FULL CASE

INTRODUCTION
A. Concept:
Culpa Aquiliana, Quasi-Delict, Torts
1.
2.
3.
4.

Padilla vs Ca, L-39999, 129 Scra 558 (1984)

Syquia v CA, GR 98695 Jan 27, 1993
Gashem Shookat Baksh v CA, GR. 97336, 217 SCRA (1993)
LRTA v. Navidad, GR 145804, 397 SCRA 75 (2003)

B. Distinctions
i. Culpa Aquiliana
ii. Culpa Contractual
iii. Culpa Criminal
5. Calalas v. CA, GR 122039 (May 31, 2000)
6. Barredo vs Garcia, 73 Phil 607
7. Cango v. MRR, 38 Phil 769

8.
9.
10.
11.

QUASI-DELICT
A. Elements (Article 2176,CC)
i. Culpable Act or Negligence
ii. Damage to another
iii. Causal relation between culpable act or negligence and the damage to another
Picart v. SMith, 37 Phil. 809
Daywalt v. Corporacion de PP Agustino Recoletos, 39 Phil. 587
Air France v. Carrascoso, 18 SCRA 155
Gilchrist v Cuddy, 29 Phil. 542

Damnum Absque Injuria

12. Board of Liquidators v Kalaw, GR 18805 (August 14, 1967)
13. Farolan v. Solmac Marketing Corp., GR 83589 (March 13, 1991)
B. No Double Recovery Rule ( Article 2177,CC)
14. Joseph v. Bautista, 170 SCRA 549 (N/A)

15.
16.
17.
18.

Bermudez, Sr. v. Herrera, 158 SCRA 178

Singson v. Bank of P.I. 23 SCRA 1117
AIr France Carrascoso, 18 SCRA 155
Rafael Reyes Trucking v. People, GR 12029 (April 3, 2000)

III. Negligence
A. Concept
19. Jarco Marketing v CA, GR 129792 (December 21,1999)
Applicability of Articles 1172-1174
20. Sarmiento v. Sun-Cabrido, GR 141258 (April 9,2003)

G.R. No. L-39999 May 31, 1984

ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and JOSE
FARLEY BEDENIA, petitioners,
vs.
COURT OF APPEALS, respondent.
Sisenando Villaluz, Sr. for petitioners.
The Solicitor General for respondent.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of a Court of Appeals' decision which reversed the
trial court's judgment of conviction and acquitted the petitioners of the crime of grave
coercion on the ground of reasonable doubt but inspite of the acquittal ordered them to pay
jointly and severally the amount of P9,000.00 to the complainants as actual damages.
The petitioners were charged under the following information:
The undersigned Fiscal accused ROY PADILLA, FILOMENO GALDONES, PEPITO
BEDENIA, YOLLY RICO, DAVID BERMUNDO, VILLANOAC, ROBERTO ROSALES,
VILLANIA, ROMEO GARRIDO, JOSE ORTEGA, JR., RICARDO CELESTINO, REALINGO
alias "KAMLON", JOHN DOE alias TATO, and FOURTEEN (14) RICARDO DOES of the
crime of GRAVE COERCION, committed as follows:
That on or about February 8, 1964 at around 9:00 o'clock in the morning, in the municipality
of Jose Panganiban, province of Camarines Norte, Philippines, and within the jurisdiction of
this Honorable Court, the above- named accused, Roy Padilla, Filomeno Galdones, Pepito
Bedenia, Yolly Rico, David Bermundo, Villanoac, Roberto Rosales, Villania, Romeo Garrido,
Jose Ortega, Jr., Ricardo Celestino, Realingo alias Kamlon, John Doe alias Tato, and Fourteen
Richard Does, by confederating and mutually helping one another, and acting without any
authority of law, did then and there wilfully, unlawfully, and feloniously, by means of threats,
force and violence prevent Antonio Vergara and his family to close their stall located at the
Public Market, Building No. 3, Jose Panganiban, Camarines Norte, and by subsequently
forcibly opening the door of said stall and thereafter brutally demolishing and destroying said
stall and the furnitures therein by axes and other massive instruments, and carrying away the
goods, wares and merchandise, to the damage and prejudice of the said Antonio Vergara and
his family in the amount of P30,000.00 in concept of actual or compensatory and moral
damages, and further the sum of P20,000.00 as exemplary damages.
That in committing the offense, the accused took advantage of their public positions: Roy
Padilla, being the incumbent municipal mayor, and the rest of the accused being policemen,

except Ricardo Celestino who is a civilian, all of Jose Panganiban, Camarines Norte, and that
it was committed with evident premeditation.
The Court of First Instance of Camarines Norte, Tenth Judicial District rendered a decision,
the dispositive portion of which states that:
IN VIEW OF THE FOREGOING, the Court finds the accused Roy Padilla, Filomeno
Galdonez, Ismael Gonzalgo and Jose Parley Bedenia guilty beyond reasonable doubt of the
crime of grave coercion, and hereby imposes upon them to suffer an imprisonment of FIVE
(5) months and One (1) day; to pay a fine of P500.00 each; to pay actual and compensatory
damages in the amount of P10,000.00; moral damages in the amount of P30,000.00; and
another P10,000.00 for exemplary damages, jointly and severally, and all the accessory
penalties provided for by law; and to pay the proportionate costs of this proceedings.
The accused Federico Realingo alias 'Kamlon', David Bermundo, Christopher Villanoac,
Godofredo Villania, Romeo Garrido, Roberto Rosales, Ricardo Celestino and Jose Ortega, are
hereby ordered acquitted on grounds of reasonable doubt for their criminal participation in
the crime charged.
The petitioners appealed the judgment of conviction to the Court of Appeals. They contended
that the trial court's finding of grave coercion was not supported by the evidence. According
to the petitioners, the town mayor had the power to order the clearance of market premises
and the removal of the complainants' stall because the municipality had enacted municipal
ordinances pursuant to which the market stall was a nuisance per se. The petitioners stated
that the lower court erred in finding that the demolition of the complainants' stall was a
violation of the very directive of the petitioner Mayor which gave the stall owners seventy two
(72) hours to vacate the market premises. The petitioners questioned the imposition of prison
terms of five months and one day and of accessory penalties provided by law. They also
challenged the order to pay fines of P500.00 each, P10,000.00 actual and compensatory
damages, P30,000.00 moral damages, P10,000.00 exemplary damages, and the costs of the
suit.
The dispositive portion of the decision of the respondent Court of Appeals states:
WHEREFORE, we hereby modify the judgment appealed from in the sense that the
appellants are acquitted on ground of reasonable doubt. but they are ordered to pay jointly
and severally to complainants the amount of P9,600.00, as actual damages.
The petitioners filed a motion for reconsideration contending that the acquittal of the
defendants-appellants as to criminal liability results in the extinction of their civil liability.
The Court of Appeals denied the motion holding that:
xxx xxx xxx
... appellants' acquittal was based on reasonable doubt whether the crime of coercion was
committed, not on facts that no unlawful act was committed; as their taking the law into their

hands, destructing (sic) complainants' properties is unlawful, and, as evidence on record

established that complainants suffered actual damages, the imposition of actual damages is
correct.
Consequently, the petitioners filed this special civil action, contending that:
I
THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW OR GRAVELY
ABUSED ITS DISCRETION IN IMPOSING UPON PETITIONERS PAYMENT OF DAMAGES
TO COMPLAINANTS AFTER ACQUITTING PETITIONERS OF THE CRIME CHARGED
FROM WHICH SAID LIABILITY AROSE.
II
THE COURT OF APPEALS ERRED IN HOLDING IN ITS RESOLUTION DATED
DECEMBER 26, 1974 THAT SINCE APPELLANTS' ACQUITTAL WAS BASED ON
REASONABLE DOUBT, NOT ON FACTS THAT NO UNLAWFUL ACT WAS COMMITTED,
THE IMPOSITION OF ACTUAL DAMAGES IS CORRECT.
III
THE COURT OF APPEALS COMMITTED A LEGAL INCONSISTENCY, IF NOT PLAIN
JUDICIAL ERROR, IN HOLDING IN ITS APPEALED RESOLUTION THAT PETITIONERS
COMMITTED AN UNLAWFUL ACT, THAT IS TAKING THE LAW INTO THEIR HANDS,
DESTRUCTING (sic) 'COMPLAINANTS' PROPERTIES', AFTER HOLDING IN ITS MAIN
DECISION OF NOVEMBER 6,1974 THAT THE ACTS FOR WHICH THEY WERE CHARGED
DID NOT CONSTITUTE GRAVE COERCION AND THEY WERE NOT CHARGED OF ANY
OTHER CRIME.
IV
THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS HEREIN,
APPELLANTS IN CA-G.R. NO. 13456CR, JOINTLY AND SEVERALLY, TO PAY
COMPLAINANTS P9,600.00 IN SUPPOSED ACTUAL DAMAGES.
The issue posed in the instant proceeding is whether or not the respondent court committed a
reversible error in requiring the petitioners to pay civil indemnity to the complainants after
acquitting them from the criminal charge.
Petitioners maintain the view that where the civil liability which is included in the criminal
action is that arising from and as a consequence of the criminal act, and the defendant was
acquitted in the criminal case, (no civil liability arising from the criminal case), no civil
liability arising from the criminal charge could be imposed upon him. They cite precedents to
the effect that the liability of the defendant for the return of the amount received by him may
not be enforced in the criminal case but must be raised in a separate civil action for the
recovery of the said amount (People v. Pantig, 97 Phil. 748; following the doctrine laid down
in Manila Railroad Co. v. Honorable Rodolfo Baltazar, 49 O.G. 3874; Pueblo contra Abellera,

69 Phil. 623; People v. Maniago 69 Phil. 496; People v. Miranda, 5 SCRA 1067; Aldaba v.
Elepafio 116 Phil. 457). In the case before us, the petitioners were acquitted not because they
did not commit the acts stated in the charge against them. There is no dispute over the
forcible opening of the market stall, its demolition with axes and other instruments, and the
carting away of the merchandize. The petitioners were acquitted because these acts were
denominated coercion when they properly constituted some other offense such as threat or
malicious mischief.
The respondent Court of Appeals stated in its decision:
For a complaint to prosper under the foregoing provision, the violence must be employed
against the person, not against property as what happened in the case at bar. ...
xxx xxx xxx
The next problem is: May the accused be convicted of an offense other than coercion?
From all appearances, they should have been prosecuted either for threats or malicious
mischief. But the law does not allow us to render judgment of conviction for either of these
offenses for the reason that they were not indicted for, these offenses. The information under
which they were prosecuted does not allege the elements of either threats or malicious
mischief. Although the information mentions that the act was by means of threats', it does not
allege the particular threat made. An accused person is entitled to be informed of the nature
of the acts imputed to him before he can be made to enter into trial upon a valid information.
We rule that the crime of grave coercion has not been proved in accordance with law.
While appellants are entitled to acquittal they nevertheless are liable for the actual damages
suffered by the complainants by reason of the demolition of the stall and loss of some of their
properties. The extinction of the penal action does not carry with it that of the civil, unless the
extinction proceeds from a declaration in a final judgment that the fact from which the civil
might arise did not exist. (Rule 111, Sec. 3 (c), Rev. Rules of Court; Laperal v. Aliza, 51 OG.R.
1311, People v. Velez, 44 OG. 1811). In the instant case, the fact from which the civil might
arise, namely, the demolition of the stall and loss of the properties contained therein; exists,
and this is not denied by the accused. And since there is no showing that the complainants
have reserved or waived their right to institute a separate civil action, the civil aspect therein
is deemed instituted with the criminal action. (Rule 111, Sec. 1, Rev. Rules of Court).
xxx xxx xxx
Section 1 of Rule 111 of the Rules of Court states the fundamental proposition that when a
criminal action is instituted, the civil action for recovery of civil liability arising from the
offense charged is impliedly instituted with it. There is no implied institution when the
offended party expressly waives the civil action or reserves his right to institute it separately.
(Morte Sr. v. Alvizo, Jr., 101 SCRA 221).
The extinction of the civil action by reason of acquittal in the criminal case refers exclusively

to civil liability ex delicto founded on Article 100 of the Revised Penal Code. (Elcano v. Hill, 77
SCRA 98; Virata v. Ochoa, 81 SCRA 472). In other words, the civil liability which is also
extinguished upon acquittal of the accused is the civil liability arising from the act as a crime.
As easily as 1942, the Supreme Court speaking through Justice Jorge Bocobo in Barredo v.
Garcia, et at. 73 Phil. 607 laid down the rule that the same punishable act or omission can
create two kinds of civil liabilities against the accused and, where provided by law, his
employer. 'There is the civil liability arising from the act as a crime and the liability arising
from the same act as a quasi-delict. Either one of these two types of civil liability may be
enforced against the accused, However, the offended party cannot recover damages under
both types of liability. For instance, in cases of criminal negligence or crimes due to reckless
imprudence, Article 2177 of the Civil Code provides:
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.
Section 3 (c) of Rule 111 specifically provides that:
Sec. 3. Other civil actions arising from offenses. In all cases not included in the preceding
section the following rules shall be observed:
xxx xxx xxx
xxx xxx xxx
(c) Extinction of the penal action does not carry with it extinction of the civil, unless the
extinction proceeds from a declaration in a final judgment that the fact from which the civil
might arise did not exist. In other cases, the person entitled to the civil action may institute it
in the Jurisdiction and in the manner provided by law against the person who may be liable
for restitution of the thing and reparation or indemnity for the damage suffered.
The judgment of acquittal extinguishes the liability of the accused for damages only when it
includes a declaration that the facts from which the civil might arise did not exist. Thus, the
civil liability is not extinguished by acquittal where the acquittal is based on reasonable doubt
(PNB v. Catipon, 98 Phil. 286) as only preponderance of evidence is required in civil cases;
where the court expressly declares that the liability of the accused is not criminal but only civil
in nature (De Guzman v. Alvia, 96 Phil. 558; People v. Pantig, supra) as, for instance, in the
felonies of estafa, theft, and malicious mischief committed by certain relatives who thereby
incur only civil liability (See Art. 332, Revised Penal Code); and, where the civil liability does
not arise from or is not based upon the criminal act of which the accused was acquitted
(Castro v. Collector of Internal Revenue, 4 SCRA 1093; See Regalado, Remedial Law
Compendium, 1983 ed., p. 623). Article 29 of the Civil Code also provides that:
When the accused in a criminal prosecution is acquitted on the ground that his guilt has not
been proved beyond reasonable doubt, a civil action for damages for the same act or omission

may be instituted. Such action requires only a preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a bond to answer for damages in case the
complaint should be found to be malicious.
If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall
so declare. In the absence of any declaration to that effect, it may be inferred from the text of
the decision whether or not the acquittal is due to that ground.
More recently, we held that the acquittal of the defendant in the criminal case would not
constitute an obstacle to the filing of a civil case based on the same acts which led to the
criminal prosecution:
... The finding by the respondent court that he spent said sum for and in the interest of the
Capiz Agricultural and Fishery School and for his personal benefit is not a declaration that the
fact upon which Civil Case No. V-3339 is based does not exist. The civil action barred by such
a declaration is the civil liability arising from the offense charged, which is the one impliedly
instituted with the criminal action. (Section 1, Rule III, Rules of Court.) Such a declaration
would not bar a civil action filed against an accused who had been acquitted in the criminal
case if the criminal action is predicated on factual or legal considerations other than the
commission of the offense charged. A person may be acquitted of malversation where, as in
the case at bar, he could show that he did not misappropriate the public funds in his
possession, but he could be rendered liable to restore said funds or at least to make a proper
accounting thereof if he shall spend the same for purposes which are not authorized nor
intended, and in a manner not permitted by applicable rules and regulations. (Republic v.
Bello, 120 SCRA 203)
There appear to be no sound reasons to require a separate civil action to still be filed
considering that the facts to be proved in the civil case have already been established in the
criminal proceedings where the accused was acquitted. Due process has been accorded the
accused. He was, in fact, exonerated of the criminal charged. The constitutional presumption
of innocence called for more vigilant efforts on the part of prosecuting attorneys and defense
counsel, a keener awareness by all witnesses of the serious implications of perjury, and a
more studied consideration by the judge of the entire records and of applicable statutes and
precedents. To require a separate civil action simply because the accused was acquitted would
mean needless clogging of court dockets and unnecessary duplication of litigation with all its
attendant loss of time, effort, and money on the part of all concerned.
The trial court found the following facts clearly established by the evidence adduced by both
the prosecution and the defense:
xxx xxx xxx
(9) In the morning of February 8, 1964, then Chief Galdones, complying with the instructions
contained in said Memorandum No. 32 of the Mayor, and upon seeing that Antonio Vergara

had not vacated the premises in question, with the aid of his policemen, forced upon the store
or stall and ordered the removal of the goods inside the store of Vergara, at the same time
taking inventory of the goods taken out, piled them outside in front of the store and had it
cordoned with a rope, and after all the goods were taken out from the store, ordered the
demolition of said stall of Antonio Vergara. Since then up to the trial of this case, the
whereabouts of the goods taken out from the store nor the materials of the demolished stall
have not been made known.
The respondent Court of Appeals made a similar finding that:
On the morning of February 8th, because the said Vergaras had not up to that time complied
with the order to vacate, the co-accused Chief of Police Galdones and some members of his
police force, went to the market and, using ax, crowbars and hammers, demolished the stall of
the Vergaras who were not present or around, and after having first inventoried the goods and
merchandise found therein, they had them brought to the municipal building for safekeeping.
Inspite of notice served upon the Vergaras to take possession of the goods and merchandise
thus taken away, the latter refused to do so.
The loss and damage to the Vergaras as they evaluated them were:
Cost of stall construction P1,300.00
Value of furniture and equipment
judgment destroyed 300.00
Value of goods and equipment taken 8,000.00
P9,600.00
It is not disputed that the accused demolished the grocery stall of the complainants Vergaras
and carted away its contents. The defense that they did so in order to abate what they
considered a nuisance per se is untenable, This finds no support in law and in fact. The couple
has been paying rentals for the premises to the government which allowed them to lease the
stall. It is, therefore, farfetched to say that the stall was a nuisance per se which could be
summarily abated.
The petitioners, themselves, do not deny the fact that they caused the destruction of the
complainant's market stall and had its contents carted away. They state:
On February 8, 1964, despite personal pleas on Vergaras by the Mayor to vacate the
passageways of Market Building No. 3, the Vergaras were still in the premises, so the
petitioners Chief of Police and members of the Police Force of Jose Panganiban, pursuant to
the Mayor' 6 directives, demolished the store of the Vergaras, made an inventory of the goods
found in said store, and brought these goods to the municipal building under the custody of
the Municipal Treasurer, ...
The only supposed obstacle is the provision of Article 29 of the Civil Code, earlier cited, that
"when the accused in a criminal prosecution is acquitted on the ground that his guilt has not

been proved beyond reasonable doubt, a civil action for damages for the same act or omission
may be instituted." According to some scholars, this provision of substantive law calls for a
separate civil action and cannot be modified by a rule of remedial law even in the interests of
economy and simplicity and following the dictates of logic and common sense.
As stated by retired Judge J. Cezar Sangco:
... if the Court finds the evidence sufficient to sustain the civil action but inadequate to justify
a conviction in the criminal action, may it render judgment acquitting the accused on
reasonable doubt, but hold him civilly liable nonetheless? An affirmative answer to this
question would be consistent with the doctrine that the two are distinct and separate actions,
and win (a) dispense with the reinstituting of the same civil action, or one based on quasidelict or other independent civil action, and of presenting the same evidence: (b) save the
injured party unnecessary expenses in the prosecution of the civil action or enable him to take
advantage of the free services of the fiscal; and (c) otherwise resolve the unsettling
implications of permitting the reinstitution of a separate civil action whether based on delict,
or quasi-delict, or other independent civil actions.
... But for the court to be able to adjudicate in the manner here suggested, Art. 29 of the Civil
Code should be amended because it clearly and expressly provides that the civil action based
on the same act or omission may only be instituted in a separate action, and therefore, may
not inferentially be resolved in the same criminal action. To dismiss the civil action upon
acquittal of the accused and disallow the reinstitution of any other civil action, would likewise
render, unjustifiably, the acquittal on reasonable doubt without any significance, and would
violate the doctrine that the two actions are distinct and separate.
In the light of the foregoing exposition, it seems evident that there is much sophistry and no
pragmatism in the doctrine that it is inconsistent to award in the same proceedings damages
against the accused after acquitting him on reasonable doubt. Such doctrine must recognize
the distinct and separate character of the two actions, the nature of an acquittal on reasonable
doubt, the vexatious and oppressive effects of a reservation or institution of a separate civil
action, and that the injured party is entitled to damages not because the act or omission is
punishable but because he was damaged or injured thereby (Sangco, Philippine Law on Torts
and Damages, pp. 288-289).
We see no need to amend Article 29 of the Civil Code in order to allow a court to grant
damages despite a judgment of acquittal based on reasonable doubt. What Article 29 clearly
and expressly provides is a remedy for the plaintiff in case the defendant has been acquitted
in a criminal prosecution on the ground that his guilt has not been proved beyond reasonable
doubt. It merely emphasizes that a civil action for damages is not precluded by an acquittal
for the same criminal act or omission. The Civil Code provision does not state that the remedy
can be availed of only in a separate civil action. A separate civil case may be filed but there is

no statement that such separate filing is the only and exclusive permissible mode of
recovering damages.
There is nothing contrary to the Civil Code provision in the rendition of a judgment of
acquittal and a judgment awarding damages in the same criminal action. The two can stand
side by side. A judgment of acquittal operates to extinguish the criminal liability. It does not,
however, extinguish the civil liability unless there is clear showing that the act from which
civil liability might arise did not exist.
A different conclusion would be attributing to the Civil Code a trivial requirement, a provision
which imposes an uncalled for burden before one who has already been the victim of a
condemnable, yet non-criminal, act may be accorded the justice which he seeks.
We further note the rationale behind Art. 29 of the Civil Code in arriving at the intent of the
legislator that they could not possibly have intended to make it more difficult for the
aggrieved party to recover just compensation by making a separate civil action mandatory and
exclusive:
The old rule that the acquittal of the accused in a criminal case also releases him from civil
liability is one of the most serious flaws in the Philippine legal system. It has given rise to
numberless instances of miscarriage of justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the accused. The reasoning followed is that
inasmuch as the civil responsibility is derived from the the criminal offense, when the latter is
not proved, civil liability cannot be demanded.
This is one of those cases where confused thinking leads to unfortunate and deplorable
consequences. Such reasoning fails to draw a clear line of demarcation between criminal
liability and civil responsibility, and to determine the logical result of the distinction. The two
liabilities are separate and distinct from each other. One affects the social order and the other,
private rights. One is for the punishment or correction of the offender while the other is for
reparation of damages suffered by the aggrieved party... it is just and proper that, for the
purposes of the imprisonment of or fine upon the accused, the offense should be proved
beyond reasonable doubt. But for the purpose of indemnifying the complaining party, why
should the offense also be proved beyond reasonable doubt? Is not the invasion or violation of
every private right to be proved only by preponderance of evidence? Is the right of the
aggrieved person any less private because the wrongful act is also punishable by the criminal
law? (Code Commission, pp. 45-46).
A separate civil action may be warranted where additional facts have to be established or
more evidence must be adduced or where the criminal case has been fully terminated and a
separate complaint would be just as efficacious or even more expedient than a timely remand
to the trial court where the criminal action was decided for further hearings on the civil
aspects of the case. The offended party may, of course, choose to file a separate action. These

do not exist in this case. Considering moreover the delays suffered by the case in the trial,
appellate, and review stages, it would be unjust to the complainants in this case to require at
this time a separate civil action to be filed.
With this in mind, we therefore hold that the respondent Court of Appeals did not err in
awarding damages despite a judgment of acquittal.
WHEREFORE, we hereby AFFIRM the decision of the respondent Court of Appeals and
dismiss the petition for lack of merit.
SO ORDERED.
G.R. No. 98695 January 27, 1993
JUAN J. SYQUIA, CORAZON C. SYQUIA, CARLOTA C. SYQUIA, CARLOS C.
SYQUIA and ANTHONY C. SYQUIA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, and THE MANILA MEMORIAL PARK
CEMETERY, INC., respondents.
Pacis & Reyes Law Offices for petitioners.
Augusto S. San Pedro & Ari-Ben C. Sebastian for private respondents.
CAMPOS, JR., J.:
Herein petitioners, Juan J. Syquia and Corazon C. Syquia, Carlota C. Syquia, Carlos C. Syquia,
and Anthony Syquia, were the parents and siblings, respectively, of the deceased Vicente Juan
Syquia. On March 5, 1979, they filed a complaint 1 in the then Court of First Instance against
herein private respondent, Manila Memorial Park Cemetery, Inc. for recovery of damages
arising from breach of contract and/or quasi-delict. The trial court dismissed the complaint.
The antecedent facts, as gathered by the respondent Court, are as follows:
On March 5, 1979, Juan, Corazon, Carlota and Anthony all surnamed Syquia, plaintiffappellants herein, filed a complaint for damages against defendant-appellee, Manila
Memorial Park Cemetery, Inc.
The complaint alleged among others, that pursuant to a Deed of Sale (Contract No. 6885)
dated August 27, 1969 and Interment Order No. 7106 dated July 21, 1978 executed between
plaintiff-appellant Juan J. Syquia and defendant-appellee, the former, father of deceased
Vicente Juan J. Syquia authorized and instructed defendant-appellee to inter the remains of
deceased in the Manila Memorial Park Cemetery in the morning of July 25, 1978 conformably
and in accordance with defendant-appellant's (sic) interment procedures; that on September
4, 1978, preparatory to transferring the said remains to a newly purchased family plot also at
the Manila Memorial Park Cemetery, the concrete vault encasing the coffin of the deceased
was removed from its niche underground with the assistance of certain employees of

defendant-appellant (sic); that as the concrete vault was being raised to the surface, plaintiffsappellants discovered that the concrete vault had a hole approximately three (3) inches in
diameter near the bottom of one of the walls closing out the width of the vault on one end and
that for a certain length of time (one hour, more or less), water drained out of the hole; that
because of the aforesaid discovery, plaintiffs-appellants became agitated and upset with
concern that the water which had collected inside the vault might have risen as it in fact did
rise, to the level of the coffin and flooded the same as well as the remains of the deceased with
ill effects thereto; that pursuant to an authority granted by the Municipal Court of Paraaque,
Metro Manila on September 14, 1978, plaintiffs-appellants with the assistance of licensed
morticians and certain personnel of defendant-appellant (sic) caused the opening of the
concrete vault on September 15, 1978; that upon opening the vault, the following became
apparent to the plaintiffs-appellants: (a) the interior walls of the concrete vault showed
evidence of total flooding; (b) the coffin was entirely damaged by water, filth and silt causing
the wooden parts to warp and separate and to crack the viewing glass panel located directly
above the head and torso of the deceased; (c) the entire lining of the coffin, the clothing of the
deceased, and the exposed parts of the deceased's remains were damaged and soiled by the
action of the water and silt and were also coated with filth.
Due to the alleged unlawful and malicious breach by the defendant-appellee of its obligation
to deliver a defect-free concrete vault designed to protect the remains of the deceased and the
coffin against the elements which resulted in the desecration of deceased's grave and in the
alternative, because of defendant-appellee's gross negligence conformably to Article 2176 of
the New Civil Code in failing to seal the concrete vault, the complaint prayed that judgment be
rendered ordering defendant-appellee to pay plaintiffs-appellants P30,000.00 for actual
damages, P500,000.00 for moral damages, exemplary damages in the amount determined by
the court, 20% of defendant-appellee's total liability as attorney's fees, and expenses of
litigation and costs of suit. 2
In dismissing the complaint, the trial court held that the contract between the parties did not
guarantee that the cement vault would be waterproof; that there could be no quasi-delict
because the defendant was not guilty of any fault or negligence, and because there was a preexisting contractual relation between the Syquias and defendant Manila Memorial Park
Cemetery, Inc.. The trial court also noted that the father himself, Juan Syquia, chose the
gravesite despite knowing that said area had to be constantly sprinkled with water to keep the
grass green and that water would eventually seep through the vault. The trial court also
accepted the explanation given by defendant for boring a hole at the bottom side of the vault:
"The hole had to be bored through the concrete vault because if it has no hole the vault will
(sic) float and the grave would be filled with water and the digging would caved (sic) in the
earth, the earth would caved (sic) in the (sic) fill up the grave." 3

From this judgment, the Syquias appealed. They alleged that the trial court erred in holding
that the contract allowed the flooding of the vault; that there was no desecration; that the
boring of the hole was justifiable; and in not awarding damages.
The Court of Appeals in the Decision 4 dated December 7, 1990 however, affirmed the
judgment of dismissal. Petitioner's motion for reconsideration was denied in a Resolution
dated April 25, 1991. 5
Unsatisfied with the respondent Court's decision, the Syquias filed the instant petition. They
allege herein that the Court of Appeals committed the following errors when it:
1. held that the contract and the Rules and Resolutions of private respondent allowed the
flooding of the vault and the entrance thereto of filth and silt;
2. held that the act of boring a hole was justifiable and corollarily, when it held that no act of
desecration was committed;
3. overlooked and refused to consider relevant, undisputed facts, such as those which have
been stipulated upon by the parties, testified to by private respondent's witnesses, and
admitted in the answer, which could have justified a different conclusion;
4. held that there was no tort because of a pre-existing contract and the absence of
fault/negligence; and
5. did not award the P25,000.00 actual damages which was agreed upon by the parties, moral
and exemplary damages, and attorney's fees.
At the bottom of the entire proceedings is the act of boring a hole by private respondent on
the vault of the deceased kin of the bereaved petitioners. The latter allege that such act was
either a breach of private respondent's contractual obligation to provide a sealed vault, or, in
the alternative, a negligent act which constituted a quasi-delict. Nonetheless, petitioners
claim that whatever kind of negligence private respondent has committed, the latter is liable
for desecrating the grave of petitioners' dead.
In the instant case, We are called upon to determine whether the Manila Memorial Park
Cemetery, Inc., breached its contract with petitioners; or, alternatively, whether private
respondent was guilty of a tort.
We understand the feelings of petitioners and empathize with them. Unfortunately, however,
We are more inclined to answer the foregoing questions in the negative. There is not enough
ground, both in fact and in law, to justify a reversal of the decision of the respondent Court
and to uphold the pleas of the petitioners.
With respect to herein petitioners' averment that private respondent has committed culpa
aquiliana, the Court of Appeals found no negligent act on the part of private respondent to
justify an award of damages against it. Although a pre-existing contractual relation between
the parties does not preclude the existence of a culpa aquiliana, We find no reason to
disregard the respondent's Court finding that there was no negligence.

Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict . . . . (Emphasis
supplied).
In this case, it has been established that the Syquias and the Manila Memorial Park Cemetery,
Inc., entered into a contract entitled "Deed of Sale and Certificate of Perpetual Care" 6 on
August 27, 1969. That agreement governed the relations of the parties and defined their
respective rights and obligations. Hence, had there been actual negligence on the part of the
Manila Memorial Park Cemetery, Inc., it would be held liable not for a quasi-delict or culpa
aquiliana, but for culpa contractual as provided by Article 1170 of the Civil Code, to wit:
Those who in the performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for damages.
The Manila Memorial Park Cemetery, Inc. bound itself to provide the concrete box to be send
in the interment. Rule 17 of the Rules and Regulations of private respondent provides that:
Rule 17. Every earth interment shall be made enclosed in a concrete box, or in an outer wall of
stone, brick or concrete, the actual installment of which shall be made by the employees of the
Association. 7
Pursuant to this above-mentioned Rule, a concrete vault was provided on July 27, 1978, the
day before the interment, and was, on the same day, installed by private respondent's
employees in the grave which was dug earlier. After the burial, the vault was covered by a
cement lid.
Petitioners however claim that private respondent breached its contract with them as the
latter held out in the brochure it distributed that the . . . lot may hold single or double
internment (sic) underground in sealed concrete vault." 8 Petitioners claim that the vault
provided by private respondent was not sealed, that is, not waterproof. Consequently, water
seeped through the cement enclosure and damaged everything inside it.
We do not agree. There was no stipulation in the Deed of Sale and Certificate of Perpetual
Care and in the Rules and Regulations of the Manila Memorial Park Cemetery, Inc. that the
vault would be waterproof. Private respondent's witness, Mr. Dexter Heuschkel, explained
that the term "sealed" meant "closed." 9 On the other hand, the word "seal" is defined as . . .
any of various closures or fastenings . . . that cannot be opened without rupture and that serve
as a check against tampering or unauthorized opening." 10 The meaning that has been given
by private respondent to the word conforms with the cited dictionary definition. Moreover, it
is also quite clear that "sealed" cannot be equated with "waterproof". Well settled is the rule
that when the terms of the contract are clear and leave no doubt as to the intention of the
contracting parties, then the literal meaning of the stipulation shall control. 11 Contracts
should be interpreted according to their literal meaning and should not be interpreted beyond

their obvious intendment. 12 As ruled by the respondent Court:

When plaintiff-appellant Juan J. Syquia affixed his signature to the Deed of Sale (Exhibit "A")
and the attached Rules and Regulations (Exhibit "1"), it can be assumed that he has accepted
defendant-appellee's undertaking to merely provide a concrete vault. He can not now claim
that said concrete vault must in addition, also be waterproofed (sic). It is basic that the parties
are bound by the terms of their contract, which is the law between them (Rizal Commercial
Banking Corporation vs. Court of Appeals, et al. 178 SCRA 739). Where there is nothing in the
contract which is contrary to law, morals, good customs, public order, or public policy, the
validity of the contract must be sustained (Phil. American Insurance Co. vs. Judge Pineda, 175
SCRA 416). Consonant with this ruling, a contracting party cannot incur a liability more than
what is expressly specified in his undertaking. It cannot be extended by implication, beyond
the terms of the contract (Rizal Commercial Banking Corporation vs. Court of Appeals,
supra). And as a rule of evidence, where the terms of an agreement are reduced to writing, the
document itself, being constituted by the parties as the expositor of their intentions, is the
only instrument of evidence in respect of that agreement which the law will recognize, so long
as its (sic) exists for the purpose of evidence (Starkie, Ev., pp. 648, 655, Kasheenath vs.
Chundy, 5 W.R. 68 cited in Francisco, Revised Rules of Court in the Phil. p. 153, 1973 Ed.).
And if the terms of the contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control (Santos vs. CA, et al.,
G. R. No. 83664, Nov. 13, 1989; Prudential Bank & Trust Co. vs. Community Builders Co.,
Inc., 165 SCRA 285; Balatero vs. IAC, 154 SCRA 530). 13
We hold, therefore, that private respondent did not breach the tenor of its obligation to the
Syquias. While this may be so, can private respondent be liable for culpa aquiliana for boring
the hole on the vault? It cannot be denied that the hole made possible the entry of more water
and soil than was natural had there been no hole.
The law defines negligence as the "omission of that diligence which is required by the nature
of the obligation and corresponds with the circumstances of the persons, of the time and of
the place." 14 In the absence of stipulation or legal provision providing the contrary, the
diligence to be observed in the performance of the obligation is that which is expected of a
good father of a family.
The circumstances surrounding the commission of the assailed act boring of the hole
negate the allegation of negligence. The reason for the act was explained by Henry Flores,
Interment Foreman, who said that:
Q It has been established in this particular case that a certain Vicente Juan Syquia was
interred on July 25, 1978 at the Paraaque Cemetery of the Manila Memorial Park Cemetery,
Inc., will you please tell the Hon. Court what or whether you have participation in connection
with said internment (sic)?

