OBLICON CASES LIGA vs. ALLEGRO RESOURCES 575 SCRA 310 (Art.

1159) Facts: Ortigas & Company, Limited Partnership entered into a lease agreement with La Paz Investment & Realty Corporation wherein the former leased to the latter its parcel of land located in San Juan. La Paz constructed the Greenhills Shopping Arcade and divided it into several stalls and subleased them to other people. One of the sub-lessees was Edsel Liga (Liga), who obtained the leasehold right to Unit No. 26, Level A of the GSA. As the lease expired, the stallholders made several attempts to have their leasehold rights extended. Allegro Resources became the new lessee. As the new lessee, Allegro offered to sublease Unit No. 26, Level A to Liga. They entered into a lease agreement dubbed Rental Information in which Liga agreed to pay rental of P40K monthly. She also agreed to pay the back rentals due Ortigas. Liga also gave P40K as one month advance rental and another P40K as one month security deposit as provided in the agreement. Liga failed to pay the subsequent due rent. Despite repeated demands from Allegro, Liga had failed to pay her rentals for the subleased property, as well as the back rentals from January to August 2001 due Ortigas. Issues: WON Liga should pay to Ortigas back rentals covering the period 1 January 2001 to 31 August 2001? NO WON Liga should pay to Allegro back rentals in the amount of P40K a month starting from 1 September 2001 until such time as she vacates the leased property? YES WON Liga should pay to Allegro the amount of P20K as attorneys fees and the costs of suit? YES Held: (1) Ortigas is not a party to this case, whether as plaintiff or otherwise. It is basic that no relief can be extended in a judgment to a stranger or one who is not a party to a case. (2) Allegro cannot justify the award as a legal representative by virtue of a provision in its lease agreement with Ortigas. Allegro did not aver in its complaint that it was acting as Ortigass legal representative and seeking the back rentals due Ortigas. (3) There is no allegation or prayer in the complaint that Allegro was seeking the collection of the back rentals due Ortigas. The Court cannot countenance the obstinate refusal of Liga to pay P40K a month to Allegro since she had already acquiesced to pay such rental rate when she signed the Rental Information. It is fundamental that a contract is the law between the parties. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

It is a general principle of law that no one may be permitted to change his mind or disavow and go back upon his own acts, or to proceed contrary thereto, to the prejudice of the other party. Likewise, it is settled that if the terms of the contract clearly express the intention of the contracting parties, the literal meaning of the stipulations would be controlling. Law and jurisprudence support the award of attorneys fees and costs of suit in favor of Allegro. Attorneys fees and costs of litigation are awarded in instances where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim. Having delivered possession over the leased property to Liga, Allegro had already performed its obligation under the lease agreement. Liga should have exercised fairness and good judgment in dealing with Allegro by religiously paying the agreed monthly rental of P40,000.00.

Rafael Reyes vs. People, 329 SCRA 600 Facts: In the early morning of June 20, 1989, the White Truck driven by Dunca left Tuguegarao, Cagayan bound to San Fernando, Pampanga loaded with 2,000 cases of empty beer Grande bottles. Seated at the front right seat beside him was Ferdinand Domingo, his truck helper. At around 4:00 oclock that same morning while the truck was descending at a slight downgrade along the national road at Tagaran, Cauayan, Isabela, it approached a damaged portion of the road covering the full width of the trucks right lane going south and about six meters in length. These made the surface of the road uneven because the potholes were about five to six inches deep. The left lane parallel to this damaged portion is smooth. As narrated by Ferdinand Domingo, before approaching the potholes, he and Dunca saw the Nissan with its headlights on coming from the opposite direction. They used to evade this damaged road by taking the left lance but at that particular moment, because of the incoming vehicle, they had to run over it. This caused the truck to bounce wildly. Dunca lost control of the wheels and the truck swerved to the left invading the lane of the Nissan. As a result, Duncas vehicle rammed the incoming Nissan dragging it to the left shoulder of the road and climbed a ridge above said shoulder where it finally stopped. The Nissan was severely damaged and its two passengers, namely, Feliciano Balcita and Francisco Dy, Jr. died instantly. On October 10, 1989, Provincial Prosecutor Durian filed with the RTC an amended information charging Dunca with reckless imprudence resulting in double homicide and damage to property. On November 29, 1989, the offended parties filed with the RTC a complaint against petitioner Rafael Reyes Trucking Corporation, as employer of driver Dunca, based on quasi delict. Respondents opted to pursue the criminal action but did not withdraw the civil case quasi ex delicto they filed against petitioner. On December 15, 1989, respondents withdrew the reservation to file a separate civil action against the accused and manifested that they would prosecute the civil aspect ex delicto in the criminal action. However, they did not withdraw the separate civil action based on quasi delict against petitioner as employer arising from the same act or omission of the accused driver. The RTC held that the

