THIRD DIVISION [G.R. No. 47013. February 17, 2000.] ANDRES LAO, petitioner, vs.

COURT OF APPEALS, THE ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION and ESTEBAN CO, respondents. [G.R. No. 60647. February 17, 2000.] ESTEBAN CO, petitioner, vs. COURT OF APPEALS and ANDRES LAO, respondents. [G.R. Nos. 60958-59. February 17, 2000.] THE ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION, petitioner, vs. COURT OF APPEALS, ANDRES LAO, JOSE LAO, and TOMAS LAO, respondents. Gruba Tanlimco Lamson & Apuhin for Associated Anglo American Tobacco Corporation. Alfredo O. Felizardo for petitioner Esteban Co. Sycip, Salazar, Hernandez & Gatmaitan for Andres Lao, Jose Lao and Tomas Lao. SYNOPSIS On April 6, 1965, the Associated Anglo-American Tobacco Corporation (Corporation) entered into a contract of sales agent with Andres Lao. Under the contract, Lao agreed to sell cigarettes manufactured and shipped by the corporation to his business address in Tacloban City. For his services, Lao would receive commission depending on the kind of cigarettes sold, fixed monthly salary and operational allowances. As a guarantee to Lao's compliance with his contractual obligations, his brothers Jose and his father Tomas executed a deed of mortgage in favor of the corporation in the amount of P200,000.00. The agreement went on

smoothly. But in February 1968, Lao failed to accomplish his monthly sales report. Due to this failure, the corporation reminded Lao of his enormous accounts and the difficulty of obtaining a tally thereon despite Lao's avowal of regular remittances of his collection. In 1969, the corporation summoned Lao, for an accounting, collections and that Lao's liability was established. On May 21, 1970, Andres, Jose and Tomas Lao brought a complaint (Civil Case No. 4452) for accounting and damages against the corporation. The lower court ordered the formation of a Committee on Audit to determine the true and correct accountability of Andres Lao to the corporation. After the accounting, the trial court promulgated a supplemental decision wherein it dismissed Lao's claim of overpayment and ordered Lao to pay the corporation the sum of P167,745.20. The corporation appealed the decision, just as Lao appealed the supplemental decision to the Court of Appeals. On October 26, 1981, the appellate court rendered a decision ordering the corporation to pay Lao the total amount of P190,000.00 for damages. Likewise, the appellate court reversed and set aside the supplemental decision of the trial court and ordered the corporation to reimburse Lao's overpayment of P556,444.20. The corporation filed motions for reconsideration but the same were denied. Meanwhile, during the pendency of Civil Case 4952, the corporation filed a complaint for estafa (Criminal Case No. 26500) against Lao for his alleged failure to remit the amount of P224,585.82 which he allegedly misappropriated and converted for his personal use. The said case was dismissed later but during the pendency of said Criminal Case, Lao lodged a complaint for malicious prosecution (Civil Case No. 5528) against the corporation praying for the award of damages. On March 18, 1977, the lower court rendered a decision in the action for malicious prosecution finding the corporation liable for damages. On April 18, 1977, Lao filed a motion for execution pending appeal in Civil Case No. 5528. This was opposed by the corporation, but the trial court granted said motion. Because of these decisions, both parties filed an appeal before the Court of Appeals primarily questioning the decision rendered by the lower courts. On September 14, 1977, the Court of Appeals in CA G.R. No. 06761 rendered a decision annulling the granting of execution pending appeal. The Court of Appeals likewise affirmed in CA G.R. No. 62532-R the trial court's finding that Criminal Case No. 2650-P was filed without probable cause and with malice and held the corporation and Esteban Co solidarily liable for damages. Because of these decisions, both parties filed several petitions in the Supreme Court questioning the decisions rendered by the Court of Appeals. In G.R. No. 47013, the Court ruled that the appellate court correctly opted to make its own finding of facts on the issue of the propriety of the issuance of the writ of

execution pending appeal as it was necessary and inevitable for it to look into the diverse factual allegations of the parties. Anent the issue of posting of the bond, the Court ruled that mere posting of a bond to answer for damages does not suffice as a good reason for granting execution pending appeal. In G.R. No. 60647, the Court ruled that petitioner Co's authority to institute the estafa case is buttressed by the fact that the corporation failed to make an issue out of his authority to file said case. The failure of the corporation to interpose such a defense could only mean that the filing of the affidavit complaint by petitioner Co was with the consent and authority of the corporation. In the same vein, petitioner Co may not be held personally liable for acts performed in pursuance of an authority and therefore, holding him solidarily liable with the corporation for the damages awarded to petitioner Lao does accorded with law and jurisprudence. In G.R. Nos. 606958-59, the Court ruled that the complaint for damages based on malicious prosecution and Articles 20 and 21 of the Civil Code should have been dismissed for lack of cause of action. As regards the decision in CA G.R. No. 62532-R, the Court ruled that it is within the power of the trial court to refer the accounting to court-appointed commissioners because true and correct accounting is necessary for the information of the court before it can render judgment. Since both parties offered no objection to the commissioners' report, they are deemed to have accepted and admitted the finding therein contained. Thus, in the absence of proof that the goods were actually received by Lao as evidenced by delivery receipts, the shipments allegedly made by the corporation in the amount of P597,239.40 and P126,950.00 covered only by bills of lading and factory consignment receipt invoices cannot be included in Lao's accountability. SYLLABUS 1.REMEDIAL LAW; CIVIL PROCEDURE; COURT SHOULD NOT BE SO STRICT ABOUT PROCEDURAL LAPSES THAT DO NOT REALLY IMPAIR THE PROPER ADMINISTRATION OF JUSTICE. In holding that the Court of Appeals may entertain a second motion for reconsideration of its decision although the filing of such motion violates a prohibition thereof, the Court said: ". . . (I)t is within the power of this Court to temper rigid rules in favor of substantial justice. While it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses that do not really impair the proper administration of justice. If the rules are intended to ensure the orderly conduct of litigation, it is because of the higher objective they seek which

is the protection of substantive rights of the parties." In the case under consideration, private respondents substantially complied with the Rules of Court when they submitted a copy of the writ of execution sought to be enjoined on the same day they filed the petition for certiorari, prohibition and mandamus. Petitioner Co's allegation of irregularity as to the time of receipt of the "compliance" to which copy of the writ was attached being unsubstantiated, the presumption of regularity of its receipt on the day the original petition was filed should prevail. 2.ID.; ID.; SPECIAL CIVIL ACTION; IN A PETITION FOR CERTIORARI AND MANDAMUS, THE COURT OF APPEALS, WHEN INEVITABLE, MAY EXAMINE THE FACTUAL MERITS OF THE CASE. Petitioner Co argues that the Court of Appeals cannot disturb the factual findings of the trial court and substitute its own in a petition for certiorari, prohibition and mandamus where the basic issue is one of jurisdiction or grave abuse of discretion. It is well-settled, however, that in a petition for certiorari and mandamus, the Court of Appeals; when inevitable, may examine the factual merits of the case. In the present case, it was necessary and inevitable for the Court of Appeals to look into the diverse factual allegations of the parties. It is worthy to note that petitioner's motion for execution pending appeal was premised on his contention that the award of damages in his favor would be meaningless on account of respondent Corporation's precarious financial status. On the other hand, respondent Corporation countered that it was operating at a profit, an assurance that at the time, it was a stable business entity that could answer for its obligations. In the face of these contradictory allegations, the appellate court correctly opted to make its own finding of facts on the issue of the propriety of the issuance of the writ of execution pending appeal. It should be stressed that what was at issue was not the award of damages itself but the issuance of said writ. 3.ID.; ID.; JUDGMENT; EXECUTION PENDING APPEAL; MERE POSTING OF A BOND TO ANSWER FOR DAMAGES DOES NOT SUFFICE AS A GOOD REASON FOR THE GRANT THEREOF. Petitioner Lao's position that the posting of a good and solvent bond is a special reason for the issuance of the writ of execution pending appeal is utterly barren of merit. Mere posting of a bond to answer for damages does not suffice as a good reason for the granting of execution pending appeal, within the context of "good reasons" under Section 2, Rule 39 of the Rules of Court. In Roxas v. Court of Appeals, the Court held: "It is not intended obviously that execution pending appeal shall issue as a matter of course. 'Good reasons, special, important, pressing reasons must exist to justify it; otherwise, instead of an instrument of solicitude and justice, it may well become a

tool of oppression and inequity. But to consider the mere posting of a bond a 'good reason' would precisely make immediate execution of a judgment pending appeal routinary, the rule rather than the exception. Judgments would be executed immediately, as a matter of course, once rendered, if all that the prevailing party needed to do was to post a bond to answer for damages that might result therefrom. This is a situation, to repeat, neither contemplated nor intended by law."

4.ID.; ID.; ACTIONS; LACK OF AUTHORITY OF AN OFFICER OF A CORPORATION TO BIND IT BY CONTRACT EXECUTED BY HIM IN ITS NAME, IS A DEFENSE WHICH SHOULD HAVE BEEN SPECIALLY PLEADED BY THE CORPORATION. That petitioner Co was authorized to institute the estafa case is buttressed by the fact that the Corporation failed to make an issue out of his authority to file said case. Upon well-established principles of pleading, lack of authority of an officer of a corporation to bind it by contract executed by him in its name, is a defense which should have been specially pleaded by the Corporation. The Corporation's failure to interpose such a defense could only mean that the filing of the affidavit-complaint by petitioner Co was with the consent and authority of the Corporation. In the same vein, petitioner Co may not be held personally liable for acts performed in pursuance of an authority and therefore, holding him solidarily liable with the Corporation for the damages awarded to respondent Lao does accord with law and jurisprudence. 5.CIVIL LAW; DAMAGES; MALICIOUS PROSECUTION; DEFINED; ELEMENTS. Malicious prosecution has been defined as an action for damages brought by one against whom a criminal prosecution, civil suit or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit or other proceeding in favor of the defendant therein. As thus defined, the fact of termination of the criminal prosecution, civil suit or legal proceeding maliciously filed and without probable cause, should precede the complaint for malicious prosecution. Such a complaint states a cause of action if it alleges: (a) that the defendant was himself the prosecutor or at least instigated the prosecution; (b) that the prosecution finally terminated in the acquittal of the plaintiff; (c) that in bringing the action the prosecutor acted without probable cause, and (d) that the prosecutor was actuated by malice, i.e., by improper and sinister motives. 6.REMEDIAL LAW; CIVIL PROCEDURE; CAUSE OF ACTION; UNLESS THE PLAINTIFF HAS A VALID AND SUBSISTING CAUSE OF ACTION AT

THE TIME HIS ACTION IS COMMENCED, THE DEFECT CANNOT BE CURED OR REMEDIED BY THE ACQUISITION OR ACCRUAL OF ONE WHILE THE ACTION IS PENDING AND A SUPPLEMENTAL COMPLAINT OR AN AMENDMENT SETTING UP SUCH AFTER-ACCRUED CAUSE OF ACTION IS NOT PERMISSIBLE. The contention of Lao that the elements of an action for malicious prosecution are evidentiary in nature and should be determined at the time the plaintiff offers evidence and rests his case, is untenable. To rule otherwise would, in effect, sanction the filing of actions without a cause of action. The existence of a cause of action is determined solely by the facts alleged in the complaint. Consideration of other facts is proscribed and any attempt to prove extraneous circumstances is not allowed. As this Court said in Surigao Mine Exploration Co., Inc. v. Harris, "unless the plaintiff has a valid and subsisting cause of action at the time his action is commenced, the defect cannot be cured or remedied by the acquisition or accrual of one while the action is pending, and a supplemental complaint or an amendment setting up such after-accrued cause of action is not permissible." Thus, the circumstance that the estafa case concluded in respondent Lao's acquittal during the pendency of the complaint for malicious prosecution did not cure the defect of lack of cause of action at the time of filing of the complaint. 7.ID.; ID.; TRIAL BY COMMISSIONER; WHEN ALLOWED. Trial by commissioners is allowed by the Rules of Court when a) the trial of an issue of fact requires the examination of a long account on either side, in which case the commissioner may be directed to hear and report upon the whole issue or any specific question involved therein; b) when the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect; and c) when a question of fact, other than upon the pleadings, arises upon motion or otherwise, at any stage of a case, or for carrying a judgment or order into effect. Ultimately, the trial court, in the exercise of its sound discretion, may either adopt, modify, or reject in whole or in part, the commissioners' report or it may recommit the same with instructions, or require the parties to present additional evidence before the commissioners or before the court. In the case under consideration, it is thus within the power of the trial court to refer the accounting to court-appointed commissioners because a true and correct accounting is necessary for the information of the court before it can render judgment. Moreover, the technical nature of the audit procedure necessitates the assistance of a certified public accountant. And since both parties offered no objection to the commissioners' report, they are deemed to have accepted and admitted the findings therein contained.

8.COMMERCIAL LAW; TRANSPORTATION LAW; BILL OF LADING; A BILL OF LADING CANNOT SUBSTITUTE FOR A DELIVERY RECEIPT. Delivery is generally evidenced by a written acknowledgment of a person that he or she has actually received the thing or the goods, as in delivery receipts. A bill of lading cannot substitute for a delivery receipt. This is because it is a written acknowledgment of the receipt of the goods by the carrier and an agreement to transport and deliver them at a specific place to a person named or upon his order. It does not evidence receipt of the goods by the consignee or the person named in the bill of lading; rather, it is evidence of receipt by the carrier of the goods from the shipper for transportation and delivery. 9.ID.; ID.; CONSIGNMENT INVOICE; NOT EVIDENCE OF ACTUAL DELIVERY OF THE GOODS. A factory consignment invoice is not evidence of actual delivery of the goods. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold. It is not proof that the thing or goods were actually delivered to the vendee or the consignee. IcHAaS 10.CIVIL LAW; ACTUAL DAMAGES; PROPERLY AWARDED BUT REDUCED TO P30,000.00. Petitioner Corporation also opposes for being conjectural, the award of P150,000.00 in Civil Case No. 4452, representing actual damages for loss of earnings. True, damages cannot be presumed or premised on conjecture or even logic. A party is entitled to adequate compensation only for duly substantiated pecuniary loss actually suffered by him or her. In this case, however, the trial court correctly found that an award for actual damages was justified because several months before their contract of agency was due to expire in 1969, the petitioner Corporation replaced Lao with Ngo Kheng as sales agent for the areas of Leyte and Samar. This, despite the fact that they had already agreed that Lao would continue to act as the corporation's sales agent provided that he would reduce his accountability to P200,000.00, the amount covered by his bond, and engaged the services of an independent accounting firm to do an audit to establish Lao's true liability. Due to his ouster as sales agent, Lao failed to realize a net income from his sales agency in the amount of P30,000.00 a year. However, the amount of actual damages should be reduced to P30,000.00 only instead of the P150,000.00 awarded by the appellate court. Since the contract of sales agency was on a yearly basis, the actual damages Lao suffered should be limited to the annual net income he failed to realize due to his unjust termination as sales agent prior to the expiration of his contract in 1969. Unrealized income for the succeeding years cannot be awarded to Lao because the corporation is deemed to have opted not to renew the contract with Lao for the succeeding years.

DECISION

PURISIMA, J p: These consolidated petitions for review on certiorari under Rule 45 of the Rules of Court revolve around discrepant statements of accountability between a principal and its agent in the sale of cigarettes. LLphil The common factual background at bar follows: On April 6, 1965, The Associated Anglo-American Tobacco Corporation (Corporation for brevity) entered into a "Contract of Sales Agent" with Andres Lao. Under the contract, Lao agreed to sell cigarettes manufactured and shipped by the Corporation to his business address in Tacloban City. Lao would in turn remit the sales proceeds to the Corporation. For his services, Lao would receive commission depending on the kind of cigarettes sold, fixed monthly salary, and operational allowance. As a guarantee to Lao's compliance with his contractual obligations, his brother Jose and his father Tomas executed a deed of mortgage 1 in favor of the Corporation in the amount of P200,000.00. In compliance with the contract, Lao regularly remitted the proceeds of his sales to the Corporation, generating, in the process, a great deal of business. Thus, the Corporation awarded him trophies and plaques in recognition of his outstanding performance from 1966 to 1968. However, in February 1968 and until about seven (7) months later, Lao failed to accomplish his monthly sales report. In a conference in Cebu, Ching Kiat Kam, the President of the Corporation, reminded Lao of his enormous accounts and the difficulty of obtaining a tally thereon despite Lao's avowal of regular remittances of his collections. Sometime in August and September 1969, Esteban Co, the vice-president and general manager of the Corporation, summoned Lao to Pasay City for an accounting. It was then and there established that Lao's liability amounted to P525,053.47. And so, Lao and his brother Lao Y Ka, enlisted the services of the Sycip Gorres and Velayo Accounting Firm (SGV) to check and reconcile the accounts. Ching Kiat Kam allowed Lao to continue with the sales agency provided Lao would reduce his accountability to P200,000.00, the amount secured by the mortgage. The Corporation thereafter credited in favor of Lao the amount of P325,053.47 representing partial payments he had made but without prejudice to

the result of the audit of accounts. However, the SGV personnel Lao had employed failed to conclude their services because the Corporation did not honor its commitment to assign two of its accountants to assist them. Neither did the Corporation allow the SGV men access to its records.

Subsequently, the Corporation discovered that Lao was engaging in the construction business so much so that it suspected that Lao was diverting the proceeds of his sales to finance his business. In the demand letter of April 15, 1979, 2 counsel for the Corporation sought payment of the obligations of Lao, warning him of the intention of the Corporation to foreclose the mortgage. Attached to said letter was a statement of account indicating that Lao's total obligations duly supported by receipts amounted to P248,990.82. Since Lao appeared to encounter difficulties in complying with his obligations under the contract of agency, the Corporation sent Ngo Kheng to supervise Lao's sales operations in Leyte and Samar. Ngo Kheng discovered that, contrary to Lao's allegation that he still had huge collectibles from his customers, nothing was due the Corporation from Lao's clients. From then on, Lao no longer received shipments from the Corporation which transferred its vehicles to another compound controlled by Ngo Kheng. Shipments of cigarettes and the corresponding invoices were also placed in the name of Ngo Kheng. dctai On May 21, 1970, Andres, Jose and Tomas Lao brought a complaint for accounting and damages with writ of preliminary injunction 3 against the Corporation, docketed as Civil Case No. 4452 before the then Court of First Instance of Leyte, Branch I in Tacloban City, which court 4 came out with its decision 5 on March 26, 1975, disposing as follows: "IN VIEW OF ALL THE FOREGOING PREMISES, and upon a clear preponderance of evidence in favor of the plaintiffs, the court hereby renders judgment as follows: 1.Ordering both the plaintiffs and defendant corporation to undergo a Court supervised accounting of their respective account with the view of establishing once and for all, by a reconciliation of their respective books of accounts, the true and correct accountability of Andres Lao to the defendant corporation. Pursuant thereto, both plaintiff Andres Lao and the defendant

The Associated Anglo-American Tobacco Corporation are directed to make available all their records pertainting [sic] to their business transactions with each other under the contract of sales agent, from 1965 up to the time Andres Lao ceased being the agent of the defendant. A Committee on Audit is hereby formed to be composed of three (3) members, one member to be nominated by the plaintiffs, another to be nominated by the defendant corporation and the third member who shall act as the Committee Chairman to be appointed by this Court. As Committee Chairman, the Court hereby appoints the Branch Clerk of Court of this Court, Atty. Victorio Galapon, who shall immediately convene the Committee upon appointment of the other two members, and undertake to finish their assigned task under his decision within two (2) months. 2.Ordering the defendant corporation to pay Plaintiffs the amount of P180,000 representing actual loss of earnings. 3.Ordering the defendant to pay plaintiffs moral damages in the amount of P130,000.00. 4.Ordering the defendant to pay to the plaintiffs, exemplary damages in the amount of P50,000.00. 5.Ordering the defendant to pay to the plaintiffs, attorney's fees in the amount of P40,000.00. 6.Ordering the plaintiff and the defendant to pay the compensation of the commissioners pro-rata. 7.Finally ordering the defendant to pay the cost of this suit. SO ORDERED." The Committee of Audit that was eventually constituted was composed of Atty. Victorio L. Galapon, Jr., as chairman, Wilfredo Madarang, Jr. and Cesar F.P. Corcuera, as representatives of the Corporation, and Lao himself. On September 16, 1976, said committee submitted a report 6 with the following findings:

"Total remittances made by Mr. Andres Lao in favor of Associated from April 10, 1965 to November 1969 which are substantially supported by official receiptP13,686,148.80 Shipments by Associated to Mr. Andres Lao duly supported by bills of lading, factory consignment invoices and delivery receipts9,110,777.00 Shipments by Associated to Mr. Andres Lao, covered by bills of lading and factory consignment invoices but with no supporting delivery receipts purported to have been delivered to Mr. Lao on the basis of sales made by him as reported in his monthly sales reports (except for sales in December, 1968 and November and December 1968 where the sales reports were not available to the Audit Committee)4,018,927.60 Shipments covered by bills of lading and factory consignment invoices but with no supporting delivery receipts597,239.40 Shipments with covering factory consignment invoices but not covered by bills of lading and delivery receipts126,950.00" On February 28, 1977, the trial court 7 promulgated a supplemental decision wherein it dismissed Lao's claim that he had made an overpayment of P556,444.20. The alleged overpayment was arrived at after deducting the total payment made by Lao in the amount of P13,686,148.80 from the total volume of shipments made by the Corporation in the amount of P13,129,704.60, without including the amount of P597,239.40, representing alleged shipments covered by bills of lading and factory consignment invoices but with no supporting delivery receipts, and the amount of P126,950.00, representing shipments with factory consignment invoices but not covered by bills of lading and delivery receipts. The trial court, in rejecting the claim of overpayment, held that "when he (referring to Lao) made partial payments amounting to P325,053.47 subsequent to the demand in September, 1969, he is deemed to have admitted his liability and his claim of overpayment is not only preposterous but devoid of logic." Therefore, with the sums of P597,239.40 and P126,950.00 included in the total volume of shipments made by the Corporation in the amount of P13,129,704.60, Lao's total remittances of P13,686,248.80 were short of P167,745.20. Thus, the trial court held:

"WHEREFORE, judgment is hereby rendered declaring plaintiff Andres Lao's accountability to defendant Corporation in the amount of P167,745.20 and ordering him to pay said amount of P167,745.20 to defendant The Associated Anglo-American Tobacco Corporation." The Corporation appealed the decision, dated March 26, 1975, just as Lao appealed the supplemental decision, dated February 28, 1977, to the Court of Appeals. Docketed as CA-G.R. No. 62532-R, the appeal was resolved in the Decision of the Court of Appeals dated October 26, 1981, 8 disposing thus: cdasia "WHEREFORE, in connection with the decision of March 26, 1975, defendant corporation is hereby ordered to pay plaintiffs P150,000.00 actual damages for loss of earnings, P30,000.00 by way of moral damages and P10,000.00 for exemplary damages. As modified, the decision is AFFIRMED in all other respects. As for the supplemental decision of February 28, 1977, the same is hereby reversed and set aside, and defendant-appellant corporation sentenced to reimburse Andres Lao's overpayment in the amount of P556,444.20. Costs against defendant-appellant corporation." The Corporation presented a motion for reconsideration 9 of the said Decision but the same was denied in a Resolution dated May 18, 1982. 10 A motion for leave to file a second motion for reconsideration was likewise denied. 11 Meanwhile, on June 24, 1974 and during the pendency of Civil Case No. 4452, Esteban Co, representing the Corporation as its new vice-president, filed an affidavit of complaint 12 with the Pasay City Fiscal's Office under I.S. No. 90994; alleging that Lao failed to remit the amount of P224,585.82 which he allegedly misappropriated and converted to his personal use. Although the amount supposedly defalcated was put up as a counterclaim in Civil Case No. 4452 for accounting, the Corporation averred that it reserved the right to institute a criminal case against Lao. On July 31, 1974, after finding a prima facie case against Lao, the Pasay City Fiscal filed an information 13 for estafa against Lao, docketed as Criminal Case No. 2650-P before the then Court of First Instance of Rizal, Branch XXVII. Lao sought a reinvestigation 14 of the case, contending that he was never served a subpoena or notice of preliminary investigation that was considered mandatory in cases cognizable by Court of First Instance, now Regional Trial Court. Apparently,

the preliminary investigation proceeded ex-parte because Esteban Co made it appear that Lao could not be located. On December 17, 1974, without awaiting the termination of the criminal case, Lao lodged a complaint 15 for malicious prosecution against the Corporation and Esteban Co, praying for an award of damages for violation of Articles 20 and 21 of the Civil Code. The case was docketed as Civil Case No. 5528 before Branch I of the then Court of First Instance in Cotabato City. In his resolution dated January 3, 1975, 16 then Pasay City Fiscal Jose Flaminiano found merit in the petition for reinvestigation of the estafa case. He opined that Lao had not committed estafa as his liability was essentially civil in nature. The Fiscal entertained doubts about the motive of the Corporation in instituting the criminal case against Lao because of the undue delay in its filing, aside from the fact that the estafa case involved the same subject matter the Corporation sued upon by way of counterclaim in Civil Case No. 4452. Eventually, on May 13, 1976, the Court of First Instance of Rizal, Branch XXVII, in Pasay City, promulgated a decision 17 acquitting Lao of the crime charged and adopting in toto the said Resolution of Fiscal Flaminiano. On March 18, 1977, the Court of First Instance of Samar 18 handed down a decision in Civil Case No. 5528, the action for damages arising from malicious prosecution, disposing thus: "WHEREFORE, the Court declares that the defendants filed Criminal Case No. 2650-P against the plaintiff for estafa before the Court of First Instance of Rizal, Branch XXVII, Pasay City, without probable cause and with malice and therefore orders the defendants Associated Anglo-American Tobacco Corporation and Esteban Co to jointly and severally pay the plaintiff:

a.P30,000 as actual damages; b.P150,000.00 as moral damages; c.P100,000.00 as exemplary damages; d.P50,000.00 as attorney's fees and costs.