A A day before Juan (sic) Syquia was buried our personnel dug a grave. After digging the next
morning a vault was taken and placed in the grave and when the vault was placed on the grave
a hole was placed on the vault so that water could come into the vault because it was raining
heavily then because the vault has no hole the vault will float and the grave would be filled
with water and the digging would caved (sic) in and the earth, the earth would (sic) caved in
and fill up the grave. 15 (Emphasis ours)
Except for the foreman's opinion that the concrete vault may float should there be a heavy
rainfall, from the above-mentioned explanation, private respondent has exercised the
diligence of a good father of a family in preventing the accumulation of water inside the vault
which would have resulted in the caving in of earth around the grave filling the same with
earth.
Thus, finding no evidence of negligence on the part of private respondent, We find no reason
to award damages in favor of petitioners.
In the light of the foregoing facts, and construed in the language of the applicable laws and
jurisprudence, We are constrained to AFFIRM in toto the decision of the respondent Court of
Appeals dated December 7, 1990. No costs.
SO ORDERED.
G.R. No. 97336 February 19, 1993
GASHEM SHOOKAT BAKSH, Petitioner, vs. HON. COURT OF APPEALS and
MARILOU T. GONZALES, Respondents.
Public Attorney's Office for petitioner.chanrobles virtual law library
Corleto R. Castro for private respondent.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to review and set
aside the Decision 1of the respondent Court of Appeals in CA-G.R. CV No. 24256 which
affirmed in toto the 16 October 1939 Decision of Branch 38 (Lingayen) of the Regional Trial
Court (RTC) of Pangasinan in Civil Case No. 16503. Presented is the issue of whether or not
damages may be recovered for a breach of promise to marry on the basis of Article 21 of the
Civil Code of the Philippines.chanroblesvirtualawlibrarychanrobles virtual law library
The antecedents of this case are not complicated:chanrobles virtual law library
On 27 October 1987, private respondent, without the assistance of counsel, filed with the
aforesaid trial court a complaint 2for damages against the petitioner for the alleged violation
of their agreement to get married. She alleges in said complaint that: she is twenty-two (22)
years old, single, Filipino and a pretty lass of good moral character and reputation duly
respected in her community; petitioner, on the other hand, is an Iranian citizen residing at
the Lozano Apartments, Guilig, Dagupan City, and is an exchange student taking a medical

course at the Lyceum Northwestern Colleges in Dagupan City; before 20 August 1987, the
latter courted and proposed to marry her; she accepted his love on the condition that they
would get married; they therefore agreed to get married after the end of the school semester,
which was in October of that year; petitioner then visited the private respondent's parents in
Baaga, Bugallon, Pangasinan to secure their approval to the marriage; sometime in 20
August 1987, the petitioner forced her to live with him in the Lozano Apartments; she was a
virgin before she began living with him; a week before the filing of the complaint, petitioner's
attitude towards her started to change; he maltreated and threatened to kill her; as a result of
such maltreatment, she sustained injuries; during a confrontation with a representative of the
barangay captain of Guilig a day before the filing of the complaint, petitioner repudiated their
marriage agreement and asked her not to live with him anymore and; the petitioner is already
married to someone living in Bacolod City. Private respondent then prayed for judgment
ordering the petitioner to pay her damages in the amount of not less than P45,000.00,
reimbursement for actual expenses amounting to P600.00, attorney's fees and costs, and
granting her such other relief and remedies as may be just and equitable. The complaint was
docketed as Civil Case No. 16503.chanroblesvirtualawlibrarychanrobles virtual law library
In his Answer with Counterclaim, 3petitioner admitted only the personal circumstances of the
parties as averred in the complaint and denied the rest of the allegations either for lack of
knowledge or information sufficient to form a belief as to the truth thereof or because the true
facts are those alleged as his Special and Affirmative Defenses. He thus claimed that he never
proposed marriage to or agreed to be married with the private respondent; he neither sought
the consent and approval of her parents nor forced her to live in his apartment; he did not
maltreat her, but only told her to stop coming to his place because he discovered that she had
deceived him by stealing his money and passport; and finally, no confrontation took place
with a representative of the barangay captain. Insisting, in his Counterclaim, that the
complaint is baseless and unfounded and that as a result thereof, he was unnecessarily
dragged into court and compelled to incur expenses, and has suffered mental anxiety and a
besmirched reputation, he prayed for an award of P5,000.00 for miscellaneous expenses and
P25,000.00 as moral damages.chanroblesvirtualawlibrarychanrobles virtual law library
After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial Order
4
embodying the stipulated facts which the parties had agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of Baaga, Bugallon, Pangasinan, while the
defendant is single, Iranian citizen and resident (sic) of Lozano Apartment, Guilig, Dagupan
City since September 1, 1987 up to the present;chanrobles virtual law library
2. That the defendant is presently studying at Lyceum Northwestern, Dagupan City, College of
Medicine, second year medicine proper;chanrobles virtual law library
3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette , Fernandez Avenue,

Dagupan City since July, 1986 up to the present and a (sic) high school graduate;chanrobles
virtual law library
4. That the parties happened to know each other when the manager of the Mabuhay
Luncheonette, Johhny Rabino introduced the defendant to the plaintiff on August 3, 1986.
After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered on 16
October 1989 a decision 5favoring the private respondent. The petitioner was thus ordered to
pay the latter damages and attorney's fees; the dispositive portion of the decision reads:
IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in favor of the
plaintiff and against the defendant.chanroblesvirtualawlibrarychanrobles virtual law library
1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty thousand
(P20,000.00) pesos as moral damages.chanroblesvirtualawlibrarychanrobles virtual law
library
2. Condemning further the defendant to play the plaintiff the sum of three thousand
(P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos at (sic) litigation
expenses and to pay the costs.chanroblesvirtualawlibrarychanrobles virtual law library
3. All other claims are denied. 6chanrobles virtual law library
The decision is anchored on the trial court's findings and conclusions that (a) petitioner and
private respondent were lovers, (b) private respondent is not a woman of loose morals or
questionable virtue who readily submits to sexual advances, (c) petitioner, through
machinations, deceit and false pretenses, promised to marry private respondent, d) because
of his persuasive promise to marry her, she allowed herself to be deflowered by him, (e) by
reason of that deceitful promise, private respondent and her parents - in accordance with
Filipino customs and traditions - made some preparations for the wedding that was to be held
at the end of October 1987 by looking for pigs and chickens, inviting friends and relatives and
contracting sponsors, (f) petitioner did not fulfill his promise to marry her and (g) such acts of
the petitioner, who is a foreigner and who has abused Philippine hospitality, have offended
our sense of morality, good customs, culture and traditions. The trial court gave full credit to
the private respondent's testimony because, inter alia, she would not have had the temerity
and courage to come to court and expose her honor and reputation to public scrutiny and
ridicule if her claim was false. 7chanrobles virtual law library
The above findings and conclusions were culled from the detailed summary of the evidence
for the private respondent in the foregoing decision, digested by the respondent Court as
follows:
According to plaintiff, who claimed that she was a virgin at the time and that she never had a
boyfriend before, defendant started courting her just a few days after they first met. He later
proposed marriage to her several times and she accepted his love as well as his proposal of
marriage on August 20, 1987, on which same day he went with her to her hometown of

Baaga, Bugallon, Pangasinan, as he wanted to meet her parents and inform them of their
relationship and their intention to get married. The photographs Exhs. "A" to "E" (and their
submarkings) of defendant with members of plaintiff's family or with plaintiff, were taken
that day. Also on that occasion, defendant told plaintiffs parents and brothers and sisters that
he intended to marry her during the semestral break in October, 1987, and because plaintiff's
parents thought he was good and trusted him, they agreed to his proposal for him to marry
their daughter, and they likewise allowed him to stay in their house and sleep with plaintiff
during the few days that they were in Bugallon. When plaintiff and defendant later returned
to Dagupan City, they continued to live together in defendant's apartment. However, in the
early days of October, 1987, defendant would tie plaintiff's hands and feet while he went to
school, and he even gave her medicine at 4 o'clock in the morning that made her sleep the
whole day and night until the following day. As a result of this live-in relationship, plaintiff
became pregnant, but defendant gave her some medicine to abort the fetus. Still plaintiff
continued to live with defendant and kept reminding him of his promise to marry her until he
told her that he could not do so because he was already married to a girl in Bacolod City. That
was the time plaintiff left defendant, went home to her parents, and thereafter consulted a
lawyer who accompanied her to the barangay captain in Dagupan City. Plaintiff, her lawyer,
her godmother, and a barangay tanod sent by the barangay captain went to talk to defendant
to still convince him to marry plaintiff, but defendant insisted that he could not do so because
he was already married to a girl in Bacolod City, although the truth, as stipulated by the
parties at the pre-trial, is that defendant is still single.chanroblesvirtualawlibrarychanrobles
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Plaintiff's father, a tricycle driver, also claimed that after defendant had informed them of his
desire to marry Marilou, he already looked for sponsors for the wedding, started preparing for
the reception by looking for pigs and chickens, and even already invited many relatives and
friends to the forthcoming wedding. 8chanrobles virtual law library
Petitioner appealed the trial court's decision to the respondent Court of Appeals which
docketed the case as CA-G.R. CV No. 24256. In his Brief, 9he contended that the trial court
erred (a) in not dismissing the case for lack of factual and legal basis and (b) in ordering him
to pay moral damages, attorney's fees, litigation expenses and
costs.chanroblesvirtualawlibrarychanrobles virtual law library
On 18 February 1991, respondent Court promulgated the challenged decision 10affirming in
toto the trial court's ruling of 16 October 1989. In sustaining the trial court's findings of fact,
respondent Court made the following analysis:
First of all, plaintiff, then only 21 years old when she met defendant who was already 29 years
old at the time, does not appear to be a girl of loose morals. It is uncontradicted that she was a
virgin prior to her unfortunate experience with defendant and never had boyfriend. She is, as

described by the lower court, a barrio lass "not used and accustomed to trend of modern
urban life", and certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no persuasive promise made by the
defendant to marry her." In fact, we agree with the lower court that plaintiff and defendant
must have been sweethearts or so the plaintiff must have thought because of the deception of
defendant, for otherwise, she would not have allowed herself to be photographed with
defendant in public in so (sic) loving and tender poses as those depicted in the pictures Exhs.
"D" and "E". We cannot believe, therefore, defendant's pretense that plaintiff was a nobody to
him except a waitress at the restaurant where he usually ate. Defendant in fact admitted that
he went to plaintiff's hometown of Baaga, Bugallon, Pangasinan, at least thrice; at (sic) the
town fiesta on February 27, 1987 (p. 54, tsn May 18, 1988), at (sic) a beach party together with
the manager and employees of the Mabuhay Luncheonette on March 3, 1987 (p. 50, tsn id.),
and on April 1, 1987 when he allegedly talked to plaintiff's mother who told him to marry her
daughter (pp. 55-56, tsn id.). Would defendant have left Dagupan City where he was involved
in the serious study of medicine to go to plaintiff's hometown in Baaga, Bugallon, unless
there was (sic) some kind of special relationship between them? And this special relationship
must indeed have led to defendant's insincere proposal of marriage to plaintiff,
communicated not only to her but also to her parents, and (sic) Marites Rabino, the owner of
the restaurant where plaintiff was working and where defendant first proposed marriage to
her, also knew of this love affair and defendant's proposal of marriage to plaintiff, which she
declared was the reason why plaintiff resigned from her job at the restaurant after she had
accepted defendant's proposal (pp. 6-7, tsn March 7,
1988).chanroblesvirtualawlibrarychanrobles virtual law library
Upon the other hand, appellant does not appear to be a man of good moral character and
must think so low and have so little respect and regard for Filipino women that he openly
admitted that when he studied in Bacolod City for several years where he finished his B.S.
Biology before he came to Dagupan City to study medicine, he had a common-law wife in
Bacolod City. In other words, he also lived with another woman in Bacolod City but did not
marry that woman, just like what he did to plaintiff. It is not surprising, then, that he felt so
little compunction or remorse in pretending to love and promising to marry plaintiff, a young,
innocent, trustful country girl, in order to satisfy his lust on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that it was defendant-appellant's fraudulent
and deceptive protestations of love for and promise to marry plaintiff that made her
surrender her virtue and womanhood to him and to live with him on the honest and sincere
belief that he would keep said promise, and it was likewise these (sic) fraud and deception on
appellant's part that made plaintiff's parents agree to their daughter's living-in with him

preparatory to their supposed marriage. And as these acts of appellant are palpably and
undoubtedly against morals, good customs, and public policy, and are even gravely and
deeply derogatory and insulting to our women, coming as they do from a foreigner who has
been enjoying the hospitality of our people and taking advantage of the opportunity to study
in one of our institutions of learning, defendant-appellant should indeed be made, under Art.
21 of the Civil Code of the Philippines, to compensate for the moral damages and injury that
he had caused plaintiff, as the lower court ordered him to do in its decision in this case.
12
chanrobles virtual law library
Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he raises
therein the single issue of whether or not Article 21 of the Civil Code applies to the case at bar.
13
chanrobles virtual law library
It is petitioner's thesis that said Article 21 is not applicable because he had not committed any
moral wrong or injury or violated any good custom or public policy; he has not professed love
or proposed marriage to the private respondent; and he has never maltreated her. He
criticizes the trial court for liberally invoking Filipino customs, traditions and culture, and
ignoring the fact that since he is a foreigner, he is not conversant with such Filipino customs,
traditions and culture. As an Iranian Moslem, he is not familiar with Catholic and Christian
ways. He stresses that even if he had made a promise to marry, the subsequent failure to
fulfill the same is excusable or tolerable because of his Moslem upbringing; he then alludes to
the Muslim Code which purportedly allows a Muslim to take four (4) wives and concludes
that on the basis thereof, the trial court erred in ruling that he does not posses good moral
character. Moreover, his controversial "common law life" is now his legal wife as their
marriage had been solemnized in civil ceremonies in the Iranian Embassy. As to his unlawful
cohabitation with the private respondent, petitioner claims that even if responsibility could be
pinned on him for the live-in relationship, the private respondent should also be faulted for
consenting to an illicit arrangement. Finally, petitioner asseverates that even if it was to be
assumed arguendo that he had professed his love to the private respondent and had also
promised to marry her, such acts would not be actionable in view of the special circumstances
of the case. The mere breach of promise is not actionable. 14chanrobles virtual law library
On 26 August 1991, after the private respondent had filed her Comment to the petition and
the petitioner had filed his Reply thereto, this Court gave due course to the petition and
required the parties to submit their respective Memoranda, which they subsequently
complied with.chanroblesvirtualawlibrarychanrobles virtual law library
As may be gleaned from the foregoing summation of the petitioner's arguments in support of
his thesis, it is clear that questions of fact, which boil down to the issue of the credibility of
witnesses, are also raised. It is the rule in this jurisdiction that appellate courts will not
disturb the trial court's findings as to the credibility of witnesses, the latter court having heard

the witnesses and having had the opportunity to observe closely their deportment and
manner of testifying, unless the trial court had plainly overlooked facts of substance or value
which, if considered, might affect the result of the case. 15chanrobles virtual law library
Petitioner has miserably failed to convince Us that both the appellate and trial courts had
overlooked any fact of substance or values which could alter the result of the
case.chanroblesvirtualawlibrarychanrobles virtual law library
Equally settled is the rule that only questions of law may be raised in a petition for review on
certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to analyze or
weigh all over again the evidence introduced by the parties before the lower court. There are,
however, recognized exceptions to this rule. Thus, in Medina vs. Asistio, Jr., 16this Court took
the time, again, to enumerate these exceptions:
xxx xxx xxxchanrobles virtual law library
(1) When the conclusion is a finding grounded entirely on speculation, surmises or
conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the inference made is
manifestly mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15 [1942]); (3) Where
there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4) When the
judgment is based on a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v. Villaseca, L9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the admissions of both appellate and
appellee (Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court (Garcia v.
Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]); (8)
When the findings of fact are conclusions without citation of specific evidence on which they
are based (Ibid.,); (9) When the facts set forth in the petition as well as in the petitioners main
and reply briefs are not disputed by the respondents (Ibid.,); and (10) The finding of fact of
the Court of Appeals is premised on the supposed absence of evidence and is contradicted by
the evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).
Petitioner has not endeavored to joint out to Us the existence of any of the above quoted
exceptions in this case. Consequently, the factual findings of the trial and appellate courts
must be respected.chanroblesvirtualawlibrarychanrobles virtual law library
And now to the legal issue.chanroblesvirtualawlibrarychanrobles virtual law library
The existing rule is that a breach of promise to marry per se is not an actionable wrong.
17
Congress deliberately eliminated from the draft of the New Civil Code the provisions that
would have made it so. The reason therefor is set forth in the report of the Senate Committees
on the Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That breach of promise to marry is not actionable

has been definitely decided in the case of De Jesus vs. Syquia. 18The history of breach of
promise suits in the United States and in England has shown that no other action lends itself
more readily to abuse by designing women and unscrupulous men. It is this experience which
has led to the abolition of rights of action in the so-called Heart Balm suits in many of the
American states. . . . 19chanrobles virtual law library
This notwithstanding, the said Code contains a provision, Article 21, which is designed to
expand the concept of torts or quasi-delict in this jurisdiction by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human foresight to
specifically enumerate and punish in the statute books. 20chanrobles virtual law library
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the sphere of wrongs defined or determined
by positive law. 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.
An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-year
old daughter of "X". A promise of marriage either has not been made, or can not be proved.
The girl becomes pregnant. Under the present laws, there is no crime, as the girl is above
nineteen years of age. Neither can any civil action for breach of promise of marriage be filed.
Therefore, though the grievous moral wrong has been committed, and though the girl and
family have suffered incalculable moral damage, she and her parents cannot bring action for
damages. But under the proposed article, she and her parents would have such a right of
action.chanroblesvirtualawlibrarychanrobles virtual law library
Thus at one stroke, the legislator, if the forgoing rule is approved, would vouchsafe adequate
legal remedy for that untold number of moral wrongs which it is impossible for human
foresight to provide for specifically in the statutes. 21chanrobles virtual law library
Article 2176 of the Civil Code, which defines a quasi-delict thus:
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.
is limited to negligent acts or omissions and excludes the notion of willfulness or intent.
Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law concept while
torts is an Anglo-American or common law concept. Torts is much broader than culpa
aquiliana because it includes not only negligence, but international criminal acts as well such

as assault and battery, false imprisonment and deceit. In the general scheme of the Philippine
legal system envisioned by the Commission responsible for drafting the New Civil Code,
intentional and malicious acts, with certain exceptions, are to be governed by the Revised
Penal Code while negligent acts or omissions are to be covered by Article 2176 of the Civil
Code. 22In between these opposite spectrums are injurious acts which, in the absence of
Article 21, would have been beyond redress. Thus, Article 21 fills that vacuum. It is even
postulated that together with Articles 19 and 20 of the Civil Code, Article 21 has greatly
broadened the scope of the law on civil wrongs; it has become much more supple and
adaptable than the Anglo-American law on torts. 23
In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold,
that where a man's promise to marry is in fact the proximate cause of the acceptance of his
love by a woman and his representation to fulfill that promise thereafter becomes the
proximate cause of the giving of herself unto him in a sexual congress, proof that he had, in
reality, no intention of marrying her and that the promise was only a subtle scheme or
deceptive device to entice or inveigle her to accept him and to obtain her consent to the sexual
act, could justify the award of damages pursuant to Article 21 not because of such promise to
marry but because of the fraud and deceit behind it and the willful injury to her honor and
reputation which followed thereafter. It is essential, however, that such injury should have
been committed in a manner contrary to morals, good customs or public
policy.chanroblesvirtualawlibrarychanrobles virtual law library
In the instant case, respondent Court found that it was the petitioner's "fraudulent and
deceptive protestations of love for and promise to marry plaintiff that made her surrender her
virtue and womanhood to him and to live with him on the honest and sincere belief that he
would keep said promise, and it was likewise these fraud and deception on appellant's part
that made plaintiff's parents agree to their daughter's living-in with him preparatory to their
supposed marriage." 24In short, the private respondent surrendered her virginity, the
cherished possession of every single Filipina, not because of lust but because of moral
seduction - the kind illustrated by the Code Commission in its example earlier adverted to.
The petitioner could not be held liable for criminal seduction punished under either Article
337 or Article 338 of the Revised Penal Code because the private respondent was above
eighteen (18) years of age at the time of the seduction.chanroblesvirtualawlibrarychanrobles
virtual law library
Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of
promise to marry where the woman is a victim of moral seduction. Thus, in Hermosisima vs.
Court of Appeals, 25 this Court denied recovery of damages to the woman because:
. . . we find ourselves unable to say that petitioner is morally guilty of seduction, not only
because he is approximately ten (10) years younger than the complainant - who was around

thirty-six (36) years of age, and as highly enlightened as a former high school teacher and a
life insurance agent are supposed to be - when she became intimate with petitioner, then a
mere apprentice pilot, but, also, because the court of first instance found that, complainant
"surrendered herself" to petitioner because, "overwhelmed by her love" for him, she "wanted
to bind" him by having a fruit of their engagement even before they had the benefit of
clergy.
In Tanjanco vs. Court of Appeals, 26while this Court likewise hinted at possible recovery if
there had been moral seduction, recovery was eventually denied because We were not
convinced that such seduction existed. The following enlightening disquisition and conclusion
were made in the said case:
The Court of Appeals seem to have overlooked that the example set forth in the Code
Commission's memorandum refers to a tort upon a minor who had been seduced. The
essential feature is seduction, that in law is more than mere sexual intercourse, or a breach of
a promise of marriage; it connotes essentially the idea of deceit, enticement, superior power
or abuse of confidence on the part of the seducer to which the woman has yielded (U.S. vs.
Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil.
595).chanroblesvirtualawlibrarychanrobles virtual law library
It has been ruled in the Buenaventura case (supra) that To constitute seduction there must in all cases be some sufficient promise or inducement and
the woman must yield because of the promise or other inducement. If she consents merely
from carnal lust and the intercourse is from mutual desire, there is no seduction (43 Cent.
Dig. tit. Seduction, par. 56) She must be induced to depart from the path of virtue by the use
of some species of arts, persuasions and wiles, which are calculated to have and do have that
effect, and which result in her person to ultimately submitting her person to the sexual
embraces of her seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement, persuasion or deception is the
essence of the injury; and a mere proof of intercourse is insufficient to warrant a
recovery.chanroblesvirtualawlibrarychanrobles virtual law library
Accordingly it is not seduction where the willingness arises out of sexual desire of curiosity of
the female, and the defendant merely affords her the needed opportunity for the commission
of the act. It has been emphasized that to allow a recovery in all such cases would tend to the
demoralization of the female sex, and would be a reward for unchastity by which a class of
adventuresses would be swift to profit. (47 Am. Jur. 662)
xxx xxx xxxchanrobles virtual law library
Over and above the partisan allegations, the fact stand out that for one whole year, from 1958
to 1959, the plaintiff-appellee, a woman of adult age, maintain intimate sexual relations with

appellant, with repeated acts of intercourse. Such conduct is incompatible with the idea of
seduction. Plainly there is here voluntariness and mutual passion; for had the appellant been
deceived, had she surrendered exclusively because of the deceit, artful persuasions and wiles
of the defendant, she would not have again yielded to his embraces, much less for one year,
without exacting early fulfillment of the alleged promises of marriage, and would have cut
short all sexual relations upon finding that defendant did not intend to fulfill his defendant
did not intend to fulfill his promise. Hence, we conclude that no case is made under article 21
of the Civil Code, and no other cause of action being alleged, no error was committed by the
Court of First Instance in dismissing the complaint. 27chanrobles virtual law library
In his annotations on the Civil Code, 28Associate Justice Edgardo L. Paras, who recently
retired from this Court, opined that in a breach of promise to marry where there had been
carnal knowledge, moral damages may be recovered:
. . . if there be criminal or moral seduction, but not if the intercourse was due to mutual lust.
(Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra vs. Marcos,
7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan. 29, 1962). (In other
words, if the CAUSE be the promise to marry, and the EFFECT be the carnal knowledge, there
is a chance that there was criminal or moral seduction, hence recovery of moral damages will
prosper. If it be the other way around, there can be no recovery of moral damages, because
here mutual lust has intervened). . . .
together with "ACTUAL damages, should there be any, such as the expenses for the wedding
presentations (See Domalagon v. Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino 29is also of the same persuasion:
It is submitted that the rule in Batarra vs. Marcos, 30still subsists, notwithstanding the
incorporation of the present article 31 in the Code. The example given by the Code Commission
is correct, if there was seduction, not necessarily in the legal sense, but in the vulgar sense of
deception. But when the sexual act is accomplished without any deceit or qualifying
circumstance of abuse of authority or influence, but the woman, already of age, has knowingly
given herself to a man, it cannot be said that there is an injury which can be the basis for
indemnity.chanroblesvirtualawlibrarychanrobles virtual law library
But so long as there is fraud, which is characterized by willfulness (sic), the action lies. The
court, however, must weigh the degree of fraud, if it is sufficient to deceive the woman under
the circumstances, because an act which would deceive a girl sixteen years of age may not
constitute deceit as to an experienced woman thirty years of age. But so long as there is a
wrongful act and a resulting injury, there should be civil liability, even if the act is not
punishable under the criminal law and there should have been an acquittal or dismissal of the
criminal case for that reason.

We are unable to agree with the petitioner's alternative proposition to the effect that granting,
for argument's sake, that he did promise to marry the private respondent, the latter is
nevertheless also at fault. According to him, both parties are in pari delicto; hence, pursuant
to Article 1412(1) of the Civil Code and the doctrine laid down in Batarra vs. Marcos, 32the
private respondent cannot recover damages from the petitioner. The latter even goes as far as
stating that if the private respondent had "sustained any injury or damage in their
relationship, it is primarily because of her own doing, 33for:
. . . She is also interested in the petitioner as the latter will become a doctor sooner or later.
Take notice that she is a plain high school graduate and a mere employee . . . (Annex "C") or a
waitress (TSN, p. 51, January 25, 1988) in a luncheonette and without doubt, is in need of a
man who can give her economic security. Her family is in dire need of financial assistance.
(TSN, pp. 51-53, May 18, 1988). And this predicament prompted her to accept a proposition
that may have been offered by the petitioner. 34chanrobles virtual law library
These statements reveal the true character and motive of the petitioner. It is clear that he
harbors a condescending, if not sarcastic, regard for the private respondent on account of the
latter's ignoble birth, inferior educational background, poverty and, as perceived by him,
dishonorable employment. Obviously then, from the very beginning, he was not at all moved
by good faith and an honest motive. Marrying with a woman so circumstances could not have
even remotely occurred to him. Thus, his profession of love and promise to marry were empty
words directly intended to fool, dupe, entice, beguile and deceive the poor woman into
believing that indeed, he loved her and would want her to be his life's partner. His was
nothing but pure lust which he wanted satisfied by a Filipina who honestly believed that by
accepting his proffer of love and proposal of marriage, she would be able to enjoy a life of ease
and security. Petitioner clearly violated the Filipino's concept of morality and brazenly defied
the traditional respect Filipinos have for their women. It can even be said that the petitioner
committed such deplorable acts in blatant disregard of Article 19 of the Civil Code which
directs every person to act with justice, give everyone his due and observe honesty and good
faith in the exercise of his rights and in the performance of his
obligations.chanroblesvirtualawlibrarychanrobles virtual law library
No foreigner must be allowed to make a mockery of our laws, customs and
traditions.chanroblesvirtualawlibrarychanrobles virtual law library
The pari delicto rule does not apply in this case for while indeed, the private respondent may
not have been impelled by the purest of intentions, she eventually submitted to the petitioner
in sexual congress not out of lust, but because of moral seduction. In fact, it is apparent that
she had qualms of conscience about the entire episode for as soon as she found out that the
petitioner was not going to marry her after all, she left him. She is not, therefore, in pari
delicto with the petitioner. Pari delicto means "in equal fault; in a similar offense or crime;

equal in guilt or in legal fault." 35At most, it could be conceded that she is merely in delicto.
Equity often interferes for the relief of the less guilty of the parties, where his transgression
has been brought about by the imposition of undue influence of the party on whom the
burden of the original wrong principally rests, or where his consent to the transaction was
itself procured by
fraud. 36chanrobles virtual law library
In Mangayao vs. Lasud, 37We declared:
Appellants likewise stress that both parties being at fault, there should be no action by one
against the other (Art. 1412, New Civil Code). This rule, however, has been interpreted as
applicable only where the fault on both sides is, more or less, equivalent. It does not apply
where one party is literate or intelligent and the other one is not. (c.f. Bough vs. Cantiveros,
40 Phil. 209).
We should stress, however, that while We find for the private respondent, let it not be said
that this Court condones the deplorable behavior of her parents in letting her and the
petitioner stay together in the same room in their house after giving approval to their
marriage. It is the solemn duty of parents to protect the honor of their daughters and infuse
upon them the higher values of morality and dignity.chanroblesvirtualawlibrarychanrobles
virtual law library
WHEREFORE, finding no reversible error in the challenged decision, the instant petition is
hereby DENIED, with costs against the petitioner.chanroblesvirtualawlibrarychanrobles
virtual law library
SO ORDERED.

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, vs.

MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT
SECURITY AGENCY, respondents.
DECISION
VITUG, J.:
The case before the Court is an appeal from the decision and resolution of the Court of
Appeals, promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV
No. 60720, entitled Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo
Roman, et. al., which has modified the decision of 11 August 1998 of the Regional Trial Court,
Branch 266, Pasig City, exonerating Prudent Security Agency (Prudent) from liability and

finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on
account of the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad,
then drunk, entered the EDSA LRT station after purchasing a token (representing payment of
the fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin,
the security guard assigned to the area approached Navidad. A misunderstanding or an
altercation between the two apparently ensued that led to a fist fight. No evidence, however,
was adduced to indicate how the fight started or who, between the two, delivered the first
blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an
LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the
moving train, and he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along
with her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman,
the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of
her husband. LRTA and Roman filed a counterclaim against Navidad and a cross-claim
against Escartin and Prudent. Prudent, in its answer, denied liability and averred that it had
exercised due diligence in the selection and supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of
presenting evidence, filed a demurrer contending that Navidad had failed to prove that
Escartin was negligent in his assigned task. On 11 August 1998, the trial court rendered its
decision; it adjudged:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and
severally the plaintiffs the following:
a) 1) Actual damages of P44,830.00;
2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;
b) Moral damages of P50,000.00;
c) Attorneys fees of P20,000;
d) Costs of suit.
The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.
The compulsory counterclaim of LRTA and Roman are likewise dismissed.[if !supportFootnotes][1][endif]
Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court
promulgated its now assailed decision exonerating Prudent from any liability for the death of
Nicanor Navidad and, instead, holding the LRTA and Roman jointly and severally liable
thusly:
WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants

from any liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and
the Light Rail Transit Authority (LRTA) are held liable for his death and are hereby directed
to pay jointly and severally to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
e) P20,000.00 as and for attorneys fees.[if !supportFootnotes][2][endif]
The appellate court ratiocinated that while the deceased might not have then as yet boarded
the train, a contract of carriage theretofore had already existed when the victim entered the
place where passengers were supposed to be after paying the fare and getting the
corresponding token therefor. In exempting Prudent from liability, the court stressed that
there was nothing to link the security agency to the death of Navidad. It said that Navidad
failed to show that Escartin inflicted fist blows upon the victim and the evidence merely
established the fact of death of Navidad by reason of his having been hit by the train owned
and managed by the LRTA and operated at the time by Roman. The appellate court faulted
petitioners for their failure to present expert evidence to establish the fact that the application
of emergency brakes could not have stopped the train.
The appellate court denied petitioners motion for reconsideration in its resolution of 10
October 2000.
In their present recourse, petitioners recite alleged errors on the part of the appellate court;
viz:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE
FINDINGS OF FACTS BY THE TRIAL COURT
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.
III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO
ROMAN IS AN EMPLOYEE OF LRTA.[if !supportFootnotes][3][endif]
Petitioners would contend that the appellate court ignored the evidence and the factual
findings of the trial court by holding them liable on the basis of a sweeping conclusion that
the presumption of negligence on the part of a common carrier was not overcome. Petitioners
would insist that Escartins assault upon Navidad, which caused the latter to fall on the tracks,
was an act of a stranger that could not have been foreseen or prevented. The LRTA would add
that the appellate courts conclusion on the existence of an employer-employee relationship

between Roman and LRTA lacked basis because Roman himself had testified being an
employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court, contended that a contract of
carriage was deemed created from the moment Navidad paid the fare at the LRT station and
entered the premises of the latter, entitling Navidad to all the rights and protection under a
contractual relation, and that the appellate court had correctly held LRTA and Roman liable
for the death of Navidad in failing to exercise extraordinary diligence imposed upon a
common carrier.
Law and jurisprudence dictate that a common carrier, both from the nature of its business
and for reasons of public policy, is burdened with the duty of exercising utmost diligence in
ensuring the safety of passengers.[if !supportFootnotes][4][endif] The Civil Code, governing the liability of
a common carrier for death of or injury to its passengers, provides:
Article 1755. A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.
Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the formers employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees.
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account
of the willful acts or negligence of other passengers or of strangers, if the common carriers
employees through the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
The law requires common carriers to carry passengers safely using the utmost diligence of
very cautious persons with due regard for all circumstances.[if !supportFootnotes][5][endif] Such duty of a
common carrier to provide safety to its passengers so obligates it not only during the course of
the trip but for so long as the passengers are within its premises and where they ought to be in
pursuance to the contract of carriage.[if !supportFootnotes][6][endif] The statutory provisions render a
common carrier liable for death of or injury to passengers (a) through the negligence or
wilful acts of its employees or b) on account of wilful acts or negligence of other
passengers or of strangers if the common carriers employees through the
exercise of due diligence could have prevented or stopped the act or omission.[if !
supportFootnotes][7][endif]
In case of such death or injury, a carrier is presumed to have been at fault or

been negligent, and[if !supportFootnotes][8][endif] by simple proof of injury, the passenger is relieved of
the duty to still establish the fault or negligence of the carrier or of its employees and the
burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to
force majeure.[if !supportFootnotes][9][endif] In the absence of satisfactory explanation by the carrier on
how the accident occurred, which petitioners, according to the appellate court, have failed to
show, the presumption would be that it has been at fault,[if !supportFootnotes][10][endif] an exception
from the general rule that negligence must be proved. [if !supportFootnotes][11][endif]
The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify
the victim arises from the breach of that contract by reason of its failure to exercise the high
diligence required of the common carrier. In the discharge of its commitment to ensure the
safety of passengers, a carrier may choose to hire its own employees or avail itself of the
services of an outsider or an independent firm to undertake the task. In either case, the
common carrier is not relieved of its responsibilities under the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only be for tort under the
provisions of Article 2176[if !supportFootnotes][12][endif] and related provisions, in conjunction with
Article 2180,[if !supportFootnotes][13][endif] of the Civil Code. The premise, however, for the employers
liability is negligence or fault on the part of the employee. Once such fault is established, the
employer can then be made liable on the basis of the presumption juris tantum that the
employer failed to exercise diligentissimi patris families in the selection and supervision of its
employees. The liability is primary and can only be negated by showing due diligence in the
selection and supervision of the employee, a factual matter that has not been shown. Absent
such a showing, one might ask further, how then must the liability of the common carrier, on
the one hand, and an independent contractor, on the other hand, be described? It would be
solidary. A contractual obligation can be breached by tort and when the same act or omission
causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article
2194[if !supportFootnotes][14][endif] of the Civil Code can well apply.[if !supportFootnotes][15][endif] In fine, a liability
for tort may arise even under a contract, where tort is that which breaches the contract. [if !
supportFootnotes][16][endif]
Stated differently, when an act which constitutes a breach of contract would
have itself constituted the source of a quasi-delictual liability had no contract existed between
the parties, the contract can be said to have been breached by tort, thereby allowing the rules
on tort to apply.[if !supportFootnotes][17][endif]
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor
Navidad, this Court is concluded by the factual finding of the Court of Appeals that there is
nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the
negligence of its employee, Escartin, has not been duly proven x x x. This finding of the
appellate court is not without substantial justification in our own review of the records of the
case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any
culpable act or omission, he must also be absolved from liability. Needless to say, the
contractual tie between the LRT and Navidad is not itself a juridical relation between the
latter and Roman; thus, Roman can be made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is untenable. Nominal damages
are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.[if !supportFootnotes][18][endif] It is an established rule that nominal
damages cannot co-exist with compensatory damages.[if !supportFootnotes][19][endif]
WHEREFORE, the assailed decision of the appellate court is AFFIRMED with
MODIFICATION but only in that (a) the award of nominal damages is DELETED and (b)
petitioner Rodolfo Roman is absolved from liability. No costs.
SO ORDERED.
[G.R. No. 122039. May 31, 2000]
VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA JUJEURCHE
SUNGA and FRANCISCO SALVA, respondents.
D E C I S I ON
MENDOZA, J.:
This is a petition for review on certiorari of the decision[if !supportFootnotes][1][endif] of the Court of
Appeals, dated March 31, 1991, reversing the contrary decision of the Regional Trial Court,
Branch 36, Dumaguete City, and awarding damages instead to private respondent Eliza
Jujeurche Sunga as plaintiff in an action for breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 oclock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga,
then a college freshman majoring in Physical Education at the Siliman University, took a
passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was
filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension
seat," a wooden stool at the back of the door at the rear end of the vehicle. Sclaw
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger
off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger.
Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco
Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. She
sustained a fracture of the "distal third of the left tibia-fibula with severe necrosis of the
underlying skin." Closed reduction of the fracture, long leg circular casting, and case wedging
were done under sedation. Her confinement in the hospital lasted from August 23 to

September 7, 1989. Her attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon,
certified she would remain on a cast for a period of three months and would have to ambulate
in crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of
the contract of carriage by the former in failing to exercise the diligence required of him as a
common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco
Salva, the owner of the Isuzu truck. Korte
The lower court rendered judgment against Salva as third-party defendant and absolved
Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for
the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas against
Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his
driver Verena jointly liable to Calalas for the damage to his jeepney. Rtcspped
On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground
that Sungas cause of action was based on a contract of carriage, not quasi-delict, and that the
common carrier failed to exercise the diligence required under the Civil Code. The appellate
court dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and
another one is entered ordering defendant-appellee Vicente Calalas to
pay plaintiff-appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorneys fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the
negligence of Verena was the proximate cause of the accident negates his liability and that to
rule otherwise would be to make the common carrier an insurer of the safety of its passengers.
He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito.
Petitioner further assails the award of moral damages to Sunga on the ground that it is not
supported by evidence. Sdaadsc
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and
the owner of the truck liable for quasi-delict ignores the fact that she was never a party to that
case and, therefore, the principle of res judicata does not apply. Missdaa
Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil

Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the
damage caused to petitioners jeepney. On the other hand, the issue in this case is whether
petitioner is liable on his contract of carriage. The first, quasi-delict, also known as culpa
aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor. The
second, breach of contract or culpa contractual, is premised upon the negligence in the
performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly established because it
is the basis of the action, whereas in breach of contract, the action can be prosecuted merely
by proving the existence of the contract and the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to his destination.[if !supportFootnotes][2][endif] In case of
death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are
presumed to have been at fault or to have acted negligently unless they prove that they
observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision
necessarily shifts to the common carrier the burden of proof. Slxmis
There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva
and his driver Verena liable for the damage to petitioners jeepney, should be binding on
Sunga. It is immaterial that the proximate cause of the collision between the jeepney and the
truck was the negligence of the truck driver. The doctrine of proximate cause is applicable
only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a
device for imputing liability to a person where there is no relation between him and another
party. In such a case, the obligation is created by law itself. But, where there is a pre-existing
contractual relation between the parties, it is the parties themselves who create the obligation,
and the function of the law is merely to regulate the relation thus created. Insofar as contracts
of carriage are concerned, some aspects regulated by the Civil Code are those respecting the
diligence required of common carriers with regard to the safety of passengers as well as the
presumption of negligence in cases of death or injury to passengers. It provides: Slxsc
Art. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles
1734, 1735, and 1746, Nos. 5,6, and 7, while the extraordinary diligence
for the safety of the passengers is further set forth in articles 1755 and
1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed by articles 1733 and
1755.
In the case at bar, upon the happening of the accident, the presumption of negligence at once
arose, and it became the duty of petitioner to prove that he had to observe extraordinary
diligence in the care of his passengers. Scslx
Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could
provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances" as required by Art. 1755? We do not think so. Several factors militate against
petitioners contention. Slx
First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion
being exposed about two meters from the broad shoulders of the highway, and facing the
middle of the highway in a diagonal angle. This is a violation of the R.A. No. 4136, as
amended, or the Land Transportation and Traffic Code, which provides:
Sec. 54. Obstruction of Traffic. - No person shall drive his motor vehicle in such a manner as
to obstruct or impede the passage of any vehicle, nor, while discharging
or taking on passengers or loading or unloading freight, obstruct the
free passage of other vehicles on the highway.
Second, it is undisputed that petitioners driver took in more passengers than the allowed
seating capacity of the jeepney, a violation of 32(a) of the same law. It provides: Mesm
Exceeding registered capacity. - No person operating any motor vehicle shall allow more
passengers or more freight or cargo in his vehicle than its registered capacity.
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to
which the other passengers were exposed. Therefore, not only was petitioner unable to
overcome the presumption of negligence imposed on him for the injury sustained by Sunga,
but also, the evidence shows he was actually negligent in transporting passengers. Calrky
We find it hard to give serious thought to petitioners contention that Sungas taking an
"extension seat" amounted to an implied assumption of risk. It is akin to arguing that the
injuries to the many victims of the tragedies in our seas should not be compensated merely
because those passengers assumed a greater risk of drowning by boarding an overloaded
ferry. This is also true of petitioners contention that the jeepney being bumped while it was
improperly parked constitutes caso fortuito. A caso fortuito is an event which could not be
foreseen, or which, though foreseen, was inevitable.[if !supportFootnotes][3][endif] This requires that the
following requirements be present: (a) the cause of the breach is independent of the debtors
will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it
impossible for the debtor to fulfill his obligation in a normal manner, and (d) the debtor did

not take part in causing the injury to the creditor.[if !supportFootnotes][4][endif] Petitioner should have
foreseen the danger of parking his jeepney with its body protruding two meters into the
highway. Kycalr
Finally, petitioner challenges the award of moral damages alleging that it is excessive and
without basis in law. We find this contention well taken.
In awarding moral damages, the Court of Appeals stated: Kyle
Plaintiff-appellant at the time of the accident was a first-year college student in that school
year 1989-1990 at the Silliman University, majoring in Physical
Education. Because of the injury, she was not able to enroll in the
second semester of that school year. She testified that she had no more
intention of continuing with her schooling, because she could not walk
and decided not to pursue her degree, major in Physical Education
"because of my leg which has a defect already."
Plaintiff-appellant likewise testified that even while she was under confinement, she cried in
pain because of her injured left foot. As a result of her injury, the
Orthopedic Surgeon also certified that she has "residual bowing of the
fracture side." She likewise decided not to further pursue Physical
Education as her major subject, because "my left leg x x x has a defect
already."
Those are her physical pains and moral sufferings, the inevitable bedfellows of the injuries
that she suffered. Under Article 2219 of the Civil Code, she is entitled to
recover moral damages in the sum of P50,000.00, which is fair, just
and reasonable.
As a general rule, moral damages are not recoverable in actions for damages predicated on a
breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil Code. [if
!supportFootnotes][5][endif]
As an exception, such damages are recoverable: (1) in cases in which the
mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art.
2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad
faith, as provided in Art. 2220.[if !supportFootnotes][6][endif]
In this case, there is no legal basis for awarding moral damages since there was no factual
finding by the appellate court that petitioner acted in bad faith in the performance of the
contract of carriage. Sungas contention that petitioners admission in open court that the
driver of the jeepney failed to assist her in going to a nearby hospital cannot be construed as
an admission of bad faith. The fact that it was the driver of the Isuzu truck who took her to the
hospital does not imply that petitioner was utterly indifferent to the plight of his injured
passenger. If at all, it is merely implied recognition by Verena that he was the one at fault for
the accident. Exsm

WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its
resolution, dated September 11, 1995, are AFFIRMED, with the MODIFICATION that the
award of moral damages is DELETED.
SO ORDERED.
G.R. No. L-48006
July 8, 1942
FAUSTO BARREDO, petitioner,
vs.
SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.
Celedonio P. Gloria and Antonio Barredo for petitioner.Jose G. Advincula for respondents.
BOCOBO, J.:
This case comes up from the Court of Appeals which held the petitioner herein, Fausto
Barredo, liable in damages for the death of Faustino Garcia caused by the negligence of Pedro
Fontanilla, a taxi driver employed by said Fausto Barredo.
At about half past one in the morning of May 3, 1936, on the road between Malabon and
Navotas, Province of Rizal, there was a head-on collision between a taxi of the Malate Taxicab
driven by Pedro Fontanilla and a carretela guided by Pedro Dimapalis. The carretela was
overturned, and one of its passengers, 16-year-old boy Faustino Garcia, suffered injuries from
which he died two days later. A criminal action was filed against Fontanilla in the Court of
First Instance of Rizal, and he was convicted and sentenced to an indeterminate sentence of
one year and one day to two years of prision correccional. The court in the criminal case
granted the petition that the right to bring a separate civil action be reserved. The Court of
Appeals affirmed the sentence of the lower court in the criminal case. Severino Garcia and
Timotea Almario, parents of the deceased on March 7, 1939, brought an action in the Court of
First Instance of Manila against Fausto Barredo as the sole proprietor of the Malate Taxicab
and employer of Pedro Fontanilla. On July 8, 1939, the Court of First Instance of Manila
awarded damages in favor of the plaintiffs for P2,000 plus legal interest from the date of the
complaint. This decision was modified by the Court of Appeals by reducing the damages to
P1,000 with legal interest from the time the action was instituted. It is undisputed that
Fontanilla 's negligence was the cause of the mishap, as he was driving on the wrong side of
the road, and at high speed. As to Barredo's responsibility, the Court of Appeals found:
... It is admitted that defendant is Fontanilla's employer. There is proof that he exercised the
diligence of a good father of a family to prevent damage. (See p. 22, appellant's brief.) In fact
it is shown he was careless in employing Fontanilla who had been caught several times for
violation of the Automobile Law and speeding (Exhibit A) violation which appeared in the
records of the Bureau of Public Works available to be public and to himself. Therefore, he

must indemnify plaintiffs under the provisions of article 1903 of the Civil Code.
The main theory of the defense is that the liability of Fausto Barredo is governed by the
Revised Penal Code; hence, his liability is only subsidiary, and as there has been no civil
action against Pedro Fontanilla, the person criminally liable, Barredo cannot be held
responsible in the case. The petitioner's brief states on page 10:
... The Court of Appeals holds that the petitioner is being sued for his failure to exercise all the
diligence of a good father of a family in the selection and supervision of Pedro Fontanilla to
prevent damages suffered by the respondents. In other words, The Court of Appeals insists on
applying in the case article 1903 of the Civil Code. Article 1903 of the Civil Code is found in
Chapter II, Title 16, Book IV of the Civil Code. This fact makes said article to a civil liability
arising from a crime as in the case at bar simply because Chapter II of Title 16 of Book IV of
the Civil Code, in the precise words of article 1903 of the Civil Code itself, is applicable only to
"those (obligations) arising from wrongful or negligent acts or commission not punishable by
law.
The gist of the decision of the Court of Appeals is expressed thus:
... We cannot agree to the defendant's contention. The liability sought to be imposed upon
him in this action is not a civil obligation arising from a felony or a misdemeanor (the crime
of Pedro Fontanilla,), but an obligation imposed in article 1903 of the Civil Code by reason of
his negligence in the selection or supervision of his servant or employee.
The pivotal question in this case is whether the plaintiffs may bring this separate civil action
against Fausto Barredo, thus making him primarily and directly, responsible under article
1903 of the Civil Code as an employer of Pedro Fontanilla. The defendant maintains that
Fontanilla's negligence being punishable by the Penal Code, his (defendant's) liability as an
employer is only subsidiary, according to said Penal code, but Fontanilla has not been sued in
a civil action and his property has not been exhausted. To decide the main issue, we must cut
through the tangle that has, in the minds of many confused and jumbled together delitos and
cuasi delitos, or crimes under the Penal Code and fault or negligence under articles 1902-1910
of the Civil Code. This should be done, because justice may be lost in a labyrinth, unless
principles and remedies are distinctly envisaged. Fortunately, we are aided in our inquiry by
the luminous presentation of the perplexing subject by renown jurists and we are likewise
guided by the decisions of this Court in previous cases as well as by the solemn clarity of the
consideration in several sentences of the Supreme Tribunal of Spain.
Authorities support the proposition that a quasi-delict or "culpa aquiliana " is a separate legal
institution under the Civil Code with a substantivity all its own, and individuality that is
entirely apart and independent from delict or crime. Upon this principle and on the wording
and spirit article 1903 of the Civil Code, the primary and direct responsibility of employers
may be safely anchored.

The pertinent provisions of the Civil Code and Revised Penal Code are as follows:
CIVIL CODE
ART. 1089 Obligations arise from law, from contracts and quasi-contracts, and from acts and
omissions which are unlawful or in which any kind of fault or negligence intervenes.
xxx
xxx
xxx
ART. 1092. Civil obligations arising from felonies or misdemeanors shall be governed by the
provisions of the Penal Code.
ART. 1093. Those which are derived from acts or omissions in which fault or negligence, not
punishable by law, intervenes shall be subject to the provisions of Chapter II, Title XVI of this
book.
xxx
xxx
xxx
ART 1902. Any person who by an act or omission causes damage to another by his fault or
negligence shall be liable for the damage so done.
ART. 1903. The obligation imposed by the next preceding article is enforcible, not only for
personal acts and omissions, but also for those of persons for whom another is responsible.
The father and in, case of his death or incapacity, the mother, are liable for any damages
caused by the minor children who live with them.
Guardians are liable for damages done by minors or incapacitated persons subject to their
authority and living with them.
Owners or directors of an establishment or business are equally liable for any damages caused
by their employees while engaged in the branch of the service in which employed, or on
occasion of the performance of their duties.
The State is subject to the same liability when it acts through a special agent, but not if the
damage shall have been caused by the official upon whom properly devolved the duty of doing
the act performed, in which case the provisions of the next preceding article shall be
applicable.
Finally, teachers or directors of arts trades are liable for any damages caused by their pupils
or apprentices while they are under their custody.
The liability imposed by this article shall cease in case the persons mentioned therein prove
that they are exercised all the diligence of a good father of a family to prevent the damage.
ART. 1904. Any person who pays for damage caused by his employees may recover from the
latter what he may have paid.
REVISED PENAL CODE
ART. 100. Civil liability of a person guilty of felony. Every person criminally liable for a
felony is also civilly liable.
ART. 101. Rules regarding civil liability in certain cases. The exemption from criminal
liability established in subdivisions 1, 2, 3, 5, and 6 of article 12 and in subdivision 4 of article

11 of this Code does not include exemption from civil liability, which shall be enforced to the
following rules:
First. In cases of subdivision, 1, 2 and 3 of article 12 the civil liability for acts committed by
any imbecile or insane person, and by a person under nine years of age, or by one over nine
but under fifteen years of age, who has acted without discernment shall devolve upon those
having such person under their legal authority or control, unless it appears that there was no
fault or negligence on their part.
Should there be no person having such insane, imbecile or minor under his authority, legal
guardianship, or control, or if such person be insolvent, said insane, imbecile, or minor shall
respond with their own property, excepting property exempt from execution, in accordance
with the civil law.
Second. In cases falling within subdivision 4 of article 11, the person for whose benefit the
harm has been prevented shall be civilly liable in proportion to the benefit which they may
have received.
The courts shall determine, in their sound discretion, the proportionate amount for which
each one shall be liable.
When the respective shares can not be equitably determined, even approximately, or when
the liability also attaches to the Government, or to the majority of the inhabitants of the town,
and, in all events, whenever the damage has been caused with the consent of the authorities
or their agents, indemnification shall be made in the manner prescribed by special laws or
regulations.
Third. In cases falling within subdivisions 5 and 6 of article 12, the persons using violence or
causing the fear shall be primarily liable and secondarily, or, if there be no such persons,
those doing the act shall be liable, saving always to the latter that part of their property
exempt from execution.
ART. 102. Subsidiary civil liability of innkeepers, tavern keepers and proprietors of
establishment. In default of persons criminally liable, innkeepers, tavern keepers, and any
other persons or corporation shall be civilly liable for crimes committed in their
establishments, in all cases where a violation of municipal ordinances or some general or
special police regulation shall have been committed by them or their employees.
Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft
within their houses lodging therein, or the person, or for the payment of the value thereof,
provided that such guests shall have notified in advance the innkeeper himself, or the person
representing him, of the deposit of such goods within the inn; and shall furthermore have
followed the directions which such innkeeper or his representative may have given them with
respect to the care of and vigilance over such goods. No liability shall attach in case of robbery
with violence against or intimidation against or intimidation of persons unless committed by

the innkeeper's employees.

ART. 103. Subsidiary civil liability of other persons. The subsidiary liability established in
the next preceding article shall also apply to employers, teachers, persons, and corporations
engaged in any kind of industry for felonies committed by their servants, pupils, workmen,
apprentices, or employees in the discharge of their duties.
xxx
xxx
xxx
ART. 365. Imprudence and negligence. Any person who, by reckless imprudence, shall
commit any act which, had it been intentional, would constitute a grave felony, shall suffer the
penalty of arresto mayor in its maximum period to prision correccional in its minimum
period; if it would have constituted a less grave felony, the penalty of arresto mayor in its
minimum and medium periods shall be imposed.
Any person who, by simple imprudence or negligence, shall commit an act which would
otherwise constitute a grave felony, shall suffer the penalty of arresto mayor in its medium
and maximum periods; if it would have constituted a less serious felony, the penalty of
arresto mayor in its minimum period shall be imposed."
It will thus be seen that while the terms of articles 1902 of the Civil Code seem to be broad
enough to cover the driver's negligence in the instant case, nevertheless article 1093 limits
cuasi-delitos to acts or omissions "not punishable by law." But inasmuch as article 365 of the
Revised Penal Code punishes not only reckless but even simple imprudence or negligence, the
fault or negligence under article 1902 of the Civil Code has apparently been crowded out. It is
this overlapping that makes the "confusion worse confounded." However, a closer study
shows that such a concurrence of scope in regard to negligent acts does not destroy the
distinction between the civil liability arising from a crime and the responsibility for cuasidelitos or culpa extra-contractual. The same negligent act causing damages may produce civil
liability arising from a crime under article 100 of the Revised Penal Code, or create an action
for cuasi-delito or culpa extra-contractual under articles 1902-1910 of the Civil Code.
The individuality of cuasi-delito or culpa extra-contractual looms clear and unmistakable.
This legal institution is of ancient lineage, one of its early ancestors being the Lex Aquilia in
the Roman Law. In fact, in Spanish legal terminology, this responsibility is often referred to
as culpa aquiliana. The Partidas also contributed to the genealogy of the present fault or
negligence under the Civil Code; for instance, Law 6, Title 15, of Partida 7, says: "Tenudo es de
fazer emienda, porque, como quier que el non fizo a sabiendas en dao al otro, pero acaescio
por su culpa."
The distinctive nature of cuasi-delitos survives in the Civil Code. According to article 1089,
one of the five sources of obligations is this legal institution of cuasi-delito or culpa extracontractual: "los actos . . . en que intervenga cualquier genero de culpa o negligencia." Then
article 1093 provides that this kind of obligation shall be governed by Chapter II of Title XVI

of Book IV, meaning articles 1902-0910. This portion of the Civil Code is exclusively devoted
to the legal institution of culpa aquiliana.
Some of the differences between crimes under the Penal Code and the culpa aquiliana or
cuasi-delito under the Civil Code are:
1. That crimes affect the public interest, while cuasi-delitos are only of private concern.
2. That, consequently, the Penal Code punishes or corrects the criminal act, while the Civil
Code, by means of indemnification, merely repairs the damage.
3. That delicts are not as broad as quasi-delicts, because the former are punished only if there
is a penal law clearly covering them, while the latter, cuasi-delitos, include all acts in which
"any king of fault or negligence intervenes." However, it should be noted that not all
violations of the penal law produce civil responsibility, such as begging in contravention of
ordinances, violation of the game laws, infraction of the rules of traffic when nobody is hurt.
(See Colin and Capitant, "Curso Elemental de Derecho Civil," Vol. 3, p. 728.)
Let us now ascertain what some jurists say on the separate existence of quasi-delicts and the
employer's primary and direct liability under article 1903 of the Civil Code.
Dorado Montero in his essay on "Responsibilidad" in the "Enciclopedia Juridica Espaola"
(Vol. XXVII, p. 414) says:
El concepto juridico de la responsabilidad civil abarca diversos aspectos y comprende a
diferentes personas. Asi, existe una responsabilidad civil propiamente dicha, que en ningun
casl lleva aparejada responsabilidad criminal alguna, y otra que es consecuencia indeclinable
de la penal que nace de todo delito o falta."
The juridical concept of civil responsibility has various aspects and comprises different
persons. Thus, there is a civil responsibility, properly speaking, which in no case carries with
it any criminal responsibility, and another which is a necessary consequence of the penal
liability as a result of every felony or misdemeanor."
Maura, an outstanding authority, was consulted on the following case: There had been a
collision between two trains belonging respectively to the Ferrocarril Cantabrico and the
Ferrocarril del Norte. An employee of the latter had been prosecuted in a criminal case, in
which the company had been made a party as subsidiarily responsible in civil damages. The
employee had been acquitted in the criminal case, and the employer, the Ferrocarril del
Norte, had also been exonerated. The question asked was whether the Ferrocarril Cantabrico
could still bring a civil action for damages against the Ferrocarril del Norte. Maura's opinion
was in the affirmative, stating in part (Maura, Dictamenes, Vol. 6, pp. 511-513):
Quedando las cosas asi, a proposito de la realidad pura y neta de los hechos, todavia menos
parece sostenible que exista cosa juzgada acerca de la obligacion civil de indemnizar los
quebrantos y menoscabos inferidos por el choque de los trenes. El titulo en que se funda la
accion para demandar el resarcimiento, no puede confundirse con las responsabilidades

civiles nacidas de delito, siquiera exista en este, sea el cual sea, una culpa rodeada de notas
agravatorias que motivan sanciones penales, mas o menos severas. La lesion causada por
delito o falta en los derechos civiles, requiere restituciones, reparaciones o indemnizaciones,
que cual la pena misma ataen al orden publico; por tal motivo vienen encomendadas, de
ordinario, al Ministerio Fiscal; y claro es que si por esta via se enmiendan los quebrantos y
menoscabos, el agraviado excusa procurar el ya conseguido desagravio; pero esta eventual
coincidencia de los efectos, no borra la diversidad originaria de las acciones civiles para pedir
indemnizacion.
Estas, para el caso actual (prescindiendo de culpas contractuales, que no vendrian a cuento y
que tiene otro regimen), dimanan, segun el articulo 1902 del Codigo Civil, de toda accion u
omision, causante de daos o perjuicios, en que intervenga culpa o negligencia. Es trivial que
acciones semejantes son ejercitadas ante los Tribunales de lo civil cotidianamente, sin que la
Justicia punitiva tenga que mezclarse en los asuntos. Los articulos 18 al 21 y 121 al 128 del
Codigo Penal, atentos al espiritu y a los fines sociales y politicos del mismo, desenvuelven y
ordenan la materia de responsabilidades civiles nacidas de delito, en terminos separados del
regimen por ley comun de la culpa que se denomina aquiliana, por alusion a precedentes
legislativos del Corpus Juris. Seria intempestivo un paralelo entre aquellas ordenaciones, y la
de la obligacion de indemnizar a titulo de culpa civil; pero viene al caso y es necesaria una de
las diferenciaciones que en el tal paralelo se notarian.
Los articulos 20 y 21 del Codigo Penal, despues de distribuir a su modo las responsabilidades
civiles, entre los que sean por diversos conceptos culpables del delito o falta, las hacen
extensivas a las empresas y los establecimientos al servicio de los cuales estan los
delincuentes; pero con caracter subsidiario, o sea, segun el texto literal, en defecto de los que
sean responsables criminalmente. No coincide en ello el Codigo Civil, cuyo articulo 1903,
dice; La obligacion que impone el articulo anterior es exigible, no solo por los actos y
omisiones propios, sino por los de aquellas personas de quienes se debe responder; personas
en la enumeracion de las cuales figuran los dependientes y empleados de los establecimientos
o empresas, sea por actos del servicio, sea con ocasion de sus funciones. Por esto acontece, y
se observa en la jurisprudencia, que las empresas, despues de intervenir en las causas
criminales con el caracter subsidiario de su responsabilidad civil por razon del delito, son
demandadas y condenadas directa y aisladamente, cuando se trata de la obligacion, ante los
tribunales civiles.
Siendo como se ve, diverso el titulo de esta obligacion, y formando verdadero postulado de
nuestro regimen judicial la separacion entre justicia punitiva y tribunales de lo civil, de suerte
que tienen unos y otros normas de fondo en distintos cuerpos legales, y diferentes modos de
proceder, habiendose, por aadidura, abstenido de asistir al juicio criminal la Compaia del
Ferrocarril Cantabrico, que se reservo ejercitar sus acciones, parece innegable que la de

indemnizacion por los daos y perjuicios que le irrogo el choque, no estuvo sub judice ante el
Tribunal del Jurado, ni fue sentenciada, sino que permanecio intacta, al pronunciarse el fallo
de 21 de marzo. Aun cuando el veredicto no hubiese sido de inculpabilidad, mostrose mas
arriba, que tal accion quedaba legitimamente reservada para despues del proceso; pero al
declararse que no existio delito, ni responsabilidad dimanada de delito, materia unica sobre
que tenian jurisdiccion aquellos juzgadores, se redobla el motivo para la obligacion civil ex
lege, y se patentiza mas y mas que la accion para pedir su cumplimiento permanece incolume,
extraa a la cosa juzgada.
As things are, apropos of the reality pure and simple of the facts, it seems less tenable that
there should be res judicata with regard to the civil obligation for damages on account of the
losses caused by the collision of the trains. The title upon which the action for reparation is
based cannot be confused with the civil responsibilities born of a crime, because there exists
in the latter, whatever each nature, a culpa surrounded with aggravating aspects which give
rise to penal measures that are more or less severe. The injury caused by a felony or
misdemeanor upon civil rights requires restitutions, reparations, or indemnifications which,
like the penalty itself, affect public order; for this reason, they are ordinarily entrusted to the
office of the prosecuting attorney; and it is clear that if by this means the losses and damages
are repaired, the injured party no longer desires to seek another relief; but this coincidence of
effects does not eliminate the peculiar nature of civil actions to ask for indemnity.
Such civil actions in the present case (without referring to contractual faults which are not
pertinent and belong to another scope) are derived, according to article 1902 of the Civil
Code, from every act or omission causing losses and damages in which culpa or negligence
intervenes. It is unimportant that such actions are every day filed before the civil courts
without the criminal courts interfering therewith. Articles 18 to 21 and 121 to 128 of the Penal
Code, bearing in mind the spirit and the social and political purposes of that Code, develop
and regulate the matter of civil responsibilities arising from a crime, separately from the
regime under common law, of culpa which is known as aquiliana, in accordance with
legislative precedent of the Corpus Juris. It would be unwarranted to make a detailed
comparison between the former provisions and that regarding the obligation to indemnify on
account of civil culpa; but it is pertinent and necessary to point out to one of such differences.
Articles 20 and 21 of the Penal Code, after distriburing in their own way the civil
responsibilities among those who, for different reasons, are guilty of felony or misdemeanor,
make such civil responsibilities applicable to enterprises and establishments for which the
guilty parties render service, but with subsidiary character, that is to say, according to the
wording of the Penal Code, in default of those who are criminally responsible. In this regard,
the Civil Code does not coincide because article 1903 says: "The obligation imposed by the
next preceding article is demandable, not only for personal acts and omissions, but also for

those of persons for whom another is responsible." Among the persons enumerated are the
subordinates and employees of establishments or enterprises, either for acts during their
service or on the occasion of their functions. It is for this reason that it happens, and it is so
observed in judicial decisions, that the companies or enterprises, after taking part in the
criminal cases because of their subsidiary civil responsibility by reason of the crime, are sued
and sentenced directly and separately with regard to the obligation, before the civil courts.
Seeing that the title of this obligation is different, and the separation between punitive justice
and the civil courts being a true postulate of our judicial system, so that they have different
fundamental norms in different codes, as well as different modes of procedure, and inasmuch
as the Compaa del Ferrocarril Cantabrico has abstained from taking part in the criminal case
and has reserved the right to exercise its actions, it seems undeniable that the action for
indemnification for the losses and damages caused to it by the collision was not sub judice
before the Tribunal del Jurado, nor was it the subject of a sentence, but it remained intact
when the decision of March 21 was rendered. Even if the verdict had not been that of
acquittal, it has already been shown that such action had been legitimately reserved till after
the criminal prosecution; but because of the declaration of the non-existence of the felony and
the non-existence of the responsibility arising from the crime, which was the sole subject
matter upon which the Tribunal del Jurado had jurisdiction, there is greater reason for the
civil obligation ex lege, and it becomes clearer that the action for its enforcement remain
intact and is not res judicata.
Laurent, a jurist who has written a monumental work on the French Civil Code, on which the
Spanish Civil Code is largely based and whose provisions on cuasi-delito or culpa extracontractual are similar to those of the Spanish Civil Code, says, referring to article 1384 of the
French Civil Code which corresponds to article 1903, Spanish Civil Code:
The action can be brought directly against the person responsible (for another), without
including the author of the act. The action against the principal is accessory in the sense that
it implies the existence of a prejudicial act committed by the employee, but it is not subsidiary
in the sense that it can not be instituted till after the judgment against the author of the act or
at least, that it is subsidiary to the principal action; the action for responsibility (of the
employer) is in itself a principal action. (Laurent, Principles of French Civil Law, Spanish
translation, Vol. 20, pp. 734-735.)
Amandi, in his "Cuestionario del Codigo Civil Reformado" (Vol. 4, pp. 429, 430), declares that
the responsibility of the employer is principal and not subsidiary. He writes:
Cuestion 1. La responsabilidad declarada en el articulo 1903 por las acciones u omisiones de
aquellas personas por las que se debe responder, es subsidiaria? es principal? Para contestar a
esta pregunta es necesario saber, en primer lugar, en que se funda el precepto legal. Es que
realmente se impone una responsabilidad por una falta ajena? Asi parece a primera vista;

pero semejante afirmacion seria contraria a la justicia y a la maxima universal, segun la que
las faltas son personales, y cada uno responde de aquellas que le son imputables. La
responsabilidad de que tratamos se impone con ocasion de un delito o culpa, pero no por
causa de ellos, sino por causa del causi delito, esto es, de la imprudencia o de la negligencia
del padre, del tutor, del dueo o director del establecimiento, del maestro, etc. Cuando
cualquiera de las personas que enumera el articulo citado (menores de edad, incapacitados,
dependientes, aprendices) causan un dao, la ley presume que el padre, el tutor, el maestro,
etc., han cometido una falta de negligencia para prevenir o evitar el dao. Esta falta es la que
la ley castiga. No hay, pues, responsabilidad por un hecho ajeno, sino en la apariencia; en
realidad la responsabilidad se exige por un hecho propio. La idea de que esa responsabilidad
sea subsidiaria es, por lo tanto, completamente inadmisible.
Question No. 1. Is the responsibility declared in article 1903 for the acts or omissions of those
persons for who one is responsible, subsidiary or principal? In order to answer this question it
is necessary to know, in the first place, on what the legal provision is based. Is it true that
there is a responsibility for the fault of another person? It seems so at first sight; but such
assertion would be contrary to justice and to the universal maxim that all faults are personal,
and that everyone is liable for those faults that can be imputed to him. The responsibility in
question is imposed on the occasion of a crime or fault, but not because of the same, but
because of the cuasi-delito, that is to say, the imprudence or negligence of the father,
guardian, proprietor or manager of the establishment, of the teacher, etc. Whenever anyone
of the persons enumerated in the article referred to (minors, incapacitated persons,
employees, apprentices) causes any damage, the law presumes that the father, guardian,
teacher, etc. have committed an act of negligence in not preventing or avoiding the damage. It
is this fault that is condemned by the law. It is, therefore, only apparent that there is a
responsibility for the act of another; in reality the responsibility exacted is for one's own act.
The idea that such responsibility is subsidiary is, therefore, completely inadmissible.
Oyuelos, in his "Digesto: Principios, Doctrina y Jurisprudencia, Referentes al Codigo Civil
Espaol," says in Vol. VII, p. 743:
Es decir, no responde de hechos ajenos, porque se responde solo de su propia culpa, doctrina
del articulo 1902; mas por excepcion, se responde de la ajena respecto de aquellas personas
con las que media algun nexo o vinculo, que motiva o razona la responsabilidad. Esta
responsabilidad, es directa o es subsidiaria? En el orden penal, el Codigo de esta clase
distingue entre menores e incapacitados y los demas, declarando directa la primera (articulo
19) y subsidiaria la segunda (articulos 20 y 21); pero en el orden civil, en el caso del articulo
1903, ha de entenderse directa, por el tenor del articulo que impone la responsabilidad
precisamente "por los actos de aquellas personas de quienes se deba responder."
That is to say, one is not responsible for the acts of others, because one is liable only for his

own faults, this being the doctrine of article 1902; but, by exception, one is liable for the acts
of those persons with whom there is a bond or tie which gives rise to the responsibility. Is this
responsibility direct or subsidiary? In the order of the penal law, the Penal Code distinguishes
between minors and incapacitated persons on the one hand, and other persons on the other,
declaring that the responsibility for the former is direct (article 19), and for the latter,
subsidiary (articles 20 and 21); but in the scheme of the civil law, in the case of article 1903,
the responsibility should be understood as direct, according to the tenor of that articles, for
precisely it imposes responsibility "for the acts of those persons for whom one should be
responsible."
Coming now to the sentences of the Supreme Tribunal of Spain, that court has upheld the
principles above set forth: that a quasi-delict or culpa extra-contractual is a separate and
distinct legal institution, independent from the civil responsibility arising from criminal
liability, and that an employer is, under article 1903 of the Civil Code, primarily and directly
responsible for the negligent acts of his employee.
One of the most important of those Spanish decisions is that of October 21, 1910. In that case,
Ramon Lafuente died as the result of having been run over by a street car owned by the
"compaia Electric Madrilea de Traccion." The conductor was prosecuted in a criminal case
but he was acquitted. Thereupon, the widow filed a civil action against the street car company,
paying for damages in the amount of 15,000 pesetas. The lower court awarded damages; so
the company appealed to the Supreme Tribunal, alleging violation of articles 1902 and 1903
of the Civil Code because by final judgment the non-existence of fault or negligence had been
declared. The Supreme Court of Spain dismissed the appeal, saying:
Considerando que el primer motivo del recurso se funda en el equivocado supuesto de que el
Tribunal a quo, al condonar a la compaia Electrica Madrilea al pago del dao causado con
la muerte de Ramon La fuente Izquierdo, desconoce el valor y efectos juridicos de la sentencia
absolutoria deictada en la causa criminal que se siguio por el mismo hecho, cuando es lo
cierto que de este han conocido las dos jurisdicciones bajo diferentes as pectos, y como la de
lo criminal declrao dentro de los limites de su competencia que el hecho de que se trata no era
constitutivo de delito por no haber mediado descuido o negligencia graves, lo que no excluye,
siendo este el unico fundamento del fallo absolutorio, el concurso de la culpa o negligencia no
califacadas, fuente de obligaciones civiles segun el articulo 1902 del Codigo, y que alcanzan,
segun el 1903, netre otras perosnas, a los Directores de establecimientos o empresas por los
daos causados por sus dependientes en determinadas condiciones, es manifesto que la de lo
civil, al conocer del mismo hehco baho este ultimo aspecto y al condenar a la compaia
recurrente a la indemnizacion del dao causado por uno de sus empleados, lejos de infringer
los mencionados textos, en relacion con el articulo 116 de la Ley de Enjuciamiento Criminal,
se ha atenido estrictamente a ellos, sin invadir atribuciones ajenas a su jurisdiccion propia, ni

contrariar en lo mas minimo el fallo recaido en la causa.

Considering that the first ground of the appeal is based on the mistaken supposition that the
trial court, in sentencing the Compaia Madrilea to the payment of the damage caused by
the death of Ramon Lafuente Izquierdo, disregards the value and juridical effects of the
sentence of acquittal rendered in the criminal case instituted on account of the same act,
when it is a fact that the two jurisdictions had taken cognizance of the same act in its different
aspects, and as the criminal jurisdiction declared within the limits of its authority that the act
in question did not constitute a felony because there was no grave carelessness or negligence,
and this being the only basis of acquittal, it does no exclude the co-existence of fault or
negligence which is not qualified, and is a source of civil obligations according to article
1902 of the Civil Code, affecting, in accordance with article 1903, among other persons, the
managers of establishments or enterprises by reason of the damages caused by employees
under certain conditions, it is manifest that the civil jurisdiccion in taking cognizance of the
same act in this latter aspect and in ordering the company, appellant herein, to pay an
indemnity for the damage caused by one of its employees, far from violating said legal
provisions, in relation with article 116 of the Law of Criminal Procedure, strictly followed the
same, without invading attributes which are beyond its own jurisdiction, and without in
any way contradicting the decision in that cause. (Emphasis supplied.)
It will be noted, as to the case just cited:
First. That the conductor was not sued in a civil case, either separately or with the street car
company. This is precisely what happens in the present case: the driver, Fontanilla, has not
been sued in a civil action, either alone or with his employer.
Second. That the conductor had been acquitted of grave criminal negligence, but the Supreme
Tribunal of Spain said that this did not exclude the co-existence of fault or negligence, which
is not qualified, on the part of the conductor, under article 1902 of the Civil Code. In the
present case, the taxi driver was found guilty of criminal negligence, so that if he had even
sued for his civil responsibility arising from the crime, he would have been held primarily
liable for civil damages, and Barredo would have been held subsidiarily liable for the same.
But the plaintiffs are directly suing Barredo, on his primary responsibility because of his own
presumed negligence which he did not overcome under article 1903. Thus, there were
two liabilities of Barredo: first, the subsidiary one because of the civil liability of the taxi
driver arising from the latter's criminal negligence; and, second, Barredo's primary liability as
an employer under article 1903. The plaintiffs were free to choose which course to take, and
they preferred the second remedy. In so doing, they were acting within their rights. It might
be observed in passing, that the plaintiff choose the more expeditious and effective method of
relief, because Fontanilla was either in prison, or had just been released, and besides, he was
probably without property which might be seized in enforcing any judgment against him for

damages.
Third. That inasmuch as in the above sentence of October 21, 1910, the employer was held
liable civilly, notwithstanding the acquittal of the employee (the conductor) in a previous
criminal case, with greater reason should Barredo, the employer in the case at bar, be held
liable for damages in a civil suit filed against him because his taxi driver had been convicted.
The degree of negligence of the conductor in the Spanish case cited was less than that of the
taxi driver, Fontanilla, because the former was acquitted in the previous criminal case while
the latter was found guilty of criminal negligence and was sentenced to an indeterminate
sentence of one year and one day to two years of prision correccional.
(See also Sentence of February 19, 1902, which is similar to the one above quoted.)
In the Sentence of the Supreme Court of Spain, dated February 14, 1919, an action was
brought against a railroad company for damages because the station agent, employed by the
company, had unjustly and fraudulently, refused to deliver certain articles consigned to the
plaintiff. The Supreme Court of Spain held that this action was properly under article 1902 of
the Civil Code, the court saying:
Considerando que la sentencia discutida reconoce, en virtud de los hechos que consigna con
relacion a las pruebas del pleito: 1., que las expediciones facturadas por la compaia
ferroviaria a la consignacion del actor de las vasijas vacias que en su demanda relacionan
tenian como fin el que este las devolviera a sus remitentes con vinos y alcoholes; 2., que
llegadas a su destino tales mercanias no se quisieron entregar a dicho consignatario por el jefe
de la estacion sin motivo justificado y con intencion dolosa, y 3., que la falta de entrega de
estas expediciones al tiempo de reclamarlas el demandante le originaron daos y perjuicios
en cantidad de bastante importancia como expendedor al por mayor que era de vinos y
alcoholes por las ganancias que dejo de obtener al verse privado de servir los pedidos que se le
habian hecho por los remitentes en los envases:
Considerando que sobre esta base hay necesidad de estimar los cuatro motivos que integran
este recurso, porque la demanda inicial del pleito a que se contrae no contiene accion que
nazca del incumplimiento del contrato de transporte, toda vez que no se funda en el retraso
de la llegada de las mercancias ni de ningun otro vinculo contractual entre las partes
contendientes, careciendo, por tanto, de aplicacion el articulo 371 del Codigo de Comercio, en
que principalmente descansa el fallo recurrido, sino que se limita a pedir la reparaction de los
daos y perjuicios producidos en el patrimonio del actor por la injustificada y dolosa negativa
del porteador a la entrega de las mercancias a su nombre consignadas, segun lo reconoce la
sentencia, y cuya responsabilidad esta claramente sancionada en el articulo 1902 del Codigo
Civil, que obliga por el siguiente a la Compaia demandada como ligada con el causante de
aquellos por relaciones de caracter economico y de jurarquia administrativa.
Considering that the sentence, in question recognizes, in virtue of the facts which it declares,

in relation to the evidence in the case: (1) that the invoice issued by the railroad company in
favor of the plaintiff contemplated that the empty receptacles referred to in the complaint
should be returned to the consignors with wines and liquors; (2) that when the said
merchandise reached their destination, their delivery to the consignee was refused by the
station agent without justification and with fraudulent intent, and (3) that the lack of delivery
of these goods when they were demanded by the plaintiff caused him losses and damages of
considerable importance, as he was a wholesale vendor of wines and liquors and he failed to
realize the profits when he was unable to fill the orders sent to him by the consignors of the
receptacles:
Considering that upon this basis there is need of upholding the four assignments of error, as
the original complaint did not contain any cause of action arising from non-fulfillment of a
contract of transportation, because the action was not based on the delay of the goods nor on
any contractual relation between the parties litigant and, therefore, article 371 of the Code of
Commerce, on which the decision appealed from is based, is not applicable; but it limits to
asking for reparation for losses and damages produced on the patrimony of the plaintiff on
account of the unjustified and fraudulent refusal of the carrier to deliver the goods consigned
to the plaintiff as stated by the sentence, and the carrier's responsibility is clearly laid down
in article 1902 of the Civil Code which binds, in virtue of the next article, the defendant
company, because the latter is connected with the person who caused the damage by relations
of economic character and by administrative hierarchy. (Emphasis supplied.)
The above case is pertinent because it shows that the same act may come under both the
Penal Code and the Civil Code. In that case, the action of the agent was unjustified and
fraudulent and therefore could have been the subject of a criminal action. And yet, it was held
to be also a proper subject of a civil action under article 1902 of the Civil Code. It is also to be
noted that it was the employer and not the employee who was being sued.
Let us now examine the cases previously decided by this Court.
In the leading case of Rakes vs. Atlantic Gulf and Pacific Co. (7 Phil., 359, 362-365 [year
1907]), the trial court awarded damages to the plaintiff, a laborer of the defendant, because
the latter had negligently failed to repair a tramway in consequence of which the rails slid off
while iron was being transported, and caught the plaintiff whose leg was broken. This Court
held:
It is contended by the defendant, as its first defense to the action that the necessary
conclusion from these collated laws is that the remedy for injuries through negligence lies
only in a criminal action in which the official criminally responsible must be made primarily
liable and his employer held only subsidiarily to him. According to this theory the plaintiff
should have procured the arrest of the representative of the company accountable for not
repairing the track, and on his prosecution a suitable fine should have been imposed, payable

primarily by him and secondarily by his employer.