driver was guilty. Respondents moved for amendment of the dispositive portion of the joint decision so as to hold petitioner subsidiarily liable for the damages awarded to the private respondents in the event of insolvency of the accused, which the lower court granted. Issues: (1) Whether or not petitioner as owner of the truck involved in the accident may be held subsidiarily liable for the damages awarded to the offended parties in the criminal action against the truck driver despite the filing of a separate civil action by the offended parties against the employer of the truck driver; and (2) Whether or not the Court may award damages to the offended parties in the criminal case despite the filing of a civil action against the employer of the truck driver. Held: (1) No. In negligence cases, the aggrieved party has the choice between (1) an action to enforce civil liability arising from crime under Article 100 of the Revised Penal Code; and (2) a separate action for quasi delict under Article 2176 of the Civil Code of the Philippines. Once the choice is made, the injured party can not avail himself of any other remedy because he may not recover damages twice for the same negligent act or omission of the accused. This is the rule against double recovery.In other words, the same act or omission can create two kinds of liability on the part of the offender, that is, civil liability ex delicto, and civil liability quasi delicto either of which may be enforced against the culprit, subject to the caveat under Article 2177 of the Civil Code that the offended party can not recover damages under both types of liability. In the instant case, the offended parties elected to file a separate civil action for damages against petitioner as employer of the accused, based on quasi delict, under Article 2176 of the Civil Code of the Philippines. Petitioner, as employer of the accused who has been adjudged guilty in the criminal case for reckless imprudence, cannot be held subsidiarily liable because of the filing of the separate civil action based on quasi delict against it. In view of the reservation to file, and the subsequent filing of the civil action for recovery of civil liability, the same was not instituted with the criminal action. Such separate civil action was for recovery of damages under Article 2176 of the Civil Code, arising from the same act or omission of the accused. (2) No. The award of damages in the criminal case was improper because the civil action for the recovery of civil liability was waived in the criminal action by the filing of a separate civil action against the employer. The only issue brought before the trial court in the criminal action is whether accused Dunca is guilty of reckless imprudence resulting in homicide and damage to property. The action for recovery of civil liability is not included therein, but is covered by the separate civil action filed against the petitioner as employer of the accused truck-driver. The policy against double recovery requires that only one action be maintained for the same act or omission whether the action is brought against the employee or against his employer. The injured party must choose which of the available causes of action for damages he will bring.

The law requires common carriers to carry passengers safely using the utmost diligence of very cautious person with due regard for all circumstances. This duty exists for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. In case of death or injury, a carrier is presumed to have been at fault or been negligent, and by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event. The common carrier is liable for death of or injury to passengers: (1) through the negligence or willful acts of its employees (2) on account of willful acts of negligence of other passengers or of strangers if the common carriers employees through the exercise of due diligence could have prevented or stopped the act or omission. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in cupla contractual and the other in culpa contractual, Art. 21941 can well apply. A liability for tort may arise even under a contract, where tort is that which breaches the contract.

LRTA v. NATIVIDAD Full Case The case before the Court is an appeal from the decision and resolution of the Court of Appeals, promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled "Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.," which has modified the decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig City, exonerating Prudent Security Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of Nicanor Navidad. On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a "token" (representing payment of the fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding or an altercation between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was killed instantaneously.

LRTA V. NATIVIDAD

On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its answer, denied liability and averred that it had exercised due diligence in the selection and supervision of its security guards. The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned task. On 11 August 1998, the trial court rendered its decision; it adjudged: "WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the following: "a) 1) Actual damages of P44,830.00; 2) Compensatory damages of P443,520.00; 3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00; "b) Moral damages of P50,000.00; "c) Attorneys fees of P20,000; "d) Costs of suit. "The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit. "The compulsory counterclaim of LRTA and Roman are likewise dismissed."1 Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its now assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead, holding the LRTA and Roman jointly and severally liable thusly: "WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from any liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally to the plaintiffs-appellees, the following amounts: a) P44,830.00 as actual damages; b) P50,000.00 as nominal damages;

c) P50,000.00 as moral damages; d) P50,000.00 as indemnity for the death of the deceased; and e) P20,000.00 as and for attorneys fees."2 The appellate court ratiocinated that while the deceased might not have then as yet boarded the train, a contract of carriage theretofore had already existed when the victim entered the place where passengers were supposed to be after paying the fare and getting the corresponding token therefor. In exempting Prudent from liability, the court stressed that there was nothing to link the security agency to the death of Navidad. It said that Navidad failed to show that Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death of Navidad by reason of his having been hit by the train owned and managed by the LRTA and operated at the time by Roman. The appellate court faulted petitioners for their failure to present expert evidence to establish the fact that the application of emergency brakes could not have stopped the train. The appellate court denied petitioners motion for reconsideration in its resolution of 10 October 2000. In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz: "I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT "II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR. "III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA."3 Petitioners would contend that the appellate court ignored the evidence and the factual findings of the trial court by holding them liable on the basis of a sweeping conclusion that the presumption of negligence on the part of a common carrier was not overcome. Petitioners would insist that Escartins assault upon Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could not have been foreseen or prevented. The LRTA would add that the appellate courts conclusion on the existence of an employer-employee relationship between Roman and LRTA lacked basis because Roman himself had testified being an employee of Metro Transit and not of the LRTA. Respondents, supporting the decision of the appellate court, contended that a contract of carriage was deemed created from the moment Navidad paid the fare at the LRT station and entered the premises of the latter, entitling Navidad to all the rights and protection under a

