents." Justice
J.B.L. Reyes did not take part but the other members of the court concurred in this decision
promulgated on May 30, 1960.

In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a
classmate with fist blows in the laboratory of the Manila Technical Institute. Although the wrongdoer
— who was already of age — was not boarding in the school, the head thereof and the teacher in
charge were held solidarily liable with him. The Court declared through Justice Teehankee:

The phrase used in the cited article — "so long as (the students) remain in their
custody" — means the protective and supervisory custody that the school and its
heads and teachers exercise over the pupils and students for as long as they are at
attendance in the school, including recess time. There is nothing in the law that
requires that for such liability to attach, the pupil or student who commits the tortious
act must live and board in the school, as erroneously held by the lower court, and
the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed
to have been set aside by the present decision.
This decision was concurred in by five other members,   including Justice J.B.L. Reyes, who
10

stressed, in answer to the dissenting opinion, that even students already of age were covered by the
provision since they were equally in the custody of the school and subject to its discipline. Dissenting
with three others,  Justice Makalintal was for retaining the custody interpretation in Mercado and
11

submitted that the rule should apply only to torts committed by students not yet of age as the school
would be acting only in loco parentis.

In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case
but added that "since the school involved at bar is a non-academic school, the question as to the
applicability of the cited codal provision to academic institutions will have to await another case
wherein it may properly be raised."

This is the case.

Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded
and is sought to be held liable under Article 2180; and unlike in Palisoc, it is not a school of arts and
trades but an academic institution of learning. The parties herein have also directly raised the
question of whether or not Article 2180 covers even establishments which are technically not
schools of arts and trades, and, if so, when the offending student is supposed to be "in its custody."

After an exhaustive examination of the problem, the Court has come to the conclusion that the
provision in question should apply to all schools, academic as well as non-academic. Where the
school is academic rather than technical or vocational in nature, responsibility for the tort committed
by the student will attach to the teacher in charge of such student, following the first part of the
provision. This is the general rule. In the case of establishments of arts and trades, it is the head
thereof, and only he, who shall be held liable as an exception to the general rule. In other words,
teachers in general shall be liable for the acts of their students except where the school is technical
in nature, in which case it is the head thereof who shall be answerable. Following the canon
of reddendo singula singulis"teachers" should apply to the words "pupils and students" and "heads
of establishments of arts and trades" to the word "apprentices."

The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde
where he said in part:

I can see no sound reason for limiting Art. 1903 of the Old Civil Code to teachers of
arts and trades and not to academic ones. What substantial difference is there
between them insofar as concerns the proper supervision and vice over their pupils?
It cannot be seriously contended that an academic teacher is exempt from the duty of
watching that his pupils do not commit a tort to the detriment of third Persons, so
long as they are in a position to exercise authority and Supervision over the pupil. In
my opinion, in the phrase "teachers or heads of establishments of arts and trades"
used in Art. 1903 of the old Civil Code, the words "arts and trades" does not qualify
"teachers" but only "heads of establishments." The phrase is only an updated version
of the equivalent terms "preceptores y artesanos" used in the Italian and French Civil
Codes.

If, as conceded by all commentators, the basis of the presumption of negligence of

Art. 1903 in some culpa in vigilando that the parents, teachers, etc. are supposed to
have incurred in the exercise of their authority, it would seem clear that where the
parent places the child under the effective authority of the teacher, the latter, and not
the parent, should be the one answerable for the torts committed while under his
custody, for the very reason/that the parent is not supposed to interfere with the
 discipline of the school nor with the authority and supervision of the teacher while the
child is under instruction. And if there is no authority, there can be no responsibility.

There is really no substantial distinction between the academic and the non-academic schools
insofar as torts committed by their students are concerned. The same vigilance is expected from the
teacher over the students under his control and supervision, whatever the nature of the school
where he is teaching. The suggestion in the Exconde and Mercado Cases is that the provision would
make the teacher or even the head of the school of arts and trades liable for an injury caused by any
student in its custody but if that same tort were committed in an academic school, no liability would
attach to the teacher or the school head. All other circumstances being the same, the teacher or the
head of the academic school would be absolved whereas the teacher and the head of the non-
academic school would be held liable, and simply because the latter is a school of arts and trades.

The Court cannot see why different degrees of vigilance should be exercised by the school
authorities on the basis only of the nature of their respective schools. There does not seem to be any
plausible reason for relaxing that vigilance simply because the school is academic in nature and for
increasing such vigilance where the school is non-academic. Notably, the injury subject of liability is
caused by the student and not by the school itself nor is it a result of the operations of the school or
its equipment. The injury contemplated may be caused by any student regardless of the school
where he is registered. The teacher certainly should not be able to excuse himself by simply
showing that he is teaching in an academic school where, on the other hand, the head would be held
liable if the school were non-academic.