SO ORDERED." The Corporation and Esteban Co both appealed the aforesaid decision to the Court of Appeals under CA-G.R. No. 61925-R. On April 18, 1977, Lao presented a motion for execution pending appeal 19 before the trial court. The opposition of the Corporation notwithstanding, on June 8, 1977 the trial court issued a special order granting the motion for execution pending appeal, 20 and on the following day, the corresponding writ of execution issued. 21 On June 10, 1977, the Court of Appeals issued a Restraining Order enjoining the execution of subject judgment. 22 The said order was issued on account of a petition for certiorari, prohibition and mandamus with preliminary injunction 23 filed by the Corporation and Esteban Co with the said appellate court. Docketed as CA-G.R. No. 06761, the petition was received by the Court of Appeals on June 9, 1977. A supplemental to the petition and a "compliance" were also received on the same time and date. 24 On June 21, 1977, Lao moved to lift the restraining order. On September 14, 1977, the Court of Appeals resolved in CA-G.R. No. 06761 thus: "WHEREFORE, the petition for certiorari is hereby granted, the special order granting execution pending appeal is annulled and the restraining order heretofore issued is made permanent. No pronouncement as to costs." On October 21, 1981, the Court of Appeals likewise rendered a Decision 25 in CA-G.R. No. 62532-R, affirming the trial court's finding that Criminal Case No. 2650-P was filed without probable cause and with malice; and held the Corporation and Esteban Co solidarily liable for damages, attorney's fees and costs. The Corporation and Esteban Co moved to reconsider 26 the said decision in CAG.R. No. 61925-R but to no avail. The motion for reconsideration was denied in a Resolution promulgated on May 18, 1992. A motion for leave of court to file a second motion for reconsideration 27 met the same fate. It was likewise denied in a Resolution 28 dated June 23, 1982. From the said cases sprung the present petitions which were ordered consolidated in the Resolutions of December 15, 1982 and November 11, 1985. 29 Subject petitions are to be passed upon in the order they were filed.

G.R. No. 47013 A petition for review on certiorari of the Decision of the Court of Appeals in CAG.R. No. 06761 that Lao filed, contending that: 1.The Court of Appeals cannot validly give due course to an original action for certiorari, prohibition and mandamus where the petition is fatally defective for not being accompanied by a copy of the trial court's questioned process/order. 2.The Court of Appeals, cannot, in a petition for certiorari, prohibition and mandamus, disregard, disturb and substitute its own judgment for the findings of facts of the trial court, particularly as in the present case, where the trial court did not exceed nor abuse its discretion. 3.The Court of Appeals did not act in accordance with established jurisprudence when it overruled the trial court's holding that the posting of a good and solvent bond is a good or special reason for execution pending appeal. For clarity, the petition for review on certiorari questioning the Decision of the Court of Appeals that nullified the special order granting execution pending appeal is anchored on the antecedent facts as follows: After the Court of First Instance of Samar had decided in favor of Lao in the action for damages by reason of malicious prosecution, Lao filed a motion for execution pending appeal 30 even as the Corporation and Co had interposed an appeal from the said decision. In that motion, Lao theorized that the appeal had no merit and the judgment in his favor would be rendered ineffectual on account of losses incurred by the Corporation in the 1972 floods in Luzon and in a fire that cost the Corporation P5 million, as well as the fact that the properties of the Corporation were heavily encumbered as it had even incurred an overdraft with a bank; for which reasons, Lao evinced his willingness to post a bond although Section 2, Rule 39 of the Rules of Court does not require such bond. Lao thereafter sent in a supplemental motion 31 asserting that the Corporation's properties were mortgaged in the total amount of Seven Million (P7,000,000.00) Pesos. The Corporation and Co opposed both motions. On June 8, 1977, after hearing and presentation of evidence by both parties, the Court of First Instance of Samar issued a special order granting the motion for

execution pending appeal. 32 The following day, June 9, 1977, the corresponding writ of execution pending appeal issued. 33 At 8:00 a.m. on the same day, the Corporation and Co filed a petition for certiorari, prohibition and mandamus with preliminary injunction with the Court of Appeals, the filing of which petition was followed by the filing of a supplement to the petition and a "compliance" with each pleading bearing the docket stamp showing that the Court of Appeals also received the same at 8:00 a.m. 34 In the petition under consideration, petitioner Lao contends that the supplemental petition and "compliance" could not have been filed with the Court of Appeals at the same time as the original petition; pointing out that the supplemental petition contains an allegation to the effect that the special order granting execution pending appeal was then still "being flown to Manila" and would be attached to the petition "as soon as it arrives in Manila which is expected tomorrow, June 10, 1977 or Saturday." 35 Petitioner Lao thus expressed incredulity on the fact that both the supplemental petition and the "compliance" submitted to the appellate court a copy of the special order bearing the same time of receipt. He theorized that the writ of execution could have been issued by the Court of First Instance of Samar at the earliest, at 8:30 a.m. on July 9, 1977. Petitioner Lao then noted that, the restraining order enjoining execution pending appeal did not mention the date of issuance of the writ subsequently issued and the names of the special sheriffs tasked to execute it simply because when the restraining order was issued the copy of the writ of execution was not yet filed with the Court of Appeals. Petitioner Lao also averred that because his counsel was furnished a copy of the restraining order through the mail, he was deprived of the opportunity to take immediate "remedial steps in connection with the improvident issuance of the restraining order." 36 In their comment on the petition, respondent Corporation and Co assail petitioner Lao's insinuation of irregularity in the filing of their pleadings. They aver that in view of petitioner Lao's allegation, they, made inquiries in the Docket Section of the Court of Appeals, and they were informed that the receiving machine of said section was out of order when the pleadings were received "as the time of receipt appearing therein is always 8:00 a.m." 37 This Court cannot gloss over, as it has never glossed over allegations of irregularity in the handling of pleadings filed in the Court. However, in the absence of concrete proof that there was malicious intent to derail the propriety of procedure, this Court has no basis on which to arrive at a conclusion thereon. The documentary evidence of simultaneous receipt of pleadings that should ordinarily

be received one after another is simply insufficient to warrant any conclusion on irregularity of procedure. All court personnel are enjoined to do their jobs properly and according to law. Should they notice anything in the performance of their duties that may generate even a mere suspicion of irregularity, they are duty-bound to correct the same. In this case, more diligence on the part of the personnel handling the receiving machine could have prevented the stamping on the pleadings with erroneous date and time of receipt and would have averted suspicion of an anomaly in the filing of pleadings. Persons responsible for the negligence should be taken to task. However, since this is not the proper forum for whatever administrative measures may be taken under the premises, the Court opts to discuss the merits of the petition for review on certiorari at bar rather than tarry more on an administrative matter that is fundamentally extraneous to the petition. cdtai Petitioner Lao maintains that the Court of Appeals should not have been given due course to the petition for certiorari, prohibition and mandamus considering that it was fatally defective for failure of the petitioners to attach thereto a copy of the questioned writ of execution. On their part, private respondents concede the mandatory character of the requirement of Section 1, Rule 65 of the Rules of Court that the petition "shall be accompanied by a certified true copy of the judgment or order subject thereof, together with copies of all pleadings and documents relevant and pertinent thereto." However, private respondents asked that their submission of a certified true copy of the special order granting execution pending appeal attached to their "compliance" dated June 9, 1977 38 be taken as substantial compliance with the rule. The Court gives due consideration to private respondents' stance. Strict adherence to procedural rules must at all times be observed. However, it is not the end-all and be-all of litigation. As this Court said: ". . . adjective law is not to be taken lightly for, without it, the enforcement of substantive law may not remain assured. The Court must add, nevertheless, that technical rules of procedure are not ends in themselves but primarily devised and designed to help in the proper and expedient dispensation of justice. In appropriate cases, therefore, the rules may have to be so construed liberally as to meet and advance the cause of substantial justice." 39

Thus, in holding that the Court of Appeals may entertain a second motion for reconsideration of its decision although the filing of such motion violates a prohibition thereof, the Court said: ". . . (I)t is within the power of this Court to temper rigid rules in favor of substantial justice. While it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses that do not really impair the proper administration of justice. If the rules are intended to ensure the orderly conduct of litigation, it is because of the higher objective they seek which is the protection of substantive rights of the parties." 40 In the case under consideration, private respondents substantially complied with the Rules of Court when they submitted a copy of the writ of execution sought to be enjoined on the same day they filed the petition for certiorari, prohibition and mandamus. Petitioner Co's allegation of irregularity as to the time of receipt of the "compliance" to which copy of the writ was attached being unsubstantiated, the presumption of regularity of its receipt on the day the original petition was filed should prevail. Petitioner Co argues that the Court of Appeals cannot disturb the factual findings of the trial court and substitute its own in a petition for certiorari, prohibition and mandamus where the basic issue is one of jurisdiction or grave abuse of discretion. It is well-settled, however, that in a petition for certiorari and mandamus, the Court of Appeals, when inevitable, may examine the factual merits of the case. 41 In the present case, it was necessary and inevitable for the Court of Appeals to look into the diverse factual allegations of the parties. It is worthy to note that petitioner's motion for execution pending appeal was premised on his contention that the award of damages in his favor would be meaningless on account of respondent Corporation's precarious financial status. On the other hand, respondent Corporation countered that it was operating at a profit, an assurance that at the time, it was a stable business entity that could answer for its obligations. In the face of these contradictory allegations, the appellate court correctly opted to make its own finding of facts on the issue of the propriety of the issuance of the writ of execution pending appeal. It should be stressed that what was at issue was not the award of damages itself but the issuance of said writ. Petitioner Lao's position that the posting of a good and solvent bond is a special reason for the issuance of the writ of execution pending appeal is utterly barren of

merit. Mere posting of a bond to answer for damages does not suffice as a good reason for the granting of execution pending appeal, within the context of "good reasons" under Section 2, Rule 39 of the Rules of Court. 42 In Roxas v. Court of Appeals, 43 the Court held: "It is not intended obviously that execution pending appeal shall issue as a matter of course. 'Good reasons, special, important, pressing reasons must exist to justify it; otherwise, instead of an instrument of solicitude and justice, it may well become a tool of oppression and inequity. But to consider the mere posting of a bond a 'good reason' would precisely make immediate execution of a judgment pending appeal routinary, the rule rather than the exception. Judgments would be executed immediately, as a matter of course, once rendered, if all that the prevailing party needed to do was to post a bond to answer for damages that might result therefrom. This is a situation, to repeat, neither contemplated nor intended by law." 44 G.R. No. 60647 From the decision of the Court of First Instance of Samar in Civil Case No. 5528, finding that they are liable for malicious prosecution and therefore, they must pay Lao damages, the Corporation and Co appealed to the Court of Appeals. In affirming the lower court's decision, the Court of Appeals deduced from the facts established that the Corporation knew all along that Lao's liability was civil in nature. However, after around four (4) years had elapsed and sensing that Civil Case No. 4452 would result in a decision against them, they instituted the criminal case for estafa. In awarding damages in the total amount of P330,000, the Court of Appeals took into account Lao's social and business standing. 45 From the Decision of the Court of Appeals in CA-G.R. No. 61925-R, Co filed the instant petition for review on certiorari; contending that the Court of Appeals erred in affirming the decision of the Samar Court of First Instance because when the case for malicious prosecution was commenced there was as yet no cause of action as the criminal case was still pending decision. Co also asserted that he should not be held jointly and severally liable with the Corporation because in filing the affidavit-complaint against respondent Lao, he was acting as the executive vicepresident of the Corporation and his action was within the scope of his authority as such corporate officer.

The issue of whether the Court of Appeals correctly ruled that the Corporation and petitioner Co should be held liable for damages on account of malicious prosecution shall be ratiocinated upon and resolved with the issues submitted for resolution in G.R. Nos. 60958-59. What should concern the Court here is whether petitioner Co should be held solidarily liable with the Corporation for whatever damages would be imposed upon them for filing the complaint for malicious prosecution. Petitioner Co argues that following the dictum in agency, the suit should be against his principal unless he acted on his own or exceeded the limits of his agency. A perusal of his affidavit-complaint reveals that at the time he filed the same on June 24, 1974, petitioner Co was the vice-president of the Corporation. As a corporate officer, his power to bind the Corporation as its agent must be sought from statute, charter, by-laws, a delegation of authority to a corporate officer, or from the acts of the board of directors formally expressed or implied from a habit or custom of doing business. 46 In this case, no such sources of petitioner's authority from which to deduce whether or not he was acting beyond the scope of his responsibilities as corporate vice-president are mentioned, much less proven. It is thus logical to conclude that the board of directors or by-laws of the corporation vested petitioner Co with certain executive duties 47 one of which is a case for the Corporation. That petitioner Co was authorized to institute the estafa case is buttressed by the fact that the Corporation failed to make an issue out of his authority to file said case. Upon well-established principles of pleading, lack of authority of an officer of a corporation to bind it by contract executed by him in its name, is a defense which should have been specially pleaded by the Corporation. 48 The Corporation's failure to interpose such a defense could only mean that the filing of the affidavit-complaint by petitioner Co was with the consent and authority of the Corporation. In the same vein, petitioner Co may not be held personally liable for acts performed in pursuance of an authority and therefore, holding him solidarily liable with the Corporation for the damages awarded to respondent Lao does accord with law and jurisprudence. G.R. Nos. 606958-59 In this petition for review on certiorari of the Decisions of the Court of Appeals in CA-G.R. No. 61925-R, regarding Lao's claim for damages on account of malicious

prosecution, and in CA-G.R. No. 62532-R that arose from Lao's complaint for accounting and damages, petitioner Corporation assigns as errors, that: 1.The respondent Court of Appeals erred and/or committed a grave abuse of discretion in affirming the erroneous decision of the lower court. The civil case for malicious prosecution was filed during the pendency of the criminal case upon which the civil suit was based. There is as yet no cause of action. . . . . 2.The respondent Court of Appeals erred and/or committed a grave abuse of discretion when it reversed or set aside the supplemental decision of the lower court in Civil Case No. 4452, which reversal was merely based on surmises and conjectures. . . . . 3.The respondent Court of Appeals erred and/or committed grave abuse of discretion when it awarded moral damages in Civil Case No. 4452 which was not prayed for because Andres Lao prayed for moral damages and was already awarded in Civil Case No. 5528. Moral damages must be specifically prayed for. . . . . 49 Petitioner Corporation contends that the complaint for malicious prosecution brought by Lao during the pendency of subject criminal case for estafa, states no cause of action as it was prematurely filed when the criminal case that resulted in the acquittal of Lao was not yet terminated. On the other hand, respondent Lao countered that the elements supportive of an action for malicious prosecution are evidentiary in nature and their existence or non-existence cannot be the subject of evaluation and conclusion upon the filing of the complaint. For Lao, those elements must be determined at the time the plaintiff has offered all his evidence and rested his case. Malicious prosecution has been defined as an action for damages brought by one against whom a criminal prosecution, civil suit or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit or other proceeding in favor of the defendant therein. 50 As thus defined, the fact of termination of the criminal prosecution, civil suit or legal proceeding maliciously filed and without probable cause, should precede the complaint for malicious prosecution. Such a complaint states a cause of action if it alleges: (a) that the defendant was himself the prosecutor or at least instigated the

prosecution; (b) that the prosecution finally terminated in the acquittal of the plaintiff; (c) that in bringing the action the prosecutor acted without probable cause, and (d) that the prosecutor was actuated by malice, i.e., by improper and sinister motives. 51

Ocamp v. Buenaventura 52 demonstrates the importance of the requirement that the case maliciously commenced should be terminated before a claim for damages arising from the filing of such case should be presented. In that case, a complaint for damages arising from the alleged malicious filing of an administrative case for serious misconduct, grave abuse of authority and commission of a felony, was held to be premature during the pendency of said administrative case before the then Police Commission (POLCOM). Observing that the complaint for damages was based on the claim that the administrative case brought before the POLCOM was malicious, unfounded and aimed to harass the respondents, the Court there held: ". . . . The veracity of this allegation is not for us to determine, for if We rule and allow the civil case for damages to proceed on that ground, there is the possibility that the court a quo in deciding said case might declare the respondents victims of harassment and thereby indirectly interfere with the proceedings before the POLCOM. The respondents' case for damages before the lower court is, therefore, premature as it was filed during the pendency of the administrative case against the respondents before the POLCOM. The possibility cannot be overlooked that the POLCOM may hand down a decision adverse to the respondents, in which case the damage suit will become unfounded and baseless for wanting in cause of action. Of persuasive force is the ruling in William H. Brown vs. Bank of the Philippine Islands and Santiago Freixas , 101 Phil. 309, 312, where this Court said: LibLex ". . . . In effect, plaintiff herein seeks to recover damages upon the ground that the detainer case has been filed, and is being maintained, maliciously and without justification; but this pretense affects the merits of said detainer case. Should final judgment be eventually rendered in that case in favor of the plaintiffs therein, such as the one rendered in the municipal court, the validity of the cause of action of said lessors against Brown, would thereby be conclusively established, and

necessarily, his contention in the present case would have to be rejected. Similarly, we cannot sustain the theory of Brown in the case at bar, without prejudging the issue in the detainer case, which is still pending. Until final determination of said case, plaintiff herein cannot, and does not, have, therefore, a cause of action if any, on which we do not express our opinion against the herein defendants. In short, the lower court has correctly held that the present action is premature, and, that, consequently, the complain herein does not set forth a cause of action against the defendants." 53 A similar ruling was laid down in Cabacungan v. Corrales 54 where the Court sustained the dismissal of an action for damages on the ground of prematurity. The records disclosed that the alleged false and malicious complaint charging plaintiffs with malicious mischief was still pending trial when the action for damages based on the subject complaint was brought. Premises studiedly viewed in proper perspective, the contention of Lao that the elements of an action for malicious prosecution are evidentiary in nature and should be determined at the time the plaintiff offers evidence and rests his case, is untenable. To rule otherwise would, in effect, sanction the filing of actions without a cause of action. The existence of a cause of action is determined solely by the facts alleged in the complaint. Consideration of other facts is proscribed and any attempt to prove extraneous circumstances is not allowed. 55 As this Court said in Surigao Mine Exploration Co., Inc. v. Harris, 56 "unless the plaintiff has a valid and subsisting cause of action at the time his action is commenced, the defect cannot be cured or remedied by the acquisition or accrual of one while the action is pending, and a supplemental complaint or an amendment setting up such afteraccrued cause of action is not permissible." 57 Thus, the circumstance that the estafa case concluded in respondent Lao's acquittal during the pendency of the complaint for malicious prosecution did not cure the defect of lack of cause of action at the time of filing of the complaint. Neither does the Court find merit in respondent Lao's submission that the complaint for malicious prosecution is viable inasmuch as it is also anchored on Articles 20 and 21 of the Civil Code. This may appear to be a persuasive argument since there is no hard and fast rule which can be applied in the determination of whether or not the principle of abuse of rights has been violated, resulting in damages under the said articles of the Civil Code on Human Relations. Indeed, a party injured by the filing of a court case against him, even if he is later on

absolved, may file a case for damages grounded either on the principle of abuse of rights or on malicious prosecution. 58 However, whether based on the principle of abuse of rights or malicious prosecution, a reading of the complaint here reveals that it is founded on the mere filing of the estafa charge against respondent Lao. As such, it was prematurely filed and it failed to allege a cause of action. Should the action for malicious prosecution be entertained and the estafa charge would result in respondent Lao's conviction during the pendency of the damage suit, even if it is based on Articles 20 and 21, such suit would nonetheless become groundless and unfounded. To repeat; that the estafa case, in fact, resulted in respondent Lao's acquittal would not infuse a cause of action on the malicious prosecution case already commenced and pending resolution. The complaint for damages based on malicious prosecution and/or on Articles 20 and 21 should have been dismissed for lack of cause of action and therefore, the Court of Appeals erred in affirming the decision of the trial court of origin. It should be stressed, however, that the dismissal of subject complaint should not be taken as an adjudication on the merits, the same being merely grounded on the failure of the complaint to state a cause of action. 59 As regards the Decision in CA-G.R. No. 62532-R which was spawned by respondent Lao's complaint for accounting, petitioner contends that the appellate court erred when it reversed and set aside the supplemental decision in Civil Case No. 4452 and directed the corporation to reimburse the amount of P556,444.20, representing Lao's overpayment to the Corporation. The Court would normally have restricted itself to questions of law and shunned away from questions of fact were it not for the conflicting findings of fact by the trial court and appellate court on the matter. The Court is therefore constrained to relax the rule on conclusiveness of factual findings of the Court of Appeals and, on the basis of the facts on record, make its own findings. 60 It is significant to note that as per decision of the trial court dated March 26, 1975, a court-supervised accounting was directed so as to ascertain the true and correct accountability of Andres Lao to the defendant corporation. Thus, a three-man audit committee was formed with the branch of clerk of court, Atty. Victorio Galapon, as chairman, and two other certified public accountants respectively nominated by the parties, as members. On September 16, 1976, the said Audit Committee submitted its report 61 and in the hearing of November 25, 1976, the parties interposed no objection thereto and unanimously accepted the Audit Committee Report. The Committee found that

Andres Lao has made a total overpayment to defendant corporation in the amount of P556,444.20. Trial by commissioners is allowed by the Rules of Court when a) the trial of an issue of fact requires the examination of a long account on either side, in which case the commissioner may be directed to hear and report upon the whole issue or any specific question involved therein; b) when the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect; and c) when a question of fact, other than upon the pleadings, arises upon motion or otherwise, at any stage of a case, or for carrying a judgment or order into effect. 62 Ultimately, the trial court, in the exercise of its sound discretion, may either adopt, modify, or reject in whole or in part, the commissioners' report or it may recommit the same with instructions, or require the parties to present additional evidence before the commissioners or before the court. 63 In the case under consideration, it is thus within the power of the trial court to refer the accounting to court-appointed commissioners because a true and correct accounting is necessary for the information of the court before it can render judgment. Moreover, the technical nature of the audit procedure necessitates the assistance of a certified public accountant. And since both parties offered no objection to the commissioners' report, they are deemed to have accepted and admitted the findings therein contained. There is no discernible cause for veering from the findings of the Audit Committee. In arriving at its conclusion, the Audit Committee subtracted the total remittances of Lao in the amount of P13,686,148.80 from the entire volume of shipments made by the corporation. In determining the total volume of shipments made by the corporation, the Audit Committee did not include the shipments covered by bills of lading and factory consignment invoices but without the corresponding delivery receipts. These included shipments in the amount of P597,239.40 covered by bills of lading and factory consignment invoices but with no supporting delivery receipts, and shipments worth P126,950.00 with factory consignment invoices but not covered by bills of lading and delivery receipts. However, the Audit Committee considered shipments made by the corporation to Lao in the amount of P9,110,777.00 covered by bills of lading and factory invoices but without the corresponding delivery receipts because subject shipments were duly reported in Lao's monthly sales report.