contractual relation, and that the appellate court had correctly held LRTA and Roman liable for the death of Navidad in failing to exercise extraordinary diligence imposed upon a common carrier. Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of passengers.4 The Civil Code, governing the liability of a common carrier for death of or injury to its passengers, provides: "Article 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. "Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755." "Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the formers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. "This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees." "Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carriers employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission." The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for all circumstances.5 Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage.6 The statutory provisions render a common carrier liable for death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of strangers if the common carriers employees through the exercise of due diligence could have prevented or stopped the act or omission.7 In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and8 by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.9 In the absence of satisfactory explanation by the carrier on how the accident occurred, which petitioners, according to the appellate court, have failed to show, the presumption would be that it has been at fault,10 an exception from the general rule that negligence must be proved.11

The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under the contract of carriage. Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of Article 217612 and related provisions, in conjunction with Article 2180,13 of the Civil Code. The premise, however, for the employers liability is negligence or fault on the part of the employee. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not been shown. Absent such a showing, one might ask further, how then must the liability of the common carrier, on the one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article 219414 of the Civil Code can well apply.15 In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract.16 Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasidelictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply.17 Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this Court is concluded by the factual finding of the Court of Appeals that "there is nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not been duly proven x x x." This finding of the appellate court is not without substantial justification in our own review of the records of the case. There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or omission, he must also be absolved from liability. Needless to say, the contractual tie between the LRT and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made liable only for his own fault or negligence. The award of nominal damages in addition to actual damages is untenable. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.18 It is an established rule that nominal damages cannot co-exist with compensatory damages.19 WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No costs.

SO ORDERED.

SAN ILDEFONSO LINES V. COURT OF APPEALS At around 3:30 in the afternoon of June 24, 1991, a Toyota Lite Ace Van being driven by its owner Annie U. Jao and a passenger bus of herein petitioner San Ildefonso Lines, Inc. (hereafter, SILI) figured in a vehicular mishap at the intersection of Julia Vargas Avenue and Rodriguez Lanuza Avenue in Pasig, Metro Manila, totally wrecking the Toyota van and injuring Ms. Jao and her two (2) passengers in the process. A criminal case was thereafter filed with the Regional Trial Court of Pasig on September 18, 1991 charging the driver of the bus, herein petitioner Eduardo Javier, with reckless imprudence resulting in damage to property with multiple physical injuries. About four (4) months later, or on January 13, 1992, herein private respondent Pioneer Insurance and Surety Corporation (PISC), as insurer of the van and subrogee, filed a case for damages against petitioner SILI with the Regional Trial Court of Manila, seeking to recover the sums it paid the assured under a motor vehicle insurance policy as well as other damages, totaling P564,500.00 (P454,000.00 as actual/compensatory damages; P50,000.00 as exemplary damages; P50,000.00 as attorney's fees; P10,000.00 as litigation expenses; and P500.00 as appearance fees.)[1] With the issues having been joined upon the filing of the petitioners' answer to the complaint for damages and after submission by the parties of their respective pre-trial briefs, petitioners filed on September 18, 1992 a Manifestation and Motion to Suspend Civil Proceedings grounded on the pendency of the criminal case against petitioner Javier in the Pasig RTC and the failure of respondent PISC to make a reservation to file a separate damage suit in said criminal action. This was denied by the Manila Regional Trial Court in its Order dated July 21, 1993,[2] ruling thus: "Answering the first question thus posed, the court holds that plaintiff may legally institute the present civil action even in the absence of a reservation in the criminal action. This is so because it falls among the very exceptions to the rule cited by the movant. "It is true that the general rule is that once a criminal action has been instituted, then civil action based thereon is deemed instituted together with the criminal action, such that if the offended party did not reserve the filing of the civil action when the criminal action was filed, then such filing of the civil action is therefore barred; on the other hand, if there was such reservation, still the civil action cannot be instituted until final judgment has been rendered in the criminal action; "But, this rule (Section 2, Rule 111, Revised Rules of Court) is subject to exemptions, the same being those provided for in Section 3 of the same rule which states:

'Section 3. When civil action may proceed independently. - In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which was been reserved may be brought by the offended party, shall proceed independently of the criminal action, and shall require only a preponderance of evidence.' "Besides, the requirement in Section 2 of Rule 111 of the former Rules on Criminal Procedure that there be a reservation in the criminal case of the right to institute an independent civil action has been declared as not in accordance with law. It is regarded as an unauthorized amendment to our substantive law, i.e., the Civil Code which does not require such reservation. In fact, the reservation of the right to file an independent civil action has been deleted from Section 2, Rule 111 of the 1985 Rules on Criminal Procedure, in consonance with the decisions of this Court declaring such requirement of a reservation as ineffective. (Bonite vs. Zosa, 162 SCRA 180) "Further, the Court rules that a subrogee-plaintiff may institute and prosecute the civil action, it being allowed by Article 2207 of the Civil Code." After their motion for reconsideration of said July 21, 1993 Order was denied, petitioners elevated the matter to this Court via petition for certiorari which was, however, referred to public respondent Court of Appeals for disposition. On February 24, 1995, a decision adverse to petitioners once again was rendered by respondent court, upholding the assailed Manila Regional Trial Court Order in this wise: "A separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed (if the tortfeasor is actually charged also criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. "To subordinate the civil action contemplated in the said articles to the result of the criminal prosecution - whether it be conviction or acquittal - would render meaningless the independent character of the civil action and the clear injunction in Art. 31, that this action may proceed independently of the criminal proceedings and regardless of the result of the latter. "In Yakult Phil. vs. CA, the Supreme Court said: 'Even if there was no reservation in the criminal case and that the civil action was not filed before the filing of the criminal action but before the prosecution presented evidence in the criminal action, and the judge handling the criminal case was informed thereof, then the actual filing of the civil action is even far better than a compliance with the requirement of an express reservation that should be made by the offended party before the prosecution presented its evidence.'

"The purpose of this rule requiring reservation is to prevent the offended party from recovering damages twice for the same act or omission. "Substantial compliance with the reservation requirement may, therefore, be made by making a manifestation in the criminal case that the private respondent has instituted a separate and independent civil action for damages. "Oft-repeated is the dictum that courts should not place undue importance on technicalities when by so doing, substantial justice is sacrificed. While the rules of procedure require adherence, it must be remembered that said rules of procedure are intended to promote, not defeat, substantial justice, and therefore, they should not be applied in a very rigid and technical sense." Hence, this petition for review after a motion for reconsideration of said respondent court judgment was denied. The two (2) crucial issues to be resolved, as posited by petitioners, are: 1) If a criminal case was filed, can an independent civil action based on quasi-delict under Article 2176 of the Civil Code be filed if no reservation was made in the said criminal case? 2) Can a subrogee of an offended party maintain an independent civil action during the pendency of a criminal action when no reservation of the right to file an independent civil action was made in the criminal action and despite the fact that the private complainant is actively participating through a private prosecutor in the aforementioned criminal case? We rule for petitioners. On the chief issue of "reservation", at the fore is Section 3, Rule 111 of the Rules of Court which reads: "Sec. 3. When civil action may proceed independently. -- In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which has been reserved may be brought by the offended party, shall proceed independently of the criminal action, and shall require only a preponderance of evidence." There is no dispute that these so-called "independent civil actions" based on the aforementioned Civil Code articles are the exceptions to the primacy of the criminal action over the civil action as set forth in Section 2 of Rule 111.[3] However, it is easily deducible from the present wording of Section 3 as brought about by the 1988 amendments to the Rules on Criminal Procedure -particularly the phrase " which has been reserved" -- that the "independent" character of these civil actions does not do away with the reservation requirement. In other words, prior reservation is a condition sine qua non before any of these independent civil actions can be instituted and thereafter have a continuous determination apart from or simultaneous with the