This reasoning misconceived the plan of the Spanish codes upon this subject. Article 1093 of
the Civil Code makes obligations arising from faults or negligence not punished by the law,
subject to the provisions of Chapter II of Title XVI. Section 1902 of that chapter reads:
"A person who by an act or omission causes damage to another when there is fault or
negligence shall be obliged to repair the damage so done.
"SEC. 1903. The obligation imposed by the preceeding article is demandable, not only for
personal acts and omissions, but also for those of the persons for whom they should be
responsible.
"The father, and on his death or incapacity, the mother, is liable for the damages caused by
the minors who live with them.
xxx
xxx
xxx
"Owners or directors of an establishment or enterprise are equally liable for the damages
caused by their employees in the service of the branches in which the latter may be employed
or in the performance of their duties.
xxx
xxx
xxx
"The liability referred to in this article shall cease when the persons mentioned therein prove
that they employed all the diligence of a good father of a family to avoid the damage."
As an answer to the argument urged in this particular action it may be sufficient to point out
that nowhere in our general statutes is the employer penalized for failure to provide or
maintain safe appliances for his workmen. His obligation therefore is one 'not punished by
the laws' and falls under civil rather than criminal jurisprudence. But the answer may be a
broader one. We should be reluctant, under any conditions, to adopt a forced construction of
these scientific codes, such as is proposed by the defendant, that would rob some of these
articles of effect, would shut out litigants against their will from the civil courts, would make
the assertion of their rights dependent upon the selection for prosecution of the proper
criminal offender, and render recovery doubtful by reason of the strict rules of proof
prevailing in criminal actions. Even if these articles had always stood alone, such a
construction would be unnecessary, but clear light is thrown upon their meaning by the
provisions of the Law of Criminal Procedure of Spain (Ley de Enjuiciamiento Criminal),
which, though never in actual force in these Islands, was formerly given a suppletory or
explanatory effect. Under article 111 of this law, both classes of action, civil and criminal,
might be prosecuted jointly or separately, but while the penal action was pending the civil was
suspended. According to article 112, the penal action once started, the civil remedy should be
sought therewith, unless it had been waived by the party injured or been expressly reserved by
him for civil proceedings for the future. If the civil action alone was prosecuted, arising out of
a crime that could be enforced only on private complaint, the penal action thereunder should

be extinguished. These provisions are in harmony with those of articles 23 and 133 of our
Penal Code on the same subject.
An examination of this topic might be carried much further, but the citation of these articles
suffices to show that the civil liability was not intended to be merged in the criminal nor even
to be suspended thereby, except as expressly provided in the law. Where an individual is
civilly liable for a negligent act or omission, it is not required that the injured party should
seek out a third person criminally liable whose prosecution must be a condition precedent to
the enforcement of the civil right.
Under article 20 of the Penal Code the responsibility of an employer may be regarded as
subsidiary in respect of criminal actions against his employees only while they are in process
of prosecution, or in so far as they determine the existence of the criminal act from which
liability arises, and his obligation under the civil law and its enforcement in the civil courts is
not barred thereby unless by the election of the injured person. Inasmuch as no criminal
proceeding had been instituted, growing our of the accident in question, the provisions of the
Penal Code can not affect this action. This construction renders it unnecessary to finally
determine here whether this subsidiary civil liability in penal actions has survived the laws
that fully regulated it or has been abrogated by the American civil and criminal procedure
now in force in the Philippines.
The difficulty in construing the articles of the code above cited in this case appears from the
briefs before us to have arisen from the interpretation of the words of article 1093, "fault or
negligence not punished by law," as applied to the comprehensive definition of offenses in
articles 568 and 590 of the Penal Code. It has been shown that the liability of an employer
arising out of his relation to his employee who is the offender is not to be regarded as derived
from negligence punished by the law, within the meaning of articles 1902 and 1093. More
than this, however, it cannot be said to fall within the class of acts unpunished by the law, the
consequence of which are regulated by articles 1902 and 1903 of the Civil Code. The acts to
which these articles are applicable are understood to be those not growing out of pre-existing
duties of the parties to one another. But where relations already formed give rise to duties,
whether springing from contract or quasi contract, then breaches of those duties are subject
to articles 1101, 1103, and 1104 of the same code. A typical application of this distinction may
be found in the consequences of a railway accident due to defective machinery supplied by the
employer. His liability to his employee would arise out of the contract of employment, that to
the passengers out of the contract for passage, while that to the injured bystander would
originate in the negligent act itself.
In Manzanares vs. Moreta, 38 Phil., 821 (year 1918), the mother of the 8 of 9-year-old child
Salvador Bona brought a civil action against Moreta to recover damages resulting from the
death of the child, who had been run over by an automobile driven and managed by the

defendant. The trial court rendered judgment requiring the defendant to pay the plaintiff the
sum of P1,000 as indemnity: This Court in affirming the judgment, said in part:
If it were true that the defendant, in coming from the southern part of Solana Street, had to
stop his auto before crossing Real Street, because he had met vehicles which were going along
the latter street or were coming from the opposite direction along Solana Street, it is to be
believed that, when he again started to run his auto across said Real Street and to continue its
way along Solana Street northward, he should have adjusted the speed of the auto which he
was operating until he had fully crossed Real Street and had completely reached a clear way
on Solana Street. But, as the child was run over by the auto precisely at the entrance of Solana
Street, this accident could not have occurred if the auto had been running at a slow speed,
aside from the fact that the defendant, at the moment of crossing Real Street and entering
Solana Street, in a northward direction, could have seen the child in the act of crossing the
latter street from the sidewalk on the right to that on the left, and if the accident had occurred
in such a way that after the automobile had run over the body of the child, and the child's
body had already been stretched out on the ground, the automobile still moved along a
distance of about 2 meters, this circumstance shows the fact that the automobile entered
Solana Street from Real Street, at a high speed without the defendant having blown the horn.
If these precautions had been taken by the defendant, the deplorable accident which caused
the death of the child would not have occurred.
It will be noticed that the defendant in the above case could have been prosecuted in a
criminal case because his negligence causing the death of the child was punishable by the
Penal Code. Here is therefore a clear instance of the same act of negligence being a proper
subject-matter either of a criminal action with its consequent civil liability arising from a
crime or of an entirely separate and independent civil action for fault or negligence under
article 1902 of the Civil Code. Thus, in this jurisdiction, the separate individually of a cuasidelito or culpa aquiliana under the Civil Code has been fully and clearly recognized, even with
regard to a negligent act for which the wrongdoer could have been prosecuted and convicted
in a criminal case and for which, after such a conviction, he could have been sued for this civil
liability arising from his crime.
Years later (in 1930) this Court had another occasion to apply the same doctrine. In Bernal
and Enverso vs. House and Tacloban Electric & Ice Plant, Ltd., 54 Phil., 327, the parents of
the five-year-old child, Purificacion Bernal, brought a civil action to recover damages for the
child's death as a result of burns caused by the fault and negligence of the defendants. On the
evening of April 10, 1925, the Good Friday procession was held in Tacloban, Leyte. Fortunata
Enverso with her daughter Purificacion Bernal had come from another municipality to attend
the same. After the procession the mother and the daughter with two others were passing
along Gran Capitan Street in front of the offices of the Tacloban Electric & Ice Plant, Ltd.,

owned by defendants J. V. House, when an automobile appeared from the opposite direction.
The little girl, who was slightly ahead of the rest, was so frightened by the automobile that she
turned to run, but unfortunately she fell into the street gutter where hot water from the
electric plant was flowing. The child died that same night from the burns. The trial courts
dismissed the action because of the contributory negligence of the plaintiffs. But this Court
held, on appeal, that there was no contributory negligence, and allowed the parents P1,000 in
damages from J. V. House who at the time of the tragic occurrence was the holder of the
franchise for the electric plant. This Court said in part:
Although the trial judge made the findings of fact hereinbefore outlined, he nevertheless was
led to order the dismissal of the action because of the contributory negligence of the plaintiffs.
It is from this point that a majority of the court depart from the stand taken by the trial judge.
The mother and her child had a perfect right to be on the principal street of Tacloban, Leyte,
on the evening when the religious procession was held. There was nothing abnormal in
allowing the child to run along a few paces in advance of the mother. No one could foresee the
coincidence of an automobile appearing and of a frightened child running and falling into a
ditch filled with hot water. The doctrine announced in the much debated case of Rakes vs.
Atlantic Gulf and Pacific Co. ([1907]), 7 Phil., 359), still rule. Article 1902 of the Civil Code
must again be enforced. The contributory negligence of the child and her mother, if any, does
not operate as a bar to recovery, but in its strictest sense could only result in reduction of the
damages.
It is most significant that in the case just cited, this Court specifically applied article 1902 of
the Civil Code. It is thus that although J. V. House could have been criminally prosecuted for
reckless or simple negligence and not only punished but also made civilly liable because of his
criminal negligence, nevertheless this Court awarded damages in an independent civil action
for fault or negligence under article 1902 of the Civil Code.
In Bahia vs. Litonjua and Leynes (30 Phil., 624 [year 1915), the action was for damages for
the death of the plaintiff's daughter alleged to have been caused by the negligence of the
servant in driving an automobile over the child. It appeared that the cause of the mishap was
a defect in the steering gear. The defendant Leynes had rented the automobile from the
International Garage of Manila, to be used by him in carrying passengers during the fiesta of
Tuy, Batangas. Leynes was ordered by the lower court to pay P1,000 as damages to the
plaintiff. On appeal this Court reversed the judgment as to Leynes on the ground that he had
shown that the exercised the care of a good father of a family, thus overcoming the
presumption of negligence under article 1903. This Court said:
As to selection, the defendant has clearly shown that he exercised the care and diligence of a
good father of a family. He obtained the machine from a reputable garage and it was, so far as
appeared, in good condition. The workmen were likewise selected from a standard garage,

were duly licensed by the Government in their particular calling, and apparently thoroughly
competent. The machine had been used but a few hours when the accident occurred and it is
clear from the evidence that the defendant had no notice, either actual or constructive, of the
defective condition of the steering gear.
The legal aspect of the case was discussed by this Court thus:
Article 1903 of the Civil Code not only establishes liability in cases of negligence, but also
provides when the liability shall cease. It says:
"The liability referred to in this article shall cease when the persons mentioned therein prove
that they employed all the diligence of a good father of a family to avoid the damage."
From this article two things are apparent: (1) That when an injury is caused by the negligence
of a servant or employee there instantly arises a presumption of law that there was negligence
on the part of the matter or employer either in the selection of the servant or employee, or in
supervision over him after the selection, or both; and (2) that presumption is juris tantum
and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the
employer shows to the satisfaction of the court that in selection and supervision he has
exercised the care and diligence of a good father of a family, the presumption is overcome and
he is relieve from liability.
This theory bases the responsibility of the master ultimately on his own negligence and not on
that of his servant.
The doctrine of the case just cited was followed by this Court in Cerf vs. Medel (33 Phil., 37
[year 1915]). In the latter case, the complaint alleged that the defendant's servant had so
negligently driven an automobile, which was operated by defendant as a public vehicle, that
said automobile struck and damaged the plaintiff's motorcycle. This Court, applying article
1903 and following the rule in Bahia vs. Litonjua and Leynes, said in part (p. 41) that:
The master is liable for the negligent acts of his servant where he is the owner or director of a
business or enterprise and the negligent acts are committed while the servant is engaged in
his master's employment as such owner.
Another case which followed the decision in Bahia vs. Litonjua and Leynes was Cuison vs.
Norton & Harrison Co., 55 Phil., 18 (year 1930). The latter case was an action for damages
brought by Cuison for the death of his seven-year-old son Moises. The little boy was on his
way to school with his sister Marciana. Some large pieces of lumber fell from a truck and
pinned the boy underneath, instantly killing him. Two youths, Telesforo Binoya and Francisco
Bautista, who were working for Ora, an employee of defendant Norton & Harrison Co.,
pleaded guilty to the crime of homicide through reckless negligence and were sentenced
accordingly. This Court, applying articles 1902 and 1903, held:
The basis of civil law liability is not respondent superior but the relationship of pater
familias. This theory bases the liability of the master ultimately on his own negligence and

not on that of his servant. (Bahia vs. Litonjua and Leynes [1915], 30 Phil., 624; Cangco vs.
Manila Railroad Co. [1918], 38 Phil., 768.)
In Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517 (year 1930) the
plaintiff brought an action for damages for the demolition of its wharf, which had been struck
by the steamer Helen C belonging to the defendant. This Court held (p. 526):
The evidence shows that Captain Lasa at the time the plaintiff's wharf collapsed was a duly
licensed captain, authorized to navigate and direct a vessel of any tonnage, and that the
appellee contracted his services because of his reputation as a captain, according to F. C.
Cadwallader. This being so, we are of the opinion that the presumption of liability against the
defendant has been overcome by the exercise of the care and diligence of a good father of a
family in selecting Captain Lasa, in accordance with the doctrines laid down by this court in
the cases cited above, and the defendant is therefore absolved from all liability.
It is, therefore, seen that the defendant's theory about his secondary liability is negatived by
the six cases above set forth. He is, on the authority of these cases, primarily and directly
responsible in damages under article 1903, in relation to article 1902, of the Civil Code.
Let us now take up the Philippine decisions relied upon by the defendant. We study first, City
of Manila vs. Manila Electric Co., 52 Phil., 586 (year 1928). A collision between a truck of the
City of Manila and a street car of the Manila Electric Co. took place on June 8, 1925. The truck
was damaged in the amount of P1,788.27. Sixto Eustaquio, the motorman, was prosecuted for
the crime of damage to property and slight injuries through reckless imprudence. He was
found guilty and sentenced to pay a fine of P900, to indemnify the City of Manila for
P1,788.27, with subsidiary imprisonment in case of insolvency. Unable to collect the
indemnity from Eustaquio, the City of Manila filed an action against the Manila Electric
Company to obtain payment, claiming that the defendant was subsidiarily liable. The main
defense was that the defendant had exercised the diligence of a good father of a family to
prevent the damage. The lower court rendered judgment in favor of the plaintiff. This Court
held, in part, that this case was governed by the Penal Code, saying:
With this preliminary point out of the way, there is no escaping the conclusion that the
provisions of the Penal Code govern. The Penal Code in easily understandable language
authorizes the determination of subsidiary liability. The Civil Code negatives its application
by providing that civil obligations arising from crimes or misdemeanors shall be governed by
the provisions of the Penal Code. The conviction of the motorman was a misdemeanor falling
under article 604 of the Penal Code. The act of the motorman was not a wrongful or negligent
act or omission not punishable by law. Accordingly, the civil obligation connected up with the
Penal Code and not with article 1903 of the Civil Code. In other words, the Penal Code affirms
its jurisdiction while the Civil Code negatives its jurisdiction. This is a case of criminal
negligence out of which civil liability arises and not a case of civil negligence.

xxx
xxx
xxx
Our deduction, therefore, is that the case relates to the Penal Code and not to the Civil Code.
Indeed, as pointed out by the trial judge, any different ruling would permit the master to
escape scot-free by simply alleging and proving that the master had exercised all diligence in
the selection and training of its servants to prevent the damage. That would be a good defense
to a strictly civil action, but might or might not be to a civil action either as a part of or
predicated on conviction for a crime or misdemeanor. (By way of parenthesis, it may be said
further that the statements here made are offered to meet the argument advanced during our
deliberations to the effect that article 0902 of the Civil Code should be disregarded and codal
articles 1093 and 1903 applied.)
It is not clear how the above case could support the defendant's proposition, because the
Court of Appeals based its decision in the present case on the defendant's primary
responsibility under article 1903 of the Civil Code and not on his subsidiary liability arising
from Fontanilla's criminal negligence. In other words, the case of City of Manila vs. Manila
Electric Co., supra, is predicated on an entirely different theory, which is the subsidiary
liability of an employer arising from a criminal act of his employee, whereas the foundation of
the decision of the Court of Appeals in the present case is the employer's primary liability
under article 1903 of the Civil Code. We have already seen that this is a proper and
independent remedy.
Arambulo vs. Manila Electric Co. (55 Phil., 75), is another case invoked by the defendant. A
motorman in the employ of the Manila Electric Company had been convicted o homicide by
simple negligence and sentenced, among other things, to pay the heirs of the deceased the
sum of P1,000. An action was then brought to enforce the subsidiary liability of the defendant
as employer under the Penal Code. The defendant attempted to show that it had exercised the
diligence of a good father of a family in selecting the motorman, and therefore claimed
exemption from civil liability. But this Court held:
In view of the foregoing considerations, we are of opinion and so hold, (1) that the exemption
from civil liability established in article 1903 of the Civil Code for all who have acted with the
diligence of a good father of a family, is not applicable to the subsidiary civil liability provided
in article 20 of the Penal Code.
The above case is also extraneous to the theory of the defendant in the instant case, because
the action there had for its purpose the enforcement of the defendant's subsidiary liability
under the Penal Code, while in the case at bar, the plaintiff's cause of action is based on the
defendant's primary and direct responsibility under article 1903 of the Civil Code. In fact, the
above case destroys the defendant's contention because that decision illustrates the principle
that the employer's primary responsibility under article 1903 of the Civil Code is different in
character from his subsidiary liability under the Penal Code.

In trying to apply the two cases just referred to, counsel for the defendant has failed to
recognize the distinction between civil liability arising from a crime, which is governed by the
Penal Code, and the responsibility for cuasi-delito or culpa aquiliana under the Civil Code,
and has likewise failed to give the importance to the latter type of civil action.
The defendant-petitioner also cites Francisco vs. Onrubia (46 Phil., 327). That case need not
be set forth. Suffice it to say that the question involved was also civil liability arising from a
crime. Hence, it is as inapplicable as the two cases above discussed.
The foregoing authorities clearly demonstrate the separate individuality of cuasi-delitos or
culpa aquiliana under the Civil Code. Specifically they show that there is a distinction
between civil liability arising from criminal negligence (governed by the Penal Code) and
responsibility for fault or negligence under articles 1902 to 1910 of the Civil Code, and that the
same negligent act may produce either a civil liability arising from a crime under the Penal
Code, or a separate responsibility for fault or negligence under articles 1902 to 1910 of the
Civil Code. Still more concretely, the authorities above cited render it inescapable to conclude
that the employer in this case the defendant-petitioner is primarily and directly liable
under article 1903 of the Civil Code.
The legal provisions, authors, and cases already invoked should ordinarily be sufficient to
dispose of this case. But inasmuch as we are announcing doctrines that have been little
understood in the past, it might not be inappropriate to indicate their foundations.
Firstly, the Revised Penal Code in article 365 punishes not only reckless but also simple
negligence. If we were to hold that articles 1902 to 1910 of the Civil Code refer only to fault or
negligence not punished by law, according to the literal import of article 1093 of the Civil
Code, the legal institution of culpa aquiliana would have very little scope and application in
actual life. Death or injury to persons and damage to property through any degree of
negligence even the slightest would have to be indemnified only through the principle of
civil liability arising from a crime. In such a state of affairs, what sphere would remain for
cuasi-delito or culpa aquiliana? We are loath to impute to the lawmaker any intention to
bring about a situation so absurd and anomalous. Nor are we, in the interpretation of the
laws, disposed to uphold the letter that killeth rather than the spirit that giveth life. We will
not use the literal meaning of the law to smother and render almost lifeless a principle of such
ancient origin and such full-grown development as culpa aquiliana or cuasi-delito, which is
conserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code.
Secondly, to find the accused guilty in a criminal case, proof of guilt beyond reasonable doubt
is required, while in a civil case, preponderance of evidence is sufficient to make the
defendant pay in damages. There are numerous cases of criminal negligence which can not be
shown beyond reasonable doubt, but can be proved by a preponderance of evidence. In such
cases, the defendant can and should be made responsible in a civil action under articles 1902

to 1910 of the Civil Code. Otherwise, there would be many instances of unvindicated civil
wrongs. Ubi jus ibi remedium.
Thirdly, to hold that there is only one way to make defendant's liability effective, and that is,
to sue the driver and exhaust his (the latter's) property first, would be tantamount to
compelling the plaintiff to follow a devious and cumbersome method of obtaining relief. True,
there is such a remedy under our laws, but there is also a more expeditious way, which is
based on the primary and direct responsibility of the defendant under article 1903 of the Civil
Code. Our view of the law is more likely to facilitate remedy for civil wrongs, because the
procedure indicated by the defendant is wasteful and productive of delay, it being a matter of
common knowledge that professional drivers of taxis and similar public conveyance usually
do not have sufficient means with which to pay damages. Why, then, should the plaintiff be
required in all cases to go through this roundabout, unnecessary, and probably useless
procedure? In construing the laws, courts have endeavored to shorten and facilitate the
pathways of right and justice.
At this juncture, it should be said that the primary and direct responsibility of employers and
their presumed negligence are principles calculated to protect society. Workmen and
employees should be carefully chosen and supervised in order to avoid injury to the public. It
is the masters or employers who principally reap the profits resulting from the services of
these servants and employees. It is but right that they should guarantee the latter's careful
conduct for the personnel and patrimonial safety of others. As Theilhard has said, "they
should reproach themselves, at least, some for their weakness, others for their poor selection
and all for their negligence." And according to Manresa, "It is much more equitable and just
that such responsibility should fall upon the principal or director who could have chosen a
careful and prudent employee, and not upon the injured person who could not exercise such
selection and who used such employee because of his confidence in the principal or director."
(Vol. 12, p. 622, 2nd Ed.) Many jurists also base this primary responsibility of the employer
on the principle of representation of the principal by the agent. Thus, Oyuelos says in the
work already cited (Vol. 7, p. 747) that before third persons the employer and employee
"vienen a ser como una sola personalidad, por refundicion de la del dependiente en la de
quien le emplea y utiliza." ("become as one personality by the merging of the person of the
employee in that of him who employs and utilizes him.") All these observations acquire a
peculiar force and significance when it comes to motor accidents, and there is need of
stressing and accentuating the responsibility of owners of motor vehicles.
Fourthly, because of the broad sweep of the provisions of both the Penal Code and the Civil
Code on this subject, which has given rise to the overlapping or concurrence of spheres
already discussed, and for lack of understanding of the character and efficacy of the action for
culpa aquiliana, there has grown up a common practice to seek damages only by virtue of the

civil responsibility arising from a crime, forgetting that there is another remedy, which is by
invoking articles 1902-1910 of the Civil Code. Although this habitual method is allowed by our
laws, it has nevertheless rendered practically useless and nugatory the more expeditious and
effective remedy based on culpa aquiliana or culpa extra-contractual. In the present case, we
are asked to help perpetuate this usual course. But we believe it is high time we pointed out to
the harm done by such practice and to restore the principle of responsibility for fault or
negligence under articles 1902 et seq. of the Civil Code to its full rigor. It is high time we
caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so
that its waters may no longer be diverted into that of a crime under the Penal Code. This will,
it is believed, make for the better safeguarding of private rights because it re-establishes an
ancient and additional remedy, and for the further reason that an independent civil action,
not depending on the issues, limitations and results of a criminal prosecution, and entirely
directed by the party wronged or his counsel, is more likely to secure adequate and efficacious
redress.
In view of the foregoing, the judgment of the Court of Appeals should be and is hereby
affirmed, with costs against the defendant-petitioner.

G.R. No. L-12219

March 15, 1918
AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr.,
the sum of P31,000, as damages alleged to have been caused by an automobile driven by the
defendant. From a judgment of the Court of First Instance of the Province of La Union
absolving the defendant from liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this action took place on December 12,
1912, on the Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion in
question the plaintiff was riding on his pony over said bridge. Before he had gotten half way
across, the defendant approached from the opposite direction in an automobile, going at the
rate of about ten or twelve miles per hour. As the defendant neared the bridge he saw a

horseman on it and blew his horn to give warning of his approach. He continued his course
and after he had taken the bridge he gave two more successive blasts, as it appeared to him
that the man on horseback before him was not observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and heard the warning signals. However,
being perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the
pony closely up against the railing on the right side of the bridge instead of going to the left.
He says that the reason he did this was that he thought he did not have sufficient time to get
over to the other side. The bridge is shown to have a length of about 75 meters and a width of
4.80 meters. As the automobile approached, the defendant guided it toward his left, that
being the proper side of the road for the machine. In so doing the defendant assumed that the
horseman would move to the other side. The pony had not as yet exhibited fright, and the
rider had made no sign for the automobile to stop. Seeing that the pony was apparently quiet,
the defendant, instead of veering to the right while yet some distance away or slowing down,
continued to approach directly toward the horse without diminution of speed. When he had
gotten quite near, there being then no possibility of the horse getting across to the other side,
the defendant quickly turned his car sufficiently to the right to escape hitting the horse
alongside of the railing where it as then standing; but in so doing the automobile passed in
such close proximity to the animal that it became frightened and turned its body across the
bridge with its head toward the railing. In so doing, it as struck on the hock of the left hind leg
by the flange of the car and the limb was broken. The horse fell and its rider was thrown off
with some violence. From the evidence adduced in the case we believe that when the accident
occurred the free space where the pony stood between the automobile and the railing of the
bridge was probably less than one and one half meters. As a result of its injuries the horse
died. The plaintiff received contusions which caused temporary unconsciousness and
required medical attention for several days.
The question presented for decision is whether or not the defendant in maneuvering his car in
the manner above described was guilty of negligence such as gives rise to a civil obligation to
repair the damage done; and we are of the opinion that he is so liable. As the defendant
started across the bridge, he had the right to assume that the horse and the rider would pass
over to the proper side; but as he moved toward the center of the bridge it was demonstrated
to his eyes that this would not be done; and he must in a moment have perceived that it was
too late for the horse to cross with safety in front of the moving vehicle. In the nature of things
this change of situation occurred while the automobile was yet some distance away; and from
this moment it was not longer within the power of the plaintiff to escape being run down by
going to a place of greater safety. The control of the situation had then passed entirely to the
defendant; and it was his duty either to bring his car to an immediate stop or, seeing that
there were no other persons on the bridge, to take the other side and pass sufficiently far away

from the horse to avoid the danger of collision. Instead of doing this, the defendant ran
straight on until he was almost upon the horse. He was, we think, deceived into doing this by
the fact that the horse had not yet exhibited fright. But in view of the known nature of horses,
there was an appreciable risk that, if the animal in question was unacquainted with
automobiles, he might get exited and jump under the conditions which here confronted him.
When the defendant exposed the horse and rider to this danger he was, in our opinion,
negligent in the eye of the law.
The test by which to determine the existence of negligence in a particular case may be stated
as follows: Did the defendant in doing the alleged negligent act use that person would have
used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts
the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias
of the Roman law. The existence of negligence in a given case is not determined by reference
to the personal judgment of the actor in the situation before him. The law considers what
would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation
must of course be always determined in the light of human experience and in view of the facts
involved in the particular case. Abstract speculations cannot here be of much value but this
much can be profitably said: Reasonable men govern their conduct by the circumstances
which are before them or known to them. They are not, and are not supposed to be,
omniscient of the future. Hence they can be expected to take care only when there is
something before them to suggest or warn of danger. Could a prudent man, in the case under
consideration, foresee harm as a result of the course actually pursued? If so, it was the duty of
the actor to take precautions to guard against that harm. Reasonable foresight of harm,
followed by ignoring of the suggestion born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the proper criterion for determining the
existence of negligence in a given case is this: Conduct is said to be negligent when a prudent
man in the position of the tortfeasor would have foreseen that an effect harmful to another
was sufficiently probable to warrant his foregoing conduct or guarding against its
consequences.
Applying this test to the conduct of the defendant in the present case we think that negligence
is clearly established. A prudent man, placed in the position of the defendant, would in our
opinion, have recognized that the course which he was pursuing was fraught with risk, and
would therefore have foreseen harm to the horse and the rider as reasonable consequence of
that course. Under these circumstances the law imposed on the defendant the duty to guard
against the threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of

antecedent negligence in planting himself on the wrong side of the road. But as we have
already stated, the defendant was also negligent; and in such case the problem always is to
discover which agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these
circumstances the law is that the person who has the last fair chance to avoid the impending
harm and fails to do so is chargeable with the consequences, without reference to the prior
negligence of the other party.
The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should
perhaps be mentioned in this connection. This Court there held that while contributory
negligence on the part of the person injured did not constitute a bar to recovery, it could be
received in evidence to reduce the damages which would otherwise have been assessed wholly
against the other party. The defendant company had there employed the plaintiff, as a
laborer, to assist in transporting iron rails from a barge in Manila harbor to the company's
yards located not far away. The rails were conveyed upon cars which were hauled along a
narrow track. At certain spot near the water's edge the track gave way by reason of the
combined effect of the weight of the car and the insecurity of the road bed. The car was in
consequence upset; the rails slid off; and the plaintiff's leg was caught and broken. It
appeared in evidence that the accident was due to the effects of the typhoon which had
dislodged one of the supports of the track. The court found that the defendant company was
negligent in having failed to repair the bed of the track and also that the plaintiff was, at the
moment of the accident, guilty of contributory negligence in walking at the side of the car
instead of being in front or behind. It was held that while the defendant was liable to the
plaintiff by reason of its negligence in having failed to keep the track in proper repair
nevertheless the amount of the damages should be reduced on account of the contributory
negligence in the plaintiff. As will be seen the defendant's negligence in that case consisted in
an omission only. The liability of the company arose from its responsibility for the dangerous
condition of its track. In a case like the one now before us, where the defendant was actually
present and operating the automobile which caused the damage, we do not feel constrained to
attempt to weigh the negligence of the respective parties in order to apportion the damage
according to the degree of their relative fault. It is enough to say that the negligence of the
defendant was in this case the immediate and determining cause of the accident and that the
antecedent negligence of the plaintiff was a more remote factor in the case.
A point of minor importance in the case is indicated in the special defense pleaded in the
defendant's answer, to the effect that the subject matter of the action had been previously
adjudicated in the court of a justice of the peace. In this connection it appears that soon after
the accident in question occurred, the plaintiff caused criminal proceedings to be instituted

before a justice of the peace charging the defendant with the infliction of serious injuries
(lesiones graves). At the preliminary investigation the defendant was discharged by the
magistrate and the proceedings were dismissed. Conceding that the acquittal of the defendant
at the trial upon the merits in a criminal prosecution for the offense mentioned would be res
adjudicata upon the question of his civil liability arising from negligence -- a point upon
which it is unnecessary to express an opinion -- the action of the justice of the peace in
dismissing the criminal proceeding upon the preliminary hearing can have no effect. (See U.
S. vs. Banzuela and Banzuela, 31 Phil. Rep., 564.)
From what has been said it results that the judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover of the defendant the sum of two hundred
pesos (P200), with costs of other instances. The sum here awarded is estimated to include the
value of the horse, medical expenses of the plaintiff, the loss or damage occasioned to articles
of his apparel, and lawful interest on the whole to the date of this recovery. The other
damages claimed by the plaintiff are remote or otherwise of such character as not to be
recoverable. So ordered.
Arellano, C.J., Torres, Carson, Araullo, Avancea, and Fisher, JJ., concur.
Johnson, J., reserves his vote.
Separate Opinions
MALCOLM, J., concurring:
After mature deliberation, I have finally decided to concur with the judgment in this case. I do
so because of my understanding of the "last clear chance" rule of the law of negligence as
particularly applied to automobile accidents. This rule cannot be invoked where the
negligence of the plaintiff is concurrent with that of the defendant. Again, if a traveler when
he reaches the point of collision is in a situation to extricate himself and avoid injury, his
negligence at that point will prevent a recovery. But Justice Street finds as a fact that the
negligent act of the interval of time, and that at the moment the plaintiff had no opportunity
to avoid the accident. Consequently, the "last clear chance" rule is applicable. In other words,
when a traveler has reached a point where he cannot extricate himself and vigilance on his
part will not avert the injury, his negligence in reaching that position becomes the condition
and not the proximate cause of the injury and will not preclude a recovery. (Note especially
Aiken vs. Metcalf [1917], 102 Atl., 330.)