The Audit Committee correctly excluded the shipments not supported by delivery receipts, albeit covered by bills of lading and factory consignment invoices. Under Article 1497 of the Civil Code, a thing sold shall be understood as delivered when it is placed in the control or possession of the vendee. Unless possession or control has been transferred to the vendee, the thing or goods sold cannot be considered as delivered. Thus, in the present case, the Audit Committee was correct when it adopted as guideline that accountability over the goods shipped was transferred from the corporation to Andres Lao only upon actual delivery of the goods to him. For it is only when the goods were actually delivered to and received by Lao, did Lao have control and possession over subject goods, and only when he had control and possession over said goods could he sell the same. cdphil Delivery is generally evidenced by a written acknowledgment of a person that he or she has actually received the thing or the goods, as in delivery receipts. A bill of lading cannot substitute for a delivery receipt. This is because it is a written acknowledgment of the receipt of the goods by the carrier and an agreement to transport and deliver them at a specific place to a person named or upon his order. 64 It does not evidence receipt of the goods by the consignee or the person named in the bill of lading; rather, it is evidence of receipt by the carrier of the goods from the shipper for transportation and delivery. Likewise, a factory consignment invoice is not evidence of actual delivery of the goods. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold. 65 It is not proof that the thing or goods were actually delivered to the vendee or the consignee. As admitted by the witness for the corporation: A:Factory consignment invoices represents what the company billed the plaintiff Mr. Lao and the bill of lading represents the goods which were supposed to have been shipped. xxx xxx xxx A:Shipments covered by factory consignment invoices simply meant these are billings made again by the Associated AngloAmerican Tobacco Corporation to plaintiff Andres Lao. (t.s.n., November 25, 1976, pp. 45-47 as cited in Respondent Lao's Comment, Rollo, p. 259) Thus, in the absence of proof that the goods were actually received by Lao as evidenced by delivery receipts, the shipments allegedly made by the corporation in

the amount of P597,239.40 and P126,950.00 covered only by bills of lading and factory consignment invoices cannot be included in Lao's accountability. However, as to the shipments worth P4,018,927.60 likewise covered only by bills of lading and factory consignment invoices, the Audit Committee correctly considered them in Lao's account because such shipments were reported in the latter's sales reports. The fact that Lao included them in his sales reports is an implied admission that subject goods were actually delivered to him, and that he received the said goods for resale. As regards the award of moral damages, petitioner Corporation faults the Court of Appeals for awarding such damages not specifically prayed for in the complaint for accounting and damages in Civil Case No. 4452. Petitioner Corporation argues that moral damages were prayed for and duly awarded in Civil Case No. 5528 and therefore, it would be unfair and unjust to allow once again, recovery of moral damages on similar grounds. Contrary to the allegation of the petitioner Corporation, the award of moral damages was specifically prayed for in the complaint albeit it left the amount of the same to the discretion of the court. 66 Moreover, Civil Case Nos. 4452 and 5528 were on varied causes of action. While the award for moral damages in Civil Case No. 4452 was based on the evident bad faith of the petitioner Corporation in unilaterally rescinding respondent Lao's sales agency through his immediate replacement by Ngo Kheng, the claim for moral damages in Civil Case No. 5528 was anchored on the supposed malice that attended the filing of the criminal case for estafa. Petitioner Corporation also opposes for being conjectural, the award of P150,000.00 in Civil Case No. 4452, representing actual damages for loss of earnings. True, damages cannot be presumed or premised on conjecture or even logic. A party is entitled to adequate compensation only for duly substantiated pecuniary loss actually suffered by him or her. 67 In this case, however, the trial court correctly found that an award for actual damages was justified because several months before their contract of agency was due to expire in 1969, the petitioner Corporation replaced Lao with Ngo Kheng as sales agent for the areas of Leyte and Samar. This, despite the fact that they had already agreed that Lao would continue to act as the corporation's sales agent provided that he would reduce his accountability to P200,000.00, the amount covered by his bond, and engaged the services of an independent accounting firm to do an audit to establish

Lao's true liability. Due to his ouster as sales agent, Lao failed to realize a net income from his sales agency in the amount of P30,000.00 a year. However, the amount of actual damages should be reduced to P30,000.00 only instead of the P150,000.00 awarded by the appellate court. Since the contract of sales agency was on a yearly basis, the actual damages Lao suffered should be limited to the annual net income he failed to realize due to his unjust termination as sales agent prior to the expiration of his contract in 1969. Unrealized income for the succeeding years cannot be awarded to Lao because the corporation is deemed to have opted not to renew the contract with Lao for the succeeding years. As to the award of exemplary damages, suffice it to state that in contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. 68 In the case under scrutiny, the Court finds the award of exemplary damages unjustified or unwarranted in the absence of any proof that the petitioner Corporation acted in a wanton, fraudulent, reckless, oppressive, and malevolent manner. For the same reasons, the award for attorney's fees should be deleted. WHEREFORE, In G.R. No. L-47013, the petition for review on certiorari is DENIED for lack of merit; In G.R. No. 60647, the petition is GRANTED and the assailed decision is SET ASIDE; and the Decision of the Court of Appeals in CA-G.R. No. 61925-R, finding Esteban Co solidarily liable with the respondent Associated AngloAmerican Tobacco Corporation for damages, is REVERSED AND SET ASIDE. As above ratiocinated, the respondent corporation cannot be held liable for damages. In G.R. Nos. 60958-59, the Decision in CA-G.R. No. 61925-R is REVERSED AND SET ASIDE; the respondent corporation is adjudged not liable for malicious prosecution due to the prematurity of the action; while the Decision in CA-G.R. No. 62532-R is AFFIRMED, insofar as it ordered respondent corporation to reimburse Andres Lao's overpayment in the amount of P556,444.20, but MODIFIED, in that only an award of P30,000.00 for actual damages is GRANTED, and all the other monetary awards are deleted. No pronouncement as to costs. SO ORDERED. LLphil

Melo, Vitug and Panganiban, JJ., concur. Gonzaga-Reyes, J., took no part; spouse is with counsel for respondents. FIRST DIVISION [G.R. No. 107019. March 20, 1997.] FRANKLIN M. DRILON, AURELIO C. TRAMPE, GREGORIO A. ARIZALA, CESAR M. SOLIS and FERDINAND R ABESAMIS, petitioners, vs. COURT OF APPEALS, HON. GEORGE C. MACLI-ING, in his capacity as Presiding Judge of Branch 100 of the Regional Trial Court of Quezon City, and HOMOBONO ADAZA, respondents. Armando M. Marcelo private respondent. SYLLABUS 1.REMEDIAL LAW; CIVIL PROCEDURE, APPEAL, WHEN A PARTY ADOPTS A CERTAIN THEORY IN THE COURT BELOW, HE WILL NOT BE PERMITTED TO CHANGE HIS THEORY ON APPEAL. An examination of the records would show that this latest posture as to the nature of his cause of action is only being raised for the first time on appeal. Nowhere in his complaint filed with the trial court did respondent Adaza allege that his action is one based on tort or on Section 3(e) of Republic Act No. 3019. Such a change of theory cannot be allowed. When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process. 2.ID.; ID.; SPECIAL CIVIL ACTIONS; IF THE LOWER COURT DENYING THE MOTION TO DISMISS ACTS WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION, CERTIORARI UNDER RULE 65 MAY BE AVAILED OF; CASE AT BAR. The ordinary procedure, as a general rule, is that petitioners should have filed an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal. This general rule, however, is subject to certain exceptions, among which are, if the court denying

the motion to dismiss acts without or in excess of jurisdiction or with grave abuse of discretion, in which case certiorari under Rule 65 may be availed of. The reason is that it would be unfair to require the defendants (petitioners in this case) to undergo the ordeal and expense of trial under such circumstances, because the remedy of appeal then would then not be plain and adequate. Judge Macli-ing committed grave abuse of discretion in denying petitioners' motion to dismiss the Adaza complaint, and thus public respondent Court of Appeals should have issued the writ of certiorari prayed for by the petitioners and annulled the February 8, 1991 and May 14, 1991 Orders of respondent Judge. It was grievous error on the part of the court a quo not to have done so. This has to be corrected. Respondent Adaza's baseless action cannot be sustained for this would unjustly compel the petitioners to needlessly go through a protracted trial and thereby unduly burden the court with one more futile and inconsequential case. 3.CIVIL LAW; DAMAGES; MALICIOUS PROSECUTION; CONSTRUED UNDER AMERICAN AND PHILIPPINE JURISDICTION. The term malicious prosecution has been defined in various ways. In American jurisdiction, it is defined as: "One begun in malice without probable cause to believe the charges can be sustained (Eustace v. Dechter, 28 Cal. App. 2d. 706, 83 P. 2d. 525). Instituted with intention of injuring defendant and without probable cause, and which terminates in favor of the person prosecuted. For this injury an action on the case lies, called the action of malicious prosecution (Hicks v. Brantley, 29 S.E. 459, 102 Ga. 264., Eggett v. Allen, 96 N.W. 803 119 Wis. 625)." In Philippine jurisdiction, it has been defined as: "An action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R, November 19, 1956)." 4.ID.; ID.; ID.; ELEMENTS THEREOF. In order for a malicious prosecution suit to prosper, the plaintiff must prove three (3) elements: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister motive. All these requisites must concur. 5.ID.; ID.; ID.; DISCHARGED ON A WRIT OF HABEAS CORPUS AND GRANTED BAIL, NOT THE TERMINATION OF THE ACTION

COMTEMPLATED TO WARRANT THE INSTITUTION OF A MALICIOUS PROSECUTION. There is nothing in the records which shows, and the complaint does not allege, that Criminal Case No. Q-90-11855, filed by the petitioners against respondent Adaza for Rebellion with Murder and Frustrated Murder, has been finally terminated and therein accused Adaza acquitted of the charge. Not even Adaza himself, thru counsel, makes any positive asseveration on this aspect that would establish his acquittal. Insofar as Criminal Case No. Q-9011855 is concerned, what appears clear from the records only is that respondent has been discharged on a writ of habeas corpus and granted ball. This is not, however, considered the termination of the action contemplated under Philippine jurisdiction to warrant the institution of a malicious prosecution suit against those responsible for the filing of the information against him. 6.ID.; ID.; ID.; ONE CANNOT BE HELD LIABLE FOR MALICIOUSLY INSTITUTING A PROSECUTION WHERE ONE HAS ACTED WITH PROBABLE CAUSE; CASE AT BAR. It is well-settled that one cannot be held liable for maliciously instituting a prosecution where one has acted with probable cause. Elsewise stated, a suit for malicious prosecution will lie only in cases where a legal prosecution has been carried on without probable cause. The reason for this rule is that it would be a very great discouragement to public justice, if prosecutors, who had tolerable ground of suspicion, were liable to be sued at law when their indictment miscarried. In the case under consideration, the decision of the Special Team of Prosecutors to file the information for rebellion with murder and frustrated murder against respondent Adaza, among others, cannot be dismissed as the mere product of whim or caprice on the part of the prosecutors who conducted the preliminary investigation. Said decision was fully justified in an eighteen (18)-page Resolution dated April 17, 1990. Here, since the petitioners were of the honest conviction that there was probable cause to hold respondent Adaza for trial for the crime of rebellion with murder and frustrated murder, and since Adaza himself, through counsel, did not allege in his complaint lack of probable cause, we find that the petitioners cannot be held liable for malicious prosecution. 7.ID.; ID.; ID.; PRESENCE OF PROBABLE CAUSE, SIGNIFIES THE ABSENCE OF MALICE. As to the requirement that the prosecutor must be impelled by malice in bringing the unfounded action, suffice it to state that the presence of probable cause signifies, as a legal consequence, the absence of malice. At the risk of being repetitious, it is evident in this case that petitioners were not motivated by malicious intent or by a sinister design to unduly harass private

respondent, but only by a well-founded belief that respondent Adaza can be held for trial for the crime alleged in the information.

DECISION

HERMOSISIMA, JR., J p: Petitioners seek the reversal of the Resolutions of respondent Court of Appeals in CA-G.R SP No. 25080 dated January 31, 1992 and September 2, 1992 affirming the Orders, dated February 8, 1991 and May 14, 1991, of respondent Judge George C. Macli-ing which denied herein petitioner's Motion to Dismiss the complaint filed in Civil Case No. Q-90-6073 by respondent Homobono Adaza. The facts are not in dispute. In a letter-complaint to then Secretary of Justice Franklin Drilon 1 dated March 20, 1990, General Renato de Villa, 2 who was then the Chief of Staff of the Armed Forces of the Philippines, requested the Department of Justice to order the investigation of several individuals named therein, including herein private respondent Homobono Adaza, for their alleged participation in the failed December 1989 coup d'etat. The letter-complaint was based on the affidavit of Brigadier General Alejandro Galido, Captain Oscarlito Mapalo, Colonel Juan Mamorno, Colonel Hernani Figueroa and Major Eduardo Sebastian. Gen. de Villa's letter-complaint with its annexes was referred for preliminary inquiry to the Special Composite Team of Prosecutors created pursuant to Department of Justice Order No. 5 dated January 10, 1990. Petitioner then Assistant Chief State Prosecutor Aurelio Trampe, 3 the Team Leader, finding sufficient basis to continue the inquiry, issued a subpoena to the individuals named in the letter-complaint, Adaza included, and assigned the case for preliminary investigation to a panel of investigators composed of prosecutors George Arizala, as Chairman, and Ferdinand Abesamis and Cesar Solis as members. The case was docketed as I.S. No. DOJ-SC-90-013. On April 17, 1990, the panel released its findings, thru a Resolution, which reads: "PREMISES CONSIDERED, we find and so hold that there is probable cause to hold herein respondents for trial for the crime of REBELLION WITH MURDER AND FRUSTRATED MURDER

Hence we respectfully recommend the filing of the corresponding information against them in court." 4 The above Resolution became the basis for the filing of an Information, 5 dated April 18, 1990, charging private respondent with the crime of rebellion with murder and frustrated murder before the Regional Trial Court of Quezon City, with no recommendation as to bail. 6 Feeling aggrieved by the institution of these proceedings against him, private respondent Adaza filed a complaint for damages, 7 dated July 11, 1990, before Branch 100 of the Regional Trial Court of Quezon City. The complaint was docketed as Civil Case No. Q-90-6073 entitled, "Homobono Adaza, plaintiff versus Franklin Drilon, et al., respondents." In his complaint, Adaza charged petitioners with engaging in a deliberate, willful and malicious experimentation by filing against him a charge of rebellion complexed with murder and frustrated murder when petitioners, according to Adaza, were fully aware of the non-existence of such crime in the statute books.

On October 15, 1990, petitioners filed a Motion to Dismiss Adaza's complaint on the ground that said complaint states no actionable wrong constituting a valid cause of action against petitioners. On February 8, 1991, public respondent judge issued an Order 8 denying petitioners' Motion to Dismiss. In the same Order, petitioners were required to file their answer to the complaint within fifteen (15) days from receipt of the Order. Petitioners moved for a reconsideration of the Order of denial, but the same was likewise denied by respondent Judge in another Order dated May 14, 1991. 9 The subsequent Order reiterated that petitioners file their responsive pleading within the prescribed reglementary period. Instead of filing their answer as ordered, petitioners filed on June 5, 1991 a petition for certiorari under Rule 65 before the Court of Appeals, docketed as CA- G.R No. 25080, alleging grave abuse of discretion on the part of the respondent Judge in ruling that sufficient cause of action exists to warrant a full-blown hearing of the case filed by Adaza and thus denying petitioners' Motion to Dismiss. In its Resolution promulgated on January 31, 1992, the appellate court dismissed the petition for lack of merit and ordered respondent Judge to proceed with the trial

of Civil Case No. Q-90-6073. 10 A Motion for Reconsideration having been subsequently filed on February 28, 1992, the court a quo denied the same in a Resolution dated September 2, 1992. 11 Hence, this petition, dated October 9, 1992, pleading this Court to exercise its power of review under Rule 45 of the Revised Rules of Court. On January 13, 1993, however, this Court, thru the Second Division, dismissed the petition for failure to comply with Revised Circular No. 1-88, particularly the requirement on the payment of the prescribed docketing fees. 12 On March 8, 1993, 13 we reinstated the petition and required the respondents to comment on the aforesaid petition. In the same Resolution, a temporary restraining order was issued by this Court enjoining respondent Judge from further proceeding with Civil Case No. Q-90-6073 until further orders from this Court. The petition has merit. In his Comment, 14 dated March 23, 1993, respondent Adaza maintains that his claim before the trial court was merely a suit for damages based on tort by reason of petitioners' various malfeasance, misfeasance and nonfeasance in office, as well as for violation by the petitioners of Section 3 (e) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act. It was not a suit for malicious prosecution. Private respondent is taking us for a ride. A cursory perusal of the complaint filed by Adaza before respondent Judge George Macli-ing reveals that it is one for malicious prosecution against the petitioners for the latter's filing of the charge against him of rebellion with murder and frustrated murder. An examination of the records would show that this latest posture as to the nature of his cause of action is only being raised for the first time on appeal. Nowhere in his complaint filed with the trial court did respondent Adaza allege that his action is one based on tort or on Section 3 (e) of Republic Act No. 3019. Such a change of theory cannot be allowed. When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process. 15 Any member of the Bar, even if not too schooled in the art of litigation, would easily discern that Adaza's complaint is no doubt a suit for damages for malicious prosecution against the herein petitioners. Unfortunately, however, his complaint filed with the trial court suffers from a fatal

infirmity that of failure to state a cause of action and should have been dismissed right from the start. We shall show why. aisadc The term malicious prosecution has been defined in various ways. In American jurisdiction, it is defined as: "One begun in malice without probable cause to believe the charges can be sustained (Eustace v. Dechter, 28 Cal. App. 2d. 706, 83 P. 2d. 525). Instituted with intention of injuring defendant and without probable cause, and which terminates in favor of the person prosecuted. For this injury an action on the case lies, called the action of malicious prosecution (Hicks v. Brantley, 29 S.E. 459, 102 Ga. 264; Eggett v. Allen, 96 N.W. 803, 119 Wis. 625)." 16 In Philippine jurisdiction, it has been defined as: "An action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R, November 19, 1956)." 17 The statutory basis for a civil action for damages for malicious prosecution are found in the provisions of the New Civil Code on Human Relations and on damages particularly Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8). 18 To constitute malicious prosecution, however, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution. 19 Thus, in order for a malicious prosecution suit to prosper, the plaintiff must prove three (3) elements: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister motive. 20 All these requisites must concur. Judging from the face of the complaint itself filed by Adaza against the herein petitioners, none of the foregoing requisites have been alleged therein, thus

rendering the complaint dismissible on the ground of failure to state a cause of action under Section 1 (g), Rule 16 of the Revised Rules of Court. There is nothing in the records which shows, and the complaint does not allege, that Criminal Case No. Q-90-11855, filed by the petitioners against respondent Adaza for Rebellion with Murder and Frustrated Murder, has been finally terminated and therein accused Adaza acquitted of the charge. Not even Adaza himself, thru counsel, makes any positive asseveration on this aspect that would establish his acquittal. Insofar as Criminal Case No. Q-90-11855 is concerned, what appears clear from the records only is that respondent has been discharged on a writ of habeas corpus and granted bail. 21 This is not however, considered the termination of the action contemplated under Philippine jurisdiction to warrant the institution of a malicious prosecution suit against those responsible for the filing of the information against him. The complaint likewise does not make any allegation that the prosecution acted without probable cause in filing the criminal information dated April 18, 1990 for rebellion with murder and frustrated murder. Elementarily defined, probable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. It is wellsettled that one cannot be held liable for maliciously instituting a prosecution where one has acted with probable cause. Elsewise stated, a suit for malicious prosecution will lie only in cases where a legal prosecution has been carried on without probable cause. The reason for this rule is that it would be a very great discouragement to public justice, if prosecutors, who had tolerable ground of suspicion, were liable to be sued at law when their indictment miscarried. 22 In the case under consideration, the decision of the Special Team of Prosecutors to file the information for rebellion with murder and frustrated murder against respondent Adaza, among others, cannot be dismissed as the mere product of whim or caprice on the part of the prosecutors who conducted the preliminary investigation. Said decision was fully justified in an eighteen (18)-page Resolution dated April 17, 1990. 23 While it is true that the petitioners were fully aware of the prevailing jurisprudence enunciated in People v. Hernandez, 24 which proscribes the complexing of murder and other common crimes with rebellion, petitioners were of the honest conviction that the Hernandez Case can be differentiated from the present case. The petitioners thus argued:

"Of course we are aware of the ruling in People vs. Hernandez, 99 Phil. 515, which held that common crimes like murder, arson, etc. are absorbed by rebellion. However, the Hernandez case is different from the present case before us. In the Hernandez case, the common crimes of murder, arson, etc. were found by the fiscal to have been committed as a necessary means to commit rebellion, or in furtherance thereof. Thus, the fiscal filed an information for rebellion alleging those common crimes as a necessary means of committing the offense charged under the second part of Article 48, RPC. We, however, find no occasion to apply the Hernandez ruling since as intimated above, the crimes of murder and frustrated murder in this case were absolutely unnecessary to commit rebellion although they were the natural consequences of the unlawful bombing. Hence, the applicable provision is the first part of Article 48 of the RPC." 25

While the Supreme Court in the case of Enrile v. Salazar, 26 addressing the issue of whether or not the Hernandez doctrine is still good law, in a 10-3 vote, did not sustain the position espoused by the herein petitioners on the matter, three justices 27 felt the need to re-study the Hernandez ruling in light of present-day developments, among whom was then Chief Justice Marcelo Fernan who wrote a dissenting opinion in this wise: "I am constrained to write this separate opinion on what seems to be a rigid adherence to the 1956 ruling of the Court. The numerous challenges to the doctrine enunciated in the case of People vs. Hernandez, 99 Phil. 515 (1956), should at once demonstrate the need to redefine the applicability of said doctrine so as to make it conformable with accepted and well-settled principles of criminal law and jurisprudence. To my mind, the Hernandez doctrine should not be interpreted as an all-embracing authority for the rule that all common crimes committed on the occasion, or in furtherance of, or in connection with, rebellion are absorbed by the latter. To that extent, I cannot go along with the view of the majority in the instant case that 'Hernandez remains binding doctrine operating to prohibit the

complexing of rebellion with any other offense committed on the occasion thereof, either as a means necessary to its commission or as an unintended effect of an activity that constitutes rebellion' (p. 9, Decision). The Hernandez doctrine has served the purpose for which it was applied by the Court in 1956 during the communist-inspired rebellion of the Huks. The changes in our society in the span of 34 years since then have far-reaching effects on the all-embracing applicability of the doctrine considering the emergence of alternative modes of seizing the powers of the duly-constituted Government not contemplated in Articles 134 and 135 of the Revised Penal Code and their consequent effects on the lives of our people. The doctrine was good law then, but I believe that there is a certain aspect of the Hernandez doctrine that needs clarification." 28 Apparently, not even the Supreme Court then was of one mind in debunking the theory being advanced by the petitioners in this case, some of whom were also the petitioners in the Enrile case. Nevertheless, we held in Enrile that the Information filed therein properly charged an offense that of simple rebellion 29 and thereupon ordered the remand of the case to the trial court for the prosecution of the named accused 30 in the Information therein. Following this lead, the Information against Adaza in Criminal Case No. Q-90-11855 was not quashed, but was instead treated likewise as charging the crime of simple rebellion. A doubtful or difficult question of law may become the basis of good faith and, in this regard, the law always accords to public officials the presumption of good faith and regularity in the performance of official duties. 31 Any person who seeks to establish otherwise has the burden of proving bad faith or ill-motive. Here, since the petitioners were of the honest conviction that there was probable cause to hold respondent Adaza for trial for the crime of rebellion with murder and frustrated murder, and since Adaza himself, through counsel, did not allege in his complaint lack of probable cause, we find that the petitioners cannot be held liable for malicious prosecution. Needless to say, probable cause was not wanting in the institution of Criminal Case No. Q-90-11855 against Adaza. As to the requirement that the prosecutor must be impelled by malice in bringing the unfounded action, suffice it to state that the presence of probable cause signifies, as a legal consequence, the absence of malice. 32 At the risk of being repetitious, it is evident in this case that petitioners were not motivated by

malicious intent or by a sinister design to unduly harass private respondent, but only by a well-founded belief that respondent Adaza can be held for trial for the crime alleged in the information. All told, the complaint, dated July 11, 1990, filed by Adaza before Branch 100 of the Regional Trial Court against the petitioners does not allege facts sufficient to constitute a cause of action for malicious prosecution. Lack of cause of action, as a ground for a motion to dismiss under Section 1 (g), Rule 16 of the Revised Rules of Court, must appear on the face of the complaint itself, meaning that it must be determined from the allegations of the complaint and from none other. 33 The infirmity of the complaint in this regard is only too obvious to have escaped respondent judge's attention. Paragraph 14 of the complaint which states: "xxx xxx xxx 14.The malicious prosecution, nay persecution, of plaintiff for a non-existent crime had severely injured and besmirched plaintiff's name and reputation and forever stigmatized his stature as a public figure, thereby causing him extreme physical suffering, serious anxiety, mental anguish, moral shock and social humiliation." 34 is a mere conclusion of law and is not an averment or allegation of ultimate facts. It does not, therefore, aid in any wise the complaint in setting forth a valid cause of action against the petitioners. It is worthy to note that this case was elevated to the public respondent Court of Appeals and now to this Court because of respondent Judge Macli-ing's denial of petitioners' motion to dismiss the Adaza complaint. The ordinary procedure, as a general rule, is that petitioners should have filed an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal. 35 This general rule, however, is subject to certain exceptions, among which are, if the court denying the motion to dismiss acts without or in excess of jurisdiction or with grave abuse of discretion, in which case certiorari under Rule 65 may be availed of. The reason is that it would be unfair to require the defendants (petitioners in this case) to undergo the ordeal and expense of trial under such circumstances, because the remedy of appeal then would then not be plain and adequate. 36 Judge Macli-ing committed grave abuse of discretion in denying petitioners' motion to dismiss the Adaza complaint, and thus public respondent Court of Appeals should have issued the writ of certiorari prayed for by the petitioners and annulled the February 8, 1991 and May 14, 1991 Orders of respondent Judge. It was grievous error on the part of

the court a quo not to have done so. This has to be corrected. Respondent Adaza's baseless action cannot be sustained for this would unjustly compel the petitioners to needlessly go through a protracted trial and thereby unduly burden the court with one more futile and inconsequential case. WHEREFORE, the petition is GRANTED. The Resolutions of respondent Court of Appeals dated January 31, 1992 and September 2, 1992 affirming the February 8, 1991 and May 14, 1991 Orders of respondent Judge George C. Macli- ing are all hereby NULLIFIED AND SET ASIDE. Respondent Judge is DIRECTED to take no further action on Civil Case No. Q-90-6073 except to DISMISS the same. SO ORDERED. Padilla, Bellosillo, Vitug, and Kapunan, JJ ., concur. SECOND DIVISION [G.R. No. 51832. April 26, 1989.] RAFAEL PATRICIO, petitioner, vs. THE HONORABLE OSCAR LEVISTE, JUDGE, CFI CAPIZ, BRANCH II and BIENVENIDO BACALOCOS, respondents. Stephen C. Arceo for petitioner. Isagani V. Roblete for private respondent. SYLLABUS 1.REMEDIAL LAW; MOTIONS; NOTICE THEREOF; PURPOSE. The general rule is that notice of motion is required where a party has a right to resist the relief sought by the motion and principles of natural justice demand that his rights be not affected without an opportunity to be heard. 2.ID.; ID.; ID.; ID.; PROCEDURAL RULES LIBERALLY CONSTRUED IN CASE AT BAR. In the case at bar, a copy of the motion for reconsideration was served upon petitioner, although service was effected through ordinary mail and not by registered mail as required to the rules. But, petitioner was duly given the full opportunity to be heard and to argue his case when the court a quo required

him to file a reply (opposition) to the motion for reconsideration and subsequently set the motion for oral argument. What the law really eschews is not the lack of previous notice of hearing but the lack of opportunity to be heard. It has been held that parties should not rely on mere technicalities which, in the interest of justice, may be relaxed. The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must be avoided. Moreover, the case should, as much as possible, be decided on the merits and not merely on technicalities. 3.CIVIL LAW; DAMAGES; ARTICLE 2219 OF THE CIVIL CODE; WHEN MORAL DAMAGES MAY BE RECOVERED. We find petitioner's claim for moral damages, meritorious. There is no question that moral damages may be recovered in cases where a defendant's wrongful act or omission has caused the complainant physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. An award of moral damages is allowed in cases specified or analogous to those provided in Article 2219 of the Civil Code, to wit: "ART. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts. (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in article 309; (10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30 32, 34, and 35 . . ." 4.ID.; ID.; WHEN AWARD OF COMPENSATORY DAMAGES PROPER; PROOF OF ACTUAL OR COMPENSABLE PHYSICAL INJURY NOT NECESSARY. Pursuant to Art. 21 of the Civil Code in relation to par. (10) of Art. 2219 of the same Code, "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." The fact that no actual or compensatory damage was proven before the trial court, does not adversely affect petitioner's right to recover moral damages. Moral damages may be awarded in appropriate cases referred to in the chapter on human relations of the Civil Code (Articles 19 to 36), without need of proof that the wrongful act complained of had caused any physical injury upon the complainant. (Malonzo v. Galang, G.R. No. L-13851, 27 July 1960, 109 Phil. 16).

5.ID.; ID.; ID.; REASON FOR THE RULE. It is clear from the report of the Code Commission that the reason underlying an award of damages under Art. 21 of the Civil Code is to compensate the injured party for the moral injury caused upon his person, thus ". . . Fully sensible that there are countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed Civil Code the following rule: 'ART. 23. 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.' 6.ID.; ID.; REASON FOR THE AWARD OF EXEMPLARY OR CORRECTIVE DAMAGES; SUCH AWARD IS NOT RECOVERABLE AS A MATTER OF RIGHT. In addition to the award of moral damages, exemplary or corrective damages may be imposed upon herein private respondent by way of example or correction for the public good (Art. 22, 29, Civil Code). Exemplary damages are required by public policy to suppress the wanton acts of the offender. They are an antidote so that the poison of wickedness may not run through the body politic. The amount of exemplary damages need not be proved where it is shown that plaintiff is entitled to either moral, temperate or compensatory damages, as the case may be (Art. 2234, Civil Code), although such award cannot be recovered as a matter of right. (Art. 2233, Civil Code). 7.ID.; ID.; ATTORNEY'S FEES; AWARD THEREOF PROPER WHERE EXEMPLARY DAMAGES RECOVERABLE. In cases where exemplary damages are awarded to the injured party, attorney's fees are also recoverable.

DECISION

PADILLA, J p: Petition for review on certiorari of the Order 1 of the Court of First Instance of Capiz, Branch II, on the motion for reconsideration filed by private respondent Bienvenido Bacalocos, dismissing the complaint for damages against the latter, docketed as Civil Case No. V-3937.

Petitioner Rafael Patricio, an ordained Catholic priest, and actively engaged in social and civic affairs in Pilar, Capiz, where he is residing, was appointed Director General of the 1976 Religious and Municipal Town Fiesta of Pilar, Capiz. On 16 May 1976 at about 10:00 o'clock in the evening, while a benefit dance was on-going in connection with the celebration of the town fiesta, petitioner together with two (2) policemen were posted near the gate of the public auditorium to check on the assigned watchers of the gate. Private respondent Bienvenido Bacalocos, President of the Association of Barangay Captains of Pilar, Capiz and a member of the Sangguniang Bayan, who was in a state of drunkenness and standing near the same gate together with his companions, struck a bottle of beer on the table causing an injury on his hand which started to bleed. Then, he approached petitioner in a hostile manner and asked the latter if he had seen his wounded hand, and before petitioner could respond, private respondent, without provocation, hit petitioner's face with his bloodied hand. As a consequence, a commotion ensued and private respondent was brought by the policemen to the municipal building. 2 As a result of the incident, a criminal complaint for "Slander by Deed was filed by petitioner with the Municipal Trial Court of Pilar, Capiz, docketed as Criminal Case No. 2228, but the same was dismissed. 3 Subsequently, a complaint for damages was filed by petitioner with the court a quo. In a decision, 4 dated 18 April 1978, the court ruled in favor of herein petitioner (as complainant), holding private respondent liable to the former for moral damages as a result of the physical suffering, moral shock and social humiliation caused by private respondent's act of hitting petitioner on the face in public. The dispositive part of the decision reads as follows: "WHEREFORE, the Court orders defendant to pay plaintiff the damages as follows: Cdpr a)Moral damages of P10,000.00 b)Exemplary damages, P1,000.00 and c)Attorney's fees, P2,000.00 SO ORDERED." 5 On 9 June 1978, petitioner filed a motion for execution of judgment, alleging that the 18 April 1978 decision had become final and executory alter the lapse of thirty (30) days from receipt thereof by private respondent, without any motion for

reconsideration or appeal having been filed. 6 However, said motion was denied by the court a quo on the ground that there was a pending motion for reconsideration filed by private respondent. 7 Subsequently, private respondent filed a supplemental motion for reconsideration 8 and the court ordered petitioner to file a reply (opposition) thereto. 9 In compliance, petitioner filed a reply (opposition) to the motion for reconsideration, alleging that the filing of said motion and supplement thereto was without notice to the adverse party and proof of service, hence, the decision sought to be reconsidered had already become final and unappealable. 10 Private respondent filed a rejoinder (reply) and a manifestation stating that petitioner was duly served with a copy of said motion for reconsideration by ordinary mail, attaching thereto the affidavit of Godofredo Almazol who stated that he mailed the envelope to counsel for herein petitioner. 11 The court a quo then scheduled the motion for oral argument and the parties were allowed to extensively argue their respective causes. On 3 August 1979, an order 12 of dismissal of the petitioner's complaint was issued by the trial court, thus "ORDER This is a motion for reconsideration of the decision of this Court dated April 18, 1978, filed by counsel for defendant on May 18, 1978. In view of the recent trend in the Supreme Court to liberally construe the Rules, and in view of Section 2, Rule 1, the Court resolves to give due course to the motion. Upon review of the facts of the case, it appears and the Court finds merit in the motion for reconsideration, particularly noting that there is indeed no showing of compensatory damages being proved. WHEREFORE, this Court reconsiders its decision to conform to the facts and the law, namely, that moral and exemplary damages, in order to merit, the plaintiff ought to have proven actual or compensatory damages. WHEREFORE, this case is ordered dismissed. LLpr

SO ORDERED." Not satisfied with said order, petitioner filed the petition at bar contending that no copy of the Motion for Reconsideration was served upon petitioner and no proof of service as well as notice of hearing were attached to said motion when filed with the court a quo; thus, the motion for reconsideration did not interrupt the running of the period to appeal. The alleged mailing of a copy of said motion by ordinary mail did not, according to petitioner, cure the defect. Petitioner further argues that respondent's admission that he slapped herein petitioner in public causing him physical suffering and social humiliation, entitles the latter to moral damages. Actual and compensatory damages need not be proven before an award of moral damages can be granted, so petitioner contends. On the other hand, private respondent claims that the order of the court a quo apprising petitioner of the motion for reconsideration filed by private respondent and requiring the former to file a reply (opposition) thereto, had cured the defect of lack of proof of service and notice of hearing of said motion for reconsideration; and that the award of moral damages to petitioner is without basis for lack of proof of bad faith on the part of private respondent. With respect to the alleged lack of service on petitioner of a copy of the motion and notice of hearing and failure to attach to the motion proof of service thereof, the general rule is that notice of motion is required where a party has a right to resist the relief sought by the motion and principles of natural justice demand that his rights be not affected without an opportunity to be heard. 13 In the case at bar, a copy of the motion for reconsideration was served upon petitioner, although service was effected through ordinary mail and not by registered mail as required to the rules. But, petitioner was duly given the full opportunity to be heard and to argue his case when the court a quo required him to file a reply (opposition) to the motion for reconsideration and subsequently set the motion for oral argument. What the law really eschews is not the lack of previous notice of hearing but the lack of opportunity to be heard. It has been held that parties should not rely on mere technicalities which, in the interest of justice, may be relaxed. 14 The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must be avoided. 15

Moreover, the case should, as much as possible, be decided on the merits and not merely on technicalities. As to the petitioner's claim for moral damages, we find the same to be meritorious. There is no question that moral damages may be recovered in cases where a defendant's wrongful act or omission has caused the complainant physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. 16 An award of moral damages is allowed in cases specified or analogous to those provided in Article 2219 of the Civil Code, to wit: "ART. 2219.Moral damages may be recovered in the following and analogous cases: (1)A criminal offense resulting in physical injuries; (2)Quasi-delicts causing physical injuries; (3)Seduction, abduction, rape, or other lascivious acts. (4)Adultery or concubinage; (5)Illegal or arbitrary detention or arrest; (6)Illegal search; (7)Libel, slander or any other form of defamation; (8)Malicious prosecution; (9)Acts mentioned in article 309; (10)Acts and actions referred to in articles 21, 26, 27, 28, 29, 30 32, 34, and 35. xxx xxx xxx Private respondent's contention that there was no bad faith on his part in slapping petitioner on the face and that the incident was merely accidental is not tenable. It was established before the court a quo that there was an existing feud between the families of both petitioner and private respondent and that private respondent slapped the petitioner without provocation in the presence of several persons.

The act of private respondent in hitting petitioner on the face is contrary to morals and good customs and caused the petitioner mental anguish, moral shock, wounded feelings and social humiliation. Private respondent has to take full responsibility for his act and his claim that he was unaware of what he had done to petitioner because of drunkenness is definitely no excuse and does not relieve him of his liability to the latter. Pursuant to Art. 21 of the Civil Code in relation to par. (10) of Art. 2219 of the same Code, "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." The fact that no actual or compensatory damage was proven before the trial court, does not adversely affect petitioner's right to recover moral damages. Moral damages may be awarded in appropriate cases referred to in the chapter on human relations of the Civil Code (Articles 19 to 36), without need of proof that the wrongful act complained of had caused any physical injury upon the complainant. 17 It is clear from the report of the Code Commission that the reason underlying an award of damages under Art. 21 of the Civil Code is to compensate the injured party for the moral injury caused upon his person, thus ". . . Fully sensible that there are countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed Civil Code the following rule: LLphil 'ART. 23.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.' xxx xxx xxx" 18 In addition to the award of moral damages, exemplary or corrective damages may be imposed upon herein private respondent by way of example or correction for the public good. 19 Exemplary damages are required by public policy to suppress the wanton acts of the offender. They are an antidote so that the poison of wickedness may not run through the body politic. 20

The amount of exemplary damages need not be proved where it is shown that plaintiff is entitled to either moral, temperate or compensatory damages, as the case may be, 21 although such award cannot be recovered as a matter of right. 22 In cases where exemplary damages are awarded to the injured party, attorney's fees are also recoverable. 23 WHEREFORE, the petition is GRANTED. The order appealed from, dated 3 August 1979, is REVERSED and the decision of the court a quo dated 18 April 1978 is hereby REINSTATED. With costs against private respondent. SO ORDERED. Melencio-Herrera (Chairperson), Paras, Sarmiento and Regalado, JJ., concur. SECOND DIVISION [G.R. No. L-59825. September 11, 1982.] ERNESTO MEDINA and JOSE G. ONG, petitioners, vs. HON. FLORELIANA CASTRO-BARTOLOME in her capacity as Presiding Judge of the Court of First Instance of Rizal, Branch XV, Makati, Metro Manila, COSME DE ABOITIZ and PEPSICOLA BOTTLING COMPANY OF THE PHILIPPINES, INC. respondents. Emerito F. Upano for petitioners. Rodrigo B. Lorenzo for private respondents. SYNOPSIS Petitioners Ernesto Medina and Jose Ong, former Plant Manager and Comptroller, respectively, of respondent Pepsi-Cola Bottling Co. of the Philippines, Inc. filed with the Court of First Instance a complaint for damages against private respondents, alleging, among others, that respondent company, through its president and chief executive officer, respondent Aboitiz, without provocation, dismissed and publicly humiliated petitioners. Private respondents filed a motion to dismiss the complaint on the ground of lack of jurisdiction, which motion was

denied. While trial was in progress, private respondents filed another motion to dismiss because of amendments to the Labor Code which vested on Labor Arbiters original and exclusive jurisdiction over cases involving employer-employee relations, including claims for damages. The trial court granted the motion to dismiss for lack of jurisdiction. On review, the Supreme Court held that the trial court erred in dismissing the complaint because, there being no allegation therein of any unfair labor practice, the same is a simple action for damages for tortious acts allegedly committed by private respondents, in which case, the governing statute is the Civil Code and not the Labor Code. Petition granted. Respondent Judge is ordered to reinstate subject case and render a decision on the merits. SYLLABUS REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS FOR DAMAGES; GOVERNED BY THE NEW CIVIL CODE WHERE THE COMPLAINT ALLEGES NO UNFAIR LABOR PRACTICE ARISING FROM EMPLOYMENT; CASE AT BAR. Where plaintiffs' complaint for damages arising from the alleged disgraceful termination of employment does not allege any unfair labor practice, theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. Hence, it is error for the Court of First Instance to dismiss the complaint for lack of jurisdiction.