criminal action. That this should now be the controlling procedural rule is confirmed by no less than retired Justice Jose Y. Feria, remedial law expert and a member of the committee which drafted the 1988 amendments, whose learned explanation on the matter was aptly pointed out by petitioners, to wit: "The 1988 amendment expands the scope of the civil action which is deemed impliedly instituted with the criminal action unless waived, reserved or previously instituted xxx. Under the present Rule as amended, such a civil action includes not only recovery of indemnity under the Revised Penal Code and damages under Articles 32, 33, 34 of the Civil Code of the Philippines, but also damages under Article 2176 of the said code. xxx Objections were raised to the inclusion in this Rule of quasi-delicts under Article 2176 of the Civil Code of the Philippines. However, in view of Article 2177 of the said code which provides that the offended party may not recover twice for the same act or omission of the accused, and in line with the policy of avoiding multiplicity of suits, these objections were overruled. In any event, the offended party is not precluded from filing a civil action to recover damages arising from quasi-delict before the institution of the criminal action, or from reserving his right to file such a separate civil action, just as he is not precluded from filing a civil action for damages under Articles 32, 33 and 34 before the institution of the criminal action, or from reserving his right to file such a separate civil action. It is only in those cases where the offended party has not previously filed a civil action or has not reserved his right to file a separate civil action that his civil action is deemed impliedly instituted with the criminal action. It should be noted that while it was ruled in Abella vs. Marave (57 SCRA 106) that a reservation of the right to file an independent civil action is not necessary, such a reservation is necessary under the amended rule. Without such reservation, the civil action is deemed impliedly instituted with the criminal action, unless previously waived or instituted. (Underscoring ours. Justice Jose Y. Feria [Ret.], 1988 Amendments to the 1985 Rules on Criminal Procedure, a pamphlet, published by Central Lawbook Publishing Co., Inc., Philippine Legal Studies, Series No. 3, 5-6).[4] Sharing the same view on the indispensability of a prior reservation is Mr. Justice Florenz D. Regalado, whose analysis of the historical changes in Rule 111 since the 1964 Rules of Court is equally illuminating. Thus, "1. Under Rule 111 of the 1964 Rules of Court, the civil liability arising from the offense charged was impliedly instituted with the criminal action, unless such civil action was expressly waived or reserved. The offended party was authorized to bring an independent civil action in the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code provided such right was reserved. In the 1985 Rules on Criminal Procedure, the same Rule 111 thereof reiterated said provision on the civil liability arising from the offense charged. The independent civil actions, however, were

limited to the cases provided for in Articles 32, 33 and 34 of the Civil Code, obviously because the actions contemplated in Articles 31 and 2177 of said Code are not liabilities ex delicto. Furthermore, no reservation was required in order the civil actions in said Articles 32, 33 and 34 may be pursued separately. 2. The present amendments introduced by the Supreme Court have the following notable features on this particular procedural aspect, viz: a. The civil action which is impliedly instituted with the criminal action, barring a waiver, reservation or prior institution thereof, need not arise from the offense charged, as the phrase 'arising from the offense charged' which creates that nexus has been specifically eliminated. b. The independent civil actions contemplated in the present Rule 111 include the quasidelicts provided for in Art. 2176 of the Civil Code, in addition to the cases provided in Arts. 32, 33 and 34 thereof. It is necessary, however, that the civil liability under all the said articles arise 'from the same act or omission of the accused.' Furthermore, a reservation of the right to institute these separate civil actions is again required, otherwise, said civil actions are impliedly instituted with the criminal action, unless the former are waived or filed ahead of the criminal action." (Emphasis supplied.)[5] In fact, a deeper reading of the "Yakult Phils. vs. CA" case[6] relied upon by respondent court reveals an acknowledgement of the reservation requirement. After recognizing that the civil case instituted by private respondent therein Roy Camaso (represented by his father David Camaso) against petitioner Yakult Phils. (the owner of the motorcycle that sideswiped Roy Camaso, only five years old at the time of the accident) and Larry Salvado (the driver of the motorcycle) during the pendency of the criminal case against Salvado for reckless imprudence resulting to slight physical injuries, as one based on tort, this Court said: "The civil liability sought arising from the act or omission of the accused in this case is a quasidelict as defined under Article 2176 of the Civil Code as follows: xxx xxx xxx

express reservation that should be made by the offended party before the prosecution presents its evidence" The distinct factual scenario in "Yakult" simply does not obtain in this case. No satisfactory proof exists to show that private respondent PISC's damage suit was instituted before the prosecution presented its evidence in the criminal case pending in the Pasig Regional Trial Court. Neither is there any indication that the judge presiding over the criminal action has been made aware of the civil case. It is in this light that reliance on the "Yakult" case is indeed misplaced. Now that the necessity of a prior reservation is the standing rule that shall govern the institution of the independent civil actions referred to in Rule 111 of the Rules of Court, past pronouncements that view the reservation requirement as an "unauthorized amendment" to substantive law - i.e., the Civil Code, should no longer be controlling. There must be a renewed adherence to the time-honored dictum that procedural rules are designed, not to defeat, but to safeguard the ends of substantial justice. And for this noble reason, no less than the Constitution itself has mandated this Court to promulgate rules concerning the enforcement of rights with the end in view of providing a simplified and inexpensive procedure for the speedy disposition of cases which should not diminish, increase or modify substantive rights.[7] Far from altering substantive rights, the primary purpose of the reservation is, to borrow the words of the Court in "Caos v. Peralta":[8] " to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to clear congested dockets, to simplify the work of the trial court; in short, the attainment of justice with the least expense and vexation to the parties-litigants." Clearly then, private respondent PISC, as subrogee under Article 2207 of the Civil Code,[9] is not exempt from the reservation requirement with respect to its damages suit based on quasi-delict arising from the same act or omission of petitioner Javier complained of in the criminal case. As private respondent PISC merely stepped into the shoes of Ms. Jao (as owner of the insured Toyota van), then it is bound to observe the procedural requirements which Ms. Jao ought to follow had she herself instituted the civil case. WHEREFORE, premises considered, the assailed decision of the Court of Appeals dated February 24, 1995 and the Resolution dated April 3, 1995 denying the motion for reconsideration thereof are hereby REVERSED and SET ASIDE. The "MANIFESTATION AND MOTION TO SUSPEND CIVIL PROCEEDINGS" filed by petitioners is GRANTED. SO ORDERED.