G.R. No. L-13505

February 4, 1919
GEO. W. DAYWALT, plaintiff-appellant,

vs.
LA CORPORACION DE LOS PADRES AGUSTINOS RECOLETOS, ET AL.,
defendants-appellees.
C. C. Cohn and Thos. D. Aitken for appellant.Crossfield & O'Brien for appellee.
STREET, J.:
In the year 1902, Teodorica Endencia, an unmarried woman, resident in the Province of
Mindoro, executed a contract whereby she obligated herself to convey to Geo. W. Daywalt, a
tract of land situated in the barrio of Mangarin, municipality of Bulalacao, now San Jose, in
said province. It was agreed that a deed should be executed as soon as the title to the land
should be perfected by proceedings in the Court of Land Registration and a Torrens certificate
should be produced therefore in the name of Teodorica Endencia. A decree recognizing the
right of Teodorica as owner was entered in said court in August 1906, but the Torrens
certificate was not issued until later. The parties, however, met immediately upon the
entering of this decree and made a new contract with a view to carrying their original
agreement into effect. This new contract was executed in the form of a deed of conveyance
and bears date of August 16, 1906. The stipulated price was fixed at P4,000, and the area of
the land enclosed in the boundaries defined in the contract was stated to be 452 hectares and
a fraction.
The second contract was not immediately carried into effect for the reason that the Torrens
certificate was not yet obtainable and in fact said certificate was not issued until the period of
performance contemplated in the contract had expired. Accordingly, upon October 3, 1908,
the parties entered into still another agreement, superseding the old, by which Teodorica
Endencia agreed upon receiving the Torrens title to the land in question, to deliver the same
to the Hongkong and Shanghai Bank in Manila, to be forwarded to the Crocker National Bank
in San Francisco, where it was to be delivered to the plaintiff upon payment of a balance of
P3,100.
The Torrens certificate was in time issued to Teodorica Endencia, but in the course of the
proceedings relative to the registration of the land, it was found by official survey that the area
of the tract inclosed in the boundaries stated in the contract was about 1.248 hectares of 452
hectares as stated in the contract. In view of this development Teodorica Endencia became
reluctant to transfer the whole tract to the purchaser, asserting that she never intended to sell
so large an amount of land and that she had been misinformed as to its area.
This attitude of hers led to litigation in which Daywalt finally succeeded, upon appeal to the
Supreme Court, in obtaining a decree for specific performance; and Teodorica Endencia was
ordered to convey the entire tract of land to Daywalt pursuant to the contract of October 3,
1908, which contract was declared to be in full force and effect. This decree appears to have
become finally effective in the early part of the year 1914.1

The defendant, La Corporacion de los Padres Recoletos, is a religious corporation, with its
domicile in the city of Manila. Said corporation was formerly the owner of a large tract of
land, known as the San Jose Estate, on the island of Mindoro, which was sold to the
Government of the Philippine Islands in the year 1909. The same corporation was at this time
also the owner of another estate on the same island immediately adjacent to the land which
Teodorica Endencia had sold to Geo. W. Daywalt; and for many years the Recoletos Fathers
had maintained large herds of cattle on the farms referred to. Their representative, charged
with management of these farms, was father Isidoro Sanz, himself a members of the order.
Father Sanz had long been well acquainted with Teodorica Endencia and exerted over her an
influence and ascendency due to his religious character as well as to the personal friendship
which existed between them. Teodorica appears to be a woman of little personal force, easily
subject to influence, and upon all the important matters of business was accustomed to seek,
and was given, the advice of father Sanz and other members of his order with whom she came
in contact.
Father Sanz was fully aware of the existence of the contract of 1902 by which Teodorica
Endencia agreed to sell her land to the plaintiff as well as of the later important developments
connected with the history of that contract and the contract substituted successively for it;
and in particular Father Sanz, as well as other members of the defendant corporation, knew of
the existence of the contract of October 3, 1908, which, as we have already seen finally fixed
the rights of the parties to the property in question. When the Torrens certificate was finally
issued in 1909 in favor of Teodorica Endencia, she delivered it for safekeeping to the
defendant corporation, and it was then taken to Manila where it remained in the custody and
under the control of P. Juan Labarga the procurador and chief official of the defendant
corporation, until the deliver thereof to the plaintiff was made compulsory by reason of the
decree of the Supreme Court in 1914.
When the defendant corporation sold the San Jose Estate, it was necessary to bring the cattle
off of that property; and, in the first half of 1909, some 2,368 head were removed to the estate
of the corporation immediately adjacent to the property which the plaintiff had purchased
from Teodorica Endencia. As Teodorica still retained possession of said property Father Sanz
entered into an arrangement with her whereby large numbers of cattle belonging to the
defendant corporation were pastured upon said land during a period extending from June 1,
1909, to May 1, 1914.
Under the first cause stated in the complaint in the present action the plaintiff seeks to
recover from the defendant corporation the sum of P24,000, as damages for the use and
occupation of the land in question by reason of the pasturing of cattle thereon during the
period stated. The trial court came to the conclusion that the defendant corporation was liable
for damages by reason of the use and occupation of the premises in the manner stated; and

fixed the amount to be recovered at P2,497. The plaintiff appealed and has assigned error to
this part of the judgment of the court below, insisting that damages should have been
awarded in a much larger sum and at least to the full extent of P24,000, the amount claimed
in the complaint.
As the defendant did not appeal, the property of allowing damages for the use and occupation
of the land to the extent o P2,497, the amount awarded, is not now in question an the only
thing here to be considered, in connection with this branch of the case, is whether the
damages allowed under this head should be increased. The trial court rightly ignored the fact
that the defendant corporation had paid Teodorica Endencia of ruse and occupation of the
same land during the period in question at the rate of P425 per annum, inasmuch as the final
decree of this court in the action for specific performance is conclusive against her right, and
as the defendant corporation had notice of the rights of the plaintiff under this contract of
purchase, it can not be permitted that the corporation should escape liability in this action by
proving payment of rent to a person other than the true owner.
With reference to the rate of which compensation should be estimated the trial court came to
the following conclusion:
As to the rate of the compensation, the plaintiff contends that the defendant corporation
maintained at leas one thousand head of cattle on the land and that the pasturage was of the
value of forty centavos per head monthly, or P4,800 annually, for the whole tract. The court
can not accept this view. It is rather improbable that 1,248 hectares of wild Mindoro land
would furnish sufficient pasturage for one thousand head of cattle during the entire year, and,
considering the locality, the rate of forty centavos per head monthly seems too high. The
evidence shows that after having recovered possession of the land the plaintiff rented it to the
defendant corporation for fifty centavos per hectares annually, the tenant to pay the taxes on
the land, and this appears to be a reasonable rent. There is no reason to suppose that the land
was worth more for grazing purposes during the period from 1909 to 1913, than it was at the
later period. Upon this basis the plaintiff is entitled to damages in the sum of p2,497, and is
under no obligation to reimburse the defendants for the land taxes paid by either of them
during the period the land was occupied by the defendant corporation. It may be mentioned
in this connection that the Lontok tract adjoining the land in question and containing over
three thousand hectares appears to have been leased for only P1,000 a year, plus the taxes.
From this it will be seen that the trial court estimated the rental value of the land for grazing
purposes at 50 centavos per hectare per annum, and roughly adopted the period of four years
as the time for which compensation at that rate should be made. As the court had already
found that the defendant was liable for these damages from June, 1, 1909, to May 1, 1914, or a
period of four years and eleven months, there seems some ground for the contention made in
the appellant's first assignment of error that the court's computation was erroneous, even

accepting the rule upon which the damages were assessed, as it is manifest that at the rate of
50 centavos per hectare per annum, the damages for four years and eleven months would be
P3,090.
Notwithstanding this circumstance, we are of the opinion that the damages assessed are
sufficient to compensate the plaintiff for the use and occupation of the land during the whole
time it was used. There is evidence in the record strongly tending to show that the wrongful
use of the land by the defendant was not continuous throughout the year but was confined
mostly to the reason when the forage obtainable on the land of the defendant corporation was
not sufficient to maintain its cattle, for which reason it became necessary to allow them to go
over to pasture on the land in question; and it is not clear that the whole of the land was used
for pasturage at any time. Considerations of this character probably led the trial court to
adopt four years as roughly being the period during which compensation should be allowed.
But whether this was advertently done or not, we see no sufficient reason, in the uncertainty
of the record with reference to the number of the cattle grazed and the period when the land
was used, for substituting our guess for the estimate made by the trial court.
In the second cause of action stated in the complaint the plaintiff seeks to recover from the
defendant corporation the sum of P500,000, as damages, on the ground that said
corporation, for its own selfish purposes, unlawfully induced Teodorica Endencia to refrain
from the performance of her contract for the sale of the land in question and to withhold
delivery to the plaintiff of the Torrens title, and further, maliciously and without reasonable
cause, maintained her in her defense to the action of specific performance which was finally
decided in favor of the plaintiff in this court. The cause of action here stated is based on
liability derived from the wrongful interference of the defendant in the performance of the
contract between the plaintiff and Teodorica Endencia; and the large damages laid in the
complaint were, according to the proof submitted by the plaintiff, incurred as a result of a
combination of circumstances of the following nature: In 1911, it appears, the plaintiff, as the
owner of the land which he had bought from Teodorica Endencia entered into a contract
(Exhibit C) with S. B. Wakefield, of San Francisco, for the sale and disposal of said lands to a
sugar growing and milling enterprise, the successful launching of which depended on the
ability of Daywalt to get possession of the land and the Torrens certificate of title. In order to
accomplish this end, the plaintiff returned to the Philippine Islands, communicated his
arrangement to the defendant,, and made repeated efforts to secure the registered title for
delivery in compliance with said agreement with Wakefield. Teodorica Endencia seems to
have yielded her consent to the consummation of her contract, but the Torrens title was then
in the possession of Padre Juan Labarga in Manila, who refused to deliver the document.
Teodorica also was in the end contract with the plaintiff, with the result that the plaintiff was
kept out of possession until the Wakefield project for the establishment of a large sugar

growing and milling enterprise fell through. In the light of what has happened in recent years
in the sugar industry, we feel justified in saying that the project above referred to, if carried
into effect, must inevitably have proved a great success.
The determination of the issue presented in this second cause of action requires a
consideration of two points. The first is whether a person who is not a party to a contract for
the sale of land makes himself liable for damages to the vendee, beyond the value of the use
and occupation, by colluding with the vendor and maintaining him in the effort to resist an
action for specific performance. The second is whether the damages which the plaintiff seeks
to recover under this head are too remote and speculative to be the subject of recovery.
As preliminary to a consideration of the first of these questions, we deem it well it dispose of
the contention that the members of the defendants corporation, in advising and prompting
Teodorica Endencia not to comply with the contract of sale, were actuated by improper and
malicious motives. The trial court found that this contention was not sustained, observing
that while it was true that the circumstances pointed to an entire sympathy on the part of the
defendant corporation with the efforts of Teodorica Endencia to defeat the plaintiff's claim to
the land, the fact that its officials may have advised her not to carry the contract into effect
would not constitute actionable interference with such contract. It may be added that when
one considers the hardship that the ultimate performance of that contract entailed on the
vendor, and the doubt in which the issue was involved to the extent that the decision of the
Court of the First Instance was unfavorable to the plaintiff and the Supreme Court itself was
divided the attitude of the defendant corporation, as exhibited in the conduct of its
procurador, Juan Labarga, and other members of the order of the Recollect Fathers, is not
difficult to understand. To our mind a fair conclusion on this feature of the case is that father
Juan Labarga and his associates believed in good faith that the contract cold not be enforced
and that Teodorica would be wronged if it should be carried into effect. Any advice or
assistance which they may have given was, therefore, prompted by no mean or improper
motive. It is not, in our opinion, to be denied that Teodorica would have surrendered the
documents of title and given possession of the land but for the influence and promptings of
members of the defendants corporation. But we do not credit the idea that they were in any
degree influenced to the giving of such advice by the desire to secure to themselves the paltry
privilege of grazing their cattle upon the land in question to the prejudice of the just rights of
the plaintiff.
The attorney for the plaintiff maintains that, by interfering in the performance of the contract
in question and obstructing the plaintiff in his efforts to secure the certificate of tittle to the
land, the defendant corporation made itself a co-participant with Teodorica Endencia in the
breach of said contract; and inasmuch as father Juan Labarga, at the time of said unlawful
intervention between the contracting parties, was fully aware of the existence of the contract

(Exhibit C) which the plaintiff had made with S. B. Wakefield, of San Francisco, it is insisted
that the defendant corporation is liable for the loss consequent upon the failure of the project
outlined in said contract.
In this connection reliance is placed by the plaintiff upon certain American and English
decisions in which it is held that a person who is a stranger to contract may, by an
unjustifiable interference in the performance thereof, render himself liable for the damages
consequent upon non-performance. It is said that the doctrine of these cases was recognized
by this court in Gilchrist vs. Cuddy (29 Phil. Rep., 542); and we have been earnestly pressed
to extend the rule there enunciated to the situation here presente.
Somewhat more than half a century ago the English Court of the Queen's Bench saw its way
clear to permit an action for damages to be maintained against a stranger to a contract
wrongfully interfering in its performance. The leading case on this subject is Lumley vs. Gye
([1853], 2 El. & Bl., 216). It there appeared that the plaintiff, as manager of a theatre, had
entered into a contract with Miss Johanna Wagner, an opera singer,, whereby she bound
herself for a period to sing in the plaintiff's theatre and nowhere else. The defendant, knowing
of the existence of this contract, and, as the declaration alleged, "maliciously intending to
injure the plaintiff," enticed and produced Miss Wagner to leave the plaintiff's employment. It
was held that the plaintiff was entitled to recover damages. The right which was here
recognized had its origin in a rule, long familiar to the courts of the common law, to the effect
that any person who entices a servant from his employment is liable in damages to the
master. The master's interest in the service rendered by his employee is here considered as a
distinct subject of juridical right. It being thus accepted that it is a legal wrong to break up a
relation of personal service, the question now arose whether it is illegal for one person to
interfere with any contract relation subsisting between others. Prior to the decision of Lumley
vs. Gye [supra] it had been supposed that the liability here under consideration was limited to
the cases of the enticement of menial servants, apprentices, and others to whom the English
Statutes of Laborers were applicable. But in the case cited the majority of the judges
concurred in the opinion that the principle extended to all cases of hiring. This doctrine was
followed by the Court of Appeal in Bowen vs. Hall ([1881], 6 Q. B., Div., 333); and in
Temperton vs. Russell ([1893], Q. B., 715), it was held that the right of action for maliciously
procuring a breach of contract is not confined to contracts for personal services, but extends
to contracts in general. In that case the contract which the defendant had procured to be
breached was a contract for the supply of building material.
Malice in some form is generally supposed to be an essential ingredient in cases of
interference with contract relations. But upon the authorities it is enough if the wrong-doer,
having knowledge of the existence of the contract relations, in bad faith sets about to break it
up. Whether his motive is to benefit himself or gratify his spite by working mischief to the

employer is immaterial. Malice in the sense of ill-will or spite is not essential.

Upon the question as to what constitutes legal justification, a good illustration was put in the
leading case. If a party enters into contract to go for another upon a journey to a remote and
unhealthful climate, and a third person, with a bona fide purpose of benefiting the one who is
under contract to go, dissuades him from the step, no action will lie. But if the advice is not
disinterested and the persuasion is used for "the indirect purpose of benefiting the defendant
at the expense of the plaintiff," the intermedler is liable if his advice is taken and the contract
broken.
The doctrine embodied in the cases just cited has sometimes been found useful, in the
complicated relations of modern industry, as a means of restraining the activities of labor
unions and industrial societies when improperly engaged in the promotion of strikes. An
illustration of the application of the doctrine in question in a case of this kind is found in
South Wales Miners Federation vs. Glamorgan Coal Co. ([1905]), A. C., 239). It there
appeared that certain miners employed in the plaintiff's collieries, acting under the order of
the executive council of the defendant federation, violated their contract with the plaintiff by
abstaining from work on certain days. The federation and council acted without any actual
malice or ill-will towards the plaintiff, and the only object of the order in question was that
the price of coal might thereby be kept up, a factor which affected the miner's wage scale. It
was held that no sufficient justification was shown and that the federation was liable.
In the United States, the rule established in England by Lumley vs. Gye [supra] and
subsequent cases is commonly accepted, though in a few of the States the broad idea that a
stranger to a contract can be held liable upon its is rejected, and in these jurisdictions the
doctrine, if accepted at all, is limited to the situation where the contract is strictly for personal
service. (Boyson vs. Thorn, 98 Cal., 578; Chambers & Marshall vs. Baldwin 91 Ky., 121;
Bourlier vs. Macauley, 91 Ky., 135; Glencoe Land & Gravel Co. vs. Hudson Bros. Com. Co., 138
Mo., 439.)
It should be observed in this connection that, according to the English and American
authorities, no question can be made as to the liability to one who interferes with a contract
existing between others by means which, under known legal cannons, can be denominated an
unlawful means. Thus, if performance is prevented by force, intimidation, coercion, or
threats, or by false or defamatory statements, or by nuisance or riot, the person using such
unlawful means is, under all the authorities, liable for the damage which ensues. And in
jurisdictions where the doctrine of Lumley vs. Gye [supra] is rejected, no liability can arise
from a meddlesome and malicious interference with a contract relation unless some such
unlawful means as those just indicated are used. (See cases last above cited.)
This brings us to the decision made by this court in Gilchrist vs. Cuddy (29 Phil. Rep., 542). It
there appeared that one Cuddy, the owner of a cinematographic film, let it under a rental

contract to the plaintiff Gilchrist for a specified period of time. In violation of the terms of this
agreement, Cuddy proceeded to turn over the film also under a rental contract, to the
defendants Espejo and Zaldarriaga. Gilchrist thereupon restored to the Court of First Instance
and produced an injunction restraining the defendants from exhibiting the film in question in
their theater during the period specified in the contract of Cuddy with Gilchrist. Upon appeal
to this court it was in effect held that the injunction was not improperly granted, although the
defendants did not, at the time their contract was made, know the identity of the plaintiff as
the person holding the prior contract but did know of the existence of a contract in favor of
someone. It was also said arguendo, that the defendants would have been liable in damages
under article 1902 of the Civil Code, if the action had been brought by the plaintiff to recover
damages. The force of the opinion is, we think, somewhat weakened by the criticism contain
in the concurring opinion, where it is said that the question of breach of contract by
inducement was not really involved in the case. Taking the decision upon the point which was
rally decided, it is authority for the proposition that one who buys something which he knows
has been sold to some other person can be restrained from using that thing to the prejudice of
the person having the prior and better right.
Translated into terms applicable to the case at bar, the decision in Gilchrist vs. Cuddy (29
Phil. Rep., 542), indicates that the defendant corporation, having notice of the sale of the land
in question to Daywalt, might have been enjoined by the latter from using the property for
grazing its cattle thereon. That the defendant corporation is also liable in this action for the
damage resulting to the plaintiff from the wrongful use and occupation of the property has
also been already determined. But it will be observed that in order to sustain this liability it is
not necessary to resort to any subtle exegesis relative to the liability of a stranger to a contract
for unlawful interference in the performance thereof. It is enough that defendant use the
property with notice that the plaintiff had a prior and better right.
Article 1902 of the Civil Code declares that any person who by an act or omission,
characterized by fault or negligence, causes damage to another shall be liable for the damage
so done. Ignoring so much of this article as relates to liability for negligence, we take the rule
to be that a person is liable for damage done to another by any culpable act; and by "culpable
act" we mean any act which is blameworthy when judged by accepted legal standards. The
idea thus expressed is undoubtedly broad enough to include any rational conception of
liability for the tortious acts likely to be developed in any society. Thus considered, it cannot
be said that the doctrine of Lumley vs. Gye [supra] and related cases is repugnant to the
principles of the civil law.
Nevertheless, it must be admitted that the codes and jurisprudence of the civil law furnish a
somewhat uncongenial field in which to propagate the idea that a stranger to a contract may
sued for the breach thereof. Article 1257 of the Civil Code declares that contracts are binding

only between the parties and their privies. In conformity with this it has been held that a
stranger to a contract has no right of action for the nonfulfillment of the contract except in the
case especially contemplated in the second paragraph of the same article. (Uy Tam and Uy Yet
vs. Leonard, 30 Phil. Rep., 471.) As observed by this court in Manila Railroad Co. vs.
Compaia Transatlantica, R. G. No. 11318 (38 Phil. Rep., 875), a contract, when effectually
entered into between certain parties, determines not only the character and extent of the
liability of the contracting parties but also the person or entity by whom the obligation is
exigible. The same idea should apparently be applicable with respect to the person against
whom the obligation of the contract may be enforced; for it is evident that there must be a
certain mutuality in the obligation, and if the stranger to a contract is not permitted to sue to
enforce it, he cannot consistently be held liable upon it.
If the two antagonistic ideas which we have just brought into juxtaposition are capable of
reconciliation, the process must be accomplished by distinguishing clearly between the right
of action arising from the improper interference with the contract by a stranger thereto,
considered as an independent act generate of civil liability, and the right of action ex
contractu against a party to the contract resulting from the breach thereof. However, we do
not propose here to pursue the matter further, inasmuch as, for reasons presently to be
stated, we are of the opinion that neither the doctrine of Lumley vs. Gye [supra] nor the
application made of it by this court in Gilchrist vs. Cuddy (29 Phil. Rep., 542), affords any
basis for the recovery of the damages which the plaintiff is supposed to have suffered by
reason of his inability to comply with the terms of the Wakefield contract.
Whatever may be the character of the liability which a stranger to a contract may incur by
advising or assisting one of the parties to evade performance, there is one proposition upon
which all must agree. This is, that the stranger cannot become more extensively liable in
damages for the nonperformance of the contract than the party in whose behalf he
intermeddles. To hold the stranger liable for damages in excess of those that could be
recovered against the immediate party to the contract would lead to results at once grotesque
and unjust. In the case at bar, as Teodorica Endencia was the party directly bound by the
contract, it is obvious that the liability of the defendant corporation, even admitting that it has
made itself coparticipant in the breach of the contract, can in no even exceed hers. This leads
us to consider at this point the extent of the liability of Teodorica Endencia to the plaintiff by
reason of her failure to surrender the certificate of title and to place the plaintiff in possession.
It should in the first place be noted that the liability of Teodorica Endencia for damages
resulting from the breach of her contract with Daywalt was a proper subject for adjudication
in the action for specific performance which Daywalt instituted against her in 1909 and which
was litigated by him to a successful conclusion in this court, but without obtaining any special
adjudication with reference to damages. Indemnification for damages resulting from the

breach of a contract is a right inseparably annexed to every action for the fulfillment of the
obligation (art. 1124, Civil Code); and its is clear that if damages are not sought or recovered
in the action to enforce performance they cannot be recovered in an independent action. As to
Teodorica Endencia, therefore, it should be considered that the right of action to recover
damages for the breach of the contract in question was exhausted in the prior suit. However,
her attorneys have not seen fit to interpose the defense of res judicata in her behalf; and as
the defendant corporation was not a party to that action, and such defense could not in any
event be of any avail to it, we proceed to consider the question of the liability of Teodorica
Endencia for damages without refernce to this point.
The most that can be said with refernce to the conduct of Teodorica Endencia is that she
refused to carry out a contract for the sale of certain land and resisted to the last an action for
specific performance in court. The result was that the plaintiff was prevented during a period
of several years from exerting that control over the property which he was entitled to exert
and was meanwhile unable to dispose of the property advantageously. Now, what is the
measure of damages for the wrongful detention of real property by the vender after the time
has come for him to place the purchaser in possession?
The damages ordinarily and normally recoverable against a vendor for failure to deliver land
which he has contracted to deliver is the value of the use and occupation of the land for the
time during which it is wrongfully withheld. And of course where the purchaser has not paid
the purchaser money, a deduction may be made in respect to the interest on the money which
constitutes the purchase price. Substantially the same rule holds with respect to the liability of
a landlord who fails to put his tenant in possession pursuant to contract of lease. The measure
of damages is the value of the leasehold interest, or use and occupation, less the stipulated
rent, where this has not been paid. The rule that the measure of damages for the wrongful
detention of land is normally to be found in the value of use and occupation is, we believe, one
of the things that may be considered certain in the law (39 cyc., 1630; 24 Cyc., 1052
Sedgewick on Damages, Ninth ed., sec. 185.) almost as wellsettled, indeed, as the rule that
the measure of damages for the wrongful detention of money is to be found in the interest.
We recognize the possibility that more extensive damages may be recovered where, at the
time of the creation of the contractual obligation, the vendor, or lessor, is aware of the use to
which the purchaser or lessee desires to put the property which is the subject of the contract,
and the contract is made with the eyes of the vendor or lessor open to the possibility of the
damage which may result to the other party from his own failure to give possession. The case
before us is not this character, inasmuch as at the time when the rights of the parties under
the contract were determined, nothing was known to any to them about the San Francisco
capitalist who would be willing to back the project portrayed in Exhibit C.
The extent of the liability for the breach of a contract must be determined in the light of the

situation in existence at the time the contract is made; and the damages ordinarily
recoverable are in all events limited to such as might be reasonable are in all events limited to
such as might be reasonably foreseen in the light of the facts then known to the contracting
parties. Where the purchaser desires to protect himself, in the contingency of the failure of
the vendor promptly to give possession, from the possibility of incurring other damages than
such as the incident to the normal value of the use and occupation, he should cause to be
inserted in the contract a clause providing for stipulated amount to the paid upon failure of
the vendor to give possession; and not case has been called to our attention where, in the
absence of such a stipulation, damages have been held to be recoverable by the purchaser in
excess of the normal value of use and occupation. On the contrary, the most fundamental
conceptions of the law relative to the assessment of damages are inconsistent with such idea.
The principles governing this branch of the law were profoundly considered in the case
Hadley vs. Baxendale (9 Exch., 341), decided in the English Court of Exchequer in 1854; and a
few words relative to the principles governing will here be found instructive. The decision in
that case is considered a leading authority in the jurisprudence of the common law. The
plaintiffs in that case were proprietors of a mill in Gloucester, which was propelled by steam,
and which was engaged in grinding and supplying meal and flour to customers. The shaft of
the engine got broken, and it became necessarily that the broken shaft be sent to an engineer
or foundry man at Greenwich, to serve as a model for casting or manufacturing another that
would fit into the machinery. The broken shaft could be delivered at Greenwich on the second
day after its receipts by the carrier it. It was delivered to the defendants, who were common
carriers engaged in that business between these points, and who had told plaintiffs it would
be delivered at Greenwich on the second day after its delivery to them, if delivered at a given
hour. The carriers were informed that the mill was stopped, but were not informed of the
special purpose for which the broken shaft was desired to forwarded, They were not told the
mill would remain idle until the new shaft would be returned, or that the new shaft could not
be manufactured at Greenwich until the broken one arrived to serve as a model. There was
delay beyond the two days in delivering the broken shaft at Greenwich, and a corresponding
delay in starting the mill. No explanation of the delay was offered by the carriers. The suit was
brought to recover damages for the lost profits of the mill, cause by the delay in delivering the
broken shaft. It was held that the plaintiff could not recover.
The discussion contained in the opinion of the court in that case leads to the conclusion that
the damages recoverable in case of the breach of a contract are two sorts, namely, (1) the
ordinary, natural, and in a sense necessary damage; and (2) special damages.
Ordinary damages is found in all breaches of contract where the are no special circumstances
to distinguish the case specially from other contracts. The consideration paid for an
unperformed promise is an instance of this sort of damage. In all such cases the damages

recoverable are such as naturally and generally would result from such a breach, "according to
the usual course of things." In case involving only ordinary damage no discussion is ever
indulged as to whether that damage was contemplated or not. This is conclusively presumed
from the immediateness and inevitableness of the damage, and the recovery of such damage
follows as a necessary legal consequence of the breach. Ordinary damage is assumed as a
matter of law to be within the contemplation of the parties.
Special damage, on the other hand, is such as follows less directly from the breach than
ordinary damage. It is only found in case where some external condition, apart from the
actual terms to the contract exists or intervenes, as it were, to give a turn to affairs and to
increase damage in a way that the promisor, without actual notice of that external condition,
could not reasonably be expected to foresee. Concerning this sort of damage, Hadley vs.
Baxendale (1854) [supra] lays down the definite and just rule that before such damage can be
recovered the plaintiff must show that the particular condition which made the damage a
possible and likely consequence of the breach was known to the defendant at the time the
contract was made.
The statement that special damages may be recovered where the likelihood of such damages
flowing from the breach of the contract is contemplated and foreseen by the parties needs to
be supplemented by a proposition which, though not enunciated in Hadley vs. Baxendale, is
yet clearly to be drawn from subsequent cases. This is that where the damage which a plaintiff
seeks to recover as special damage is so far speculative as to be in contemplation of law
remote, notification of the special conditions which make that damage possible cannot render
the defendant liable therefor. To bring damages which would ordinarily be treated as remote
within the category of recoverable special damages, it is necessary that the condition should
be made the subject of contract in such sense as to become an express or implied term of the
engagement. Horne vs. Midland R. Co. (L. R., 8 C. P., 131) is a case where the damage which
was sought to be recovered as special damage was really remote, and some of the judges
rightly places the disallowance of the damage on the ground that to make such damage
recoverable, it must so far have been within the contemplation of the parties as to form at
least an implied term of the contract. But others proceeded on the idea that the notice given to
the defendant was not sufficiently full and definite. The result was the same in either view.
The facts in that case were as follows: The plaintiffs, shoe manufacturers at K, were under
contract to supply by a certain day shoes to a firm in London for the French government. They
delivered the shoes to a carrier in sufficient time for the goods to reach London at the time
stipulated in the contract and informed the railroad agent that the shoes would be thrown
back upon their hands if they did not reach the destination in time. The defendants
negligently failed to forward the good in due season. The sale was therefore lost, and the
market having fallen, the plaintiffs had to sell at a loss.

In the preceding discussion we have considered the plaintiff's right chiefly against Teodorica
Endencia; and what has been said suffices in our opinion to demonstrate that the damages
laid under the second cause of action in the complaint could not be recovered from her, first,
because the damages laid under the second cause of action in the complaint could not be
recovered from her, first, because the damages in question are special damages which were
not within contemplation of the parties when the contract was made, and secondly, because
said damages are too remote to be the subject of recovery. This conclusion is also necessarily
fatal to the right of the plaintiff to recover such damages from the defendant corporation, for,
as already suggested, by advising Teodorica not to perform the contract, said corporation
could in no event render itself more extensively liable than the principle in the contract.
Our conclusion is that the judgment of the trial court should be affirmed, and it is so ordered,
with costs against the appellant.
G.R. No. L-21438
September 28, 1966
AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.Bengzon Villegas and Zarraga for respondent
R. Carrascoso.
SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael
Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages;
P393.20 representing the difference in fare between first class and tourist class for the portion
of the trip Bangkok-Rome, these various amounts with interest at the legal rate, from the date
of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of
suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane
ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all other
respects", with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air
Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome.

From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of
the defendant airline forced plaintiff to vacate the "first class" seat that he was occupying
because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the
Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat,
the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would
be taken over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento,
"many of the Filipino passengers got nervous in the tourist class; when they found out that
Mr. Carrascoso was having a hot discussion with the white man [manager], they came all
across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man"
(Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat
in the plane.3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of
respondent Court of Appeals. Petitioner charges that respondent court failed to make
complete findings of fact on all the issues properly laid before it. We are asked to consider
facts favorable to petitioner, and then, to overturn the appellate court's decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by any
court of record without expressing therein clearly and distinctly the facts and the law on
which it is based". 5 This is echoed in the statutory demand that a judgment determining the
merits of the case shall state "clearly and distinctly the facts and the law on which it is based";
6
and that "Every decision of the Court of Appeals shall contain complete findings of fact on all
issues properly raised before it". 7
A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The
law, however, solely insists that a decision state the "essential ultimate facts" upon which the
court's conclusion is drawn. 9 A court of justice is not hidebound to write in its decision every
bit and piece of evidence 10 presented by one party and the other upon the issues raised.
Neither is it to be burdened with the obligation "to specify in the sentence the facts" which a
party "considered as proved". 11 This is but a part of the mental process from which the Court
draws the essential ultimate facts. A decision is not to be so clogged with details such that
prolixity, if not confusion, may result. So long as the decision of the Court of Appeals contains
the necessary facts to warrant its conclusions, it is no error for said court to withhold
therefrom "any specific finding of facts with respect to the evidence for the defense". Because
as this Court well observed, "There is no law that so requires". 12 Indeed, "the mere failure to
specify (in the decision) the contentions of the appellant and the reasons for refusing to
believe them is not sufficient to hold the same contrary to the requirements of the provisions
of law and the Constitution". It is in this setting that in Manigque, it was held that the mere
fact that the findings "were based entirely on the evidence for the prosecution without taking
into consideration or even mentioning the appellant's side in the controversy as shown by his

own testimony", would not vitiate the judgment. 13 If the court did not recite in the decision
the testimony of each witness for, or each item of evidence presented by, the defeated party, it
does not mean that the court has overlooked such testimony or such item of evidence. 14 At
any rate, the legal presumptions are that official duty has been regularly performed, and that
all the matters within an issue in a case were laid before the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make, maybe defined as "the
written statement of the ultimate facts as found by the court ... and essential to support the
decision and judgment rendered thereon". 16 They consist of the court's "conclusions" with
respect to the determinative facts in issue". 17 A question of law, upon the other hand, has
been declared as "one which does not call for an examination of the probative value of the
evidence presented by the parties." 18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment
of the Court of Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately
the business of this Court to alter the facts or to review the questions of fact. 20
With these guideposts, we now face the problem of whether the findings of fact of the Court of
Appeals support its judgment.
3. Was Carrascoso entitled to the first class seat he claims?
It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a
first class ticket. But petitioner asserts that said ticket did not represent the true and complete
intent and agreement of the parties; that said respondent knew that he did not have
confirmed reservations for first class on any specific flight, although he had tourist class
protection; that, accordingly, the issuance of a first class ticket was no guarantee that he
would have a first class ride, but that such would depend upon the availability of first class
seats.
These are matters which petitioner has thoroughly presented and discussed in its brief before
the Court of Appeals under its third assignment of error, which reads: "The trial court erred in
finding that plaintiff had confirmed reservations for, and a right to, first class seats on the
"definite" segments of his journey, particularly that from Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no
guarantee that the passenger to whom the same had been issued, would be accommodated in
the first-class compartment, for as in the case of plaintiff he had yet to make arrangements
upon arrival at every station for the necessary first-class reservation. We are not impressed by
such a reasoning. We cannot understand how a reputable firm like defendant airplane
company could have the indiscretion to give out tickets it never meant to honor at all. It
received the corresponding amount in payment of first-class tickets and yet it allowed the
passenger to be at the mercy of its employees. It is more in keeping with the ordinary course

of business that the company should know whether or riot the tickets it issues are to be
honored or not.22
Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's
contention, thus:
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no
question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C"
and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and
testified as follows:
Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx
xxx
xxx
Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael
Altonaga that although plaintiff paid for, and was issued a "first class" airplane ticket, the
ticket was subject to confirmation in Hongkong. The court cannot give credit to the testimony
of said witnesses. Oral evidence cannot prevail over written evidence, and plaintiff's Exhibits
"A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses, and clearly show that
the plaintiff was issued, and paid for, a first class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that
the reservation for a "first class" accommodation for the plaintiff was confirmed. The court
cannot believe that after such confirmation defendant had a verbal understanding with
plaintiff that the "first class" ticket issued to him by defendant would be subject to
confirmation in Hongkong. 23
We have heretofore adverted to the fact that except for a slight difference of a few pesos in the
amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was
affirmed by the Court of Appeals in all other respects. We hold the view that such a judgment
of affirmance has merged the judgment of the lower court. 24 Implicit in that affirmance is a
determination by the Court of Appeals that the proceeding in the Court of First Instance was
free from prejudicial error and "all questions raised by the assignments of error and all
questions that might have been raised are to be regarded as finally adjudicated against the
appellant". So also, the judgment affirmed "must be regarded as free from all error". 25 We
reached this policy construction because nothing in the decision of the Court of Appeals on
this point would suggest that its findings of fact are in any way at war with those of the trial
court. Nor was said affirmance by the Court of Appeals upon a ground or grounds different
from those which were made the basis of the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,

notwithstanding the fact that seat availability in specific flights is therein confirmed, then an
air passenger is placed in the hollow of the hands of an airline. What security then can a
passenger have? It will always be an easy matter for an airline aided by its employees, to
strike out the very stipulations in the ticket, and say that there was a verbal agreement to the
contrary. What if the passenger had a schedule to fulfill? We have long learned that, as a rule,
a written document speaks a uniform language; that spoken word could be notoriously
unreliable. If only to achieve stability in the relations between passenger and air carrier,
adherence to the ticket so issued is desirable. Such is the case here. The lower courts refused
to believe the oral evidence intended to defeat the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are facts upon
which the Court of Appeals predicated the finding that respondent Carrascoso had a first class
ticket and was entitled to a first class seat at Bangkok, which is a stopover in the Saigon to
Beirut leg of the flight. 27 We perceive no "welter of distortions by the Court of Appeals of
petitioner's statement of its position", as charged by petitioner. 28 Nor do we subscribe to
petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to
provoke an issue". 29 And this because, as petitioner states, Carrascoso went to see the
Manager at his office in Bangkok "to confirm my seat and because from Saigon I was told
again to see the Manager". 30 Why, then, was he allowed to take a first class seat in the plane
at Bangkok, if he had no seat? Or, if another had a better right to the seat?
4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim
is that Carrascoso's action is planted upon breach of contract; that to authorize an award for
moral damages there must be an averment of fraud or bad faith;31 and that the decision of the
Court of Appeals fails to make a finding of bad faith. The pivotal allegations in the complaint
bearing on this issue are:
3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a
valuable consideration, the latter acting as general agents for and in behalf of the defendant,
under which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff,
First Class passage on defendant's plane during the entire duration of plaintiff's tour of
Europe with Hongkong as starting point up to and until plaintiff's return trip to Manila, ... .
4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to
Bangkok, defendant furnished to the plaintiff First Class accommodation but only after
protestations, arguments and/or insistence were made by the plaintiff with defendant's
employees.
5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff
only Tourist Class accommodations from Bangkok to Teheran and/or Casablanca, ... the
plaintiff has been compelled by defendant's employees to leave the First Class
accommodation berths at Bangkok after he was already seated.