DECISION

ABAD SANTOS, J p: Civil Case No. 33150 of the Court of First Instance of Rizal Branch XV, was filed in May, 1979, by Ernesto Medina and Jose G. Ong against Cosme de Aboitiz and Pepsi-Cola Bottling Co. of the Philippines, Inc. Medina was the former Plant General Manager and Ong was the former Plant Comptroller of the company. Among the averments in the complaint are the following:

"3.That on or about 1:00 o'clock in the afternoon of December 20, 1977, defendant Cosme de Aboitiz, acting in his capacity as President and Chief Executive Officer of the defendant Pepsi-Cola Bottling Company of the Philippines, Inc., went to the Pepsi-Cola Plant in Muntinlupa, Metro Manila, and without any provocation, shouted and maliciously humiliated the plaintiffs with the use of the following slanderous language and other words of similar import uttered in the presence of the plaintiffs' subordinate employees, thus 'GOD DAMN IT. YOU FUCKED ME UP . . . YOU SHUT UP! FUCK YOU! YOU ARE BOTH SHIT TO ME! YOU ARE FIRED (referring to Ernesto Medina). YOU TOO ARE FIRED!' (referring to Jose Ong). "4.That on January 9, 1978, the herein plaintiffs filed a joint criminal complaint for oral defamation against the defendant Cosme de Aboitiz duly supported with respective affidavits and corroborated by the affidavits of two (2) witnesses: Isagani Hernandez and Jose Ganseco II, but after conducting a preliminary investigation, Hon. Jose B. Castillo, dismissed the complaint allegedly because the expression 'Fuck you' and 'You are both shit to me' were uttered not to slander but to express anger and displeasure: "5.That on February 8, 1978, plaintiffs filed a Petition for Review with the office of the Secretary of Justice (now Ministry of Justice) and on June 13, 1978, the Deputy Minister of Justice, Catalino Macaraig, Jr., issued a resolution sustaining the plaintiff's complaint, reversing the resolution of the Provincial Fiscal and directing him to file against defendant Cosme de Aboitiz an information for Grave Slander . . .; "6.That the employment records of plaintiffs show their track performance and impeccable qualifications, not to mention their long years of service to the Company which undoubtedly caused their promotion to the two highest positions in Muntinlupa Plant having about 700 employees under them with Ernesto Medina as the Plant General Manager receiving a monthly salary of P6,600.00 excluding other perquisites accorded only to top executives and having under his direct supervision other professionals like himself,

including the plaintiff Jose G. Ong who was the Plant Comptroller with a basic monthly salary of P4,855.00; "7.That far from taking these matters into consideration, the defendant corporation, acting through its President, Cosme de Aboitiz, dismissed and slandered the plaintiffs in the presence of their subordinate employees although this could have been done in private; "8.That the defendants have evidently enjoyed the act of dismissing the plaintiffs and such dismissal was planned to make it as humiliating as possible because instead of allowing a lesser official like the Regional Vice President to take whatever action was necessary under the circumstances, Cosme de Aboitiz himself went to the Muntinlupa Plant in order to publicly upbraid and dismiss the plaintiffs; "9.That the defendants dismissed the plaintiffs because of an alleged delay in the use of promotional crowns when such delay was true with respect to the other Plants, which is therefore demonstrative of the fact that Cosme de Aboitiz did not really have a strong reason for publicly humiliating the plaintiffs by dismissing them on the spot; "10.That the defendants were moved by evil motives and an antisocial attitude in dismissing the plaintiffs because the dismissal was effected on the very day that plaintiffs were awarded rings of loyalty to the Company, five days before Christmas and on the day when the employees' Christmas party was held in the Muntinlupa Plant, so that when plaintiffs went home that day and found their wives and children already dressed up for the party, they didn't know what to do and so they cried unashamedly; xxx xxx xxx "20.That because of the anti-social manner by which the plaintiffs were dismissed from their employment and the embarrassment and degradation they experience in the hands of the defendants, the plaintiffs have suffered and will continue to suffer wounded feelings, sleepless nights, mental torture, besmirched reputation and other similar injuries, for which the sum of P150,000.00 for each

plaintiff, or the total amount of P300,000.00 should be awarded as moral damages; "21.That the defendants have demonstrated their lack of concern for the rights and dignity of the Filipino worker and their callous disregard of Philippine labor and social legislation, and to prevent other persons from following the footsteps of defendants, the amount of P50,000.00 for each plaintiff, or the total sum of P100,000.00, should be awarded as exemplary damages; "22.That plaintiffs likewise expect to spend no less than P5,000.00 as litigation expenses and were constrained to secure the services of counsel for the protection and enforcement of their rights for which they agreed to pay the sum of P10,000.00 and P200.00 per appearance, as and for attorney's fees." The complaint contains the following: "PRAYER WHEREFORE, in view of all the foregoing, it is most respectfully prayed that after proper notice and hearing, judgment be rendered for the plaintiffs and against the defendants ordering them, jointly and solidarily, to pay the plaintiffs the sums of: 1.Unrealized income in such sum as will be established during the trial; 2.P300,000.00 as moral damages; 3.P100,000.00 by way of exemplary damages; 4.P5,000.00 as litigation expenses; 5.P10,000.00 and P200.00 per appearance as and for attorney's fees; and 6.Costs of this suit. Plaintiffs also pray for such further reliefs and remedies as may be in keeping with justice and equity."

On June 4, 1979, a motion to dismiss the complaint on the ground of lack of jurisdiction was filed by the defendants. The trial court denied the motion on September 6, 1979, in an order which reads as follows: "Up for resolution by the Court is the defendants' Motion to Dismiss dated June 4, 1979, which is basically anchored on whether or not this Court has jurisdiction over the instant petition. "The complaint alleges that the plaintiffs' dismissal was without any provocation and that defendant Aboitiz shouted and maliciously humiliated plaintiffs and used the words quoted in paragraph 3 thereof. The plaintiffs further allege that they were receiving salaries of P6,600.00 and P4,855.00 a month. So the complaint for civil damages is clearly not based on an employer-employee relationship but on the manner of plaintiffs' dismissal and the effects flowing therefrom (Jovito N. Quisaba vs. Sta. Ines-Melale Veneer & Plywood Co., Inc., et al., No. L-38088, Aug. 30, 1974.). "This case was filed on May 10, 1979. The amendatory decree, P.D. 1367, which took effect on May 1, 1978 and which provides that Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for moral or other forms of damages, now expressly confers jurisdiction on the courts in these cases, specifically under the plaintiff's causes of action. "Because of the letter dated January 4, 1978 and the statement of plaintiff Medina that his receipt of the amount from defendant company was done `under strong protest,' it cannot be said that the demands set forth in the complaint have been paid, waived or other extinguished. In fact, in defendants' Motion to Dismiss, it is stated that `in the absence of a showing that there was fraud, duress or violence attending said transactions, such Release and Quitclaim Deeds are valid and binding contracts between them,' which in effect admits that plaintiffs can prove fraud, violence, duress or violence. Hence a cause of action for plaintiffs exist.

"It is noticed that the defamatory remarks standing alone per se had been made the sole cause under the first cause of action, but it is alleged in connection with the manner in which the plaintiffs had

been dismissed, and whether the statute of limitations would apply or not would be a matter of evidence. "It has been already settled by jurisprudence that mere asking for reinstatement does not remove from the CFI jurisdiction over the damages. The case must involve unfair labor practices to bring it within the jurisdiction of the CIR (now NLRC). "WHEREFORE, the defendants' Motion to Dismiss dated June 4, 1979 is hereby denied. "The defendants are hereby directed to interpose their answer within ten (10) days from receipt hereof." While the trial was underway, the defendants filed a second motion to dismiss the complaint dated January 23, 1981, because of amendments to the Labor Code immediately prior thereto, Acting on the motion, the trial court issued on May 23, 1981, the following order: "Up for resolution by the Court is the defendants' Motion to Dismiss dated January 23, 1981, on grounds not existing when the first Motion to Dismiss dated June 4, 1979 was interposed. The ground relied upon is the promulgation of P.D. No. 1691 amending Art. 217 of the Labor Code of the Philippines and Batasan Pambansa Blg. 70 which took effect on May 1, 1980, amending Art. 248 of the Labor Code. "The Court agrees with defendants that the complaint alleges unfair labor practices which under Art. 217 of the Labor Code, as amended by P.D. 1691, has vested original and exclusive jurisdiction to Labor Arbiters, and Art. 248, thereof . . . 'which may include claims for damages and other affirmative reliefs.' Under the amendment, therefore, jurisdiction over employee-employer relations and claims of workers have been removed from the Courts of First Instance. If it is argued that this case did not arise from employer-employee relation, but it cannot be denied that this case would not have arisen if the plaintiffs had not been employees of defendant Pepsi-Cola. Even the alleged defamatory remarks made by defendant Cosme de Aboitiz were said to plaintiffs in the course of their employment, and the latter were dismissed from such employment. Hence, the case arose from such employer-employee relationship which under

the new Presidential Decree 1691 are under the exclusive, original jurisdiction of the labor arbiters. The ruling of this Court with respect to the defendants' first motion to dismiss, therefore, no longer holds as the positive law has been subsequently issued and being a curative law, can be applied retroactively (Garcia v. Martinez, et al., L-47629, May 28, 1979; 90 SCRA 331-333). "It will also logically follow that plaintiffs can reinterpose the same complaint with the Ministry of Labor. "WHEREFORE, let this case be, as it is hereby ordered, dismissed, without pronouncement as to costs." A motion to reconsider the above order was filed on July 7, 1981, but it was only on February 8, 1982, or after a lapse of around seven (7) months when the motion was denied. Plaintiffs have filed the instant petition pursuant to R. A. No. 5440 alleging that the respondent court committed the following errors: "IN DIVESTING ITSELF OF ITS JURISDICTION TO HEAR AND DECIDE CIVIL CASE NO. 33150 DESPITE THE FACT THAT JURISDICTION HAD ALREADY ATTACHED WHICH WAS NOT OUSTED BY THE SUBSEQUENT ENACTMENT OF PRESIDENTIAL DECREE 1691; IN HOLDING THAT PRESIDENTIAL DECREE 1691 SHOULD BE GIVEN A RETROSPECTIVE EFFECT WHEN PRESIDENTIAL DECREE 1367 WHICH WAS IN FORCE WHEN CIVIL CASE NO. 33150 WAS FILED AND TRIAL THEREOF HAD COMMENCED, WAS NEVER EXPRESSLY REPEALED BY PRESIDENTIAL DECREE 1691, AND IF EVER THERE WAS AN IMPLIED REPEAL, THE SAME IS NOT FAVORED UNDER PREVAILED JURISPRUDENCE; IN HOLDING THAT WITH THE REMOVAL BY PRESIDENTIAL DECREE 1691 OF THE PROVISO INSERTED IN ARTICLE 217 OF THE LABOR CODE BY PRESIDENTIAL DECREE 1367, THE LABOR ARBITERS HAVE ACQUIRED JURISDICTION OVER CLAIMS FOR DAMAGES ARISING FROM EMPLOYER-EMPLOYEE RELATIONS TO THE

EXCLUSION OF THE REGULAR COURTS, WHEN A READING OF ARTICLE 217 WITHOUT THE PROVISO IN QUESTION READILY REVEALS THAT JURISDICTION OVER DAMAGE CLAIMS IS STILL VESTED WITH THE REGULAR COURTS; IN DISMISSING FOR LACK OF JURISDICTION CIVIL CASE NO. 33150 THEREBY VIOLATING THE CONSTITUTIONAL RIGHTS OF THE PETITIONERS NOTABLY THEIR RIGHT TO DUE PROCESS." The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary. It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise. WHEREFORE, the petition is granted; the respondent judge is hereby ordered to reinstate Civil Case No. 33150 and render a decision on the merits. Costs against the private respondents. SO ORDERED. Barredo, (Chairman), Concepcion, Jr. Guerrero, De Castro and Escolin, JJ., concur. Separate Opinions AQUINO, J., dissenting: I dissent with due deference to the opinion penned by Mr. Justice Abad Santos. This case is about the jurisdiction of the Court of First Instance to entertain an action for damages arising from the alleged disgraceful termination of petitioners' employment.

Ernesto Medina, the manager of the Muntinlupa plant of Pepsi-Cola Bottling Company of the Philippines with a monthly salary of P6,600, and Jose G. Ong, Pepsi's controller in the same plant with a monthly salary of P4,855, were summarily dismissed by Cosme de Aboitiz, Pepsi's president and chief executive officer, on December 20, 1977 for having allegedly delayed the use of promotional crowns (pp. 29-31, Rollo). The two signed on January 5, 1978 letters of resignation and quitclaims and were paid P93,063 and P84,386 as separation pay, respectively. However, before receiving those amounts, Medina and Ong sent by registered mail to Aboitiz letters wherein they indicated that they objected to their illegal dismissal and that they would sign the quitclaim and resignation papers "under protest" (pp. 32, 270-275, Rollo). More than a month after their dismissal or on January 27, 1978, Medina and Ong filed with the Ministry of Labor, a complaint for illegal dismissal. They prayed for reinstatement with full backwages and, in the alternative, they prayed for additional separation pay of P72,904 for Medina and P35,927 for Ong (NLRC Case No. R4-STF-1-492-78, pp. 40, 288-299, Rollo). The director of Region IV of the Ministry of Labor dismissed that complaint because of their resignation and quitclaim. Medina and Ong appealed to the National Labor Relations Commission. Deputy Minister Amado C. Inciong affirmed the dismissal in his order of April 23, 1979 (p. 246, Rollo). He denied the motion for reconsideration of Medina and Ong in his Order of October 25, 1979 (p. 327, Rollo). Seventeen days after that order of dismissal, or on May 10, 1979, Medina and Ong filed, in the Court of First Instance of Rizal, Makati Branch XV an action for damages against Aboitiz and Pepsi-Cola by reason of the humiliating manner in which they were dismissed. They prayed for the payment of unrealized income and P415,000 as moral and exemplary damages, attorney's fees and litigation expenses (pp. 34-5, 246, Rollo). Aboitiz and Pepsi-Cola filed a motion to dismiss on the grounds of lack of jurisdiction, pendency of a labor case, lack of cause of action, payment and prescription (p. 37, Rollo). Ong and Medina opposed the motion. Judge Floreliana Castro-Bartolome in her order of September 6, 1979 denied the motion to dismiss on the ground that under Presidential Decree No. 1367, which took effect on May 1, 1979, the NLRC and Labor Arbiters cannot entertain claims

for moral or other damages, thus implying that such claims should be ventilated in court (p. 247, Rollo). After Medina had commenced his testimony, Aboitiz and Pepsi-Cola filed another motion to dismiss based on Presidential Decree No. 1691, which took effect on May 1, 1980 and which repealed Presidential Decree No. 1367 and restored to the NLRC and Labor Arbiters the jurisdiction to adjudicate money claims of workers, including moral damages, and other claims arising from employer-employee relationship. Judge Bartolome in her order of May 23, 1981 dismissed the case for lack of jurisdiction. That order of dismissal is assailed in this appeal by Medina and Ong under Republic Act No. 5440. In my opinion the dismissal of the civil action for damages is correct because the claims of Medina and Ong were within the exclusive jurisdiction of the Labor Arbiter and the NLRC, as originally provided in article 217 of the Labor Code and as reaffirmed in Presidential Decree No. 1691. Medina and Ong could not split their cause of action against Aboitiz and Pepsi-Cola. (See Aguda vs. Judge Vallejos, G. R. No. 58133, March 26, 1982; Ebon vs. Judge De Guzman, G. R. No. 58265, March 25, 1982; Cardinal Industries, Inc. vs. Vallejos, G. R. No. 57032, June 19, 1982; Pepsi-Cola Bottling Co. vs. Martinez, G. R. No. 58877, March 15, 1982. The decisions of the Regional Director and Deputy Minister Inciong are res judicata as to the claims of Medina and Ong. SECOND DIVISION [G.R. No. L-46061. November 14, 1984.] ST. LOUIS REALTY CORPORATION, petitioner, vs. COURT OF APPEALS and CONRADO J. ARAMIL, respondents. Romeo Z. Comia for petitioner. Roman R. Bersamin for private respondent. SYLLABUS

CIVIL LAW; CIVIL CODE; DAMAGES; ACTS AND OMISSIONS FALLING UNDER ARTICLE 26; WRONGFUL ADVERTISEMENT AND FAILURE TO MAKE IMMEDIATE RECTIFICATION; CASE AT BAR. Judge Jose M. Leuterio found that as a result of St. Louis Realty's mistake in misrepresenting the house of Doctor J. Aramil as belonging to Arcadio S. Arcadio, magnified by its utter lack of sincerity, Doctor Aramil suffered mental anguish and his income was reduced by about P1,000 to P1,500 a month. Moreover there was a violation of Aramil's right to privacy (Art. 26, Civil Code). The Appellate Court adopted the facts found by the trial court. Those factual findings are binding on the Supreme Court. The trial court awarded Aramil P8,000 as actual damages, P20,000 as moral damages and P2,000) as attorney's fees. They are sanctioned by Articles 2200, 2208 and 2219 of the Civil Code. Article 2219 allows moral damages for acts and actions mentioned in Article 26. The acts and omissions of the firm fall under Article 26. St. Louis Realty's employee was grossly negligent in mixing up the Aramil and Arcadio residences in a widely circulated publication like the Sunday Times. To suit its purpose, it never made any written apology and explanation of the mixup. It just contented itself with a cavalier "rectification". Persons who know the residence of Doctor Aramil, were confused by the distorted, lingering impression that he was renting his residence from Arcadio or that Arcadio had leased it from him. Either way, his private life was mistakenly and unnecessarily exposed. He suffered diminution of income and mental anguish.

DECISION

AQUINO, J p: This case is about the recovery of damages for a wrongful advertisement in the Sunday Times where Saint Louis Realty Corporation misrepresented that the house of Doctor Conrado J. Aramil belonged to Arcadio S. Arcadio. St. Louis Realty caused to be published with the permission of Arcadio S. Arcadio (but without permission of Doctor Aramil) in the issue of the Sunday Times of December 15, 1968 an advertisement with the heading "WHERE THE HEART IS". Below that heading was the photograph of the residence of Doctor Aramil and the Arcadio family and then below the photograph was the following write-up: "Home is where the heart is. And the hearts of MR. AND MRS. ARCADIO S. ARCADIO and their family have been captured by

BROOKSIDE HILLS. They used to rent a small 2-bedroom house in a cramped neighborhood, sadly inadequate and unwholesome for the needs of a large family. They dream(ed) of a more pleasant place free from the din and dust of city life yet near all facilities. Plans took shape when they heard of BROOKSIDE HILLS. With thrift and determination, they bought a lot and built their dream house . . . for P31,000. The Arcadios are now part of the friendly, thriving community of BROOKSIDE HILLS . . . a beautiful first-class subdivision planned for wholesome family living." The same advertisement appeared in the Sunday Times dated January 5, 1969. Doctor Aramil, a neuropsychiatrist and a member of the faculty of the U. E. Ramon Magsaysay Memorial Hospital, noticed the mistake. On that same date, he wrote St. Louis Realty the following letter of protest: LLjur "Dear Sirs: This is anent to your advertisements appearing in the December 15, 1968 and January 5, 1969 issues of the Sunday Times which boldly depicted my house at the above-mentioned address and implying that it belonged to another person. I am not aware of any permission or authority on my part for the use of my house for such publicity. "This unauthorized use of my house for your promotional gain and much more the apparent distortions therein are I believe not only transgression to my private property but also damaging to my prestige in the medical profession. I have had invited in several occasions numerous medical colleagues, medical students and friends to my house and after reading your December 15 advertisement, some of them have uttered some remarks purporting doubts as to my professional and personal integrity. Such sly remarks although in light vein as `it looks like your house,' `how much are you renting from the Arcadios?', `like your wife portrayed in the papers as belonging to another husband', etc., have resulted in no little mental anguish on my part. "I have referred this matter to the Legal Panel of the Philippine Medical Association and their final advice is pending upon my submission of supporting ownership papers.

"I will therefore be constrained to pursue court action against your corporation unless you could satisfactorily explain this matter within a week upon receipt of this letter." The letter was received by Ernesto Magtoto, an officer of St. Louis Realty in charge of advertising. He stopped publication of the advertisement. He contacted Doctor Aramil and offered his apologies. However, no rectification or apology was published. On February 20, 1969, Aramil's counsel demanded from St. Louis Realty actual, moral and exemplary damages of P110,000 (Exh. D). In its answer dated March 10, St. Louis Realty claimed that there was an honest mistake and that if Aramil so desired, rectification would be published in the Manila Times (Exh. 3). LexLib It published in the issue of the Manila Times of March 18, 1969 a new advertisement with the Arcadio family and their real house. But it did not publish any apology to Doctor Aramil and an explanation of the error. On March 29, Aramil filed his complaint for damages. St. Louis Realty published in the issue of the Manila Times of April 15, 1969 the following "NOTICE OF RECTIFICATION" in a space 4 by 3 inches: "This will serve as a notice that our print ad `Where the Heart is' which appeared in the Manila Times issue of March 18, 1969 is a rectification of the same ad that appeared in the Manila Times issues of December 15, 1968 and January 5, 1969 wherein a photo of the house of another Brookside Homeowner (Dr. Aramil-private respondent) was mistakenly used as a background for the featured homeowner's the Arcadio family. "The ad of March 18, 1969 shows the Arcadio family with their real house in the background, as was intended all along." Judge Jose M. Leuterio observed that St. Louis Realty should have immediately published a rectification and apology. He found that as a result of St. Louis Realty's mistake, magnified by its utter lack of sincerity, Doctor Aramil suffered mental anguish and his income was reduced by about P1,000 to P1,500 a month. Moreover, there was violation of Aramil's right to privacy (Art. 26, Civil Code).

The trial court awarded Aramil P8,000 as actual damages, P20,000 as moral damages and P2,000 as attorney's fees. St. Louis Realty appealed to the Court of Appeals. The Appellate Court affirmed that judgment, with Acting Presiding Justice Magno S. Gatmaitan asponente, and Justices Sixto A. Domondon and Samuel F. Reyes concurring. cdrep The Appellate Court reasoned out that St. Louis Realty committed an actionable quasi-delict under articles 21 and 26 of the Civil Code because the questioned advertisements pictured a beautiful house which did not belong to Arcadio but to Doctor Aramil who, naturally, was annoyed by that contretemps. In this appeal, St. Louis Realty contends that the Appellate Court ignored certain facts and resorted to surmises and conjectures. This contention is unwarranted. The Appellate Court adopted the facts found by the trial court. Those factual findings are binding on this Court. St. Louis Realty also contends that the decision is contrary to law and that the case was decided in a way not in conformity with the rulings of this Court. It argues that the case is not covered by article 26 which provides that "every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons". "Prying into the privacy of another's residence" and "meddling with or disturbing the private life or family relations of another" and "similar acts", "though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief". The damages fixed by Judge Leuterio are sanctioned by articles 2200, 2208 and 2219 of the Civil Code. Article 2219 allows moral damages for acts and actions mentioned in article 26. As lengthily explained by Justice Gatmaitan, the acts and omissions of the firm fall under article 26. St. Louis Realty's employee was grossly negligent in mixing up the Aramil and Arcadio residences in a widely circulated publication like the Sunday Times. To suit its purpose, it never made any written apology and explanation of the mixup. It just contented itself with a cavalier "rectification". Persons, who know the residence of Doctor Aramil, were confused by the distorted, lingering impression that he was renting his residence from Arcadio or that Arcadio had leased it from him. Either way, his private life was mistakenly

and unnecessarily exposed. He suffered diminution of income and mental anguish. LexLib WHEREFORE, the judgment of the Appellate Court is affirmed. Costs against the petitioner. SO ORDERED. Makasiar, Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ ., concur. THIRD DIVISION [G.R. No. 161803. February 4, 2008.] DY TEBAN TRADING, INC., petitioner, vs. JOSE CHING AND/OR LIBERTY FOREST, INC. and CRESILITO M. LIMBAGA, respondents.