"The aforecited rule [referring to the amended Section 1, Rule111] requiring such previous reservation also covers quasi-delict as defined under Article 2176 of the Civil Code arising from the same act or omission of the accused"(Underscoring supplied). But what prompted the Court to validate the institution and non-suspension of the civil case involved in "Yakult" was the peculiar facts attendant therein. Thus, "Although the separate civil action filed in this case was without previous reservation in the criminal case, nevertheless since it was instituted before the prosecution presented evidence in the criminal action, and the judge handling the criminal case was informed thereof, then the actual filing of the civil action is even far better than a compliance with the requirement of an

MAKATI STOCK EXCHANGE VS CAMPOS At around 3:30 in the afternoon of June 24, 1991, a Toyota Lite Ace Van being driven by its owner Annie U. Jao and a passenger bus of herein petitioner San Ildefonso Lines, Inc. (hereafter,

SILI) figured in a vehicular mishap at the intersection of Julia Vargas Avenue and Rodriguez Lanuza Avenue in Pasig, Metro Manila, totally wrecking the Toyota van and injuring Ms. Jao and her two (2) passengers in the process. A criminal case was thereafter filed with the Regional Trial Court of Pasig on September 18, 1991 charging the driver of the bus, herein petitioner Eduardo Javier, with reckless imprudence resulting in damage to property with multiple physical injuries. About four (4) months later, or on January 13, 1992, herein private respondent Pioneer Insurance and Surety Corporation (PISC), as insurer of the van and subrogee, filed a case for damages against petitioner SILI with the Regional Trial Court of Manila, seeking to recover the sums it paid the assured under a motor vehicle insurance policy as well as other damages, totaling P564,500.00 (P454,000.00 as actual/compensatory damages; P50,000.00 as exemplary damages; P50,000.00 as attorney's fees; P10,000.00 as litigation expenses; and P500.00 as appearance fees.)[1] With the issues having been joined upon the filing of the petitioners' answer to the complaint for damages and after submission by the parties of their respective pre-trial briefs, petitioners filed on September 18, 1992 a Manifestation and Motion to Suspend Civil Proceedings grounded on the pendency of the criminal case against petitioner Javier in the Pasig RTC and the failure of respondent PISC to make a reservation to file a separate damage suit in said criminal action. This was denied by the Manila Regional Trial Court in its Order dated July 21, 1993,[2] ruling thus: "Answering the first question thus posed, the court holds that plaintiff may legally institute the present civil action even in the absence of a reservation in the criminal action. This is so because it falls among the very exceptions to the rule cited by the movant. "It is true that the general rule is that once a criminal action has been instituted, then civil action based thereon is deemed instituted together with the criminal action, such that if the offended party did not reserve the filing of the civil action when the criminal action was filed, then such filing of the civil action is therefore barred; on the other hand, if there was such reservation, still the civil action cannot be instituted until final judgment has been rendered in the criminal action; "But, this rule (Section 2, Rule 111, Revised Rules of Court) is subject to exemptions, the same being those provided for in Section 3 of the same rule which states: 'Section 3. When civil action may proceed independently. - In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which was been reserved may be brought by the offended party, shall proceed independently of the criminal action, and shall require only a preponderance of evidence.' "Besides, the requirement in Section 2 of Rule 111 of the former Rules on Criminal Procedure that there be a reservation in the criminal case of the right to institute an independent civil