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and

embarrassments brought by defendant's breach of contract was forced to take a Pan American
World Airways plane on his return trip from Madrid to Manila.32
xxx
xxx
xxx
2. That likewise, as a result of defendant's failure to furnish First Class accommodations
aforesaid, plaintiff suffered inconveniences, embarrassments, and humiliations, thereby
causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation, and
the like injury, resulting in moral damages in the amount of P30,000.00. 33
xxx
xxx
xxx
The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish
plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg; Second,
That said contract was breached when petitioner failed to furnish first class transportation at
Bangkok; and Third, that there was bad faith when petitioner's employee compelled
Carrascoso to leave his first class accommodation berth "after he was already, seated" and to
take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments
and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and
social humiliation, resulting in moral damages. It is true that there is no specific mention of
the term bad faith in the complaint. But, the inference of bad faith is there, it may be drawn
from the facts and circumstances set forth therein. 34 The contract was averred to establish the
relation between the parties. But the stress of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel
placed petitioner on guard on what Carrascoso intended to prove: That while sitting in the
plane in Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat to a white
man; 35 and (b) evidence of bad faith in the fulfillment of the contract was presented without
objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether or
not there is sufficient averment in the complaint to justify an award for moral damages.
Deficiency in the complaint, if any, was cured by the evidence. An amendment thereof to
conform to the evidence is not even required. 36 On the question of bad faith, the Court of
Appeals declared:
That the plaintiff was forced out of his seat in the first class compartment of the plane
belonging to the defendant Air France while at Bangkok, and was transferred to the tourist
class not only without his consent but against his will, has been sufficiently established by
plaintiff in his testimony before the court, corroborated by the corresponding entry made by
the purser of the plane in his notebook which notation reads as follows:
"First-class passenger was forced to go to the tourist class against his will, and that the
captain refused to intervene",
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The

captain of the plane who was asked by the manager of defendant company at Bangkok to
intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever
contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to
present its manager at Bangkok to testify at the trial of the case, or yet to secure his
disposition; but defendant did neither. 37
The Court of appeals further stated
Neither is there evidence as to whether or not a prior reservation was made by the white man.
Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when all
the seats had already been taken, surely the plaintiff should not have been picked out as the
one to suffer the consequences and to be subjected to the humiliation and indignity of being
ejected from his seat in the presence of others. Instead of explaining to the white man the
improvidence committed by defendant's employees, the manager adopted the more drastic
step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the testimony of
defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters
"O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class.
Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the
Reservation Office of defendant, testified as follows:
"Q How does the person in the ticket-issuing office know what reservation the passenger has
arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)
In this connection, we quote with approval what the trial Judge has said on this point:
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right"
to the seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not
prove "any better", nay, any right on the part of the "white man" to the "First class" seat that
the plaintiff was occupying and for which he paid and was issued a corresponding "first class"
ticket.
If there was a justified reason for the action of the defendant's Manager in Bangkok, the
defendant could have easily proven it by having taken the testimony of the said Manager by
deposition, but defendant did not do so; the presumption is that evidence willfully suppressed
would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances,
the Court is constrained to find, as it does find, that the Manager of the defendant airline in
Bangkok not merely asked but threatened the plaintiff to throw him out of the plane if he did
not give up his "first class" seat because the said Manager wanted to accommodate, using the
words of the witness Ernesto G. Cuento, the "white man". 38
It is really correct to say that the Court of Appeals in the quoted portion first transcribed did
not use the term "bad faith". But can it be doubted that the recital of facts therein points to

bad faith? The manager not only prevented Carrascoso from enjoying his right to a first class
seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him
suffer the humiliation of having to go to the tourist class compartment - just to give way to
another passenger whose right thereto has not been established. Certainly, this is bad faith.
Unless, of course, bad faith has assumed a meaning different from what is understood in law.
For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or
with some motive of self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express finding of bad faith in the
judgment of the Court of First Instance, thus:
The evidence shows that the defendant violated its contract of transportation with plaintiff in
bad faith, with the aggravating circumstances that defendant's Manager in Bangkok went to
the extent of threatening the plaintiff in the presence of many passengers to have him thrown
out of the airplane to give the "first class" seat that he was occupying to, again using the words
of the witness Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to
accommodate, and the defendant has not proven that this "white man" had any "better right"
to occupy the "first class" seat that the plaintiff was occupying, duly paid for, and for which
the corresponding "first class" ticket was issued by the defendant to him.40
5. The responsibility of an employer for the tortious act of its employees need not be essayed.
It is well settled in law. 41 For the willful malevolent act of petitioner's manager, petitioner, his
employer, must answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the
provisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in kind and degree from any other
contractual relation. 43 And this, because of the relation which an air-carrier sustains with the
public. Its business is mainly with the travelling public. It invites people to avail of the
comforts and advantages it offers. The contract of air carriage, therefore, generates a relation
attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally,
could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by the
carrier's employees with kindness, respect, courtesy and due consideration. They are entitled
to be protected against personal misconduct, injurious language, indignities and abuses from
such employees. So it is, that any rule or discourteous conduct on the part of employees
towards a passenger gives the latter an action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of
contract and a tort, giving a right of action for its agent in the presence of third persons to

falsely notify her that the check was worthless and demand payment under threat of ejection,
though the language used was not insulting and she was not ejected." 46 And this, because,
although the relation of passenger and carrier is "contractual both in origin and nature"
nevertheless "the act that breaks the contract may be also a tort". 47 And in another case,
"Where a passenger on a railroad train, when the conductor came to collect his fare tendered
him the cash fare to a point where the train was scheduled not to stop, and told him that as
soon as the train reached such point he would pay the cash fare from that point to destination,
there was nothing in the conduct of the passenger which justified the conductor in using
insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of South
Carolina there held the carrier liable for the mental suffering of said passenger.1awphl.nt
Petitioner's contract with Carrascoso is one attended with public duty. The stress of
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a violation
of public duty by the petitioner air carrier a case of quasi-delict. Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus
Q You mentioned about an attendant. Who is that attendant and purser?
A When we left already that was already in the trip I could not help it. So one of the flight
attendants approached me and requested from me my ticket and I said, What for? and she
said, "We will note that you transferred to the tourist class". I said, "Nothing of that kind. That
is tantamount to accepting my transfer." And I also said, "You are not going to note anything
there because I am protesting to this transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg
room, I stood up and I went to the pantry that was next to me and the purser was there. He
told me, "I have recorded the incident in my notebook." He read it and translated it to me
because it was recorded in French "First class passenger was forced to go to the tourist
class against his will, and that the captain refused to intervene."
Mr. VALTE
I move to strike out the last part of the testimony of the witness because the best evidence
would be the notes. Your Honor.
COURT
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of Appeals that the purser made an entry in
his notebook reading "First class passenger was forced to go to the tourist class against his
will, and that the captain refused to intervene" is predicated upon evidence [Carrascoso's
testimony above] which is incompetent. We do not think so. The subject of inquiry is not the

entry, but the ouster incident. Testimony on the entry does not come within the proscription
of the best evidence rule. Such testimony is admissible. 49a
Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact
of the startling occurrence was still fresh and continued to be felt. The excitement had not as
yet died down. Statements then, in this environment, are admissible as part of the res gestae.
50
For, they grow "out of the nervous excitement and mental and physical condition of the
declarant". 51 The utterance of the purser regarding his entry in the notebook was
spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has
been guaranteed. 52 It thus escapes the operation of the hearsay rule. It forms part of the res
gestae.
At all events, the entry was made outside the Philippines. And, by an employee of petitioner.
It would have been an easy matter for petitioner to have contradicted Carrascoso's testimony.
If it were really true that no such entry was made, the deposition of the purser could have
cleared up the matter.
We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.
8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant
exemplary damages in contracts and quasi- contracts. The only condition is that defendant
should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner." 53
The manner of ejectment of respondent Carrascoso from his first class seat fits into this legal
precept. And this, in addition to moral damages.54
9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a
similar judgment for attorneys' fees. The least that can be said is that the courts below felt
that it is but just and equitable that attorneys' fees be given. 55 We do not intend to break faith
with the tradition that discretion well exercised as it was here should not be disturbed.
10. Questioned as excessive are the amounts decreed by both the trial court and the Court of
Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages,
and P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial
court. 56 The Court of Appeals did not interfere with the same. The dictates of good sense
suggest that we give our imprimatur thereto. Because, the facts and circumstances point to
the reasonableness thereof.57
On balance, we say that the judgment of the Court of Appeals does not suffer from reversible
error. We accordingly vote to affirm the same. Costs against petitioner. So ordered.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro,
JJ., concur.Bengzon, J.P., J., took no part.
G.R. No. L-9356
February 18, 1915
C. S. GILCHRIST, plaintiff-appellee,

vs.
E. A. CUDDY, ET AL., defendants.
JOSE FERNANDEZ ESPEJO and MARIANO ZALDARRIAGA, appellants.
C. Lozano for appellants. Bruce, Lawrence, Ross and Block for appellee.
TRENT, J.:
An appeal by the defendants, Jose Fernandez Espejo and Mariano Zaldarriaga, from a
judgment of the Court of First Instance of Iloilo, dismissing their cross-complaint upon the
merits for damages against the plaintiff for the alleged wrongful issuance of a mandatory and
a preliminary injunction.
Upon the application of the appellee an ex parte mandatory injunction was issued on the 22d
of May, 1913, directing the defendant, E. A. Cuddy, to send to the appellee a certain
cinematograph film called "Zigomar" in compliance with an alleged contract which had been
entered into between these two parties, and at the time an ex parte preliminary injunction
was issued restraining the appellants from receiving and exhibiting in their theater the
Zigomar until further orders of the court. On the 26th of that month the appellants appeared
and moved the court to dissolve the preliminary injunction. When the case was called for trial
on August 6, the appellee moved for the dismissal of the complaint "for the reason that there
is no further necessity for the maintenance of the injunction." The motion was granted
without objection as to Cuddy and denied as to the appellants in order to give them an
opportunity to prove that the injunction were wrongfully issued and the amount of damages
suffered by reason thereof.
The pertinent part of the trial court's findings of fact in this case is as follows:
It appears in this case that Cuddy was the owner of the film Zigomar and that on the 24th of
April he rented it to C. S. Gilchrist for a week for P125, and it was to be delivered on the 26th
of May, the week beginning that day. A few days prior to this Cuddy sent the money back to
Gilchrist, which he had forwarded to him in Manila, saying that he had made other
arrangements with his film. The other arrangements was the rental to these defendants
Espejo and his partner for P350 for the week and the injunction was asked by Gilchrist
against these parties from showing it for the week beginning the 26th of May.
It appears from the testimony in this case, conclusively, that Cuddy willfully violated his
contract, he being the owner of the picture, with Gilchrist because the defendants had offered
him more for the same period. Mr. Espejo at the trial on the permanent injunction on the
26th of May admitted that he knew that Cuddy was the owner of the film. He was trying to get
it through his agents Pathe Brothers in Manila. He is the agent of the same concern in Iloilo.
There is in evidence in this case on the trial today as well as on the 26th of May, letters
showing that the Pathe Brothers in Manila advised this man on two different occasions not to
contend for this film Zigomar because the rental price was prohibitive and assured him also

that he could not get the film for about six weeks. The last of these letters was written on the
26th of April, which showed conclusively that he knew they had to get this film from Cuddy
and from this letter that the agent in Manila could not get it, but he made Cuddy an offer
himself and Cuddy accepted it because he was paying about three times as much as he had
contracted with Gilchrist for. Therefore, in the opinion of this court, the defendants failed
signally to show the injunction against the defendant was wrongfully procured.
The appellants duly excepted to the order of the court denying their motion for new trial on
the ground that the evidence was insufficient to justify the decision rendered. There is lacking
from the record before us the deposition of the defendant Cuddy, which apparently throws
light upon a contract entered into between him and the plaintiff Gilchrist. The contents of this
deposition are discussed at length in the brief of the appellants and an endeavor is made to
show that no such contract was entered into. The trial court, which had this deposition before
it, found that there was a contract between Cuddy and Gilchrist. Not having the deposition in
question before us, it is impossible to say how strongly it militates against this findings of fact.
By a series of decisions we have construed section 143 and 497 (2) of the Code of Civil
Procedure to require the production of all the evidence in this court. This is the duty of the
appellant and, upon his failure to perform it, we decline to proceed with a review of the
evidence. In such cases we rely entirely upon the pleadings and the findings of fact of the trial
court and examine only such assigned errors as raise questions of law. (Ferrer vs. Neri
Abejuela, 9 Phil. Rep., 324; Valle vs. Galera, 10 Phil. Rep., 619; Salvacion vs. Salvacion, 13
Phil. Rep., 366; Breta vs. Smith, Bell & Co., 15 Phil. Rep., 446; Arroyo vs. Yulo, 18 Phil. Rep.,
236; Olsen & Co. vs. Matson, Lord & Belser Co., 19 Phil. Rep., 102; Blum vs. Barretto, 19 Phil.
Rep., 161; Cuyugan vs. Aguas, 19 Phil. Rep., 379; Mapa vs. Chaves, 20 Phil. Rep., 147; Mans
vs. Garry, 20 Phil. Rep., 134.) It is true that some of the more recent of these cases make
exceptions to the general rule. Thus, in Olsen & Co. vs. Matson, Lord & Belser Co., (19 Phil.
Rep., 102), that portion of the evidence before us tended to show that grave injustice might
result from a strict reliance upon the findings of fact contained in the judgment appealed
from. We, therefore, gave the appellant an opportunity to explain the omission. But we
required that such explanation must show a satisfactory reason for the omission, and that the
missing portion of the evidence must be submitted within sixty days or cause shown for
failing to do so. The other cases making exceptions to the rule are based upon peculiar
circumstances which will seldom arise in practice and need not here be set forth, for the
reason that they are wholly inapplicable to the present case. The appellants would be entitled
to indulgence only under the doctrine of the Olsen case. But from that portion of the record
before us, we are not inclined to believe that the missing deposition would be sufficient to
justify us in reversing the findings of fact of the trial court that the contract in question had
been made. There is in the record not only the positive and detailed testimony of Gilchrist to

this effect, but there is also a letter of apology from Cuddy to Gilchrist in which the former
enters into a lengthy explanation of his reasons for leasing the film to another party. The
latter could only have been called forth by a broken contract with Gilchrist to lease the film to
him. We, therefore, fail to find any reason for overlooking the omission of the defendants to
bring up the missing portion of the evidence and, adhering to the general rule above referred
to, proceed to examine the questions of law raised by the appellants.
From the above-quoted findings of fact it is clear that Cuddy, a resident of Manila, was the
owner of the "Zigomar;" that Gilchrist was the owner of a cinematograph theater in Iloilo;
that in accordance with the terms of the contract entered into between Cuddy and Gilchrist
the former leased to the latter the "Zigomar" for exhibition in his (Gilchrist's) theater for the
week beginning May 26, 1913; and that Cuddy willfully violate his contract in order that he
might accept the appellant's offer of P350 for the film for the same period. Did the appellants
know that they were inducing Cuddy to violate his contract with a third party when they
induced him to accept the P350? Espejo admitted that he knew that Cuddy was the owner of
the film. He received a letter from his agents in Manila dated April 26, assuring him that he
could not get the film for about six weeks. The arrangement between Cuddy and the
appellants for the exhibition of the film by the latter on the 26th of May were perfected after
April 26, so that the six weeks would include and extend beyond May 26. The appellants must
necessarily have known at the time they made their offer to Cuddy that the latter had booked
or contracted the film for six weeks from April 26. Therefore, the inevitable conclusion is that
the appellants knowingly induced Cuddy to violate his contract with another person. But
there is no specific finding that the appellants knew the identity of the other party. So we
must assume that they did not know that Gilchrist was the person who had contracted for the
film.
The appellants take the position that if the preliminary injunction had not been issued against
them they could have exhibited the film in their theater for a number of days beginning May
26, and could have also subleased it to other theater owners in the nearby towns and, by so
doing, could have cleared, during the life of their contract with Cuddy, the amount claimed as
damages. Taking this view of the case, it will be unnecessary for us to inquire whether the
mandatory injunction against Cuddy was properly issued or not. No question is raised with
reference to the issuance of that injunction.
The right on the part of Gilchrist to enter into a contract with Cuddy for the lease of the film
must be fully recognized and admitted by all. That Cuddy was liable in an action for damages
for the breach of that contract, there can be no doubt. Were the appellants likewise liable for
interfering with the contract between Gilchrist and Cuddy, they not knowing at the time the
identity of one of the contracting parties? The appellants claim that they had a right to do
what they did. The ground upon which the appellants base this contention is, that there was

no valid and binding contract between Cuddy and Gilchrist and that, therefore, they had a
right to compete with Gilchrist for the lease of the film, the right to compete being a
justification for their acts. If there had been no contract between Cuddy and Gilchrist this
defense would be tenable, but the mere right to compete could not justify the appellants in
intentionally inducing Cuddy to take away the appellee's contractual rights.
Chief Justice Wells in Walker vs. Cronin (107 Mass., 555), said: "Everyone has a right to enjoy
the fruits and advantages of his own enterprise, industry, skill and credit. He has no right to
be free from malicious and wanton interference, disturbance or annoyance. If disturbance or
loss come as a result of competition, or the exercise of like rights by others, it is damnum
absque injuria, unless some superior right by contract or otherwise is interfered with."
In Read vs. Friendly Society of Operative Stonemasons ([1902] 2 K. B., 88), Darling, J., said:
"I think the plaintiff has a cause of action against the defendants, unless the court is satisfied
that, when they interfered with the contractual rights of plaintiff, the defendants had a
sufficient justification for their interference; . . . for it is not a justification that `they acted
bona fide in the best interests of the society of masons,' i. e., in their own interests. Nor is it
enough that `they were not actuated by improper motives.' I think their sufficient justification
for interference with plaintiff's right must be an equal or superior right in themselves, and
that no one can legally excuse himself to a man, of whose contract he has procured the breach,
on the ground that he acted on a wrong understanding of his own rights, or without malice, or
bona fide, or in the best interests of himself, or even that he acted as an altruist, seeking only
good of another and careless of his own advantage." (Quoted with approval in Beekman vs.
Marsters, 195 Mass., 205.)
It is said that the ground on which the liability of a third party for interfering with a contract
between others rests, is that the interference was malicious. The contrary view, however, is
taken by the Supreme Court of the United States in the case of Angle vs. Railway Co. (151 U.
S., 1). The only motive for interference by the third party in that case was the desire to make a
profit to the injury of one of the parties of the contract. There was no malice in the case
beyond the desire to make an unlawful gain to the detriment of one of the contracting parties.
In the case at bar the only motive for the interference with the Gilchrist Cuddy contract on
the part of the appellants was a desire to make a profit by exhibiting the film in their theater.
There was no malice beyond this desire; but this fact does not relieve them of the legal
liability for interfering with that contract and causing its breach. It is, therefore, clear, under
the above authorities, that they were liable to Gilchrist for the damages caused by their acts,
unless they are relieved from such liability by reason of the fact that they did not know at the
time the identity of the original lessee (Gilchrist) of the film.
The liability of the appellants arises from unlawful acts and not from contractual obligations,
as they were under no such obligations to induce Cuddy to violate his contract with Gilchrist.

So that if the action of Gilchrist had been one for damages, it would be governed by chapter 2,
title 16, book 4 of the Civil Code. Article 1902 of that code provides that a person who, by act
or omission, causes damages to another when there is fault or negligence, shall be obliged to
repair the damage do done. There is nothing in this article which requires as a condition
precedent to the liability of a tort-feasor that he must know the identity of a person to whom
he causes damages. In fact, the chapter wherein this article is found clearly shows that no
such knowledge is required in order that the injured party may recover for the damage
suffered.
But the fact that the appellants' interference with the Gilchrist contract was actionable did not
of itself entitle Gilchrist to sue out an injunction against them. The allowance of this remedy
must be justified under section 164 of the Code of Civil Procedure, which specifies the
circumstance under which an injunction may issue. Upon the general doctrine of injunction
we said in Devesa vs. Arbes (13 Phil. Rep., 273):
An injunction is a "special remedy" adopted in that code (Act No. 190) from American
practice, and originally borrowed from English legal procedure, which was there issued by the
authority and under the seal of a court of equity, and limited, as in order cases where
equitable relief is sought, to cases where there is no "plain, adequate, and complete remedy at
law," which "will not be granted while the rights between the parties are undetermined,
except in extraordinary cases where material and irreparable injury will be done," which
cannot be compensated in damages, and where there will be no adequate remedy, and which
will not, as a rule, be granted, to take property out of the possession of one party and put it
into that of another whose title has not been established by law.
We subsequently affirmed the doctrine of the Devesa case in Palafox vs. Madamba (19 Phil.,
Rep., 444), and we take this occasion of again affirming it, believing, as we do, that the
indiscriminate use of injunctions should be discouraged.
Does the fact that the appellants did not know at the time the identity of the original lessee of
the film militate against Gilchrist's right to a preliminary injunction, although the appellant's
incurred civil liability for damages for such interference? In the examination of the
adjudicated cases, where in injunctions have been issued to restrain wrongful interference
with contracts by strangers to such contracts, we have been unable to find any case where this
precise question was involved, as in all of those cases which we have examined, the identity of
both of the contracting parties was known to the tort-feasors. We might say, however, that
this fact does not seem to have a controlling feature in those cases. There is nothing in section
164 of the Code of Civil Procedure which indicates, even remotely, that before an injunction
may issue restraining the wrongful interference with contrast by strangers, the strangers must
know the identity of both parties. It would seem that this is not essential, as injunctions
frequently issue against municipal corporations, public service corporations, public officers,

and others to restrain the commission of acts which would tend to injuriously affect the rights
of person whose identity the respondents could not possibly have known beforehand. This
court has held that in a proper case injunction will issue at the instance of a private citizen to
restrain ultra vires acts of public officials. (Severino vs. Governor-General, 16 Phil. Rep.,
366.) So we proceed to the determination of the main question of whether or not the
preliminary injunction ought to have been issued in this case.
As a rule, injunctions are denied to those who have an adequate remedy at law. Where the
choice is between the ordinary and the extraordinary processes of law, and the former are
sufficient, the rule will not permit the use of the latter. (In re Debs, 158 U. S., 564.) If the
injury is irreparable, the ordinary process is inadequate. In Wahle vs. Reinbach (76 Ill., 322),
the supreme court of Illinois approved a definition of the term "irreparable injury" in the
following language: "By `irreparable injury' is not meant such injury as is beyond the
possibility of repair, or beyond possible compensation in damages, nor necessarily great
injury or great damage, but that species of injury, whether great or small, that ought not to be
submitted to on the one hand or inflicted on the other; and, because it is so large on the one
hand, or so small on the other, is of such constant and frequent recurrence that no fair or
reasonable redress can be had therefor in a court of law." (Quoted with approval in Nashville
R. R. Co. vs. McConnell, 82 Fed., 65.)
The case at bar is somewhat novel, as the only contract which was broken was that between
Cuddy and Gilchrist, and the profits of the appellee depended upon the patronage of the
public, for which it is conceded the appellants were at liberty to complete by all fair does not
deter the application of remarked in the case of the "ticket scalpers" (82 Fed., 65), the novelty
of the facts does not deter the application of equitable principles. This court takes judicial
notice of the general character of a cinematograph or motion-picture theater. It is a quite
modern form of the play house, wherein, by means of an apparatus known as a
cinematograph or cinematograph, a series of views representing closely successive phases of a
moving object, are exhibited in rapid sequence, giving a picture which, owing to the
persistence of vision, appears to the observer to be in continuous motion. (The Encyclopedia
Britanica, vol. 6, p. 374.) The subjects which have lent themselves to the art of the
photographer in this manner have increased enormously in recent years, as well as have the
places where such exhibition are given. The attendance, and, consequently, the receipts, at
one of these cinematograph or motion-picture theaters depends in no small degree upon the
excellence of the photographs, and it is quite common for the proprietor of the theater to
secure an especially attractive exhibit as his "feature film" and advertise it as such in order to
attract the public. This feature film is depended upon to secure a larger attendance that if its
place on the program were filled by other films of mediocre quality. It is evident that the
failure to exhibit the feature film will reduce the receipts of the theater.

Hence, Gilchrist was facing the immediate prospect of diminished profits by reason of the fact
that the appellants had induced Cuddy to rent to them the film Gilchrist had counted upon as
his feature film. It is quite apparent that to estimate with any decree of accuracy the damages
which Gilchrist would likely suffer from such an event would be quite difficult if not
impossible. If he allowed the appellants to exhibit the film in Iloilo, it would be useless for
him to exhibit it again, as the desire of the public to witness the production would have been
already satisfied. In this extremity, the appellee applied for and was granted, as we have
indicated, a mandatory injunction against Cuddy requiring him to deliver the Zigomar to
Gilchrist, and a preliminary injunction against the appellants restraining them from
exhibiting that film in their theater during the weeks he (Gilchrist) had a right to exhibit it.
These injunction saved the plaintiff harmless from damages due to the unwarranted
interference of the defendants, as well as the difficult task which would have been set for the
court of estimating them in case the appellants had been allowed to carry out their illegal
plans. As to whether or not the mandatory injunction should have been issued, we are not, as
we have said, called upon to determine. So far as the preliminary injunction issued against the
appellants is concerned, which prohibited them from exhibiting the Zigomar during the week
which Gilchrist desired to exhibit it, we are of the opinion that the circumstances justified the
issuance of that injunction in the discretion of the court.
We are not lacking in authority to support our conclusion that the court was justified in
issuing the preliminary injunction against the appellants. Upon the precise question as to
whether injunction will issue to restrain wrongful interference with contracts by strangers to
such contracts, it may be said that courts in the United States have usually granted such relief
where the profits of the injured person are derived from his contractual relations with a large
and indefinite number of individuals, thus reducing him to the necessity of proving in an
action against the tort-feasor that the latter was responsible in each case for the broken
contract, or else obliging him to institute individual suits against each contracting party and
so exposing him to a multiplicity of suits. Sperry & Hutchinson Co. vs. Mechanics' Clothing
Co. (128 Fed., 800); Sperry & Hutchinson Co. vs. Louis Weber & Co. (161 Fed., 219); Sperry &
Hutchinson Co. vs. Pommer (199 Fed., 309); were all cases wherein the respondents were
inducing retail merchants to break their contracts with the company for the sale of the latters'
trading stamps. Injunction issued in each case restraining the respondents from interfering
with such contracts.
In the case of the Nashville R. R. Co. vs. McConnell (82 Fed., 65), the court, among other
things, said: "One who wrongfully interferes in a contract between others, and, for the
purpose of gain to himself induces one of the parties to break it, is liable to the party injured
thereby; and his continued interference may be ground for an injunction where the injuries
resulting will be irreparable."

In Hamby & Toomer vs. Georgia Iron & Coal Co. (127 Ga., 792), it appears that the
respondents were interfering in a contract for prison labor, and the result would be, if they
were successful, the shutting down of the petitioner's plant for an indefinite time. The court
held that although there was no contention that the respondents were insolvent, the trial
court did not abuse its discretion in granting a preliminary injunction against the
respondents.
In Beekman vs. Marsters (195 Mass., 205), the plaintiff had obtained from the Jamestown
Hotel Corporation, conducting a hotel within the grounds of the Jamestown Exposition, a
contract whereby he was made their exclusive agent for the New England States to solicit
patronage for the hotel. The defendant induced the hotel corporation to break their contract
with the plaintiff in order to allow him to act also as their agent in the New England States.
The court held that an action for damages would not have afforded the plaintiff adequate
relief, and that an injunction was proper compelling the defendant to desist from further
interference with the plaintiff's exclusive contract with the hotel company.
In Citizens' Light, Heat & Power Co. vs. Montgomery Light & Water Power Co. (171 Fed., 553),
the court, while admitting that there are some authorities to the contrary, held that the
current authority in the United States and England is that:
The violation of a legal right committed knowingly is a cause of action, and that it is a
violation of a legal right to interfere with contractual relations recognized by law, if there be
no sufficient justification for the interference. (Quinn vs. Leatham, supra, 510; Angle vs.
Chicago, etc., Ry. Co., 151 U. S., 1; 14 Sup. Ct., 240; 38 L. Ed., 55; Martens vs. Reilly, 109 Wis.,
464, 84 N. W., 840; Rice vs. Manley, 66 N. Y., 82; 23 Am. Rep., 30; Bitterman vs. L. & N. R.
R. Co., 207 U. S., 205; 28 Sup. Ct., 91; 52 L. Ed., 171; Beekman vs. Marsters, 195 Mass., 205;
80 N. E., 817; 11 L. R. A. [N. S.] 201; 122 Am. St. Rep., 232; South Wales Miners' Fed. vs.
Glamorgan Coal Co., Appeal Cases, 1905, p. 239.)
See also Nims on Unfair Business Competition, pp. 351- 371.
In 3 Elliot on Contracts, section 2511, it is said: "Injunction is the proper remedy to prevent a
wrongful interference with contract by strangers to such contracts where the legal remedy is
insufficient and the resulting injury is irreparable. And where there is a malicious interference
with lawful and valid contracts a permanent injunction will ordinarily issue without proof of
express malice. So, an injunction may be issued where the complainant to break their
contracts with him by agreeing to indemnify who breaks his contracts of employment may be
adjoined from including other employees to break their contracts and enter into new
contracts with a new employer of the servant who first broke his contract. But the remedy by
injunction cannot be used to restrain a legitimate competition, though such competition
would involve the violation of a contract. Nor will equity ordinarily enjoin employees who
have quit the service of their employer from attempting by proper argument to persuade

others from taking their places so long as they do not resort to force or intimidations on
obstruct the public thoroughfares."
Beekman vs. Marster, supra, is practically on all fours with the case at bar in that there was
only one contract in question and the profits of the injured person depended upon the
patronage of the public. Hamby & Toomer vs. Georgia Iron & Coal Co., supra, is also similar
to the case at bar in that there was only one contract, the interference of which was stopped by
injunction.
For the foregoing reasons the judgment is affirmed, with costs, against the appellants.
Arellano, C.J., Torres, Carson and Araullo, JJ., concur.
Separate Opinions
MORELAND, J., concurring:
The court seems to be of the opinion that the action is one for a permanent injunction;
whereas, under my view of the case, it is one for specific performance. The facts are simple. C.
S. Gilchrist, the plaintiff, proprietor of the Eagle Theater of Iloilo, contracted with E. A.
Cuddy, one of the defendants, of Manila, for a film entitled "Zigomar or Eelskin, 3d series," to
be exhibited in his theater in Iloilo during the week beginning May 26, 1913. Later, the
defendants Espejo and Zaldarriaga, who were also operating a theater in Iloilo, representing
Pathe Freres, also obtained from Cuddy a contract for the exhibition of the film aforesaid in
their theater in Iloilo during the same week.
The plaintiff commenced this action against Cuddy and the defendants Espejo and
Zaldarriaga for the specific performance of the contract with Cuddy. The complaint prays
"that the court, by a mandatory injunction, order Cuddy to deliver, on the 24th of May, 1913,
in accordance with the aforesaid contract, the said film 'Zigomar, 3d series, or Eelskin,' to the
plaintiff Gilchrist, in accordance with the terms of the agreement, so that plaintiff can exhibit
the same during the last week beginning May 26, 1913, in the Eagle Theater, in Iloilo; that the
court issue a preliminary injunction against the defendants Espejo and Zaldarriaga
prohibiting them from receiving, exhibiting, or using said film in Iloilo during the last week of
May, 1913, or at any other time prior to the delivery to the plaintiff ; that, on the trial, said
injunction be made perpetual and that Cuddy be ordered and commanded to specifically
perform his contract with the plaintiff ."
On the filing of the complaint the plaintiff made an application for a mandatory injunction
compelling the defendant Cuddy to deliver to plaintiff the film in question by mailing it to him
from Manila on the 24th of May so that it would reach Iloilo for exhibition on the 26th; and
for a preliminary restraining order against the order two defendants prohibiting them from
receiving or exhibiting the said film prior to its exhibition by plaintiff.
The court, on this application, entered an order which provided that Cuddy should "not send

said film 'Zigomar, 3d series, or Eelskin,' to the defendants Espejo and Zaldarriaga and that
he should send it to the plaintiff, Gilchrist, on the 24th day of May, 1913, in the mail for
Iloilo," This order was duly served on the defendants, including Cuddy, in whose possession
the film still was, and, in compliance therewith Cuddy mailed the film to the plaintiff at Iloilo
on the 24th of May. The latter duly received it and exhibited it without molestation during the
week beginning the 26th of May in accordance with the contract which he claimed to have
made with Cuddy.
The defendants Espejo and Zaldarriaga having received due notice of the issuance of the
mandatory injunction and restraining order of the 22d of May, appeared before the court on
the 26th of May and moved that the court vacate so much of the order as prohibited them
from receiving and exhibiting the film. In other words, while the order of the 22d of May was
composed of two parts, one a mandatory order for immediate specific performance of the
plaintiff's contract with the defendant Cuddy, and the other a preliminary restraining order
directed to Espejo and Zaldarriaga prohibiting them from receiving and exhibiting the film
during the week beginning the 26th of May, their motion of the 26th of May referred
exclusively to the injunction against them and touched in no way that portion of the order
which required the immediate performance by Cuddy of his contract with Gilchrist. Indeed,
the defendants Espejo and Zaldarriaga did not even except to the order requiring Cuddy to
specifically perform his agreement with the plaintiff nor did they in any way make an
objection to or show their disapproval of it. It was not excepted to or appealed from and is not
before this court for review.
The motion of Espejo and Zaldarriaga to vacate the injunction restraining them from
receiving the film was denied on the 26th of May. After the termination of the week beginning
May 26th, and after the exhibition of the film by the plaintiff in accordance with the alleged
contract with Cuddy, the plaintiff came into court and moved that, in view of the fact that he
had already obtained all that he desired to obtain or could obtain by his action, namely, the
exhibition of the film in question during the week beginning May 26th, there was no reason
for continuing it and moved for its dismissal. To this motion Cuddy consented and the action
was dismissed as to him. But the other defendants objected to the dismissal of the action on
the ground that they desired to present to the court evidence showing the damages which they
had suffered by reason of the issuance of the preliminary injunction prohibiting them from
receiving and exhibiting the film in question during the week beginning May 26. The court
sustained their objection and declined to dismiss the action as to them, and, on the 8th of
August, heard the evidence as to damages. He denied defendants the relief asked for and
dismissed their claim for damages. They thereupon took an appeal from that order, and that
is the appeal which we have now before us and which is the subject of the opinion of the court
with which I am concurring.

We thus have this strange condition:

An action for specific performance of a contract to deliver a film for exhibition during a given
time. A preliminary mandatory injunction ordering the delivery of the film in accordance with
the contract. The delivery of the film in accordance with the preliminary mandatory
injunction. The actual exhibition of the film during the time specified in the contract. No
objection to the issuance of the mandatory injunction, to the delivery of the film, or to the
ground that the plaintiff had obtained full relief by means of the so-called preliminary remedy
by virtue of which the contract was actually specifically performed before the action was
tried. No objection or exception to the order requiring the specific performance of the
contract.
Under such conditions it is possible for the defendant Espejo and Zaldarriaga to secure
damages for the wrongful issuance of the preliminary injunction directed against them even
though it be admitted that it was erroneously issued and that there was no ground therefor
whatever? It seems to me that it is not. At the time this action was begun the film, as we have
seen, was in the possession of Cuddy and, while in his possession, he complied with a
command of the court to deliver it to plaintiff. In pursuance of that command he delivered it
to plaintiff, who used it during the time specified in his contract with Cuddy; or, in other
words, he made such use of it as he desired and then returned it to Cuddy. This order and the
delivery of the film under it were made in an action in which the defendants Espejo and
Zaldarriaga were parties, without objection on their part and without objection or exception
to the order. The film having been delivered to defendants' competitor, the plaintiff, under a
decree of the court to which they made no objection and took no exception and from which
they have not appealed, what injury can they show by reason of the injunction restraining
them from making use of the film? If they themselves, by their conduct, permitted the
plaintiff to make it impossible for them to gain possession of the film and to use it, then the
preliminary injunction produced no injury for the reason that no harm can result from
restraining a party from doing a thing which, without such restraint, it would be impossible
for him to do. Moreover, the order for the delivery of the film to plaintiff was a complete
determination of the rights of the parties to the film which, while the court had no right to
make, nevertheless, was valid and binding on all the parties, none of them objecting or taking
exception thereto. Being a complete determination of the rights of the parties to the action, it
should have been the first point attacked by the defendants, as it foreclosed them completely
and, if left in force, eliminating every defense. This order was made on May 22d and was not
excepted to or appealed from. On the 8th of August following the defendants appealed from
the order dismissing their claim to damages but the order for the delivery of the film to
plaintiff was final at that time and is now conclusive on this court.
Section 143 of the Code of Civil Procedure, providing for appeals by bill of exceptions,

provides that "upon the rendition of final judgment disposing of the action, either party shall
have the right to perfect a bill of exceptions for a review by the Supreme Court of all rulings,
orders, and judgment made in the action, to which the party has duly excepted at the time of
making such ruling, order, or judgment." While the order for the delivery of the film to
plaintiff was in one sense a preliminary order, it was in reality a final determination of the
rights of the parties to the film, as it ordered the delivery thereof to plaintiff for his use. If it
had been duly excepted to, its validity could have been attacked in an appeal from the final
judgment thereafter entered in the action. Not having been excepted to as required by the
section just referred to, it became final and conclusive on all the parties to the action, and
when, on the 8th day of August following, the defendants presented their claim for damages
based on the alleged wrongful issuance of a temporary restraining order, the whole
foundation of their claim had disappeared by virtue of the fact that the execution of the order
of the 22d of May had left nothing for them to litigate. The trial court, on the 8th of August,
would have been fully justified in refusing to hear the defendants on their claim for damages.
Their right thereto had been adjudicated on the 22d of May and that adjudication had been
duly put into execution without protest, objection or exception, and was, therefore, final and
conclusive on them on the 8th of August.
I have presented this concurring opinion in an attempt to prevent confusion, if any, which
might arise from the theory on which the court decides this case. It seems to me impossible
that the action can be one for a permanent injunction. The very nature of the case
demonstrates that a permanent injunction is out of the question. The only thing that plaintiff
desired was to be permitted to use the film for the week beginning the 26th of May. With the
termination of that week his rights expired. After that time Cuddy was perfectly free to turn
the film over to the defendants Espejo and Zaldarriaga for exhibition at any time. An
injunction permanently prohibiting the defendants from exhibiting the film in Iloilo would
have been unjustifiable, as it was something that plaintiff did not ask and did not want; and
would have been an invasion of the rights of Cuddy as, after the termination of the week
beginning May 26, he was at liberty, under his contract with plaintiff, to rent the film to the
defendants Espejo and Zaldarriaga and permit its exhibition in Iloilo at any time. The plaintiff
never asked to have defendants permanently enjoined from exhibiting the film in Iloilo and
no party to the action has suggested such thing.
The action is one for specific performance purely; and while the court granted plaintiff rights
which should have been granted only after a trial of the action, nevertheless, such right having
been granted before trial and none of the defendants having made objection or taken
exception thereto, and the order granting them having become final, such order became a
final determination of the action, by reason of the nature of the action itself, the rights of the
parties became thereby finally determined and the defendants Espejo and Zaldarriaga, being

parties to the action, were precluded from further litigation relative to the subject matter of
the controversy.
No damages are claimed by reason of the issuance of the mandatory injunction under which
the film was delivered to plaintiff and used by him during the week beginning the 26th of
May. While the opinion says in the first paragraph that the action is "for damages against the
plaintiff for the alleged wrongful issuance of a mandatory and preliminary injunction," the
opinion also says in a latter portion that "It will be unnecessary for us to inquire whether the
mandatory injunction against Cuddy was properly issued or not. No question is raised with
reference to the issuance of that injunction;" and still later it is also stated that "as to whether
or not the mandatory injunction should have been issued, we are not, as we have said, called
upon to determine." I repeat that no objection was made by the defendants to the issuance of
the mandatory injunction, no exception was taken to the order on which it was issued and no
appeal has been taken therefrom. That order is now final and conclusive and was at the time
this appeal was taken. That being so, the rights of the defendants were foreclosed thereby. The
defendants Espejo and Zaldarriaga cannot now be heard to say that they were damaged by the
issuance of the preliminary restraining injunction issued on the same day as the mandatory
injunction.
From what has been said it is clear, it seems to me, that the question of a breach of contract by
inducement, which is substantially the only question discussed and decided, is not in the case
in reality and, in my judgment, should not be touched upon. Courts will not proceed with a
litigation and discuss and decided question which might possibly be involved in the case when
it clearly appears that there remains nothing about which to litigate, the whole subject matter
of the original action having been settled and the parties having no real controversy to
present. At the time the defendants Espejo and Zaldarriaga offered their claim for damages
arising out of the wrongful issuance of the restraining order, there was nothing between them
and the plaintiff to litigate, the rightfulness of plaintiff's demand having already been finally
adjudicated and determined in the same action.

G.R. No. L-18805

August 14, 1967
THE BOARD OF LIQUIDATORS1 representing THE GOVERNMENT OF THE
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
HEIRS OF MAXIMO M. KALAW,2 JUAN BOCAR, ESTATE OF THE DECEASED
CASIMIRO GARCIA,3 and LEONOR MOLL, defendants-appellees.