DECISION

REYES, R.T., J p: THE vehicular collision resulting in damages and injuries in this case could have been avoided if the stalled prime mover with trailer were parked properly and equipped with an early warning device. It is high time We sounded the call for strict enforcement of the law and regulation on traffic and vehicle registration. Panahon na para mahigpit na ipatupad ang batas at regulasyon sa trapiko at pagpapatala ng sasakyan. Before Us is a petition for review on certiorari of the Decision 1 of the Court of Appeals (CA) modifying that 2 of the Regional Trial Court (RTC) in Butuan City finding private respondents Liberty Forest, Inc. and Cresilito Limbaga liable to petitioner Dy Teban Trading, Inc. for damages. Facts On July 4, 1995, at around 4:45 a.m., Rogelio Ortiz, with helper Romeo Catamora, was driving a Nissan van owned by petitioner Dy Teban Trading, Inc. along the

National Highway in Barangay Sumilihon, Butuan City, going to Surigao City. They were delivering commercial ice to nearby barangays and municipalities. A Joana Paula passenger bus was cruising on the opposite lane towards the van. In between the two vehicles was a parked prime mover with a trailer, owned by private respondent Liberty Forest, Inc. 3 The night before, at around 10:00 p.m., the prime mover with trailer suffered a tire blowout. The driver, private respondent Cresilito Limbaga, parked the prime mover askew occupying a substantial portion of the national highway, on the lane of the passenger bus. He parked the prime mover with trailer at the shoulder of the road with the left wheels still on the cemented highway and the right wheels on the sand and gravel shoulder of the highway. 4 The prime mover was not equipped with triangular, collapsible reflectorized plates, the early warning device required under Letter of Instruction No. 229. As substitute, Limbaga placed a banana trunk with leaves on the front and the rear portion of the prime mover to warn incoming motorists. It is alleged that Limbaga likewise placed kerosene lighted tin cans on the front and rear of the trailer. 5 To avoid hitting the parked prime mover occupying its lane, the incoming passenger bus swerved to the right, onto the lane of the approaching Nissan van. Ortiz saw two bright and glaring headlights and the approaching passenger bus. He pumped his break slowly, swerved to the left to avoid the oncoming bus but the van hit the front of the stationary prime mover. The passenger bus hit the rear of the prime mover. 6 Ortiz and Catamora only suffered minor injuries. The Nissan van, however, became inoperable as a result of the incident. After the collision, SPO4 Teofilo Pame conducted an investigation and submitted a police traffic incident investigation report. 7 On October 31, 1995, petitioner Nissan van owner filed a complaint for damages 8 against private respondents prime mover owner and driver with the RTC in Butuan City. The Joana Paula passenger bus was not impleaded as defendant in the complaint. RTC Disposition On August 7, 2001, the RTC rendered a decision in favor of petitioner Dy Teban Trading, Inc. with a fallo reading:

WHEREFORE, judgment is hereby rendered directing, ordaining and ordering: a)That defendants Liberty Forest, Inc. and Cresilito M. Limbaga pay, jointly and solidarily, plaintiff Dy Teban Trading, Inc. the amounts of P279,832.00 as actual and compensatory damages, P30,000.00 as attorney's fees and P5,000.00 as expenses of litigation; b)That all money claims of plaintiff Rogelio C. Ortiz are dismissed; c)That defendant Jose Ching is absolved from any civil liability or the case against him dismissed; d)That the counterclaim of all the defendants is dismissed; and e)That defendants Liberty Forest, Inc. and Cresilito M. Limbaga to pay, jointly and solidarily, the costs. SO ORDERED. 9 The RTC held that the proximate cause of the three-way vehicular collision was improper parking of the prime mover on the national highway and the absence of an early warning device on the vehicle, thus: The court finds that the proximate cause of the incidents is the negligence and carelessness attributable to the defendants. When the trailer being pulled by the prime mover suffered two (2) flat tires at Sumilihon, the prime mover and trailer were parked haphazardly, as the right tires of the prime mover were the only ones on the sand and gravel shoulder of the highway while the left tires and all the tires of the trailer were on the cemented pavement of the highway, occupying almost the whole of the right lane on the direction the prime mover and trailer were traveling. The statement of Limbaga that he could not park the prime mover and trailer deeper into the sand and gravel shoulder of the highway to his right because there were banana plants is contradicted by the picture marked Exhibit "F." The picture shows that there was ample space on the shoulder. If defendant Limbaga was careful and prudent enough, he should

have the prime mover and trailer traveled more distance forward so that the bodies of the prime mover and trailer would be far more on the shoulder rather than on the cemented highway when they were parked. . . . The court has some doubts on the statement of witnessdriver Limbaga that there were banana trunks with leaves and lighted tin cans with crude oil placed 3 strides in front of the prime mover and behind the trailer because the testimonies of witnesses Rogelio C. Ortiz, driver of the ice van, Romeo D. Catamora, helper of the ice van, and Police Traffic Investigator SPO3 Teofilo M. Pame show that there were no banana trunks with leaves and lighted tin cans at the scene of the incident. But even assuming that there were banana trunks with leaves but they were placed close to the prime mover and trailer as they were placed 3 strides away which to the mind of the court is equivalent approximately to 3 meters and with this distance, approaching vehicles would have no sufficient time and space to make a complete stop, especially if the vehicles are heavy and loaded. If there were lighted tin cans, it was not explained by the defendants why the driver, especially driver witness Ortiz, did not see them. xxx xxx xxx Defendant Liberty Forest, Inc. did not exercise the diligence of a good father of a family in managing and running its business. The evidence on record shows that it failed to provide its prime mover and trailer with the required "early warning devices" with reflectors and it did not keep proper maintenance and condition of the prime mover and the trailer. The circumstances show that the trailer were provided with wornout tires and with only one (1) piece of spare tire. The pictures marked Exhibit "3" and "4" show that two (2) flat tires suffered by the trailer and these two (2) tires were attached to one of the two (2) I-beams or axles attached to the rear of the trailer which axle is very near but behind the other axle and with the location of the 2 I-beams, it would have the other I-beam that would have suffered the flat tires as it has to bear the brunt of weight of the D-8 bulldozer. The bulldozer was not loaded directly above the two (2) Ibeams as 2 I-beams, as a pair, were attached at the far rear end of the trailer. xxx xxx xxx

However, defendant Jose Ching should be absolved of any liability as there is no showing that he is the manager or CEO of defendant Liberty Forest, Inc. Although in the answer, it is admitted that he is an officer of the defendant corporation, but it is not clarified what kind of position he is holding, as he could be an officer as one of the members of the Board of Directors or a cashier and treasurer of the corporation. Witness Limbaga in his testimony mentioned a certain Boy Ching as the Manager but it was never clarified whether or not Boy Ching and defendant Jose Ching is one and the same person. 10 Private respondents appealed to the CA. CA Disposition On August 28, 2003, the CA reversed the RTC decision, disposing as follows: WHEREFORE, premises considered, the decision dated August 7, 2001 of the Regional Trial Court, Branch 2, Butuan City in Civil Case No. 4360 is hereby PARTLY MODIFIED by absolving the defendants-appellants/appellees of any liability to plaintiffsappellants/appellees by reason of the incident on July 4, 1995. The dismissal of the case against Jose Ching, the counterclaim of defendants-appellants/appellees and the money claim of Rogelio Ortiz STANDS. SO ORDERED. 11 In partly reversing or partly modifying the RTC decision, the CA held that the proximate cause of the vehicular collision was the failure of the Nissan van to give way or yield to the right of way of the passenger bus, thus: It was stated that the Joana Paula bus in trying to avoid a head-on collision with the truck, sideswept the parked trailer loaded with bulldozer. Evidently, the driver of the Joana Paula bus was aware of the presence on its lane of the parked trailer with bulldozer. For this reason, it proceeded to occupy what was left of its lane and part of the opposite lane. The truck occupying the opposite lane failed to give way or yield the right of way to the oncoming bus by

proceeding with the same speed. The two vehicles were, in effect, trying to beat each other in occupying a single lane. The bus was the first to occupy the said lane but upon realizing that the truck refused to give way or yield the right of way, the bus, as a precaution, geared to its right where the trailer was parked. Unfortunately, the bus miscalculated its distance from the parked trailer and its rear right side hit the protruding blade of the bulldozer then on the top of the parked trailer. The impact of the collision on its right rear side with the blade of the bulldozer threw the bus further to the opposite lane, landing its rear portion on the shoulder of the opposite lane.

xxx xxx xxx Facts of the case reveal that when Ortiz, the driver of the truck, failed to give the Joana Paula bus the space on the road it needed, the latter vehicle scraped its rear right side on the protruded bulldozer blade and the impact threw the bus directly on the path of the oncoming truck. This made plaintiffs-appellants/appellees conclude that the Joana Paula bus occupied its lane which forced Ortiz, the driver of the truck, to swerve to its left and ram the front of the parked trailer. xxx xxx xxx The trailer was parked because its two (2) rear-left tires were blown out. With a bulldozer on top of the trailer and two (2) busted tires, it would be dangerous and quite impossible for the trailer to further park on the graveled shoulder of the road. To do so will cause the flat car to tilt and may cause the bulldozer to fall from where it was mounted. In fact, it appeared that the driver of the trailer tried its best to park on the graveled shoulder since the right-front tires were on the graveled shoulder of the road. The lower court erred in stating that the Joana Paula bus swerved to the left of the truck because it did not see the parked trailer due to lack of warning sign of danger of any kind that can be seen from a distance. The damage suffered by the Joana Paula bus belied this assessment. As stated before, the Joana Paula bus, with the intention of passing first which it did, first approached the space beside the

parked trailer, veered too close to the parked trailer thereby hitting its rear right side on the protruding bulldozer blade. Since the damage was on the rear right most of the bus, it was clearly on the space which was wide enough for a single passing vehicle but not sufficient for two (2) passing vehicles. The bus was thrown right to the path of the truck by the impact of the collision of its rear right side with the bulldozer blade. 12 The CA disagreed with the RTC that the prime mover did not have an early warning device. The appellate court accepted the claim of private respondent that Limbaga placed kerosene lighted tin cans on the front and rear of the trailer which, in Baliwag Transit, Inc. v. Court of Appeals, 13 may act as substitute early warning device. The CA stated: Likewise, it was incorrect for the lower court to state that there was no warning sign of danger of any kind, most probably referring to the absence of the triangular reflectorized plates. The police sketch clearly indicated the stack of banana leaves placed at the rear of the parked trailer. The trailer's driver testified that they placed kerosene lighted tin can at the back of the parked trailer. A pair of triangular reflectorized plates is not the only early warning device allowed by law. The Supreme Court (in Baliwag Transit, Inc. v. Court of Appeals) held that: ". . . Col. dela Cruz and Romano testified that they did not see any early warning device at the scene of the accident. They were referring to the triangular reflectorized plates in red and yellow issued by the Land Transportation Office. However, the evidence shows that Recontique and Ecala placed a kerosene lamp or torch at the edge of the road, near the rear portion of the truck to serve as an early warning device. This substantially complies with Section 34 (g) of the Land Transportation and Traffic Code . . . Baliwag's argument that the kerosene lamp or torch does not substantially comply with the law is untenable. The aforequoted law clearly allows the use not only of an early warning device of the triangular reflectorized plates' variety

but also parking lights or flares visible one hundred meters away. . . . ." This Court holds that the defendants-appellants/appellees were not negligent in parking the trailer on the scene of the accident. It would have been different if there was only one flat tire and defendantappellant/appellee Limbaga failed to change the same and left immediately. As such, defendants-appellants/appellees are not liable for the damages suffered by plaintiffs-appellants/appellees. Whatever damage plaintiffs-appellants/appellees suffered, they alone must bear them. 14 Issues Petitioner raises two issues 15 for Our consideration, to wit: I. THE HONORABLE COURT OF APPEALS, WITHOUT ANY AVAILABLE CONCRETE EVIDENCE, ERRONEOUSLY DETERMINED THAT THERE WERE EARLY WARNING DEVICES PLACED IN FRONT OF THE DEFENDANTAPPELLANTS/APPELLEES' TRUCK AND FLAT CAR TO WARN PLAINTIFF-APPELLANT/APPELLEE ROGELIO ORTIZ OF THEIR PRESENCE. II. WITH DUE RESPECT, IT IS HIGH TIME TO ENFORCE THE LAW ON EARLY WARNING DEVICES IN THE PUBLIC INTEREST. Our Ruling The petition is meritorious. The meat of the petition is whether or not the prime mover is liable for the damages suffered by the Nissan van. The RTC ruled in the affirmative holding that the proximate cause of the vehicular collision was the negligence of Limbaga in

parking the prime mover on the national highway without an early warning device on the vehicle. The CA reversed the RTC decision, holding that the proximate cause of the collision was the negligence of Ortiz in not yielding to the right of way of the passenger bus. Article 2176 of the Civil Code provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict. To sustain a claim based on quasi-delict, the following requisites must concur: (a) damage suffered by plaintiff; (b) fault or negligence of defendant; and (c) connection of cause and effect between the fault or negligence of defendant and the damage incurred by plaintiff. 16 There is no dispute that the Nissan van suffered damage. That is borne by the records and conceded by the parties. The outstanding issues are negligence and proximate cause. Tersely put, the twin issues are: (a) whether or not prime mover driver Limbaga was negligent in parking the vehicle; and (b) whether or not his negligence was the proximate cause of the damage to the Nissan van. Limbaga was negligent in parking the prime mover on the national highway; he failed to prevent or minimize the risk to oncoming motorists. Negligence is defined as the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. 17 The Supreme Court stated the test of negligence in the landmark case Picart v. Smith 18 as follows: The test by which to determine the existence or negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinary person would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case is not determined by reference to the

personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines liability by that. (Underscoring supplied) The test of negligence is objective. We measure the act or omission of the tortfeasor with that of an ordinary reasonable person in the same situation. The test, as applied to this case, is whether Limbaga, in parking the prime mover, used that reasonable care and caution which an ordinary reasonable person would have used in the same situation. We find that Limbaga was utterly negligent in parking the prime mover askew on the right side of the national highway. The vehicle occupied a substantial portion of the national road on the lane of the passenger bus. It was parked at the shoulder of the road with its left wheels still on the cemented highway and the right wheels on the sand and gravel shoulder of the highway. It is common sense that the skewed parking of the prime mover on the national road posed a serious risk to oncoming motorists. It was incumbent upon Limbaga to take some measures to prevent that risk, or at least minimize it. We are unable to agree with the CA conclusion "it would have been dangerous and quite impossible to further park the prime mover on the graveled shoulder of the road because the prime mover may tilt and the bulldozer may fall off." The photographs taken after the incident show that it could have been possible for Limbaga to park the prime mover completely on the shoulder of the national road without risk to oncoming motorists. We agree with the RTC observation on this point, thus: . . . The statement of Limbaga that he could not park the prime mover and trailer deeper into the sand and gravel shoulder of the highway to his right because there were banana plants is contradicted by the picture marked Exhibit "F." The picture shows that there was ample space on the shoulder. If defendant Limbaga was careful and prudent enough, he should have the prime mover and trailer traveled more distance forward so that the bodies of the prime mover and trailer would be far more on the shoulder rather than on the cemented highway when they were parked. Although at the time of the incident, it was about 4:45 in the morning and it was drizzling but there is showing that it was pitch dark that whoever travels along the highway must be extra careful. If the Joana Paula

bus swerved to the lane on which the "Nissan" ice van was properly traveling, as prescribed by Traffic Rules and Regulations, it is because the driver of the bus did not see at a distance the parked prime mover and trailer on the bus' proper lane because there was no warning signs of danger of any kind that can be seen from a distance. 19

Limbaga also failed to take proper steps to minimize the risk posed by the improperly parked prime mover. He did not immediately inform his employer, private respondent Liberty Forest, Inc., that the prime mover suffered two tire blowouts and that he could not have them fixed because he had only one spare tire. Instead of calling for help, Limbaga took it upon himself to simply place banana leaves on the front and rear of the prime mover to serve as warning to oncoming motorists. Worse, Limbaga slept on the prime mover instead of standing guard beside the vehicle. By his own account, Limbaga was sleeping on the prime mover at the time of the collision and that he was only awakened by the impact of the Nissan van and the passenger bus on the prime mover. 20 Limbaga also admitted on cross-examination that it was his first time to drive the prime mover with trailer loaded with a D-8 caterpillar bulldozer. 21 We find that private respondent Liberty Forest, Inc. was utterly negligent in allowing a novice driver, like Limbaga, to operate a vehicle, such as a truck loaded with a bulldozer, which required highly specialized driving skills. Respondent employer clearly failed to properly supervise Limbaga in driving the prime mover. The RTC noted that private respondent Liberty Forest, Inc. also failed to keep the prime mover in proper condition at the time of the collision. The prime mover had worn out tires. It was only equipped with one spare tire. It was for this reason that Limbaga was unable to change the two blown out tires because he had only one spare. The bulldozer was not even loaded properly on the prime mover, which caused the tire blowouts. All told, We agree with the RTC that private respondent Limbaga was negligent in parking the prime mover on the national highway. Private respondent Liberty Forest, Inc. was also negligent in failing to supervise Limbaga and in ensuring that the prime mover was in proper condition. The case of Baliwag Transit, Inc. v. Court of Appeals is inapplicable;

Limbaga did not put lighted kerosene tin cans on the front and rear of the prime mover. Anent the absence of an early warning device on the prime mover, the CA erred in accepting the bare testimony of Limbaga that he placed kerosene lighted tin cans on the front and rear of the prime mover. The evidence on records belies such claim. The CA reliance on Baliwag Transit, Inc. v. Court of Appeals 22 as authority for the proposition that kerosene lighted tin cans may act as substitute early warning device is misplaced. First, the traffic incident report did not mention any lighted tin cans on the prime mover or within the immediate vicinity of the accident. Only banana leaves were placed on the prime mover. The report reads: VIII RESULT OF INVESTIGATION: A Joana Paula Bus, with Body No. 7788, with Plate No. LVA-137, driven by one Temestocles Relova v. Antero, of legal age, married and a resident of San Roque, Kitcharao, Agusan del Norte, while traveling along the National Highway, coming from the east going to the west direction, as it moves along the way and upon reaching Brgy. Sumilihon, Butuan City to evade bumping to the approaching Nissan Ice Van with Plate No. PNT-247, driven by one Rogelio Cortez y Ceneza. As the result, the Joana Paula Bus accidentally busideswept (sic) to the parked Prime Mover with Trailer loaded with Bulldozer without early warning device, instead placing only dry banana leaves three (3) meters at the rear portion of the Trailer, while failure to place at the front portion, and the said vehicle occupied the whole lane. As the result, the Joana Paula Bus hit to the left edge blade of the Bulldozer. Thus, causing the said bus swept to the narrow shouldering, removing the rear four (4) wheels including the differential and injuring the above-stated twelve (12) passengers and damaged to the right side fender above the rear wheel. Thus, causing damage on it. While the Nissan Ice Van in evading, accidentally swerved to the left lane and accidentally bumped to the front bumper of the parked Prime Mover with Trailer loaded with Bulldozer. Thus, causing heavy damage to said Nissan Ice Van including the cargoes of the said van. 23

Second, SPO4 Pame, who investigated the collision, testified 24 that only banana leaves were placed on the front and rear of the prime mover. He did not see any lighted tin cans in the immediate vicinity of the collision. Third, the claim of Limbaga that he placed lighted tin cans on the front and rear of the prime mover belatedly surfaced only during his direct examination. No allegation to this effect was made by private respondents in their Answer to the complaint for damages. Petitioner's counsel promptly objected to the testimony of Limbaga, thus: ATTY. ROSALES: Q.Now you mentioned about placing some word signs in front and at the rear of the prime mover with trailer, will you please describe to us what this word signs are? A.We placed a piece of cloth on tin cans and filled them with crude oil. And these tin cans were lighted and they are like torches. These two lights or torches were placed in front and at the rear side of the prime mover with trailer. After each torch, we placed banana trunk. The banana trunk is placed between the two (2) torches and the prime mover, both on the rear and on the front portion of the prime mover. Q.How far was the lighted tin cans with wick placed in front of the prime mover. ATTY. ASIS: At this point, we will be objecting to questions particularly referring to the alleged tin cans as some of the warning-sign devices, considering that there is no allegation to that effect in the answer of the defendants. The answer was just limited to the numbers 4 & 5 of the answer. And, therefore, if we follow the rule of the binding effect of an allegation in the complaint, then the party will not be allowed to introduce evidence to attack jointly or rather the same, paragraph 5 states, warning device consisting of 3 banana trunks, banana items and leaves were filed. He can be cross-examined in the point, Your Honor.

COURT: Q.Put that on record that as far as this tin cans are concerned, the plaintiffs are interposing continuing objections. But the Court will allow the question. 25 We thus agree with the RTC that Limbaga did not place lighted tin cans on the front and rear of the prime mover. We give more credence to the traffic incident report and the testimony of SPO4 Pame that only banana leaves were placed on the vehicle. Baliwag Transit, Inc. v. Court of Appeals 26 thus finds no application to the case at bar. The skewed parking of the prime mover was the proximate cause of the collision. Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. More comprehensively, proximate cause is that cause acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom. 27 There is no exact mathematical formula to determine proximate cause. It is based upon mixed considerations of logic, common sense, policy and precedent. 28 Plaintiff must, however, establish a sufficient link between the act or omission and the damage or injury. That link must not be remote or far-fetched; otherwise, no liability will attach. The damage or injury must be a natural and probable result of the act or omission. In the precedent-setting Vda. de Bataclan v. Medina, 29 this Court discussed the necessary link that must be established between the act or omission and the damage or injury, viz.: It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely causing him physical injuries, if through some event, unexpected and extraordinary, the overturned bus is set on fire, say, by lightning, or if some highwaymen after looting the

vehicle sets it on fire, and the passenger is burned to death, one might still contend that the proximate cause of his death was the fire and not the overturning of the vehicle. But in the present case and under the circumstances obtaining in the same, we do not hesitate to hold that the proximate cause of the death of Bataclan was the overturning of the bus, this for the reason that when the vehicle turned not only on its side but completely on its back, the leaking of the gasoline from the tank was not unnatural or unexpected; that the coming of the men with a lighted torch was in response to the call for help, made not only by the passengers, but most probably, by the driver and the conductor themselves, and that because it was very dark (about 2:30 in the morning), the rescuers had to carry a light with them; and coming as they did from a rural area where lanterns and flashlights were not available, they had to use a torch, the most handy and available; and what was more natural than that said rescuers should innocently approach the overturned vehicle to extend the aid and effect the rescue requested from them. In other words, the coming of the men with the torch was to be expected and was natural sequence of the overturning of the bus, the trapping of some of its passengers' bus, the trapping of some of its passengers and the call for outside help. The ruling in Bataclan has been repeatedly cited in subsequent cases as authority for the proposition that the damage or injury must be a natural or probable result of the act or omission. Here, We agree with the RTC that the damage caused to the Nissan van was a natural and probable result of the improper parking of the prime mover with trailer. As discussed, the skewed parking of the prime mover posed a serious risk to oncoming motorists. Limbaga failed to prevent or minimize that risk. The skewed parking of the prime mover triggered the series of events that led to the collision, particularly the swerving of the passenger bus and the Nissan van.