These questions, though, may be asked: If the teacher of the academic school is to be held
answerable for the torts committed by his students, why is it the head of the school only who is held
liable where the injury is caused in a school of arts and trades? And in the case of the academic or
non- technical school, why not apply the rule also to the head thereof instead of imposing the liability
only on the teacher?

The reason for the disparity can be traced to the fact that historically the head of the school of arts
and trades exercised a closer tutelage over his pupils than the head of the academic school. The old
schools of arts and trades were engaged in the training of artisans apprenticed to their master who
personally and directly instructed them on the technique and secrets of their craft. The head of the
school of arts and trades was such a master and so was personally involved in the task of teaching
his students, who usually even boarded with him and so came under his constant control,
supervision and influence. By contrast, the head of the academic school was not as involved with his
students and exercised only administrative duties over the teachers who were the persons directly
dealing with the students. The head of the academic school had then (as now) only a vicarious
relationship with the students. Consequently, while he could not be directly faulted for the acts of the
students, the head of the school of arts and trades, because of his closer ties with them, could be so
blamed.

It is conceded that the distinction no longer obtains at present in view of the expansion of the
schools of arts and trades, the consequent increase in their enrollment, and the corresponding
diminution of the direct and personal contract of their heads with the students. Article 2180, however,
remains unchanged. In its present state, the provision must be interpreted by the Court according to
its clear and original mandate until the legislature, taking into account the charges in the situation
subject to be regulated, sees fit to enact the necessary amendment.

The other matter to be resolved is the duration of the responsibility of the teacher or the head of the
school of arts and trades over the students. Is such responsibility co-extensive with the period when
the student is actually undergoing studies during the school term, as contended by the respondents
and impliedly admitted by the petitioners themselves?

From a reading of the provision under examination, it is clear that while the custody requirement, to
repeat Palisoc v. Brillantes, does not mean that the student must be boarding with the school
authorities, it does signify that the student should be within the control and under the influence of the
school authorities at the time of the occurrence of the injury. This does not necessarily mean that
such, custody be co-terminous with the semester, beginning with the start of classes and ending
upon the close thereof, and excluding the time before or after such period, such as the period of
registration, and in the case of graduating students, the period before the commencement exercises.
In the view of the Court, the student is in the custody of the school authorities as long as he is under
the control and influence of the school and within its premises, whether the semester has not yet
begun or has already ended.

It is too tenuous to argue that the student comes under the discipline of the school only upon the
start of classes notwithstanding that before that day he has already registered and thus placed
himself under its rules. Neither should such discipline be deemed ended upon the last day of classes
notwithstanding that there may still be certain requisites to be satisfied for completion of the course,
such as submission of reports, term papers, clearances and the like. During such periods, the
student is still subject to the disciplinary authority of the school and cannot consider himself released
altogether from observance of its rules.

As long as it can be shown that the student is in the school premises in pursuance of a legitimate
student objective, in the exercise of a legitimate student right, and even in the enjoyment of a
legitimate student right, and even in the enjoyment of a legitimate student privilege, the responsibility
of the school authorities over the student continues. Indeed, even if the student should be doing
nothing more than relaxing in the campus in the company of his classmates and friends and enjoying
the ambience and atmosphere of the school, he is still within the custody and subject to the
discipline of the school authorities under the provisions of Article 2180.

During all these occasions, it is obviously the teacher-in-charge who must answer for his students'
torts, in practically the same way that the parents are responsible for the child when he is in their
custody. The teacher-in-charge is the one designated by the dean, principal, or other administrative
superior to exercise supervision over the pupils in the specific classes or sections to which they are
assigned. It is not necessary that at the time of the injury, the teacher be physically present and in a
position to prevent it. Custody does not connote immediate and actual physical control but refers
more to the influence exerted on the child and the discipline instilled in him as a result of such
influence. Thus, for the injuries caused by the student, the teacher and not the parent shag be held
responsible if the tort was committed within the premises of the school at any time when its authority
could be validly exercised over him.

In any event, it should be noted that the liability imposed by this article is supposed to fall directly on
the teacher or the head of the school of arts and trades and not on the school itself. If at all, the
school, whatever its nature, may be held to answer for the acts of its teachers or even of the head
thereof under the general principle of respondeat superior, but then it may exculpate itself from
liability by proof that it had exercised the diligence of a bonus paterfamilias.

Such defense is, of course, also available to the teacher or the head of the school of arts and trades
directly held to answer for the tort committed by the student. As long as the defendant can show that
he had taken the necessary precautions to prevent the injury complained of, he can exonerate
himself from the liability imposed by Article 2180, which also states that:
 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 damages.

In this connection, it should be observed that the teacher will be held liable not only when he is
acting in loco parentis for the law does not require that the offending student be of minority age.
Unlike the parent, who wig be liable only if his child is still a minor, the teacher is held answerable by
the law for the act of the student under him regardless of the student's age. Thus, in the Palisoc
Case, liability attached to the teacher and the head of the technical school although the wrongdoer
was already of age. In this sense, Article 2180 treats the parent more favorably than the teacher.