Simeon M. Gopengco and Solicitor General for plaintiff-appellant.L. H. Hernandez, Emma

Quisumbing, Fernando and Quisumbing, Jr.; Ponce Enrile, Siguion Reyna, Montecillo and
Belo for defendants-appellees.
SANCHEZ, J.:
The National Coconut Corporation (NACOCO, for short) was chartered as a non-profit
governmental organization on May 7, 1940 by Commonwealth Act 518 avowedly for the
protection, preservation and development of the coconut industry in the Philippines. On
August 1, 1946, NACOCO's charter was amended [Republic Act 5] to grant that corporation
the express power "to buy, sell, barter, export, and in any other manner deal in, coconut,
copra, and dessicated coconut, as well as their by-products, and to act as agent, broker or
commission merchant of the producers, dealers or merchants" thereof. The charter
amendment was enacted to stabilize copra prices, to serve coconut producers by securing
advantageous prices for them, to cut down to a minimum, if not altogether eliminate, the
margin of middlemen, mostly aliens.4
General manager and board chairman was Maximo M. Kalaw; defendants Juan Bocar and
Casimiro Garcia were members of the Board; defendant Leonor Moll became director only on
December 22, 1947.
NACOCO, after the passage of Republic Act 5, embarked on copra trading activities. Amongst
the scores of contracts executed by general manager Kalaw are the disputed contracts, for the
delivery of copra, viz:
(a) July 30, 1947: Alexander Adamson & Co., for 2,000 long tons, $167.00: per ton, f. o. b.,
delivery: August and September, 1947. This contract was later assigned to Louis Dreyfus & Co.
(Overseas) Ltd.
(b) August 14, 1947: Alexander Adamson & Co., for 2,000 long tons $145.00 per long ton,
f.o.b., Philippine ports, to be shipped: September-October, 1947. This contract was also
assigned to Louis Dreyfus & Co. (Overseas) Ltd.
(c) August 22, 1947: Pacific Vegetable Co., for 3,000 tons, $137.50 per ton, delivery:
September, 1947.
(d) September 5, 1947: Spencer Kellog & Sons, for 1,000 long tons, $160.00 per ton, c.i.f., Los
Angeles, California, delivery: November, 1947.
(e) September 9, 1947: Franklin Baker Division of General Foods Corporation, for 1,500 long
tons, $164,00 per ton, c.i.f., New York, to be shipped in November, 1947.
(f) September 12, 1947: Louis Dreyfus & Co. (Overseas) Ltd., for 3,000 long tons, $154.00 per
ton, f.o.b., 3 Philippine ports, delivery: November, 1947.
(g) September 13, 1947: Juan Cojuangco, for 2,000 tons, $175.00 per ton, delivery: November
and December, 1947. This contract was assigned to Pacific Vegetable Co.
(h) October 27, 1947: Fairwood & Co., for 1,000 tons, $210.00 per short ton, c.i.f., Pacific

ports, delivery: December, 1947 and January, 1948. This contract was assigned to Pacific
Vegetable Co.
(i) October 28, 1947: Fairwood & Co., for 1,000 tons, $210.00 per short ton, c.i.f., Pacific
ports, delivery: January, 1948. This contract was assigned to Pacific Vegetable Co.
An unhappy chain of events conspired to deter NACOCO from fulfilling these contracts.
Nature supervened. Four devastating typhoons visited the Philippines: the first in October,
the second and third in November, and the fourth in December, 1947. Coconut trees
throughout the country suffered extensive damage. Copra production decreased. Prices
spiralled. Warehouses were destroyed. Cash requirements doubled. Deprivation of export
facilities increased the time necessary to accumulate shiploads of copra. Quick turnovers
became impossible, financing a problem.
When it became clear that the contracts would be unprofitable, Kalaw submitted them to the
board for approval. It was not until December 22, 1947 when the membership was completed.
Defendant Moll took her oath on that date. A meeting was then held. Kalaw made a full
disclosure of the situation, apprised the board of the impending heavy losses. No action was
taken on the contracts. Neither did the board vote thereon at the meeting of January 7, 1948
following. Then, on January 11, 1948, President Roxas made a statement that the NACOCO
head did his best to avert the losses, emphasized that government concerns faced the same
risks that confronted private companies, that NACOCO was recouping its losses, and that
Kalaw was to remain in his post. Not long thereafter, that is, on January 30, 1948, the board
met again with Kalaw, Bocar, Garcia and Moll in attendance. They unanimously approved the
contracts hereinbefore enumerated.
As was to be expected, NACOCO but partially performed the contracts, as follows:
Buyers

Tons Delivered

Pacific Vegetable Oil

2,386.45

Spencer Kellog

None

Franklin Baker

1,000

Louis Dreyfus

800

Louis Dreyfus (Adamson contract of July 30, 1947)

1,150

Louis Dreyfus (Adamson Contract of August 14, 1947)

1,755

TOTALS

7,091.45

The buyers threatened damage suits. Some of the claims were settled, viz: Pacific Vegetable
Oil Co., in copra delivered by NACOCO, P539,000.00; Franklin Baker Corporation,
P78,210.00; Spencer Kellog & Sons, P159,040.00.
But one buyer, Louis Dreyfus & Go. (Overseas) Ltd., did in fact sue before the Court of First
Instance of Manila, upon claims as follows: For the undelivered copra under the July 30
contract (Civil Case 4459); P287,028.00; for the balance on the August 14 contract (Civil Case
4398), P75,098.63; for that per the September 12 contract reduced to judgment (Civil Case
4322, appealed to this Court in L-2829), P447,908.40. These cases culminated in an out-ofcourt amicable settlement when the Kalaw management was already out. The corporation
thereunder paid Dreyfus P567,024.52 representing 70% of the total claims. With particular
reference to the Dreyfus claims, NACOCO put up the defenses that: (1) the contracts were
void because Louis Dreyfus & Co. (Overseas) Ltd. did not have license to do business here;
and (2) failure to deliver was due to force majeure, the typhoons. To project the utter
unreasonableness of this compromise, we reproduce in haec verba this finding below:
x x x However, in similar cases brought by the same claimant [Louis Dreyfus & Co. (Overseas)
Ltd.] against Santiago Syjuco for non-delivery of copra also involving a claim of P345,654.68
wherein defendant set up same defenses as above, plaintiff accepted a promise of P5,000.00
only (Exhs. 31 & 32 Heirs.) Following the same proportion, the claim of Dreyfus against
NACOCO should have been compromised for only P10,000.00, if at all. Now, why should
defendants be held liable for the large sum paid as compromise by the Board of Liquidators?
This is just a sample to show how unjust it would be to hold defendants liable for the
Undelivered
readiness with which the Board of Liquidators disposed of the NACOCO funds, although
there was much possibility of successfully resisting the claims, or at least settlement for
4,613.55
nominal sums like what happened in the Syjuco case.5
1,000All the settlements sum up to P1,343,274.52.
In this suit started in February, 1949, NACOCO seeks to recover the above sum of
500 P1,343,274.52 from general manager and board chairman Maximo M. Kalaw, and directors
Juan Bocar, Casimiro Garcia and Leonor Moll. It charges Kalaw with negligence under Article
2,2001902 of the old Civil Code (now Article 2176, new Civil Code); and defendant board members,
including Kalaw, with bad faith and/or breach of trust for having approved the contracts. The
850 fifth amended complaint, on which this case was tried, was filed on July 2, 1959. Defendants
resisted the action upon defenses hereinafter in this opinion to be discussed.
245 The lower court came out with a judgment dismissing the complaint without costs as well as
defendants' counterclaims, except that plaintiff was ordered to pay the heirs of Maximo Kalaw
the sum of P2,601.94 for unpaid salaries and cash deposit due the deceased Kalaw from

9,408.55

NACOCO.
Plaintiff appealed direct to this Court.
Plaintiff's brief did not, question the judgment on Kalaw's counterclaim for the sum of
P2,601.94.
Right at the outset, two preliminary questions raised before, but adversely decided by, the
court below, arrest our attention. On appeal, defendants renew their bid. And this, upon
established jurisprudence that an appellate court may base its decision of affirmance of the
judgment below on a point or points ignored by the trial court or in which said court was in
error.6
1. First of the threshold questions is that advanced by defendants that plaintiff Board of
Liquidators has lost its legal personality to continue with this suit.
Accepted in this jurisdiction are three methods by which a corporation may wind up its
affairs: (1) under Section 3, Rule 104, of the Rules of Court [which superseded Section 66 of
the Corporation Law]7 whereby, upon voluntary dissolution of a corporation, the court may
direct "such disposition of its assets as justice requires, and may appoint a receiver to collect
such assets and pay the debts of the corporation;" (2) under Section 77 of the Corporation
Law, whereby a corporation whose corporate existence is terminated, "shall nevertheless be
continued as a body corporate for three years after the time when it would have been so
dissolved, for the purpose of prosecuting and defending suits by or against it and of enabling
it gradually to settle and close its affairs, to dispose of and convey its property and to divide its
capital stock, but not for the purpose of continuing the business for which it was established;"
and (3) under Section 78 of the Corporation Law, by virtue of which the corporation, within
the three year period just mentioned, "is authorized and empowered to convey all of its
property to trustees for the benefit of members, stockholders, creditors, and others
interested."8
It is defendants' pose that their case comes within the coverage of the second method. They
reason out that suit was commenced in February, 1949; that by Executive Order 372, dated
November 24, 1950, NACOCO, together with other government-owned corporations, was
abolished, and the Board of Liquidators was entrusted with the function of settling and
closing its affairs; and that, since the three year period has elapsed, the Board of Liquidators
may not now continue with, and prosecute, the present case to its conclusion, because
Executive Order 372 provides in Section 1 thereof that
Sec.1. The National Abaca and Other Fibers Corporation, the National Coconut Corporation,
the National Tobacco Corporation, the National Food Producer Corporation and the former
enemy-owned or controlled corporations or associations, . . . are hereby abolished. The said
corporations shall be liquidated in accordance with law, the provisions of this Order, and/or
in such manner as the President of the Philippines may direct; Provided, however, That each

of the said corporations shall nevertheless be continued as a body corporate for a period of
three (3) years from the effective date of this Executive Order for the purpose of prosecuting
and defending suits by or against it and of enabling the Board of Liquidators gradually to
settle and close its affairs, to dispose of and, convey its property in the manner hereinafter
provided.
Citing Mr. Justice Fisher, defendants proceed to argue that even where it may be found
impossible within the 3 year period to reduce disputed claims to judgment, nonetheless,
"suits by or against a corporation abate when it ceases to be an entity capable of suing or
being sued" (Fisher, The Philippine Law of Stock Corporations, pp. 390-391). Corpus Juris
Secundum likewise is authority for the statement that "[t]he dissolution of a corporation ends
its existence so that there must be statutory authority for prolongation of its life even for
purposes of pending litigation"9 and that suit "cannot be continued or revived; nor can a valid
judgment be rendered therein, and a judgment, if rendered, is not only erroneous, but void
and subject to collateral attack." 10 So it is, that abatement of pending actions follows as a
matter of course upon the expiration of the legal period for liquidation, 11 unless the statute
merely requires a commencement of suit within the added time. 12 For, the court cannot
extend the time alloted by statute. 13
We, however, express the view that the executive order abolishing NACOCO and creating the
Board of Liquidators should be examined in context. The proviso in Section 1 of Executive
Order 372, whereby the corporate existence of NACOCO was continued for a period of three
years from the effectivity of the order for "the purpose of prosecuting and defending suits by
or against it and of enabling the Board of Liquidators gradually to settle and close its affairs,
to dispose of and convey its property in the manner hereinafter provided", is to be read not as
an isolated provision but in conjunction with the whole. So reading, it will be readily observed
that no time limit has been tacked to the existence of the Board of Liquidators and its function
of closing the affairs of the various government owned corporations, including NACOCO.
By Section 2 of the executive order, while the boards of directors of the various corporations
were abolished, their powers and functions and duties under existing laws were to be
assumed and exercised by the Board of Liquidators. The President thought it best to do away
with the boards of directors of the defunct corporations; at the same time, however, the
President had chosen to see to it that the Board of Liquidators step into the vacuum. And
nowhere in the executive order was there any mention of the lifespan of the Board of
Liquidators. A glance at the other provisions of the executive order buttresses our conclusion.
Thus, liquidation by the Board of Liquidators may, under section 1, proceed in accordance
with law, the provisions of the executive order, "and/or in such manner as the President of
the Philippines may direct." By Section 4, when any property, fund, or project is transferred
to any governmental instrumentality "for administration or continuance of any project," the

necessary funds therefor shall be taken from the corresponding special fund created in
Section 5. Section 5, in turn, talks of special funds established from the "net proceeds of the
liquidation" of the various corporations abolished. And by Section, 7, fifty per centum of the
fees collected from the copra standardization and inspection service shall accrue "to the
special fund created in section 5 hereof for the rehabilitation and development of the coconut
industry." Implicit in all these, is that the term of life of the Board of Liquidators is without
time limit. Contemporary history gives us the fact that the Board of Liquidators still exists as
an office with officials and numerous employees continuing the job of liquidation and
prosecution of several court actions.
Not that our views on the power of the Board of Liquidators to proceed to the final
determination of the present case is without jurisprudential support. The first judicial test
before this Court is National Abaca and Other Fibers Corporation vs. Pore, L-16779, August
16, 1961. In that case, the corporation, already dissolved, commenced suit within the threeyear extended period for liquidation. That suit was for recovery of money advanced to
defendant for the purchase of hemp in behalf of the corporation. She failed to account for that
money. Defendant moved to dismiss, questioned the corporation's capacity to sue. The lower
court ordered plaintiff to include as co-party plaintiff, The Board of Liquidators, to which the
corporation's liquidation was entrusted by Executive Order 372. Plaintiff failed to effect
inclusion. The lower court dismissed the suit. Plaintiff moved to reconsider. Ground:
excusable negligence, in that its counsel prepared the amended complaint, as directed, and
instructed the board's incoming and outgoing correspondence clerk, Mrs. Receda Vda. de
Ocampo, to mail the original thereof to the court and a copy of the same to defendant's
counsel. She mailed the copy to the latter but failed to send the original to the court. This
motion was rejected below. Plaintiff came to this Court on appeal. We there said that "the rule
appears to be well settled that, in the absence of statutory provision to the contrary, pending
actions by or against a corporation are abated upon expiration of the period allowed by law
for the liquidation of its affairs." We there said that "[o]ur Corporation Law contains no
provision authorizing a corporation, after three (3) years from the expiration of its lifetime, to
continue in its corporate name actions instituted by it within said period of three (3) years." 14
However, these precepts notwithstanding, we, in effect, held in that case that the Board of
Liquidators escapes from the operation thereof for the reason that "[o]bviously, the complete
loss of plaintiff's corporate existence after the expiration of the period of three (3) years for
the settlement of its affairs is what impelled the President to create a Board of Liquidators,
to continue the management of such matters as may then be pending." 15 We accordingly
directed the record of said case to be returned to the lower court, with instructions to admit
plaintiff's amended complaint to include, as party plaintiff, the Board of Liquidators.
Defendants' position is vulnerable to attack from another direction.

By Executive Order 372, the government, the sole stockholder, abolished NACOCO, and
placed its assets in the hands of the Board of Liquidators. The Board of Liquidators thus
became the trustee on behalf of the government. It was an express trust. The legal interest
became vested in the trustee the Board of Liquidators. The beneficial interest remained
with the sole stockholder the government. At no time had the government withdrawn the
property, or the authority to continue the present suit, from the Board of Liquidators. If for
this reason alone, we cannot stay the hand of the Board of Liquidators from prosecuting this
case to its final conclusion. 16 The provisions of Section 78 of the Corporation Law the third
method of winding up corporate affairs find application.
We, accordingly, rule that the Board of Liquidators has personality to proceed as: partyplaintiff in this case.
2. Defendants' second poser is that the action is unenforceable against the heirs of Kalaw.
Appellee heirs of Kalaw raised in their motion to dismiss, 17 which was overruled, and in their
nineteenth special defense, that plaintiff's action is personal to the deceased Maximo M.
Kalaw, and may not be deemed to have survived after his death. 18 They say that the
controlling statute is Section 5, Rule 87, of the 1940 Rules of Court. 19 which provides that
"[a]ll claims for money against the decedent, arising from contract, express or implied", must
be filed in the estate proceedings of the deceased. We disagree.
The suit here revolves around the alleged negligent acts of Kalaw for having entered into the
questioned contracts without prior approval of the board of directors, to the damage and
prejudice of plaintiff; and is against Kalaw and the other directors for having subsequently
approved the said contracts in bad faith and/or breach of trust." Clearly then, the present case
is not a mere action for the recovery of money nor a claim for money arising from contract.
The suit involves alleged tortious acts. And the action is embraced in suits filed "to recover
damages for an injury to person or property, real or personal", which survive. 20
The leading expositor of the law on this point is Aguas vs. Llemos, L-18107, August 30, 1962.
There, plaintiffs sought to recover damages from defendant Llemos. The complaint averred
that Llemos had served plaintiff by registered mail with a copy of a petition for a writ of
possession in Civil Case 4824 of the Court of First Instance at Catbalogan, Samar, with notice
that the same would be submitted to the Samar court on February 23, 1960 at 8:00 a.m.; that
in view of the copy and notice served, plaintiffs proceeded to the said court of Samar from
their residence in Manila accompanied by their lawyers, only to discover that no such petition
had been filed; and that defendant Llemos maliciously failed to appear in court, so that
plaintiffs' expenditure and trouble turned out to be in vain, causing them mental anguish and
undue embarrassment. Defendant died before he could answer the complaint. Upon leave of
court, plaintiffs amended their complaint to include the heirs of the deceased. The heirs
moved to dismiss. The court dismissed the complaint on the ground that the legal

representative, and not the heirs, should have been made the party defendant; and that,
anyway, the action being for recovery of money, testate or intestate proceedings should be
initiated and the claim filed therein. This Court, thru Mr. Justice Jose B. L. Reyes, there
declared:
Plaintiffs argue with considerable cogency that contrasting the correlated provisions of the
Rules of Court, those concerning claims that are barred if not filed in the estate settlement
proceedings (Rule 87, sec. 5) and those defining actions that survive and may be prosecuted
against the executor or administrator (Rule 88, sec. 1), it is apparent that actions for damages
caused by tortious conduct of a defendant (as in the case at bar) survive the death of the
latter. Under Rule 87, section 5, the actions that are abated by death are: (1) claims for funeral
expenses and those for the last sickness of the decedent; (2) judgments for money; and (3) "all
claims for money against the decedent, arising from contract express or implied." None of
these includes that of the plaintiffs-appellants; for it is not enough that the claim against the
deceased party be for money, but it must arise from "contract express or implied", and these
words (also used by the Rules in connection with attachments and derived from the common
law) were construed in Leung Ben vs. O'Brien, 38 Phil. 182, 189-194,
"to include all purely personal obligations other than those which have their source in delict
or tort."
Upon the other hand, Rule 88, section 1, enumerates actions that survive against a decedent's
executors or administrators, and they are: (1) actions to recover real and personal property
from the estate; (2) actions to enforce a lien thereon; and (3) actions to recover damages for
an injury to person or property. The present suit is one for damages under the last class, it
having been held that "injury to property" is not limited to injuries to specific property, but
extends to other wrongs by which personal estate is injured or diminished (Baker vs.
Crandall, 47 Am. Rep. 126; also 171 A.L.R., 1395). To maliciously cause a party to incur
unnecessary expenses, as charged in this case, is certainly injury to that party's property
(Javier vs. Araneta, L-4369, Aug. 31, 1953).
The ruling in the preceding case was hammered out of facts comparable to those of the
present. No cogent reason exists why we should break away from the views just expressed.
And, the conclusion remains: Action against the Kalaw heirs and, for the matter, against the
Estate of Casimiro Garcia survives.
The preliminaries out of the way, we now go to the core of the controversy.
3. Plaintiff levelled a major attack on the lower court's holding that Kalaw justifiedly entered
into the controverted contracts without the prior approval of the corporation's directorate.
Plaintiff leans heavily on NACOCO's corporate by-laws. Article IV (b), Chapter III thereof,
recites, as amongst the duties of the general manager, the obligation: "(b) To perform or
execute on behalf of the Corporation upon prior approval of the Board, all contracts necessary

and essential to the proper accomplishment for which the Corporation was organized."
Not of de minimis importance in a proper approach to the problem at hand, is the nature of a
general manager's position in the corporate structure. A rule that has gained acceptance
through the years is that a corporate officer "intrusted with the general management and
control of its business, has implied authority to make any contract or do any other act which
is necessary or appropriate to the conduct of the ordinary business of the corporation. 21 As
such officer, "he may, without any special authority from the Board of Directors perform all
acts of an ordinary nature, which by usage or necessity are incident to his office, and may bind
the corporation by contracts in matters arising in the usual course of business. 22
The problem, therefore, is whether the case at bar is to be taken out of the general concept of
the powers of a general manager, given the cited provision of the NACOCO by-laws requiring
prior directorate approval of NACOCO contracts.
The peculiar nature of copra trading, at this point, deserves express articulation. Ordinary in
this enterprise are copra sales for future delivery. The movement of the market requires that
sales agreements be entered into, even though the goods are not yet in the hands of the seller.
Known in business parlance as forward sales, it is concededly the practice of the trade. A
certain amount of speculation is inherent in the undertaking. NACOCO was much more
conservative than the exporters with big capital. This short-selling was inevitable at the time
in the light of other factors such as availability of vessels, the quantity required before being
accepted for loading, the labor needed to prepare and sack the copra for market. To NACOCO,
forward sales were a necessity. Copra could not stay long in its hands; it would lose weight, its
value decrease. Above all, NACOCO's limited funds necessitated a quick turnover. Copra
contracts then had to be executed on short notice at times within twenty-four hours. To be
appreciated then is the difficulty of calling a formal meeting of the board.
Such were the environmental circumstances when Kalaw went into copra trading.
Long before the disputed contracts came into being, Kalaw contracted by himself alone as
general manager for forward sales of copra. For the fiscal year ending June 30, 1947,
Kalaw signed some 60 such contracts for the sale of copra to divers parties. During that
period, from those copra sales, NACOCO reaped a gross profit of P3,631,181.48. So pleased
was NACOCO's board of directors that, on December 5, 1946, in Kalaw's absence, it voted to
grant him a special bonus "in recognition of the signal achievement rendered by him in
putting the Corporation's business on a self-sufficient basis within a few months after
assuming office, despite numerous handicaps and difficulties."
These previous contract it should be stressed, were signed by Kalaw without prior authority
from the board. Said contracts were known all along to the board members. Nothing was said
by them. The aforesaid contracts stand to prove one thing: Obviously, NACOCO board met
the difficulties attendant to forward sales by leaving the adoption of means to end, to the

sound discretion of NACOCO's general manager Maximo M. Kalaw.

Liberally spread on the record are instances of contracts executed by NACOCO's general
manager and submitted to the board after their consummation, not before. These agreements
were not Kalaw's alone. One at least was executed by a predecessor way back in 1940, soon
after NACOCO was chartered. It was a contract of lease executed on November 16, 1940 by
the then general manager and board chairman, Maximo Rodriguez, and A. Soriano y Cia., for
the lease of a space in Soriano Building On November 14, 1946, NACOCO, thru its general
manager Kalaw, sold 3,000 tons of copra to the Food Ministry, London, thru Sebastian
Palanca. On December 22, 1947, when the controversy over the present contract cropped up,
the board voted to approve a lease contract previously executed between Kalaw and Fidel
Isberto and Ulpiana Isberto covering a warehouse of the latter. On the same date, the board
gave its nod to a contract for renewal of the services of Dr. Manuel L. Roxas. In fact, also on
that date, the board requested Kalaw to report for action all copra contracts signed by him
"at the meeting immediately following the signing of the contracts." This practice was
observed in a later instance when, on January 7, 1948, the board approved two previous
contracts for the sale of 1,000 tons of copra each to a certain "SCAP" and a certain "GNAPO".
And more. On December 19, 1946, the board resolved to ratify the brokerage commission of
2% of Smith, Bell and Co., Ltd., in the sale of 4,300 long tons of copra to the French
Government. Such ratification was necessary because, as stated by Kalaw in that same
meeting, "under an existing resolution he is authorized to give a brokerage fee of only 1% on
sales of copra made through brokers." On January 15, 1947, the brokerage fee agreements of
1-1/2% on three export contracts, and 2% on three others, for the sale of copra were approved
by the board with a proviso authorizing the general manager to pay a commission up to the
amount of 1-1/2% "without further action by the Board." On February 5, 1947, the brokerage
fee of 2% of J. Cojuangco & Co. on the sale of 2,000 tons of copra was favorably acted upon by
the board. On March 19, 1947, a 2% brokerage commission was similarly approved by the
board for Pacific Trading Corporation on the sale of 2,000 tons of copra.
It is to be noted in the foregoing cases that only the brokerage fee agreements were passed
upon by the board, not the sales contracts themselves. And even those fee agreements were
submitted only when the commission exceeded the ceiling fixed by the board.
Knowledge by the board is also discernible from other recorded instances.1wph1.t
When the board met on May 10, 1947, the directors discussed the copra situation: There was a
slow downward trend but belief was entertained that the nadir might have already been
reached and an improvement in prices was expected. In view thereof, Kalaw informed the
board that "he intends to wait until he has signed contracts to sell before starting to buy
copra."23
In the board meeting of July 29, 1947, Kalaw reported on the copra price conditions then

current: The copra market appeared to have become fairly steady; it was not expected that
copra prices would again rise very high as in the unprecedented boom during January-April,
1947; the prices seemed to oscillate between $140 to $150 per ton; a radical rise or decrease
was not indicated by the trends. Kalaw continued to say that "the Corporation has been
closing contracts for the sale of copra generally with a margin of P5.00 to P7.00 per hundred
kilos." 24
We now lift the following excerpts from the minutes of that same board meeting of July 29,
1947:
521. In connection with the buying and selling of copra the Board inquired whether it is the
practice of the management to close contracts of sale first before buying. The General
Manager replied that this practice is generally followed but that it is not always possible to do
so for two reasons:
(1) The role of the Nacoco to stabilize the prices of copra requires that it should not cease
buying even when it does not have actual contracts of sale since the suspension of buying by
the Nacoco will result in middlemen taking advantage of the temporary inactivity of the
Corporation to lower the prices to the detriment of the producers.
(2) The movement of the market is such that it may not be practical always to wait for the
consummation of contracts of sale before beginning to buy copra.
The General Manager explained that in this connection a certain amount of speculation is
unavoidable. However, he said that the Nacoco is much more conservative than the other big
exporters in this respect.25
Settled jurisprudence has it that where similar acts have been approved by the directors as a
matter of general practice, custom, and policy, the general manager may bind the company
without formal authorization of the board of directors. 26 In varying language, existence of
such authority is established, by proof of the course of business, the usage and practices of
the company and by the knowledge which the board of directors has, or must be presumed to
have, of acts and doings of its subordinates in and about the affairs of the corporation. 27 So
also,
x x x authority to act for and bind a corporation may be presumed from acts of recognition in
other instances where the power was in fact exercised. 28
x x x Thus, when, in the usual course of business of a corporation, an officer has been allowed
in his official capacity to manage its affairs, his authority to represent the corporation may be
implied from the manner in which he has been permitted by the directors to manage its
business.29
In the case at bar, the practice of the corporation has been to allow its general manager to
negotiate and execute contracts in its copra trading activities for and in NACOCO's behalf
without prior board approval. If the by-laws were to be literally followed, the board should

give its stamp of prior approval on all corporate contracts. But that board itself, by its acts and
through acquiescence, practically laid aside the by-law requirement of prior approval.
Under the given circumstances, the Kalaw contracts are valid corporate acts.
4. But if more were required, we need but turn to the board's ratification of the contracts in
dispute on January 30, 1948, though it is our (and the lower court's) belief that ratification
here is nothing more than a mere formality.
Authorities, great in number, are one in the idea that "ratification by a corporation of an
unauthorized act or contract by its officers or others relates back to the time of the act or
contract ratified, and is equivalent to original authority;" and that " [t]he corporation and the
other party to the transaction are in precisely the same position as if the act or contract had
been authorized at the time." 30 The language of one case is expressive: "The adoption or
ratification of a contract by a corporation is nothing more or less than the making of an
original contract. The theory of corporate ratification is predicated on the right of a
corporation to contract, and any ratification or adoption is equivalent to a grant of prior
authority." 31
Indeed, our law pronounces that "[r]atification cleanses the contract from all its defects from
the moment it was constituted." 32 By corporate confirmation, the contracts executed by
Kalaw are thus purged of whatever vice or defect they may have. 33
In sum, a case is here presented whereunder, even in the face of an express by-law
requirement of prior approval, the law on corporations is not to be held so rigid and inflexible
as to fail to recognize equitable considerations. And, the conclusion inevitably is that the
embattled contracts remain valid.
5. It would be difficult, even with hostile eyes, to read the record in terms of "bad faith and/or
breach of trust" in the board's ratification of the contracts without prior approval of the board.
For, in reality, all that we have on the government's side of the scale is that the board knew
that the contracts so confirmed would cause heavy losses.
As we have earlier expressed, Kalaw had authority to execute the contracts without need of
prior approval. Everybody, including Kalaw himself, thought so, and for a long time. Doubts
were first thrown on the way only when the contracts turned out to be unprofitable for
NACOCO.
Rightfully had it been said that bad faith does not simply connote bad judgment or
negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of
wrong; it means breach of a known duty thru some motive or interest or ill will; it partakes of
the nature of fraud.34 Applying this precept to the given facts herein, we find that there was no
"dishonest purpose," or "some moral obliquity," or "conscious doing of wrong," or "breach of
a known duty," or "Some motive or interest or ill will" that "partakes of the nature of fraud."
Nor was it even intimated here that the NACOCO directors acted for personal reasons, or to

serve their own private interests, or to pocket money at the expense of the corporation. 35 We
have had occasion to affirm that bad faith contemplates a "state of mind affirmatively
operating with furtive design or with some motive of self-interest or ill will or for ulterior
purposes." 36 Briggs vs. Spaulding, 141 U.S. 132, 148-149, 35 L. ed. 662, 669, quotes with
approval from Judge Sharswood (in Spering's App., 71 Pa. 11), the following: "Upon a close
examination of all the reported cases, although there are many dicta not easily reconcilable,
yet I have found no judgment or decree which has held directors to account, except when they
have themselves been personally guilty of some fraud on the corporation, or have known and
connived at some fraud in others, or where such fraud might have been prevented had they
given ordinary attention to their duties. . . ." Plaintiff did not even dare charge its defendantdirectors with any of these malevolent acts.
Obviously, the board thought that to jettison Kalaw's contracts would contravene basic
dictates of fairness. They did not think of raising their voice in protest against past contracts
which brought in enormous profits to the corporation. By the same token, fair dealing
disagrees with the idea that similar contracts, when unprofitable, should not merit the same
treatment. Profit or loss resulting from business ventures is no justification for turning one's
back on contracts entered into. The truth, then, of the matter is that in the words of the trial
court the ratification of the contracts was "an act of simple justice and fairness to the
general manager and the best interest of the corporation whose prestige would have been
seriously impaired by a rejection by the board of those contracts which proved
disadvantageous." 37
The directors are not liable." 38
6. To what then may we trace the damage suffered by NACOCO.
The facts yield the answer. Four typhoons wreaked havoc then on our copra-producing
regions. Result: Copra production was impaired, prices spiralled, warehouses destroyed.
Quick turnovers could not be expected. NACOCO was not alone in this misfortune. The record
discloses that private traders, old, experienced, with bigger facilities, were not spared; also
suffered tremendous losses. Roughly estimated, eleven principal trading concerns did run
losses to about P10,300,000.00. Plaintiff's witness Sisenando Barretto, head of the copra
marketing department of NACOCO, observed that from late 1947 to early 1948 "there were
many who lost money in the trade." 39 NACOCO was not immune from such usual business
risk.
The typhoons were known to plaintiff. In fact, NACOCO resisted the suits filed by Louis
Dreyfus & Co. by pleading in its answers force majeure as an affirmative defense and there
vehemently asserted that "as a result of the said typhoons, extensive damage was caused to
the coconut trees in the copra producing regions of the Philippines and according to estimates
of competent authorities, it will take about one year until the coconut producing regions will

be able to produce their normal coconut yield and it will take some time until the price of
copra will reach normal levels;" and that "it had never been the intention of the contracting
parties in entering into the contract in question that, in the event of a sharp rise in the price of
copra in the Philippine market produce by force majeure or by caused beyond defendant's
control, the defendant should buy the copra contracted for at exorbitant prices far beyond the
buying price of the plaintiff under the contract." 40
A high regard for formal judicial admissions made in court pleadings would suffice to deter us
from permitting plaintiff to stray away therefrom, to charge now that the damage suffered
was because of Kalaw's negligence, or for that matter, by reason of the board's ratification of
the contracts. 41
Indeed, were it not for the typhoons, 42 NACOCO could have, with ease, met its contractual
obligations. Stock accessibility was no problem. NACOCO had 90 buying agencies spread
throughout the islands. It could purchase 2,000 tons of copra a day. The various contracts
involved delivery of but 16,500 tons over a five-month period. Despite the typhoons,
NACOCO was still able to deliver a little short of 50% of the tonnage required under the
contracts.
As the trial court correctly observed, this is a case of damnum absque injuria. Conjunction of
damage and wrong is here absent. There cannot be an actionable wrong if either one or the
other is wanting. 43
7. On top of all these, is that no assertion is made and no proof is presented which would link
Kalaw's acts ratified by the board to a matrix for defraudation of the government. Kalaw
is clear of the stigma of bad faith. Plaintiff's corporate counsel 44 concedes that Kalaw all
along thought that he had authority to enter into the contracts, that he did so in the best
interests of the corporation; that he entered into the contracts in pursuance of an overall
policy to stabilize prices, to free the producers from the clutches of the middlemen. The prices
for which NACOCO contracted in the disputed agreements, were at a level calculated to
produce profits and higher than those prevailing in the local market. Plaintiff's witness,
Barretto, categorically stated that "it would be foolish to think that one would sign (a)
contract when you are going to lose money" and that no contract was executed "at a price
unsafe for the Nacoco." 45 Really, on the basis of prices then prevailing, NACOCO envisioned a
profit of around P752,440.00. 46
Kalaw's acts were not the result of haphazard decisions either. Kalaw invariably consulted
with NACOCO's Chief Buyer, Sisenando Barretto, or the Assistant General Manager. The
dailies and quotations from abroad were guideposts to him.
Of course, Kalaw could not have been an insurer of profits. He could not be expected to
predict the coming of unpredictable typhoons. And even as typhoons supervened Kalaw was
not remissed in his duty. He exerted efforts to stave off losses. He asked the Philippine

National Bank to implement its commitment to extend a P400,000.00 loan. The bank did not
release the loan, not even the sum of P200,000.00, which, in October, 1947, was approved by
the bank's board of directors. In frustration, on December 12, 1947, Kalaw turned to the
President, complained about the bank's short-sighted policy. In the end, nothing came out of
the negotiations with the bank. NACOCO eventually faltered in its contractual obligations.
That Kalaw cannot be tagged with crassa negligentia or as much as simple negligence, would
seem to be supported by the fact that even as the contracts were being questioned in Congress
and in the NACOCO board itself, President Roxas defended the actuations of Kalaw. On
December 27, 1947, President Roxas expressed his desire "that the Board of Directors should
reelect Hon. Maximo M. Kalaw as General Manager of the National Coconut Corporation." 47
And, on January 7, 1948, at a time when the contracts had already been openly disputed, the
board, at its regular meeting, appointed Maximo M. Kalaw as acting general manager of the
corporation.
Well may we profit from the following passage from Montelibano vs. Bacolod-Murcia Milling
Co., Inc., L-15092, May 18, 1962:
"They (the directors) hold such office charged with the duty to act for the corporation
according to their best judgment, and in so doing they cannot be controlled in the reasonable
exercise and performance of such duty. Whether the business of a corporation should be
operated at a loss during a business depression, or closed down at a smaller loss, is a purely
business and economic problem to be determined by the directors of the corporation, and not
by the court. It is a well known rule of law that questions of policy of management are left
solely to the honest decision of officers and directors of a corporation, and the court is without
authority to substitute its judgment for the judgment of the board of directors; the board is
the business manager of the corporation, and so long as it acts in good faith its orders are
not reviewable by the courts." (Fletcher on Corporations, Vol. 2, p. 390.) 48
Kalaw's good faith, and that of the other directors, clinch the case for defendants. 49
Viewed in the light of the entire record, the judgment under review must be, as it is hereby,
affirmed.
Without costs. So ordered.
G.R. No. 83589
March 13, 1991
RAMON FAROLAN as ACTING COMMISSIONER OF CUSTOMS, and
GUILLERMO PARAYNO, as CHIEF OF CUSTOM INTELLIGENCE and
INVESTIGATION DIVISION, petitioners,
vs.
SOLMAC MARKETING CORPORATION and COURT OF APPEALS, respondents.

Dakila F. Castro & Associates for private respondent.

SARMIENTO, J.:
This petition for review on certiorari, instituted by the Solicitor General on behalf of the
public officers-petitioners, seek the nullification and setting aside of the Resolution 1 dated
May 25, 1988 of the Court of Appeals in CA-G.R. No. SP-10509, entitled "Solmac Marketing
Corporation vs. Ramon Farolan, Acting Commissioner of Customs, and Guillermo Parayno,
Chief of Customs Intelligence and Investigation Division," which adjudged these public
officers to pay solidarily and in their private personal capacities respondent Solmac
Marketing Corporation temperate damages in the sum of P100,000.00, exemplary damages
in the sum of P50,000.00, and P25,000.00, as attorney's fees and expenses of litigation. This
challenged resolution of the respondent court modified its decision 2 of July 27, 1987 by
reducing into halves the original awards of P100,000.00 and P50,000.00 for exemplary
damages and attorney's fees and litigation expenses, respectively, keeping intact the original
grant of P100,000.00 in the concept of temperate damages. (Strangely, the first name of
petitioner Farolan stated in the assailed resolution, as well as in the decision, of the
respondent court is "Damian" when it should be "Ramon", his correct given name. Strictly
speaking, petitioner Ramon Farolan could not be held liable under these decision and
resolution for he is not the one adjudged to pay the huge damages but a different person.
Nonetheless, that is of no moment now considering the disposition of this ponencia.)
The relevant facts, as culled from the records, are as follows:
At the time of the commission of the acts complained of by the private respondent, which was
the subject of the latter's petition for mandamus and injunction filed with the Regional Trial
Court (RTC) of Manila in Civil Case No. 84-23537, petitioner Ramon Farolan was then the
Acting Commissioner of Customs while petitioner Guillermo Parayno was then the Acting
Chief, Customs Intelligence and Investigation Division. They were thus sued in their official
capacities as officers in the government as clearly indicated in the title of the case in the lower
courts and even here in this Court. Nevertheless, they were both held personally liable for the
awarded damages "(s)ince the detention of the goods by the defendants (petitioners herein)
was irregular and devoid of legal basis, hence, not done in the regular performance of official
duty . . . ." 3
However, as adverted to at the outset, in the dispositive portion of the challenged resolution,
the one held personally liable is a "Damian Farolan" and not the petitioner, Ramon Farolan.
Also as earlier mentioned, we will ignore that gross error.
Private respondent Solmac Marketing Corporation is a corporation organized and existing
under the laws of the Philippines. It was the assignee, transferee, and owner of an importation
of Clojus Recycling Plastic Products of 202,204 kilograms of what is technically known as
polypropylene film, valued at US$69,250.05.