Private respondents Liberty Forest, Inc. and Limbaga are liable for all damages that resulted from the skewed parking of the prime mover. Their liability includes those damages resulting from precautionary measures taken by other motorist in trying to avoid collision with the parked prime mover. As We see it, the passenger bus swerved to the right, onto the lane of the Nissan van, to avoid colliding with the improperly parked prime mover. The driver of the Nissan van, Ortiz, reacted swiftly by swerving to the left, onto the lane of the passenger bus, hitting the

parked prime mover. Ortiz obviously would not have swerved if not for the passenger bus abruptly occupying his van's lane. The passenger bus, in turn, would not have swerved to the lane of the Nissan van if not for the prime mover improperly parked on its lane. The skewed parking is the proximate cause of the damage to the Nissan van. In Phoenix Construction, Inc. v. Intermediate Appellate Court, 30 this Court held that a similar vehicular collision was caused by the skewed parking of a dump truck on the national road, thus: The conclusion we draw from the factual circumstances outlined above is that private respondent Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster than he should have been. Worse, he extinguished his headlights at or near the intersection of General Lacuna and General Santos Streets and thus did not see the dump truck that was parked askew and sticking out onto the road lane. Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the legal and proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel. That there was a reasonable relationship between petitioner Carbonel's negligence on the one hand and the accident and respondent's injuries on the other hand, is quite clear. Put in a slightly different manner, the collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the truck driver's negligence. xxx xxx xxx We believe, secondly, that the truck driver's negligence far from being a "passive and static condition" was rather an indispensable and efficient cause. The collision between the dump truck and the private respondent's car would in all probability not have occurred had the dump truck not been parked askew without any warning lights or reflector devices. The improper parking of the dump truck created an unreasonable risk of injury for anyone driving down General Lacuna Street and for having so created this risk, the truck driver must be held responsible. In our view, Dionisio's negligence,

although later in point of time than the truck driver's negligence and, therefore, closer to the accident, was not an efficient intervening or independent cause. What the Petitioner describes as an "intervening cause" was no more than a foreseeable consequence of the risk created by the negligent manner in which the truck driver had parked the dump truck. In other words, the petitioner truck driver owed a duty to private respondent Dionisio and others similarly situated not to impose upon them the very risk the truck driver had created. Dionisio's negligence was not of an independent and overpowering nature as to cut, as it were, the chain of causation in fact between the improper parking of the dump truck and the accident, nor to sever the juris vinculum of liability. . . . (Underscoring supplied) We cannot rule on the proportionate or contributory liability of the passenger bus, if any, because it was not a party to the case; joint tortfeasors are solidarily liable. The CA also faults the passenger bus for the vehicular collision. The appellate court noted that the passenger bus was "aware" of the presence of the prime mover on its lane, but it still proceeded to occupy the lane of the Nissan van. The passenger bus also miscalculated its distance from the prime mover when it hit the vehicle. We cannot definitively rule on the proportionate or contributory liability of the Joana Paula passenger bus vis--vis the prime mover because it was not a party to the complaint for damages. Due process dictates that the passenger bus must be given an opportunity to present its own version of events before it can be held liable. Any contributory or proportionate liability of the passenger bus must be litigated in a separate action, barring any defense of prescription or laches. Insofar as petitioner is concerned, the proximate cause of the collision was the improper parking of the prime mover. It was the improper parking of the prime mover which set in motion the series of events that led to the vehicular collision. Even granting that the passenger bus was at fault, it's fault will not necessarily absolve private respondents from liability. If at fault, the passenger bus will be a joint tortfeasor along with private respondents. The liability of joint tortfeasors is joint and solidary. This means that petitioner may hold either of them liable for

damages from the collision. In Philippine National Construction Corporation v. Court of Appeals, 31 this Court held: According to the great weight of authority, where the concurrent or successive negligent acts or omission of two or more persons, although acting independently of each other, are, in combination, the direct and proximate cause of a single injury to a third person and it is impossible to determine in what proportion each contributed to the injury, either is responsible for the whole injury, even though his act alone might not have caused the entire injury, or the same damage might have resulted from the acts of the other tort-feasor . . . . In Far Eastern Shipping Company v. Court of Appeals, the Court declared that the liability of joint tortfeasors is joint and solidary, to wit: It may be said, as a general rule, that negligence in order to render a person liable need not be the sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient causes other than plaintiff's, is the proximate cause of the injury. Accordingly, where several causes combine to produce injuries, a person is not relieved from liability because he is responsible for only one of them, it being sufficient that the negligence of the person charged with injury is an efficient cause without which the injury would not have resulted to as great an extent, and that such cause is not attributable to the person injured. It is no defense to one of the concurrent tortfeasors that the injury would not have resulted from his negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasors. Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not the same. No actor's negligence ceases to be a proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.

There is no contribution between joint tortfeasors whose liability is solidary since both of them are liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although acting independently, are in combination with the direct and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the whole injury. Where their concurring negligence resulted in injury or damage to a third party, they become joint tortfeasors and are solidarily liable for the resulting damage under Article 2194 of the Civil Code. (Underscoring supplied) All told, all the elements of quasi delict have been proven by clear and convincing evidence. The CA erred in absolving private respondents from liability for the vehicular collision. Final Note It is lamentable that the vehicular collision in this case could have been easily avoided by following basic traffic rules and regulations and road safety standards. In hindsight, private respondent Limbaga could have prevented the three-way vehicular collision if he had properly parked the prime mover on the shoulder of the national road. The improper parking of vehicles, most especially along the national highways, poses a serious and unnecessary risk to the lives and limbs of other motorists and passengers. Drivers owe a duty of care to follow basic traffic rules and regulations and to observe road safety standards. They owe that duty not only for their own safety, but also for that of other motorists. We can prevent most vehicular accidents by simply following basic traffic rules and regulations. We also note a failure of implementation of basic safety standards, particularly the law on early warning devices. This applies even more to trucks and big vehicles, which are prone to mechanical breakdown on the national highway. The law, as crafted, requires vehicles to be equipped with triangular reflectorized plates. 32 Vehicles without the required early warning devices are ineligible for registration. 33 Vehicle owners may also be arrested and fined for non-compliance with the law. 34 The Land Transportation Office (LTO) owes a duty to the public to ensure that all vehicles on the road meet basic and minimum safety features, including that of early warning devices. It is most unfortunate that We still see dilapidated and

rundown vehicles on the road with substandard safety features. These vehicles not only pose a hazard to the safety of their occupants but that of other motorists. The prime mover truck in this case should not have been granted registration because it failed to comply with the minimum safety features required for vehicles on the road.

It is, indeed, time for traffic enforcement agencies and the LTO to strictly enforce all pertinent laws and regulations within their mandate. WHEREFORE, the petition is GRANTED. The Court of Appeals decision dated August 28, 2003 is hereby SET ASIDE. The RTC decision dated August 7, 2001 is REINSTATED IN FULL. SO ORDERED. Ynares-Santiago, Austria-Martinez, Corona * and Nachura, JJ., concur. SECOND DIVISION [G.R. No. 155111. February 14, 2008.] CORNELIO LAMPESA and DARIO COPSIYAT, petitioners, vs. DR. JUAN DE VERA, JR., FELIX RAMOS and MODESTO TOLLAS, respondents.

DECISION

QUISUMBING, J p: This petition for review seeks the reversal of the Decision 1 dated August 21, 2002 of the Court of Appeals in CA-G.R. CV No. 49778 which had affirmed the Decision 2 dated March 22, 1995 of the Regional Trial Court of San Carlos City, Pangasinan, Branch 57, finding petitioners Cornelio Lampesa and Dario Copsiyat liable for damages on account of the injury sustained by respondent, Dr. Juan de Vera, Jr.

The antecedent facts, as found by the appellate court, are as follows: On December 28, 1988, de Vera, Jr. boarded a passenger jeepney 3 bound for Baguio City driven by respondent Modesto Tollas. Upon reaching the Km. 4 marker of the national highway, the jeepney came to a complete stop to allow a truck, 4 then being driven by Dario Copsiyat, to cross the path of the jeepney in order to park at a private parking lot on the right side of the road. As Tollas began to maneuver the jeepney slowly along its path, the truck, which had just left the pavement, suddenly started to slide back towards the jeepney until its rear left portion hit the right side of the jeepney. de Vera, Jr., who was seated in the front passenger seat, noticed his left middle finger was cut off as he was holding on to the handle of the right side of the jeepney. He asked Tollas to bring him immediately to the hospital. The Medical Certificate 5 dated June 19, 1989, described de Vera, Jr.'s amputated left middle finger as follows: Neuroma, proximal phalange left middle finger OPERATION PERFORMED: Ray amputation middle finger left. . . 6 P/Cpl. Arthur A. Bomogao of the Benguet Integrated National Police investigated and recorded the incident in his Police Investigation Report 7 dated January 17, 1989. The defense, for its part, presented the following version of the incident: After delivering a load of vegetables, truck owner Lampesa instructed his driver, Copsiyat, to park the truck in the parking lot across the highway. While the rear of the truck was still on the pavement of the highway, an approaching passenger jeepney sideswiped the rear portion of the truck. This resulted in the dismemberment of de Vera, Jr.'s left middle finger, according to the defense. Lampesa offered P5,000 to de Vera, Jr. as a gesture of humanitarian support, but the latter demanded P1 million although this amount was later lowered to P75,000. The parties failed to settle amicably; thus, de Vera, Jr. filed an action for damages 8 against Lampesa, Copsiyat, Ramos and Tollas, as the truck owner, truck driver, jeepney owner/operator and jeepney driver, respectively. The trial court found driver Copsiyat negligent in the operation of his truck and ruled that his negligence was the proximate cause of the injuries suffered by de Vera, Jr. It also ruled that Lampesa did not exercise due diligence in the selection and supervision of his driver as required under Articles 2176 9 and 2180 10 of the Civil Code. The fallo of the decision reads:

WHEREFORE, judgment is hereby rendered: 1.Ordering Dario Copsiyat and Cornelio F. Lampesa, jointly and solidarily to pay the plaintiff the sum of P75,000.00 as moral damages; P22,000.00 as actual damages; and P15,000.00 as attorney's fees plus the costs of suit. 2.The counterclaim and cross-claim of defendant Lampesa and Copsiyat and the counterclaim and counter-cross-claim of defendants Ramos and Tollas are hereby dismissed. SO ORDERED. 11 Upon review, the Court of Appeals upheld the trial court's findings of negligence on the part of Copsiyat and Lampesa. The dispositive portion of the decision reads: WHEREFORE, the questioned Decision, dated March 22, 1995, of the Regional Trial Court of Pangasinan, Branch 57, in Civil Case No. SCC-1506, is hereby AFFIRMED. SO ORDERED. 12 Hence, the instant petition, raising the following as issues: I. WHO BETWEEN THE TWO (2) DRIVERS (COPSIYAT WHO WAS THE ELF TRUCK DRIVER AND TOLLAS FOR THE PASSENGER JEEP) WAS NEGLIGENT? II. GRANTING THAT COPSIYAT WAS ALSO NEGLIGENT, WHETHER OR NOT THE AWARD OF MORAL DAMAGES AND ATTORNEY'S FEES ARE JUSTIFIED; AND III. WHETHER OR NOT THE TRIAL COURT AND THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN THE APPRECIATION OF THE EVIDENCE. 13

Simply put, the issues for our resolution are: (1) Did the Court of Appeals err in affirming the trial court's ruling that petitioners are liable for the injury sustained by de Vera, Jr.? and (2) Did it err in awarding moral damages and attorney's fees? Petitioners insist that it was Tollas, the jeepney driver, who was negligent. They maintain that Tollas should have first allowed the truck to park as he had a clear view of the scenario, compared to Copsiyat, the truck driver, who had a very limited view of the back of the truck. Lampesa also avers he did his legal duty in the selection and supervision of Copsiyat as his driver. He alleges that before hiring Copsiyat, he asked the latter if he had a professional driver's license. For their part, respondents adopt the findings of the trial and appellate courts. They contend that it was Copsiyat who was negligent in driving the truck and the testimony of de Vera, Jr. on this matter was more than sufficient to prove the fact. De Vera, Jr. also contends that petitioners are liable for moral damages and attorney's fees under Articles 2217 14 and 2208 15 of the Civil Code. Considering the contentions of the parties, in the light of the circumstances in this case, we are in agreement that the petition lacks merit. Article 2176 of the Civil Code provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called quasi-delict. Whether a person is negligent or not is a question of fact, which we cannot pass upon in a petition for review on certiorari, as our jurisdiction is limited to reviewing errors of law. 16 In this case, both the trial and the appellate courts found Copsiyat negligent in maneuvering the truck and ruled that his negligence was the proximate cause of the injury sustained by de Vera, Jr. Lampesa was also held accountable by both courts because he failed to exercise due diligence in the supervision of his driver. This Court is not bound to weigh all over again the evidence adduced by the parties, particularly where the findings of both the trial court and the appellate court on the matter of petitioners' negligence coincide. The resolution of factual issues is a function of the trial court, whose findings on these matters are, as a general rule, binding on this Court more so where these have been affirmed by the Court of Appeals. 17 Once negligence on the part of the employee is established, a presumption instantly arises that the employer was negligent in the selection and/or supervision of said employee. 18 To rebut this presumption, the employer must present adequate and

convincing proof that he exercised care and diligence in the selection and supervision of his employees. Lampesa claims he did his legal duty as an employer in the selection and supervision of Copsiyat. But the record is bare on this point. It lacks any showing that Lampesa did so. Admitting arguendo that Copsiyat did show his professional license when he applied for the job of truck driver, Lampesa should not have been satisfied by the mere possession of a professional driver's license by Copsiyat. As an employer, Lampesa was duty bound to do more. He should have carefully examined Copsiyat's qualifications, experiences and record of service, if any. 19 Lampesa must also show that he exercised due supervision over Copsiyat after his selection. But all he had shown on record were bare allegations unsubstantiated by evidence. Having failed to exercise the due diligence required of him as employer, Lampesa cannot avoid solidary liability for the tortuous act committed by his driver, Copsiyat. On a final note, petitioners' liability for moral damages and attorney's fees cannot now be questioned for failure of petitioners to raise it before the Court of Appeals. It is a well-entrenched rule that issues not raised below cannot be raised for the first time on appeal as to do so would be offensive to the basic rules of fair play and justice. 20 Moreover, the award of moral damages in this case is justifiable under Article 2219 (2) 21 of the Civil Code, which provides for said damages in cases of quasi-delicts causing physical injuries. 22 The award for attorney's fees is also proper under Article 2208 (2) 23 of the Civil Code, considering that de Vera, Jr. was compelled to litigate when petitioners ignored his demand for an amicable settlement of his claim. 24 WHEREFORE, the petition is DENIED for lack of merit. The Decision dated August 21, 2002 of the Court of Appeals in CA-G.R. CV No. 49778 is AFFIRMED. Costs against the petitioners. SO ORDERED. Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur. SECOND DIVISION [G.R. No. 108017. April 3, 1995.]

MARIA BENITA A. DULAY, in her, own behalf and in behalf of the minor children KRIZTEEN ELIZABETH, BEVERLY MARIE and NAPOLEON II, all surnamed DULAY, petitioners, vs. THE COURT OF APPEALS, Former Eighth Division, HON. TEODORO P. REGINO, in his capacity as Presiding Judge of the Regional Trial Court, National Capital Region, Quezon City, Br. 84, SAFEGUARD INVESTIGATION AND SECURITY CO., INC., and SUPERGUARD SECURITY CORPORATION, respondents. Yolanda Quisumbing-Javellana & Associates for petitioners. Ambrosio Padilla Mempin Reyes & Calsan Law Offices for respondent SUPERGUARD Security Corporation. Padilla Jimenez Kintanar & Asuncion Law Firm for respondent SAFEGUARD Investigation & Security Co. SYLLABUS 1.REMEDIAL LAW; CRIMINAL PROCEDURE; INDEPENDENT CIVIL ACTION; RULE. It is well-settled that the filing of an independent civil action before the prosecution in the criminal action presents evidence is even far better than a compliance with the requirement of an express reservation (Yakult Philippines v. Court of Appeals, 190 SCRA 357 [1990]). 2.ID.; CIVIL PROCEDURE; CAUSE OF ACTION; ELEMENTS FOR EXISTENCE THEREOF. A cause of action exists if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages. (Del Bros Hotel Corporation v. CA, 210 SCRA 33 [1992]); Development Bank of the Philippines v. Pundogar, 218 SCRA 118 [1993]). 3.ID.; ID.; ID; DETERMINED BY THE ALLEGATIONS IN THE COMPLAINTS; CASE AT BAR. The nature of a cause of action is determined

by the facts alleged in the complaint as constituting the cause of action (Republic v. Estenzo, 158 SCRA 282 [1988]). The purpose of an action or suit and the law to govern it is to be determined not by the claim of the party filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for relief (De Tavera v. Philippine Tuberculosis Society, 112 SCRA 243 [1982]). An examination of the complaint in the present case would show that the plaintiffs, petitioners herein, are invoking their right to recover damages against the private respondents for their vicarious responsibility for the injury caused by Benigno Torzuela's act of shooting and killing Napoleon Dulay, as stated in paragraphs 1 and 2 of the complaint. The general rule is that the allegations in a complaint are sufficient to constitute a cause of action against the defendants if, admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. 4.ID.; ID.; ID.; ID.; PROOF OF ALLEGATIONS; WHEN NECESSARY. In determining whether the allegations of a complaint are sufficient to support a cause of action, it must be borne in mind that the complaint does not have to establish or allege the facts proving the existence of a cause of action at the outset; this will have to be done at the trial on the merits of the case. If the allegations in a complaint can furnish a sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defenses that may be assessed by the defendants (Rava Dev't. Corp. v. CA, 211 SCRA 152 [1992] citing Consolidated Bank & Trust Corporation v. Court of Appeals, 197 SCRA 663 [1991]). To sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist rather than that a claim has been defectively stated or is ambiguous, indefinite or uncertain (Azur v. Provincial Board, 27 SCRA 50 [1969]). Since the petitioners clearly sustained an injury to their rights under the law, it would be more just to allow them to present evidence of such injury. cdrep 4.CIVIL LAW; TORTS AND DAMAGES; QUASI-DELICT; CONSTRUED. Well-entrenched is the doctrine that Article 2176 covers not only acts committed with negligence, but also acts which are voluntary and intentional. As far back as the definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that: ". . . Article 2176, where it refers to 'fault or negligence,' covers not only acts 'not punishable by law' but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores , and would be entitled

in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as 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. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law." The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court (191 SCRA 195 [1990]), wherein the Court held: "Article 2176, whenever it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a civil action lies against the offender in a criminal act, whether or not he is prosecuted or found guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually also charged 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." [Citing Virata v. Ochoa, 81 SCRA 472] 5.ID.; ID.; RULE WHEN AN INJURY IS CAUSED BY THE NEGLIGENCE OF THE EMPLOYEE. Under Article 2180 of the New Civil Code as aforequoted, 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 (Layugan v. Intermediate Appellate Court, 167 SCRA 363 [1988]). 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 (Kapalaran Bus Lines v. Coronado, 176 SCRA 792 [1989]). 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.

DECISION

BIDIN, J p: This petition for certiorari prays for the reversal of the decision of the Court of Appeals dated October 29, 1991 in CA-G.R. CV No. 24646 which

affirmed the order of the Regional Trial Court dismissing Civil Case No. Q-891751, and its resolution dated November 17, 1991 denying herein petitioner's motion for reconsideration. cdll The antecedent facts of the case are as follows: On December 7, 1988, an altercation between Benigno Torzuela and Atty. Napoleon Dulay occurred at the "Big Bang sa Alabang," Alabang Village, Muntinlupa as a result of which Benigno Torzuela, the security guard on duty at the said carnival, shot and killed Atty. Napoleon Dulay. Herein petitioner Maria Benita A. Dulay, widow of the deceased Napoleon Dulay, in her own behalf and in behalf of her minor children, filed on February 8, 1989 an action for damages against Benigno Torzuela and herein private respondents Safeguard Investigation and Security Co., Inc., ("SAFEGUARD") and/or Superguard Security Corp. ("SUPERGUARD"), alleged employers of defendant Torzuela. The complaint, docketed as Civil Case No. Q-89-1751 among others alleges the following: 1.. . . "Defendants SAFEGUARD INVESTIGATION AND SECURITY CO., INC, (Defendant Safeguard) and SUPERGUARD SECURITY CORPORATION (Defendant Superguard) are corporations duly organized and existing in accordance with Philippine laws, with offices at 10th Floor, Manufacturers Building, Inc., Plaza Santa Cruz, Manila. They are impleaded as alternative defendants for, while the former appears to be the employer of defendant BENIGNO TORZUELA (defendant TORZUELA), the latter impliedly acknowledged responsibility for the acts of defendant TORZUELA by extending its sympathies to plaintiffs. "Defendant BENIGNO TORZUELA is of legal age, an employee of defendant SAFEGUARD and/or defendant SUPERGUARD and, at the time of the incident complained of, was under their control and supervision. . . . "3.On December 7, 1988 at around 8:00 a.m., defendant TORZUEIA, while he was on duty as security guard at the "Big Bang sa Alabang," Alabang Village, Muntinlupa, Metro Manila shot and killed NAPOLEON V. DULAY with a .38 caliber revolver

belonging to defendant SAFEGUARD, and/or SUPERGUARD (per police Report dated January 7, 1989, copy attached as Annex A); "4.The incident resulting in the death of NAPOLEON V. DULAY was due to the concurring negligence of the defendants. Defendant TORZUELA'S wanton and reckless discharge of the firearm issued to him by defendant SAFEGUARD and/or SUPERGUARD was the immediate and proximate cause of the injury, while the negligence of defendant SAFEGUARD and/or SUPERGUARD consists in its having failed to exercise the diligence of a good father of a family in the supervision and control of its employee to avoid the injury.

xxx xxx xxx" (Rollo, pp. 117-118) Petitioners prayed for actual, compensatory, moral and exemplary damages, and attorney's fees. The said Civil Case No. Q-89-1751 was raffled to Branch 84 of the Regional Trial Court of Quezon City, presided by respondent Judge Teodoro Regino. cdphil On March 2, 1989, private respondent SUPERGUARD filed a Motion to Dismiss on the ground that the complaint does not state a valid cause of action. SUPERGUARD claimed that Torzuela's act of shooting Dulay was beyond the scope of his duties, and that since the alleged act of shooting was committed with deliberate intent (dolo), the civil liability therefor is governed by Article 100 of the Revised Penal Code, which states: "ARTICLE 100.Civil liability of a person guilty of a felony. Every person criminally liable for a felony is also civilly liable." Respondent SUPERGUARD further alleged that a complaint for damages based on negligence under Article 2176 of the New Civil Code, such as the one filed by petitioners, cannot lie, since the civil liability under Article 2176 applies only to quasi-offenses under Article 365 of the Revised Penal Code. In addition, the private respondent argued that petitioners' filing of the complaint is premature considering that the conviction of Torzuela in a criminal case is a condition sine qua non for the employer's subsidiary liability (Rollo, p. 55-59).