action has been declared as not in accordance with law. It is regarded as an unauthorized amendment to our substantive law, i.e., the Civil Code which does not require such reservation. In fact, the reservation of the right to file an independent civil action has been deleted from Section 2, Rule 111 of the 1985 Rules on Criminal Procedure, in consonance with the decisions of this Court declaring such requirement of a reservation as ineffective. (Bonite vs. Zosa, 162 SCRA 180) "Further, the Court rules that a subrogee-plaintiff may institute and prosecute the civil action, it being allowed by Article 2207 of the Civil Code." After their motion for reconsideration of said July 21, 1993 Order was denied, petitioners elevated the matter to this Court via petition for certiorari which was, however, referred to public respondent Court of Appeals for disposition. On February 24, 1995, a decision adverse to petitioners once again was rendered by respondent court, upholding the assailed Manila Regional Trial Court Order in this wise: "A separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed (if the tortfeasor is actually charged also criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. "To subordinate the civil action contemplated in the said articles to the result of the criminal prosecution - whether it be conviction or acquittal - would render meaningless the independent character of the civil action and the clear injunction in Art. 31, that this action may proceed independently of the criminal proceedings and regardless of the result of the latter. "In Yakult Phil. vs. CA, the Supreme Court said: 'Even if there was no reservation in the criminal case and that the civil action was not filed before the filing of the criminal action but before the prosecution presented evidence in the criminal action, and the judge handling the criminal case was informed thereof, then the actual filing of the civil action is even far better than a compliance with the requirement of an express reservation that should be made by the offended party before the prosecution presented its evidence.' "The purpose of this rule requiring reservation is to prevent the offended party from recovering damages twice for the same act or omission. "Substantial compliance with the reservation requirement may, therefore, be made by making a manifestation in the criminal case that the private respondent has instituted a separate and independent civil action for damages.

"Oft-repeated is the dictum that courts should not place undue importance on technicalities when by so doing, substantial justice is sacrificed. While the rules of procedure require adherence, it must be remembered that said rules of procedure are intended to promote, not defeat, substantial justice, and therefore, they should not be applied in a very rigid and technical sense." Hence, this petition for review after a motion for reconsideration of said respondent court judgment was denied. The two (2) crucial issues to be resolved, as posited by petitioners, are: 1) If a criminal case was filed, can an independent civil action based on quasi-delict under Article 2176 of the Civil Code be filed if no reservation was made in the said criminal case? 2) Can a subrogee of an offended party maintain an independent civil action during the pendency of a criminal action when no reservation of the right to file an independent civil action was made in the criminal action and despite the fact that the private complainant is actively participating through a private prosecutor in the aforementioned criminal case? We rule for petitioners. On the chief issue of "reservation", at the fore is Section 3, Rule 111 of the Rules of Court which reads: "Sec. 3. When civil action may proceed independently. -- In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which has been reserved may be brought by the offended party, shall proceed independently of the criminal action, and shall require only a preponderance of evidence." There is no dispute that these so-called "independent civil actions" based on the aforementioned Civil Code articles are the exceptions to the primacy of the criminal action over the civil action as set forth in Section 2 of Rule 111.[3] However, it is easily deducible from the present wording of Section 3 as brought about by the 1988 amendments to the Rules on Criminal Procedure -particularly the phrase " which has been reserved" -- that the "independent" character of these civil actions does not do away with the reservation requirement. In other words, prior reservation is a condition sine qua non before any of these independent civil actions can be instituted and thereafter have a continuous determination apart from or simultaneous with the criminal action. That this should now be the controlling procedural rule is confirmed by no less than retired Justice Jose Y. Feria, remedial law expert and a member of the committee which drafted the 1988 amendments, whose learned explanation on the matter was aptly pointed out by petitioners, to wit: "The 1988 amendment expands the scope of the civil action which is deemed impliedly instituted with the criminal action unless waived, reserved or previously instituted xxx.

Under the present Rule as amended, such a civil action includes not only recovery of indemnity under the Revised Penal Code and damages under Articles 32, 33, 34 of the Civil Code of the Philippines, but also damages under Article 2176 of the said code. xxx Objections were raised to the inclusion in this Rule of quasi-delicts under Article 2176 of the Civil Code of the Philippines. However, in view of Article 2177 of the said code which provides that the offended party may not recover twice for the same act or omission of the accused, and in line with the policy of avoiding multiplicity of suits, these objections were overruled. In any event, the offended party is not precluded from filing a civil action to recover damages arising from quasi-delict before the institution of the criminal action, or from reserving his right to file such a separate civil action, just as he is not precluded from filing a civil action for damages under Articles 32, 33 and 34 before the institution of the criminal action, or from reserving his right to file such a separate civil action. It is only in those cases where the offended party has not previously filed a civil action or has not reserved his right to file a separate civil action that his civil action is deemed impliedly instituted with the criminal action. It should be noted that while it was ruled in Abella vs. Marave (57 SCRA 106) that a reservation of the right to file an independent civil action is not necessary, such a reservation is necessary under the amended rule. Without such reservation, the civil action is deemed impliedly instituted with the criminal action, unless previously waived or instituted. (Underscoring ours. Justice Jose Y. Feria [Ret.], 1988 Amendments to the 1985 Rules on Criminal Procedure, a pamphlet, published by Central Lawbook Publishing Co., Inc., Philippine Legal Studies, Series No. 3, 5-6).[4] Sharing the same view on the indispensability of a prior reservation is Mr. Justice Florenz D. Regalado, whose analysis of the historical changes in Rule 111 since the 1964 Rules of Court is equally illuminating. Thus, "1. Under Rule 111 of the 1964 Rules of Court, the civil liability arising from the offense charged was impliedly instituted with the criminal action, unless such civil action was expressly waived or reserved. The offended party was authorized to bring an independent civil action in the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code provided such right was reserved. In the 1985 Rules on Criminal Procedure, the same Rule 111 thereof reiterated said provision on the civil liability arising from the offense charged. The independent civil actions, however, were limited to the cases provided for in Articles 32, 33 and 34 of the Civil Code, obviously because the actions contemplated in Articles 31 and 2177 of said Code are not liabilities ex delicto. Furthermore, no reservation was required in order the civil actions in said Articles 32, 33 and 34 may be pursued separately. 2. The present amendments introduced by the Supreme Court have the following notable features on this particular procedural aspect, viz:

a. The civil action which is impliedly instituted with the criminal action, barring a waiver, reservation or prior institution thereof, need not arise from the offense charged, as the phrase 'arising from the offense charged' which creates that nexus has been specifically eliminated. b. The independent civil actions contemplated in the present Rule 111 include the quasidelicts provided for in Art. 2176 of the Civil Code, in addition to the cases provided in Arts. 32, 33 and 34 thereof. It is necessary, however, that the civil liability under all the said articles arise 'from the same act or omission of the accused.' Furthermore, a reservation of the right to institute these separate civil actions is again required, otherwise, said civil actions are impliedly instituted with the criminal action, unless the former are waived or filed ahead of the criminal action." (Emphasis supplied.)[5] In fact, a deeper reading of the "Yakult Phils. vs. CA" case[6] relied upon by respondent court reveals an acknowledgement of the reservation requirement. After recognizing that the civil case instituted by private respondent therein Roy Camaso (represented by his father David Camaso) against petitioner Yakult Phils. (the owner of the motorcycle that sideswiped Roy Camaso, only five years old at the time of the accident) and Larry Salvado (the driver of the motorcycle) during the pendency of the criminal case against Salvado for reckless imprudence resulting to slight physical injuries, as one based on tort, this Court said: "The civil liability sought arising from the act or omission of the accused in this case is a quasidelict as defined under Article 2176 of the Civil Code as follows: xxx xxx xxx

there any indication that the judge presiding over the criminal action has been made aware of the civil case. It is in this light that reliance on the "Yakult" case is indeed misplaced. Now that the necessity of a prior reservation is the standing rule that shall govern the institution of the independent civil actions referred to in Rule 111 of the Rules of Court, past pronouncements that view the reservation requirement as an "unauthorized amendment" to substantive law - i.e., the Civil Code, should no longer be controlling. There must be a renewed adherence to the time-honored dictum that procedural rules are designed, not to defeat, but to safeguard the ends of substantial justice. And for this noble reason, no less than the Constitution itself has mandated this Court to promulgate rules concerning the enforcement of rights with the end in view of providing a simplified and inexpensive procedure for the speedy disposition of cases which should not diminish, increase or modify substantive rights.[7] Far from altering substantive rights, the primary purpose of the reservation is, to borrow the words of the Court in "Caos v. Peralta":[8] " to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to clear congested dockets, to simplify the work of the trial court; in short, the attainment of justice with the least expense and vexation to the parties-litigants." Clearly then, private respondent PISC, as subrogee under Article 2207 of the Civil Code,[9] is not exempt from the reservation requirement with respect to its damages suit based on quasi-delict arising from the same act or omission of petitioner Javier complained of in the criminal case. As private respondent PISC merely stepped into the shoes of Ms. Jao (as owner of the insured Toyota van), then it is bound to observe the procedural requirements which Ms. Jao ought to follow had she herself instituted the civil case. WHEREFORE, premises considered, the assailed decision of the Court of Appeals dated February 24, 1995 and the Resolution dated April 3, 1995 denying the motion for reconsideration thereof are hereby REVERSED and SET ASIDE. The "MANIFESTATION AND MOTION TO SUSPEND CIVIL PROCEEDINGS" filed by petitioners is GRANTED.

"The aforecited rule [referring to the amended Section 1, Rule111] requiring such previous reservation also covers quasi-delict as defined under Article 2176 of the Civil Code arising from the same act or omission of the accused"(Underscoring supplied). But what prompted the Court to validate the institution and non-suspension of the civil case involved in "Yakult" was the peculiar facts attendant therein. Thus, "Although the separate civil action filed in this case was without previous reservation in the criminal case, nevertheless since it was instituted before the prosecution presented evidence in the criminal action, and the judge handling the criminal case was informed thereof, then the actual filing of the civil action is even far better than a compliance with the requirement of an express reservation that should be made by the offended party before the prosecution presents its evidence" The distinct factual scenario in "Yakult" simply does not obtain in this case. No satisfactory proof exists to show that private respondent PISC's damage suit was instituted before the prosecution presented its evidence in the criminal case pending in the Pasig Regional Trial Court. Neither is