The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting
opinion in Palisoc that the school may be unduly exposed to liability under this article in view of the
increasing activism among the students that is likely to cause violence and resulting injuries in the
school premises. That is a valid fear, to be sure. Nevertheless, it should be repeated that, under the
present ruling, it is not the school that will be held directly liable. Moreover, the defense of due
diligence is available to it in case it is sought to be held answerable as principal for the acts or
omission of its head or the teacher in its employ.

The school can show that it exercised proper measures in selecting the head or its teachers and the
appropriate supervision over them in the custody and instruction of the pupils pursuant to its rules
and regulations for the maintenance of discipline among them. In almost all cases now, in fact, these
measures are effected through the assistance of an adequate security force to help the teacher
physically enforce those rules upon the students. Ms should bolster the claim of the school that it
has taken adequate steps to prevent any injury that may be committed by its students.

A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to hold him
directly answerable for the damage caused by his students as long as they are in the school
premises and presumably under his influence. In this respect, the Court is disposed not to expect
from the teacher the same measure of responsibility imposed on the parent for their influence over
the child is not equal in degree. Obviously, the parent can expect more obedience from the child
because the latter's dependence on him is greater than on the teacher. It need not be stressed that
such dependence includes the child's support and sustenance whereas submission to the teacher's
influence, besides being coterminous with the period of custody is usually enforced only because of
the students' desire to pass the course. The parent can instill more las discipline on the child than
the teacher and so should be held to a greater accountability than the teacher for the tort committed
by the child.

And if it is also considered that under the article in question, the teacher or the head of the school of
arts and trades is responsible for the damage caused by the student or apprentice even if he is
already of age — and therefore less tractable than the minor — then there should all the more be
justification to require from the school authorities less accountability as long as they can prove
reasonable diligence in preventing the injury. After all, if the parent himself is no longer liable for the
student's acts because he has reached majority age and so is no longer under the former's control,
there is then all the more reason for leniency in assessing the teacher's responsibility for the acts of
the student.

Applying the foregoing considerations, the Court has arrived at the following conclusions:

1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of
Colegio de San Jose-Recoletos notwithstanding that the fourth year classes had formally ended. It
was immaterial if he was in the school auditorium to finish his physics experiment or merely to
submit his physics report for what is important is that he was there for a legitimate purpose. As
previously observed, even the mere savoring of the company of his friends in the premises of the
school is a legitimate purpose that would have also brought him in the custody of the school
authorities.

2. The rector, the high school principal and the dean of boys cannot be held liable because none of
them was the teacher-in-charge as previously defined. Each of them was exercising only a general
authority over the student body and not the direct control and influence exerted by the teacher
placed in charge of particular classes or sections and thus immediately involved in its discipline. The
evidence of the parties does not disclose who the teacher-in-charge of the offending student was.
The mere fact that Alfredo Amadora had gone to school that day in connection with his physics
report did not necessarily make the physics teacher, respondent Celestino Dicon, the teacher-in-
charge of Alfredo's killer.

3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was
negligent in enforcing discipline upon Daffon or that he had waived observance of the rules and
regulations of the school or condoned their non-observance. His absence when the tragedy
happened cannot be considered against him because he was not supposed or required to report to
school on that day. And while it is true that the offending student was still in the custody of the
teacher-in-charge even if the latter was physically absent when the tort was committed, it has not
been established that it was caused by his laxness in enforcing discipline upon the student. On the
contrary, the private respondents have proved that they had exercised due diligence, through the
enforcement of the school regulations, in maintaining that discipline.

4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liable
especially in view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from
one of the students and returned the same later to him without taking disciplinary action or reporting
the matter to higher authorities. While this was clearly negligence on his part, for which he deserves
sanctions from the school, it does not necessarily link him to the shooting of Amador as it has not
been shown that he confiscated and returned pistol was the gun that killed the petitioners' son.

5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable
under the article because only the teacher or the head of the school of arts and trades is made
responsible for the damage caused by the student or apprentice. Neither can it be held to answer for
the tort committed by any of the other private respondents for none of them has been found to have
been charged with the custody of the offending student or has been remiss in the discharge of his
duties in connection with such custody.

In sum, the Court finds under the facts as disclosed by the record and in the light of the principles
herein announced that none of the respondents is liable for the injury inflicted by Pablito Damon on
Alfredo Amadora that resulted in the latter's death at the auditorium of the Colegio de San Jose-
Recoletos on April 13, 1972. While we deeply sympathize with the petitioners over the loss of their
son under the tragic circumstances here related, we nevertheless are unable to extend them the
material relief they seek, as a balm to their grief, under the law they have invoked.

WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so ordered.

Yap, Narvasa, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Griño-Aquino, JJ., concur.

Fernan, Padilla and Teehankee, C.J., JJ, took no part.