Respondent SAFEGUARD also filed a motion praying that it be excluded as defendant on the ground that defendant Torzuela is not one of its employees (Rollo, p. 96). LibLex Petitioners opposed both motions, stating that their cause of action against the private respondents is based on their liability under Article 2180 of the New Civil Code, which provides: "ARTICLE 2180.The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks even though the former are not engaged in any business or industry. xxx xxx xxx" (Emphasis supplied) Petitioners contended that a suit against alternative defendants is allowed under Rule 3, Section 13 of the Rules of Court. Therefore, the inclusion of private respondents as alternative defendants in the complaint is justified by the following: the Initial Investigation Report prepared by Pat. Mario Tubon showing that Torzuela is an employee of SAFEGUARD; and through overt acts, SUPERGUARD extended its sympathies to petitioners (Rollo, pp. 64 and 98). Meanwhile, an Information dated March 21, 1989 charging Benigno Torzuela with homicide was filed before the Regional Trial Court of Makati and was docketed as Criminal Case No. 89-1896. On April 13, 1989, respondent Judge Regino issued an order granting SUPERGUARD'S motion to dismiss and SAFEGUARD'S motion for exclusion as defendant. The respondent judge held that the complaint did not state facts necessary or sufficient to constitute a quasi-delict since it does not mention any negligence on the part of Torzuela in shooting Napoleon Dulay or that the same was done in the performance of his duties. Respondent judge ruled that mere allegations of the concurring negligence of the defendants (private respondents herein) without stating the facts showing such negligence are mere conclusions

of law (Rollo, p. 106). Respondent judge also declared that the complaint was one for damages founded on crimes punishable under Articles 100 and 103 of the Revised Penal Code as distinguished from those arising from quasi-delict. The dispositive portion of the order dated April 13, 1989 states: "WHEREFORE, this Court holds that in view of the material and ultimate facts alleged in the verified complaint and in accordance with the applicable law on the matter as well as precedents laid down by the Supreme Court, the complaint against the alternative defendants Superguard Security Corporation and Safeguard Investigation and Security Co., Inc., must be and (sic) it is hereby dismissed." (Rollo, p. 110). The above order was affirmed by the respondent court and petitioners' motion for reconsideration thereof was denied. cdphil Petitioners take exception to the assailed decision and insist that quasidelicts are not limited to acts of negligence but also cover acts that are intentional and voluntary, citing Andamo v. IAC (191 SCRA 195 [1990]). Thus, petitioners insist that Torzuela's act of shooting Napoleon Dulay constitutes a quasi-delict actionable under Article 2176 of the New Civil Code. Petitioners further contend that under Article 2180 of the New Civil Code, private respondents are primarily liable for their negligence either in the selection or supervision of their employees. This liability is independent of the employee's own liability for fault or negligence and is distinct from the subsidiary civil liability under Article 103 of the Revised Penal Code. The civil action against the employer may therefore proceed independently of the criminal action pursuant to Rule 111, Section 3 of the Rules of Court. Petitioners submit that the question of whether Torzuela is an employee of respondent SUPERGUARD or SAFEGUARD would be better resolved after trial. Moreover, petitioners argue that Torzuela's act of shooting Dulay is also actionable under Article 33 of the New Civil Code, to wit: "ARTICLE 33.In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence." (Emphasis supplied)

In the same vein, petitioners cite Section 3, Rule 111 of the Rules of Court which provides: "Rule 111.. . . 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 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." (Emphasis supplied) The term "physical injuries" under Article 33 has been held to include consummated, frustrated and attempted homicide. Thus, petitioners maintain that Torzuela's prior conviction is unnecessary since the civil action can proceed independently of the criminal action. On the other hand, it is the private respondents' argument that since the act was not committed with negligence, the petitioners have no cause of action under Articles 2176 and 2177 of the New Civil Code. The civil action contemplated in Article 2177 is not applicable to acts committed with deliberate intent, but only applies to quasi-offenses under Article 365 of the Revised Penal Code. Torzuela's act of shooting Atty. Dulay to death, aside from being purely personal, was done with deliberate intent and could not have been part of his duties as security guard. And since Article 2180 of the New Civil Code covers only acts done within the scope of the employee's assigned tasks, the private respondents cannot be held liable for damages. LexLib We find for petitioners. It is undisputed that Benigno Torzuela is being prosecuted for homicide for the fatal shooting of Napoleon Dulay. Rule 111 of the Rules on Criminal Procedure provides: "SECTION 1.Institution of criminal and civil actions. When a criminal action is instituted, the civil action for the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under Articles 32, 33, 34, and 2176 of the

Civil Code of the Philippines arising from the same act or omission of the accused." (Emphasis supplied) It is well-settled that the filing of an independent civil action before the prosecution in the criminal action presents evidence is even far better than a compliance with the requirement of an express reservation (Yakult Philippines v. Court of Appeals, 190 SCRA 357 [1990]). This is precisely what the petitioners opted to do in this case. However, the private respondents opposed the civil action on the ground that the same is founded on a delict and not on a quasi-delict as the shooting was not attended by negligence. What is in dispute therefore is the nature of the petitioner's cause of action. The nature of a cause of action is determined by the facts alleged in the complaint as constituting the cause of action (Republic v. Estenzo, 158 SCRA 282 [1988]). The purpose of an action or suit and the law to govern it is to be determined not by the claim of the party filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for relief (De Tavera v. Philippine Tuberculosis Society, 112 SCRA 243 [1982]). An examination of the complaint in the present case would show that the plaintiffs, petitioners herein, are invoking their right to recover damages against the private respondents for their vicarious responsibility for the injury caused by Benigno Torzuela's act of shooting and killing Napoleon Dulay, as stated in paragraphs 1 and 2 of the complaint. prLL Article 2176 of the New Civil Code provides: "ARTICLE 2176.Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties is called a quasi-delict and is governed by the provisions of this Chapter." Contrary to the theory of private respondents, there is no justification for limiting the scope of Article 2176 of the Civil Code to acts or omissions resulting from negligence. Well-entrenched is the doctrine that Article 2176 covers not only acts committed with negligence, but also acts which are voluntary and intentional. As far back as the definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that:

". . . Article 2176, where it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as 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. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law." (Emphasis supplied) The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court (191 SCRA 195 [1990]), wherein the Court held: "Article 2176, whenever it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a civil action lies against the offender in a criminal act, whether or not he is prosecuted or found guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually also charged 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." [Citing Virata v. Ochoa, 81 SCRA 472] (Emphasis supplied) Private respondents submit that the word "intentional" in the Andamo case is inaccurate obiter, and should be read as "voluntary" since intent cannot be coupled with negligence as defined by Article 365 of the Revised Penal Code. In the absence of more substantial reasons, this Court will not disturb the above doctrine on the coverage of Article 2176. Private respondents further aver that Article 33 of the New Civil Code applies only to injuries intentionally committed pursuant to the ruling in Marcia

v. CA (120 SCRA 193 [1983]), and that the actions for damages allowed thereunder are ex-delicto. However, the term "physical injuries" in Article 33 has already been construed to include bodily injuries causing death (Capuno v. Pepsi-Cola Bottling Co. of the Philippines 121 Phil. 638 [1965]; Carandang v. Santiago 97 Phil. 94 [1955]). It is not the crime of physical injuries defined in the Revised Penal Code. It includes not only physical injuries but also consummated, frustrated, and attempted homicide (Madeja v. Caro 126 SCRA 293 [1983]). Although in the Marcia case (supra), it was held that no independent civil action may be filed under Article 33 where the crime is the result of criminal negligence, it must be noted however, that Torzuela, the accused in the case at bar, is charged with homicide, not with reckless imprudence, whereas the defendant in Marcia was charged with reckless imprudence. Therefore, in this case, a civil action based on Article 33 lies. Cdpr Private respondents also contend that their liability is subsidiary under the Revised Penal Code; and that they are not liable for Torzuela's act which is beyond the scope of his duties as a security guard. It having been established that the instant action is not ex-delicto, petitioners may proceed directly against Torzuela and the private respondents. Under Article 2180 of the New Civil Code as aforequoted, 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 (Layugan v. Intermediate Appellate Court 167 SCRA 363 [1988]). 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 (Kapalaran Bus Lines v. Coronado 176 SCRA 792 [1989]). 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. Since Article 2176 covers not only acts of negligence but also acts which are intentional and voluntary, it was therefore erroneous on the part of the trial court to dismiss petitioner's complaint simply because it failed to make allegations of attendant negligence attributable to private respondents. With respect to the issue of whether the complaint at hand states a sufficient cause of action, the general rule is that the allegations in a complaint are sufficient to constitute a cause of action against the defendants if, admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. A cause of action exists if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever

means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages. (Del Bros Hotel Corporation v. CA, 210 SCRA 33 [1992]); Development Bank of the Philippines v. Pundogar 218 SCRA 118 [1993]). This Court finds, under the foregoing premises, that the complaint sufficiently alleged an actionable breach on the part of the defendant Torzuela and respondents SUPERGUARD and/or SAFEGUARD. It is enough that the complaint alleged that Benigno Torzuela shot Napoleon Dulay resulting in the latter's death; that the shooting occurred while Torzuela was on duty; and that either SUPERGUARD and/or SAFEGUARD was Torzuela's employer and responsible for his acts. This does not operate however, to establish that the defendants below are liable. Whether or not the shooting was actually reckless and wanton or attended by negligence and whether it was actually done within the scope of Torzuela's duties; whether the private respondents SUPERGUARD and/or SAFEGUARD failed to exercise the diligence of a good father of a family; and whether the defendants are actually liable, are questions which can be better resolved after trial on the merits where each party can present evidence to prove their respective allegations and defenses. In determining whether the allegations of a complaint are sufficient to support a cause of action, it must be borne in mind that the complaint does not have to establish or allege the facts proving the existence of a cause of action at the outset; this will have to be done at the trial on the merits of the case ( Del Bros Hotel Corporation v. CA, supra). If the allegations in a complaint can furnish a sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defenses that may be assessed by the defendants (Rava Dev't. Corp. v. CA, 211 SCRA 152 [1992] citing Consolidated Bank & Trust Corporation v. Court of Appeals, 197 SCRA 663 [1991]). To sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist rather than that a claim has been defectively stated or is ambiguous, indefinite or uncertain (Azur v. Provincial Board, 27 SCRA 50 [1969]). Since the petitioners clearly sustained an injury to their rights under the law, it would be more just to allow them to present evidence of such injury. cdrep WHEREFORE, premises considered, the petition for review is hereby GRANTED. The decision of the Court of Appeals as well as the Order of the Regional Trial Court dated April 13, 1989 are hereby REVERSED and SET

ASIDE. Civil Case No. Q-89-1751 is remanded to the Regional Trial Court for trial on the merits. This decision is immediately executory. SO ORDERED. THIRD DIVISION [G.R. No. 74761. November 6, 1990.] NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners, vs. INTERMEDIATE APPELLATE COURT (First Civil Cases Division) and MISSIONARIES OF OUR LADY OF LA SALETTE, INC., respondents. Lope E. Adriano for petitioners. Padilla Law Office for private respondent. SYLLABUS 1.REMEDIAL LAW; ACTIONS; NATURE AND PURPOSE THEREOF DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT. It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the complaint as constituting the cause of action. The purpose of an action or suit and the law to govern it, including the period of prescription, is to be determined not by the claim of the party filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for relief. (De Tavera vs. Philippine Tuberculosis Society, Inc., G.R. No. L-48928, February 25, 1982, 112 SCRA 243.) The nature of an action is not necessarily determined or controlled by its title or heading but by the body of the pleading or complaint itself. To avoid possible denial of substantial justice due to legal technicalities, pleadings as well as remedial laws should be liberally construed so that the litigants may have ample opportunity to prove their respective claims. (Dominguez vs. Lee, G.R. No. 74960-61, November 27, 1987, 155 SCRA 703) 2.CIVIL LAW; QUASI-DELICTS; ELEMENTS THEREOF. A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff; (b) fault or

negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. (Taylor vs. Manila Electric Company, 16 Phil. 8; Vergara vs. Court of Appeals, G.R. No. 77679, September 30, 1987, 154 SCRA 564) 3.ID; ID; "FAULT OR NEGLIGENCE," CONSTRUED. Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting fault or negligence, and whenever Article 2176 refers to "fault or negligence", it covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, (if 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. (Virata vs. Ochoa, G.R. No. L-46179, January 31, 1978, 81 SCRA 472) 4.ID; ID; DISTINGUISHED FROM CRIMINAL NEGLIGENCE. According to the Report of the Code Commission, Article 2177 of the Civil Code though at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a distinct and independent negligence, which is a "culpa aquiliana" or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and "culpa extra-contractual" or "cuasi-delito" has been sustained by decisions of the Supreme Court of Spain . . . 5.ID; ID; CIVIL ACTION, ENTIRELY INDEPENDENT OF THE CRIMINAL CASE. In Azucena vs. Potenciano, (5 SCRA 468, 470-471), the Court declared that in quasi-delicts, "(t)he civil action is entirely independent of the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no logical conclusion than this, for 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 Article 31, that his action may proceed independently of the criminal proceedings and regardless of the result of the latter."

6.ID; ID; EFFECT OF ACQUITTAL OR CONVICTION IN THE CRIMINAL CASE. In the case of Castillo vs. Court of Appeals (176 SCRA 591), this Court held 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 a delict or crime a distinction exists between the civil liability arising from a crime and the responsibility for quasi-delicts or culpa extracontractual. 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. Therefore, the acquittal or conviction in the criminal case is entirely irrelevant in the civil case, unless, of course, in the event of an acquittal where the court has declared that the fact from which the civil action arose did not exist, in which case the extinction of the criminal liability would carry with it the extinction of the civil liability. 7.ID; PROPERTY; USE THEREOF, NOT WITHOUT LIMITATIONS; RECIPROCAL DUTIES OF ADJOINING LANDOWNERS. It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others. Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury or damage suffered.

DECISION

FERNAN, J p: The pivotal issue in this petition for certiorari, prohibition and mandamus is whether a corporation, which has built through its agents, waterpaths, water conductors and contrivances within its land, thereby causing inundation and damage to an adjacent land, can be held civilly liable for damages under Articles

2176 and 2177 of the Civil Code on quasi-delicts such that the resulting civil case can proceed independently of the criminal case. The antecedent facts are as follows: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga (Biluso) Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a religious corporation. LexLib Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioners' land, caused a young man to drown, damaged petitioners' crops and plants, washed away costly fences, endangered the lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction. In July 1982, petitioners instituted a criminal action, docketed as Criminal Case No. TG 907-82, before the Regional Trial Court of Cavite, Branch 4 (Tagaytay City), against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers and directors of herein respondent corporation, for destruction by means of injunction under Article 324 of the Revised Penal Code. Subsequently, on February 22, 1983, petitioners filed another action against respondent corporation, this time a civil case, docketed as Civil Case No. TG-748, for damages with prayer for the issuance of a writ of preliminary injunction before the same court. 1 On March 11, 1983, respondent corporation filed its answer to the complaint and opposition to the issuance of a writ of preliminary injunction. Hearings were conducted including ocular inspections on the land. However, on April 26, 1984, the trial court, acting on respondent corporation's motion to dismiss or suspend the civil action, issued an order suspending further hearings in Civil Case No. TG-748 until after judgment in the related Criminal Case No. TG-907-82. Resolving respondent corporation's motion to dismiss filed on June 22, 1984, the trial court issued on August 27,1984 the disputed order dismissing Civil Case No. TG-748 for lack of jurisdiction, as the criminal case which was instituted ahead of the civil case was still unresolved. Said order was anchored on the provision of Section 3 (a), Rule 111 of the Rules of Court which provides that "criminal and civil actions arising from the same offense may be instituted separately, but after

the criminal action has been commenced the civil action cannot be instituted until final judgment has been rendered in the criminal action." 2 Petitioners appealed from that order to the Intermediate Appellate Court. 3 On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a decision, 4 affirming the questioned order of the trial court. 5 A motion for reconsideration filed by petitioners was denied by the Appellate Court in its resolution dated May 19, 1986. 6 Directly at issue is the propriety of the dismissal of Civil Case: No. TG-748 in accordance with Section 3 (a) of Rule 111 of the Pules of Court. Petitioners contend that the trial court and the Appellate Court erred in dismissing Civil Case No. TG-748 since it is predicated on a quasi-delict. Petitioners have raised a valid point.

It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the complaint as constituting the cause of action. 7 The purpose of an action or suit and the law to govern it, including the period of prescription, is to be determined not by the claim of the party filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for relief. 8 The nature of an action is not necessarily determined or controlled by its title or heading but by the body of the pleading or complaint itself. To avoid possible denial of substantial justice due to legal technicalities, pleadings as well as remedial laws should be liberally construed so that the litigants may have ample opportunity to prove their respective claims. 9 Quoted hereunder are the pertinent portions of petitioners' complaint in Civil Case No. TG-748:LibLex 4)That within defendant's land, likewise located at Biga (Biluso), Silang, Cavite, adjacent on the right side of the aforesaid land of plaintiffs, defendant constructed waterpaths starting from the middle-right portion thereof leading to a big hole or opening, also constructed by defendant, thru the lower portion of its concrete hollow-blocks fence situated on the right side of its cemented gate fronting the provincial highway, and connected by defendant to a man-height inter-connected cement culverts which were also constructed and lain by defendant cross-wise beneath the tip of the

said cemented gate, the left-end of the said inter-connected culverts again connected by defendant to a big hole or opening thru the lower portion of the same concrete hollow-blocks fence on the left side of the said cemented gate, which hole or opening is likewise connected by defendant to the cemented mouth of a big canal, also constructed by defendant, which runs northward towards a big hole or opening which was also built by defendant thru the lower portion of its concrete hollow-blocks fence which separates the land of plaintiffs from that of defendant (and which serves as the exit-point of the floodwater coming from the land of defendant, and at the same time, the entrance-point of the same floodwater to the land of plaintiffs, year after year, during rainy or stormy seasons. "5)That moreover, on the middle-left portion of its land just beside the land of plaintiffs, defendant also constructed an artificial lake, the base of which is soil, which utilizes the water being channeled thereto from its water system thru inter-connected galvanized iron pipes (No. 2) and complimented by rain water during rainy or stormy seasons, so much so that the water below it seeps into, and the excess water above it inundates, portions of the adjoining land of plaintiffs. "6)That as a result of the inundation brought about by defendant's aforementioned water conductors, contrivances and manipulators, a young man was drowned to death, while herein plaintiffs suffered and will continue to suffer, as follows: "a)Portions of the land of plaintiffs were eroded and converted to deep, wide and long canals, such that the same can no longer be planted to any crop or plant. "b)Costly fences constructed by plaintiffs were, on several occasions, washed away. "c)during rainy and stormy seasons the lives of plaintiffs and their laborers are always in danger. "d)Plants and other improvements on other portions of the land of plaintiffs are exposed to destruction. . . ." 10

A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. 11 Clearly, from petitioners' complaint, the waterpaths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery of damages. In the case of Samson vs. Dionisio, 12 the Court applied Article 1902, now Article 2176 of the Civil Code and held that "any person who without due authority constructs a bank or dike, stopping the flow or communication between a creek or a lake and a river, thereby causing loss and damages to a third party who, like the rest of the residents, is entitled to the use and enjoyment of the stream or lake, shall be liable to the payment of an indemnity for loss and damages to the injured party." While the property involved in the cited case belonged to the public domain and the property subject of the instant case is privately owned, the fact remains that petitioners' complaint sufficiently alleges that petitioners have sustained and will continue to sustain damage due to the waterpaths and contrivances built by respondent corporation. Indeed, the recitals of the complaint, the alleged presence of damage to the petitioners, the act or omission of respondent corporation supposedly constituting fault or negligence, and the causal connection between the act and the damage, with no pre-existing contractual obligation between the parties make a clear case of a quasi-delict or culpa aquiliana. llcd It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others. Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner

or a third person, the latter can claim indemnification for the injury or damage suffered. Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting fault or negligence, thus: "Article 2176.Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict is governed by the provisions of this chapter." Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law" but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, (if 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. 13 The distinctness of quasi-delicts is shown in Article 2177 of the Civil Code, which states: "Article 2177.Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant." According to the Report of the Code Commission "the foregoing provision though at first sight startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation of the criminal law, while the latter is a distinct and independent negligence, which is a "culpa aquiliana" or quasi-delict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence. Such distinction between criminal negligence and "culpa extra-contractual" or "cuasi-delito" has been sustained by decisions of the Supreme Court of Spain . . ." 14 In the case of Castillo vs. Court of Appeals, 15 this Court held 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 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 extracontractual under the Civil Code. Therefore, the acquittal or conviction in the criminal case is entirely irrelevant in the civil case, unless, of course, in the event of an acquittal where the court has declared that the fact from which the civil action arose did not exist, in which case the extinction of the criminal liability would carry with it the extinction of the civil liability. prLL In Azucena vs. Potenciano, 16 the Court declared that in quasi-delicts, "(t)he civil action is entirely independent of the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no logical conclusion than this, for 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 Article 31, that his action may proceed independently of the criminal proceedings and regardless of the result of the latter."

WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate Court affirming the order of dismissal of the Regional Trial Court of Cavite, Branch 18 (Tagaytay City) dated August 17, 1984 is hereby REVERSED and SET ASIDE. The trial court is ordered to reinstate Civil Case No. TG-748 entitled "Natividad V. Andamo and Emmanuel R. Andamo vs. Missionaries of Our Lady of La Salette, Inc." and to proceed with the hearing of the case with dispatch. This decision is immediately executory. Costs against respondent corporation. SO ORDERED.