Polypropylene is a substance resembling polyethelyne which is one of a group of partially

crystalline lightweight thermoplastics used chiefly in making fibers, films, and molded and
extruded products. 4
Without defect, polypropylene film is sold at a much higher price as prime quality film. Once
rejected as defective due to blemishes, discoloration, defective winding, holes, etc.,
polypropylene film is sold at a relatively cheap price without guarantee or return, and the
buyer takes the risk as to whether he can recover an average 30% to 50% usable matter. 5 This
latter kind of polypropylene is known as OPP film waste/scrap and this is what respondent
SOLMAC claimed the Clojus shipment to be.
The subject importation, consisting of seventeen (17) containers, arrived in December, 1981.
Upon application for entry, the Bureau of Customs asked respondent SOLMAC for its
authority from any government agency to import the goods described in the bill of lading.
Respondent SOLMAC presented a Board of Investment (BOI) authority for polypropylene
film scrap. However, upon examination of the shipment by the National Institute of Science
and Technology (NIST), it turned out that the fibers of the importation were oriented in such
a way that the materials were stronger than OPP film scrap. 6 In other words, the Clojus
shipment was not OPP film scrap, as declared by the assignee respondent SOLMAC to the
Bureau of Customs and BOI Governor Lilia R. Bautista, but oriented polypropylene the
importation of which is restricted, if not prohibited, under Letter of Instructions (LOI) No.
658-B. Specifically, Sections 1 and 2 of LOI No. 658-B provide that:
xxx
xxx
xxx
1. The importation of cellophane shall be allowed only for quantities and types of cellophane
that cannot be produced by Philippine Cellophane Film Corporation. The Board of
Investments shall issue guidelines regulating such importations.
2. The Collector of Customs shall see to the apprehension of all illegal importations of
cellophane and oriented polypropylene (OPP) and the dumping of imported stock lots of
cellophane and OPP.
xxx
xxx
xxx
Considering that the shipment was different from what had been authorized by the BOI and
by law, petitioners Parayno and Farolan withheld the release of the subject importation.
On June 7, 1982, petitioner Parayno, then Chief of Customs Intelligence and Investigation
Division, wrote the BOI asking for the latter's advice on whether or no t the subject
importation may be released 7 A series of exchange of correspondence between the BOI and
the Bureau of Customs, on one hand, and between the late Dakila Castro, counsel for the
private respondent, and the BOI and the Bureau of Customs, on the other, ensued, to wit:
xxx
xxx
xxx
4. In a letter dated August 17, 1982, the BOI agreed that the subject imports may be released

but that holes may be drilled on them by the Bureau of Customs prior to their release.
5. On January 20, 1983, (the late) Atty. Dakila Castro, (then) counsel of private respondent
wrote to petitioner Commissioner Farolan of Customs asking for the release of the
importation. The importation was not released, however, on the ground that holes had to be
drilled on them first.
6. Atty. Dakila Castro then wrote a letter dated October 6, 1983, to BOI Governor
Hermenigildo Zayco stressing the reasons why the subject importation should be released
without drilling of holes.
7. On November 8, 1983, BOI Governor H. Zayco wrote a letter to the Bureau of Customs
stating that the subject goods may be released without drilling of holes inasmuch as the goods
arrived prior to the endorsement on August 17, 1982 to the drilling of holes on all
importations of waste/scrap films.
8. On February 1, 1984, petitioner Commissioner Farolan wrote the BOI requesting for
definite guidelines regarding the disposition of importations of Oriented Polypropylene (OPP)
and Polypropylene (PP) then being held at the Bureau of Customs.
9. On March 12, 1984, Minister Roberto Ongpin of Trade, the BOI Chairman, wrote his reply
to petitioner Farolan . . . .8 (This reply of Minister Ongpin is copied in full infra.)
On March 26, 1984, respondent Solmac filed the action for mandamus and injunction with
the RTC as above mentioned. It prayed for the unconditional release of the subject
importation. It also prayed for actual damages, exemplary damages, and attorney's fees. As
prayed for, the trial court issued a writ of preliminary injunction.
After hearing on the merits, the RTC rendered a decision on February 5, 1985, the dispositive
portion of which reads as follows:
Premises considered, judgment is hereby rendered ordering defendants to release the subject
importation immediately without drilling of holes, subject only to the normal requirements of
the customs processing for such release to be done with utmost dispatch as time is of the
essence; and the preliminary injunction hereto issued is hereby made permanent until actual
physical release of the merchandise and without pronouncement as to costs.
SO ORDERED. 9
From the decision of the trial court, Solmac, the plaintiff below and the private respondent
herein, appealed to the Court of Appeals only insofar as to the denial of the award of damages
is concerned. On the other hand, the petitioners did not appeal from this decision. They did
not see any need to appeal because as far as they were concerned, they had already complied
with their duty. They had already ordered the release of the importation "without drilling of
holes," as in fact it was so released, in compliance with the advice to effect such immediate
release contained in a letter of BOI dated October 9, 1984, to Commissioner Farolan. Thus, to
stress, even before the RTC rendered its decision on February 5, 1984, the Clojus shipment of

OPP was released 10 to the private respondent in its capacity as assignee of the same. Be that it
may, the private respondent filed its appeal demanding that the petitioners be held, in their
personal and private capacities, liable for damages despite the finding of lack of bad faith on
the part of the public officers.
After due proceeding, the Court of Appeals rendered a decision 11 on July 27, 1987, the
dispositive portion which reads as follows:
WHEREFORE, the appealed judgment is modified by ordering the defendants Ramon
Farolan and Guillermo Parayno solidarity, in their personal capacity, to pay the plaintiff
temperate damages in the sum of P100,000, exemplary damages in the sum of P100,000 and
P50,000 as attorney's fees and expenses of litigation. Costs against the defendants.
SO ORDERED.
On August 14, 1987, the petitioners filed a motion for reconsideration of the decision of the
Court of Appeals.
On May 25, 1988, the Court of Appeals issued its resolution modifying the award of damages,
to wit: temperate damages in the sum of P100,000,00, exemplary damages in the sum of
P50,000.00, and P25,000.00 as attorney's fees and expenses of litigation. The respondent
court explained the reduction of the awards for exemplary damages and attorney's fees and
expenses of litigation in this wise:
3. In our decision of July 27, 1987, We awarded to plaintiff-appellant Pl00,000 as temperate
damages, Pl00,000.00 as exemplary damages, and P50,000.00 as attorney's fees and
expenses of litigation. Under Art. 2233 of the Civil Code, recovery of exemplary damages is
not a matter of right but depends upon the discretion of the court. Under Article 2208 of the
Civil Code, attorney's fees and expenses of litigation must always be reasonable. In view of
these provisions of the law, and since the award of temperate damages is only P100,000.00,
the amount of exemplary damages may not be at par as temperate damages. An award of
P50,000.00, as exemplary damages may already serve the purpose, i.e., as an example for the
public good. Likewise, the attorney's fees and expenses of litigation have to be reduced to 25%
of the amount of temperate damages, or P25,000.00, if the same have to be reasonable. The
reduction in the amount of exemplary damages, and attorney's fees and expenses of litigation
would be in accord with justice and fairness. 12
The petitioners now come to this Court, again by the Solicitor General, assigning the following
errors allegedly committed by the respondent court:
I
The Court of Appeals erred in disregarding the finding of the trial court that the defense of
good faith of petitioners (defendants) cannot be discredited.
II
The Court of Appeals erred in adjudging petitioners liable to pay temperate damages,

exemplary damages, attorney's fees and expenses of litigation. 13

These two issues boil down to a single question, i.e., whether or not the petitioners acted in
good faith in not immediately releasing the questioned importation, or, simply, can they be
held liable, in their personal and private capacities, for damages to the private respondent.
We rule for the petitioners.
The respondent court committed a reversible error in overruling the trial court's finding that:
. . . with reference to the claim of plaintiff to damages, actual and exemplary, and attorney's
fees, the Court finds it difficult to discredit or disregard totally the defendants' defense of
good faith premised on the excuse that they were all the time awaiting clarification of the
Board of Investments on the matter. 14
We hold that this finding of the trial court is correct for good faith is always presumed and it
is upon him who alleges the contrary that the burden of proof lies. 15 In Abando v. Lozada, 16
we defined good faith as "refer[ring] to a state of the mind which is manifested by the acts of
the individual concerned. It consists of the honest intention to abstain from taking an
unconscionable and unscrupulous advantage of another. It is the opposite of fraud, and its
absence should be established by convincing evidence."
We had reviewed the evidence on record carefully and we did not see any clear and
convincing proof showing the alleged bad faith of the petitioners. On the contrary, the record
is replete with evidence bolstering the petitioners' claim of good faith. First, there was the
report of the National Institute of Science and Technology (NIST) dated January 25, 1982
that, contrary to what the respondent claimed, the subject importation was not OPP film
scraps but oriented polypropylene, a plastic product of stronger material, whose importation
to the Philippines was restricted, if not prohibited, under LOI
658-B. 17 It was on the strength of this finding that the petitioners withheld the release of the
subject importation for being contrary to law. Second, the petitioners testified that, on many
occasions, the Bureau of Customs sought the advice of the BOI on whether the subject
importation might be released. 18 Third, petitioner Parayno also testified during the trial that
up to that time (of the trial) there was no clear-cut policy on the part of the BOI regarding the
entry into the Philippines of oriented polypropylene (OPP), as the letters of BOI Governors
Tordesillas and Zayco of November 8, 1983 and September 24, 1982, respectively, ordering
the release of the subject importation did not clarify the BOI policy on the matter. He then
testified on the letter of the BOI Chairman Roberto Ongpin dated March 12, 1984, which
states in full:
Thank you for your letter of 1 February 1984, on the subject of various importations of
Oriented Polypropylene (OPP) and Polypropylene (PP) withheld by Customs and the
confusion over the disposition of such imports.
I have discussed the matter with Vice-Chairman Tordesillas and Governor Zayco of the Board

of Investments and the following is their explanation:

1. On 22 June 1982, the BOI ruled that importation of OPP/PP film scraps intended for
recycling or repelletizing did not fall within the purview of LOI 658-B.
2. On 17 August l982, the BOI agreed that holes could be drilled on subject film imports to
prevent their use for other purposes.
3. For importations authorized prior to 22 June 1982, the drilling of holes should depend on
purpose for which the importations was approved by the BOI that is, for direct packaging use
or for recycling/repelletizing into raw material. The exemption from drilling of holes on
Solmac Marketing's importation under Certificates of Authority issued on 1 April 1982 and 5
May 1982 and on Clojus' importation authorized in 1982 were endorsed by the BOI on the
premise that these were not intended for recycling/repelletizing.
Should your office have any doubts as to the authorized intended use of any imported lots of
OPP/PP film scraps that you have confiscated, we have no objection to the drilling of holes to
ensure that these are indeed recycled.
I have requested Governor Zayco to contact your office in order to offer any further assistance
which you may require. 19
It can be seen from all the foregoing that even the highest officers (Chairman Ongpin, ViceChairman Tordesillas, and Governor Zayco) of the BOI themselves were not in agreement as
to what proper course to take on the subject of the various importations of Oriented
Polypropylene (OPP) and Polypropylene (PP) withheld by the Bureau of Customs. The
conflicting recommendations of the BOI on this score prompted the petitioners to seek final
clarification from the former with regard to its policy on these importations. This resulted in
the inevitable delay in the release of the Clojus shipment, one of the several of such
importations. The confusion over the disposition of this particular importation obviates bad
faith. Thus the trial court's finding that the petitioners acted in good faith in not immediately
releasing the Clojus shipment pending a definitive policy of the BOI on this matter is correct.
It is supported by substantial evidence on record, independent of the presumption of good
faith, which as stated earlier, was not successfully rebutted.
When a public officer takes his oath of office, he binds himself to perform the duties of his
office faithfully and to use reasonable skill and diligence, and to act primarily for the benefit
of the public. Thus, in the discharge of his duties, he is to use that prudence, caution, and
attention which careful men use in the management of their affairs. In the case at bar,
prudence dictated that petitioners first obtain from the BOI the latter's definite guidelines
regarding the disposition of the various importations of oriented polypropylene (OPP) and
polypropylene (PP) then being withheld at the Bureau of Customs. These cellophane/film
products were competing with locally manufactured polypropylene and oriented
polypropylene as raw materials which were then already sufficient to meet local demands,

hence, their importation was restricted, if not prohibited under LOI 658-B. Consequently, the
petitioners can not be said to have acted in bad faith in not immediately releasing the import
goods without first obtaining the necessary clarificatory guidelines from the BOI. As public
officers, the petitioners had the duty to see to it that the law they were tasked to implement,
i.e., LOI 658-B, was faithfully complied with.
But even granting that the petitioners committed a mistake in withholding the release of the
subject importation because indeed it was composed of OPP film scraps, 20 contrary to the
evidence submitted by the National Institute of Science and Technology that the same was
pure oriented OPP, nonetheless, it is the duty of the Court to see to it that public officers are
not hampered in the performance of their duties or in making decisions for fear of personal
liability for damages due to honest mistake.1wphi1 Whatever damage they may have caused
as a result of such an erroneous interpretation, if any at all, is in the nature of a damnum
absque injuria. Mistakes concededly committed by public officers are not actionable absent
any clear showing that they were motivated by malice or gross negligence amounting to bad
faith. 21 After all, "even under the law of public officers, the acts of the petitioners are
protected by the presumption of good faith. 22
In the same vein, the presumption, disputable though it may be, that an official duty has been
regularly performed 23 applies in favor of the petitioners. Omnia praesumuntur rite et
solemniter esse acta. (All things are presumed to be correctly and solemnly done.) It was
private respondent's burden to overcome this juris tantum presumption. We are not
persuaded that it has been able to do so.
WHEREFORE, the petition is hereby GRANTED, the assailed Resolution of the respondent
court, in CA-G.R. SP No. 10509, dated May 25, 1988, is SET ASIDE and ANNULLED. No
costs.
SO ORDERED.

REYNALDO BERMUDEZ, SR., and, ADONITA YABUT BERMUDEZ petitionersappellants,

vs.
HON. JUDGE A. MELENCIO-HERRERA, DOMINGO PONTINO y TACORDA and
CORDOVA NG SUN KWAN, respondents-appellees.
YAP, J.:
This is a direct appeal on pure questions of law from the Order of March 10, 1970 of the
Honorable Judge (now Supreme Court Justice) Ameurfina Melencio-Herrera of the defunct

Court of First Instance of Manila, Branch XVII, dismissing plaintiffs-appellants' complaint in

Civil Case No. 77188 entitled "Reynaldo Bermudez, Sr. and Adonita Yabut Bermudez,
plaintiffs, versus Domingo Pontino y Tacorda and Cordova Ng Sun Kwan, defendants," and
from the Order of May 7, 1970 denying plaintiffs-appellants' Motion for Reconsideration.
The background facts of the case are as follows:
A cargo truck, driven by Domingo Pontino and owned by Cordova Ng Sun Kwan, bumped a
jeep on which Rogelio, a six-year old son of plaintiffs-appellants, was riding. The boy
sustained injuries which caused his death. As a result, Criminal Case No.92944 for Homicide
Through Reckless Imprudence was filed against Domingo Pontino by the Manila City Fiscal's
Office. Plaintiffs-appellants filed on July 27,1969 in the said criminal case "A Reservation to
File Separate Civil Action."
On July 28,1969, the plaintiffs-appellants filed a civil case for damages with the Court of First
Instance of Manila docketed as Civil Case No. 77188, entitled "Reynaldo Bermudez, Sr. et al.,
Plaintiffs vs. Domingo Pontino y Tacorda and Cordova Ng Sun Kwan, Defendants." Finding
that the plaintiffs instituted the action "on the assumption that defendant Pontino's
negligence in the accident of May 10, 1969 constituted a quasi-delict," the trial court stated
that plaintiffs had already elected to treat the accident as a "crime" by reserving in the
criminal case their right to file a separate civil action. That being so, the trial court decided to
order the dismissal of the complaint against defendant Cordova Ng Sun Kwan and to suspend
the hearing of the case against Domingo Pontino until after the criminal case for Homicide
Through Reckless Imprudence is finally terminated. From said order, plaintiffs filed the
present appeal, stating as their main reasons the following:
I. The main issue brought before this Honorable Court is whether the present action is based
on quasi-delict under the Civil Code and therefore could proceed independently of the
criminal case for homicide thru reckless imprudence.
II. The second question of law is whether the lower court could properly suspend the hearing
of the civil action against Domingo Pontino and dismiss the civil case against his employer
Cordova Ng Sun Kwan by reason of the fact that a criminal case for homicide thru reckless
imprudence is pending in the lower court against Domingo Pontino
III. The last question of law is whether the suspension of the civil action against Domingo
Pontino and the dismissal of the civil case against his employer Cordova Ng Sun Kwan by
reason of the pending criminal case against Domingo Pontino for homicide thru reckless
imprudence in the lower court could be validly done considering that the civil case against
said defendants-appellees also sought to recover actual damages to the jeep of plaintiffsappellants."
We find the appeal meritorious.
The heart of the issue involved in the present case is whether the civil action filed by the

plaintiffs-appellants is founded on crime or on quasi-delict. The trial court treated the case as
an action based on a crime in view of the reservation made by the offended party in the
criminal case (Criminal Case No. 92944), also pending before the court, to file a separate civil
action. Said the trial court:
It would appear that plaintiffs instituted this action on the assumption that defendant
Pontino's negligence in the accident of May 10, l969 constituted a quasi-delict. The Court
cannot accept the validity of that assumption. In Criminal Case No. 92944 of this Court,
plaintiffs had already appeared as complainants. While that case was pending, the offended
parties reserved the right to institute a separate civil action. If, in a criminal case, the right
to file a separate civil action for damages is reserved, such civil action is to be based on crime
and not on tort. That was the ruling in Joaquin vs. Aniceto, L-18719, Oct. 31, 1964."
We do not agree. The doctrine in the case cited by the trial court is inapplicable to the instant
case. In Joaquin vs. Aniceto, the Court held:
The issue in this case is: May an employee's primary civil liability for crime and his employer's
subsidiary liability therefor be proved in a separate civil action even while the criminal case
against the employee is still pending?
To begin with, obligations arise from law, contract, quasi-contract, crime and quasi-delict.
According to appellant, her action is one to enforce the civil liability arising from crime. With
respect to obligations arising from crimes, Article 1161 of the New Civil Code provides:
Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to
the provisions of article 21 77, and of the pertinent provisions of Chapter 2, Preliminary, Title,
on Human Relations, and of Title XVIII of this book, regulating damages.
xxx xxx xxx
It is now settled that for an employer to be subsidiarily liable, the following requisites must be
present: (1) that an employee has committed a crime in the discharge of his duties; (2) that
said employee is insolvent and has not satisfied his civil liability; (3) that the employer is
engaged in some kind of industry. (1 Padilla, Criminal Law, Revised Penal Code 794 [1964])
Without the conviction of the employee, the employer cannot be subsidiarily liable.
In cases of negligence, the injured party or his heirs has the choice between an action to
enforce the civil liability arising from crime under Article 100 of the Revised Penal Code and
an action for quasi- delict under Article 2176-2194 of the Civil Code. If a party chooses the
latter, he may hold the employer solidarity liable for the negligent act of his employee, subject
to the employer's defense of exercise of the diligence of a good father of the family.
In the case at bar, the action filed b appellant was an action for damages based on quasidelict. 1 The fact that appellants reserved their right in the criminal case to file an independent
civil action did not preclude them from choosing to file a civil action for quasi-delict.
The appellants invoke the provisions of Sections 1 and 2 of Rule 111 of the Rules of Court,

which provide:
Section 1. Institution of criminal and civil action. When a criminal action is instituted,
the civil action for recovery of civil liability arising from the offense charged is impliedly
instituted with the criminal action, unless the offended party expressly waives the civil action
or reserves his right to institute it separately.
Section 2. Independent civil action.-In the cases provided for in Articles 31, 32, 33, 34 and
2177 of the Civil Code of the Philippines, an independent civil action entirely separate and
distinct from the criminal action, may be brought by the injured party during the pendency of
the criminal case,provided the right is reserved as required in the preceding section. Such civil
action shall proceed independently of the criminal prosecution, and shall require only a
preponderance of evidence.
Article 2177 of the Civil Code, cited in Section 2, of Rule 111, provides that
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.
The appellant precisely made a reservation to file an independent civil action in accordance
with the provisions of Section 2 of Rule 111, Rules of Court. In fact, even without such a
reservation, we have allowed the injured party in the criminal 1 case which resulted in the
acquittal of the accused to recover damages based on quasi-delict. In People vs. Ligon, G.R.
No. 74041, we held:
However, it does not follow that a person who is not criminally liable is also free from civil
liability. While the guilt of the accused in a criminal prosecution must be established beyond
reasonable doubt, only a preponderance of evidence is required in a civil action for damages
(Article 29, Civil Code). The judgment of acquittal extinguishes the civil liability of the
accused only when it includes a declaration that the facts from which the civil liability might
arise did not exist (Padilla vs. Court of Appeals, 129 SCRA 559).
WHEREFORE, we grant the petition and annul and set aside the appealed orders of the trial
court, dated March 10, 1970 and May 7, 1970, and remand the case for further proceedings.
No costs.
SO ORDERED.
G.R. No. L-24837
June 27, 1968
JULIAN C. SINGSON and RAMONA DEL CASTILLO, plaintiffs,
vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS, in his capacity
as President of the said Bank, defendants.

Gil B. Galang for plaintiffs.Aviado and Aranda for defendants.

CONCEPCION, C.J.:
Appeal by plaintiffs, Julian Singson and his wife, Ramona del Castillo, from a decision of the
Court of First Instance of Manila dismissing their complaint against defendants herein, the
Bank of the Philippine Islands and Santiago Freixas.
It appears that Singson, was one of the defendants in civil case No. 23906 of the Court of First
Instance, Manila, in which judgment had been rendered sentencing him and his codefendants therein, namely, Celso Lobregat and Villa-Abrille & Co., to pay the sum of
P105,539.56 to the plaintiff therein, Philippine Milling Co. Singson and Lobregat had
seasonably appealed from said judgment, but not Villa-Abrille & Co., as against which said
judgment, accordingly, became final and executory. In due course, a writ of garnishment was
subsequently served upon the Bank of the Philippine Islands in which the Singsons had a
current account insofar as Villa-Abrille's credits against the Bank were concerned. What
happened thereafter is set forth in the decision appealed from, from which we quote:
Upon receipt of the said Writ of Garnishment, a clerk of the bank in charge of all matters of
execution and garnishment, upon reading the name of the plaintiff herein in the title of the
Writ of Garnishment as a party defendants, without further reading the body of the said
garnishment and informing himself that said garnishment was merely intended for the
deposits of defendant Villa-Abrille & Co., Valentin Teus, Fernando F. de Villa-Abrille and
Joaquin Bona, prepared a letter for the signature of the President of the Bank informing the
plaintiff Julian C. Singson of the garnishment of his deposits by the plaintiff in that case.
Another letter was also prepared and signed by the said President of the Bank for the Special
Sheriff dated April 17, 1963.
Subsequently, two checks issued by the plaintiff Julian C. Singson, one for the amount of
P383 in favor of B. M. Glass Service dated April 16, 1963 and bearing No. C-424852, and
check No. C-394996 for the amount of P100 in favor of the Lega Corporation, and drawn
against the said Bank, were deposited by the said drawers with the said bank. Believing that
the plaintiff Singson, the drawer of the check, had no more control over the balance of his
deposits in the said bank, the checks were dishonored and were refused payment by the said
bank. After the first check was returned by the bank to the B. M. Glass Service, the latter
wrote plaintiff Julian C. Singson a letter, dated April 19, 1963, advising him that his check for
P383.00 bearing No. C-424852 was not honored by the bank for the reason that his account
therein had already been garnished. The said B. M. Glass Service further stated in the said
letter that they were constrained to close his credit account with them. In view thereof,
plaintiff Julian C. Singson wrote the defendant bank a letter on April 19, 1963, claiming that
his name was not included in the Writ of Execution and Notice of Garnishment, which was
served upon the bank. The defendant President Santiago Freixas of the said bank took steps

to verify this information and after having confirmed the same, apologized to the plaintiff
Julian C. Singson and wrote him a letter dated April 22, 1963, requesting him to disregard
their letter of April 17, 1963, and that the action of garnishment from his account had already
been removed. A similar letter was written by the said official of the bank on April 22, 1963 to
the Special Sheriff informing him that his letter dated April 17, 1963 to the said Special Sheriff
was considered cancelled and that they had already removed the Notice of Garnishment from
plaintiff Singson's account. Thus, the defendants lost no time to rectify the mistake that had
been inadvertently committed, resulting in the temporary freezing of the account of the
plaintiff with the said bank for a short time.
xxx
xxx
xxx
On May 8, 1963, the Singsong commenced the present action against the Bank and its
president, Santiago Freixas, for damages1 in consequence of said illegal freezing of plaintiffs'
account.1wph1.t
After appropriate proceedings, the Court of First Instance of Manila rendered judgment
dismissing the complaint upon the ground that plaintiffs cannot recover from the defendants
upon the basis of a quasi-delict, because the relation between the parties is contractual in
nature; because this case does not fall under Article 2219 of our Civil Code, upon which
plaintiffs rely; and because plaintiffs have not established the amount of damages allegedly
sustained by them.
The lower court held that plaintiffs' claim for damages cannot be based upon a tort or quasidelict, their relation with the defendants being contractual in nature. We have repeatedly
held, however, that the existence of a contract between the parties does not bar the
commission of a tort by the one against the order and the consequent recovery of damages
therefor.2 Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus,
in Air France vs. Carrascoso,3 involving an airplane passenger who, despite his first-class
ticket, had been illegally ousted from his first-class accommodation and compelled to take a
seat in the tourist compartment, was held entitled to recover damages from the air-carrier,
upon the ground of tort on the latter's part, for, although the relation between a passenger
and a carrier is "contractual both in origin and nature ... the act that breaks the contract may
also be a tort".
In view, however, of the facts obtaining in the case at bar, and considering, particularly, the
circumstance, that the wrong done to the plaintiff was remedied as soon as the President of
the bank realized the mistake he and his subordinate employee had committed, the Court
finds that an award of nominal damages the amount of which need not be proven 4 in the
sum of P1,000, in addition to attorney's fees in the sum of P500, would suffice to vindicate
plaintiff's rights.5

WHEREFORE, the judgment appealed from is hereby reversed, and another one shall be
entered sentencing the defendant Bank of the Philippine Islands to pay to the plaintiffs said
sums of P1,000, as nominal damages, and P500, as attorney's fees, apart from the costs. It is
so ordered.
[G.R. No. 129029. April 3, 2000]
RAFAEL REYES TRUCKING CORPORATION, petitioner, vs. PEOPLE OF THE
PHILIPPINES and ROSARIO P. DY (for herself and on behalf of the minors
Maria Luisa, Francis Edward, Francis Mark and Francis Rafael, all surnamed
Dy), respondents.
DECISION
PARDO, J.:
The case is an appeal via certiorari from the amended decision[if !supportFootnotes][1][endif] of the Court
of Appeals[if !supportFootnotes][2][endif] affirming the decision and supplemental decision of the trial
court,[if !supportFootnotes][3][endif] as follows:
"IN VIEW OF THE FOREGOING, judgment is hereby rendered dismissing the appeals
interposed by both accused and Reyes Trucking Corporation and
affirming the Decision and Supplemental Decision dated June 6, 1992
and October 26, 1992 respectively.
"SO ORDERED."[if !supportFootnotes][4][endif]
The facts are as follows:
On October 10, 1989, Provincial Prosecutor Patricio T. Durian of Isabela filed with the
Regional Trial Court, Isabela, Branch 19, Cauayan an amended information charging Romeo
Dunca y de Tumol with reckless imprudence resulting in double homicide and damage to
property, reading as follows:
"That on or about the 20th day of June, 1989, in the Municipality of Cauayan, Province of
Isabela, Philippines, and within the jurisdiction of this Honorable
Court, the said accused being the driver and person-in-charge of a
Trailer Truck Tractor bearing Plate No. N2A-867 registered in the name
of Rafael Reyes Trucking Corporation, with a load of 2,000 cases of
empty bottles of beer grande, willfully, unlawfully and feloniously drove
and operated the same while along the National Highway of Barangay
Tagaran, in said Municipality, in a negligent, careless and imprudent
manner, without due regard to traffic laws, rules and ordinances and
without taking the necessary precautions to prevent injuries to persons
and damage to property, causing by such negligence, carelessness and

imprudence the said trailer truck to hit and bump a Nissan Pick-up
bearing Plate No. BBG-957 driven by Feliciano Balcita and Francisco
Dy, Jr., @ Pacquing, due to irreversible shock, internal and external
hemorrhage and multiple injuries, open wounds, abrasions, and further
causing damages to the heirs of Feliciano Balcita in the amount of
P100,000.00 and to the death of Francisco Dy, Jr.; @ Pacquing and
damages to his Nissan Pick-Up bearing Plate No. BBG-957 in the total
amount of P2,000,000.00.
"CONTRARY TO LAW.
"Cauayan, Isabela, October 10, 1989.
"(Sgd.) FAUSTO C. CABANTAC"Third Assistant Provincial Prosecutor"
Upon arraignment on October 23, 1989, the accused entered a plea of not guilty. On the same
occasion, the offended parties (Rosario P. Dy and minor children and Angelina M. Balcita and
minor son Paolo) made a reservation to file a separate civil action against the accused arising
from the offense charged.[if !supportFootnotes][5][endif] On November 29, 1989, the offended parties
actually filed with the Regional Trial Court, Isabela, Branch 19, Cauayan a complaint against
petitioner Rafael Reyes Trucking Corporation, as employer of driver Romeo Dunca y de
Tumol, based on quasi delict. The petitioner settled the claim of the heirs of Feliciano Balcita
(the driver of the other vehicle involved in the accident). The private respondents opted to
pursue the criminal action but did not withdraw the civil case quasi ex delicto they filed
against petitioner. On December 15, 1989, private respondents withdrew the reservation to
file a separate civil action against the accused and manifested that they would prosecute the
civil aspect ex delicto in the criminal action.[if !supportFootnotes][6][endif] However, they did not
withdraw the separate civil action based on quasi delict against petitioner as employer arising
from the same act or omission of the accused driver. [if !supportFootnotes][7][endif]
Upon agreement of the parties, the trial court consolidated both criminal and civil cases and
conducted a joint trial of the same.
The facts, as found by the trial court, which appear to be undisputed, are as follows:
"The defendant Rafael Reyes Trucking Corporation is a domestic corporation engaged in the
business of transporting beer products for the San Miguel Corporation
(SMC for short) from the latters San Fernando, Pampanga plant to its
various sales outlets in Luzon. Among its fleets of vehicles for hire is the
white truck trailer described above driven by Romeo Dunca y Tumol, a
duly licensed driver. Aside from the Corporations memorandum to all
its drivers and helpers to physically inspect their vehicles before each
trip (Exh. 15, pars. 4 & 5), the SMCs Traffic Investigator-Inspector
certified the roadworthiness of this White Truck trailer prior to June

20, 1989 (Exh. 17). In addition to a professional drivers license, it also

conducts a rigid examination of all driver applicants before they are
hired.
"In the early morning of June 20, 1989, the White Truck driven by Dunca left Tuguegarao,
Cagayan bound to San Fernando, Pampanga loaded with 2,000 cases of
empty beer "Grande" bottles. Seated at the front right seat beside him
was Ferdinand Domingo, his truck helper ("pahinante" in Pilipino). At
around 4:00 oclock that same morning while the truck was descending
at a slight downgrade along the national road at Tagaran, Cauayan,
Isabela, it approached a damaged portion of the road covering the full
width of the trucks right lane going south and about six meters in
length. These made the surface of the road uneven because the potholes
were about five to six inches deep. The left lane parallel to this damaged
portion is smooth. As narrated by Ferdinand Domingo, before
approaching the potholes, he and Dunca saw the Nissan with its
headlights on coming from the opposite direction. They used to evade
this damaged road by taking the left lance but at that particular
moment, because of the incoming vehicle, they had to run over it. This
caused the truck to bounce wildly. Dunca lost control of the wheels and
the truck swerved to the left invading the lane of the Nissan. As a result,
Duncas vehicle rammed the incoming Nissan dragging it to the left
shoulder of the road and climbed a ridge above said shoulder where it
finally stopped. (see Exh. A-5, p. 8, record). The Nissan was severely
damaged (Exhs. A-7, A-8, A-9 and A-14, pp. 9-11, record), and its two
passengers, namely: Feliciano Balcita and Francisco Dy, Jr. died
instantly (Exh. A-19) from external and internal hemorrhage and
multiple fractures (pp. 15 and 16, record).
"For the funeral expenses of Francisco Dy, Jr. her widow spent P651,360.00 (Exh. I-3). At the
time of his death he was 45 years old. He was the President and
Chairman of the Board of the Dynamic Wood Products and
Development Corporation (DWPC), a wood processing establishment,
from which he was receiving an income of P10,000.00 a month (Exh.
D). In the Articles of Incorporation of the DWPC, the spouses Francisco
Dy, Jr. and Rosario Perez Dy appear to be stockholders of 10,000 shares
each with par value of P100.00 per share out of its outstanding and
subscribed capital stock of 60,000 shares valued at P6,000,000.00
(Exhs. K-1 & 10-B). Under its 1988 Income Tax Returns (Exh. J) the

DWPC had a taxable net income of P78,499.30 (Exh. J). Francisco Dy,
Jr. was a La Salle University graduate in Business Administration, past
president of the Pasay Jaycees, National Treasurer and President of the
Philippine Jaycees in 1971 and 1976, respectively, and World VicePresident of Jaycees International in 1979. He was also the recipient of
numerous awards as a civic leader (Exh. C). His children were all
studying in prestigious schools and spent about P180,000.00 for their
education in 1988 alone (Exh. H-4).
"As stated earlier, the plaintiffs procurement of a writ of attachment of the properties of the
Corporation was declared illegal by the Court of Appeals. It was shown
that on December 26, 1989, Deputy Sheriff Edgardo Zabat of the RTC at
San Fernando, Pampanga, attached six units of Truck Tractors and
trailers of the Corporation at its garage at San Fernando, Pampanga.
These vehicles were kept under PC guard by the plaintiffs in said garage
thus preventing the Corporation to operate them. However, on
December 28, 1989, the Court of Appeals dissolved the writ (p. 30,
record) and on December 29, 1989, said Sheriff reported to this Court
that the attached vehicles were taken by the defendants representative,
Melita Manapil (Exh. O, p. 31, record). The defendants general Manager
declared that it lost P21,000.00 per day for the non-operation of the six
units during their attachment (p. 31, t.s.n., Natividad C. Babaran,
proceedings on December 10, 1990)."[if !supportFootnotes][8][endif]
On June 6, 1992, the trial court rendered a joint decision, the dispositive portion of which
reads as follows:
"WHEREFORE, in view of the foregoing considerations judgment is hereby rendered:
"1. Finding the accused Romeo Dunca y de Tumol guilty beyond reasonable doubt of the
crime of Double Homicide through Reckless Imprudence with violation
of the Motor Vehicle Law (Rep. Act No. 4136), and appreciating in his
favor the mitigating circumstance of voluntary surrender without any
aggravating circumstance to offset the same, the Court hereby sentences
him to suffer two (2) indeterminate penalties of four months and one
day of arresto mayor as minimum to three years, six months and twenty
days as maximum; to indemnify the Heirs of Francisco Dy. Jr. in the
amount of P3,000,000.00 as compensatory damages, P1,000,000.00
as moral damages, and P1,030,000.00 as funeral expenses;
"2. Ordering the plaintiff in Civil Case No. Br. 19-424 to pay the defendant therein actual
damages in the amount of P84,000.00; and

"3. Ordering the dismissal of the complaint in Civil Case No. Br. 19-424.
"No pronouncement as to costs.
"SO ORDERED.
"Cauayan, Isabela, June 6, 1992.
"(Sgd.) ARTEMIO R. ALIVIA"Regional Trial Judge"[if !supportFootnotes][9][endif]
On September 3, 1992, petitioner and the accused filed a notice of appeal from the joint
decision.[if !supportFootnotes][10][endif]
On the other hand, private respondents moved for amendment of the dispositive portion of
the joint decision so as to hold petitioner subsidiarily liable for the damages awarded to the
private respondents in the event of insolvency of the accused. [if !supportFootnotes][11][endif]
On October 26, 1992, the trial court rendered a supplemental decision amending the
dispositive portion by inserting an additional paragraph reading as follows:
"2:A Ordering the defendant Reyes Trucking Corporation subsidiarily liable for all the
damages awarded to the heirs of Francisco Dy, Jr., in the event of
insolvency of the accused but deducting therefrom the damages of
P84,000.00 awarded to said defendant in the next preceding
paragraph; and x x x"[if !supportFootnotes][12][endif]
On November 12, 1992, petitioner filed with the trial court a supplemental notice of appeal
from the supplemental decision.[if !supportFootnotes][13][endif]
During the pendency of the appeal, the accused jumped bail and fled to a foreign country. By
resolution dated December 29, 1994, the Court of Appeals dismissed the appeal of the accused
in the criminal case.[if !supportFootnotes][14][endif]
On January 6, 1997, the Court of Appeals rendered an amended decision affirming that of the
trial court, as set out in the opening paragraph of this decision. [if !supportFootnotes][15][endif]
On January 31, 1997, petitioner filed a motion for reconsideration of the amended decision. [if !
supportFootnotes][16][endif]

On April 21, 1997, the Court of Appeals denied petitioners motion for reconsideration for lack
of merit.[if !supportFootnotes][17][endif]
Hence, this petition for review.[if !supportFootnotes][18][endif]
On July 21, 1997, the Court required respondents to comment on the petition within ten (10)
days from notice.[if !supportFootnotes][19][endif]
On January 27, 1998, the Solicitor General filed his comment.[if !supportFootnotes][20][endif] On April 13,
1998, the Court granted leave to petitioner to file a reply and noted the reply it filed on March
11, 1998.[if !supportFootnotes][21][endif]
We now resolve to give due course to the petition and decide the case.
Petitioner raises three (3) grounds for allowance of the petition, which, however, boil down to
two (2) basic issues, namely:

1.....May petitioner as owner of the truck involved in the accident be held subsidiarily liable
for the damages awarded to the offended parties in the criminal action
against the truck driver despite the filing of a separate civil action by the
offended parties against the employer of the truck driver?
2.....May the Court award damages to the offended parties in the criminal case despite the
filing of a civil action against the employer of the truck driver; and in
amounts exceeding that alleged in the information for reckless
imprudence resulting in homicide and damage to property? [if !
supportFootnotes][22][endif]

We grant the petition, resolving under the circumstances pro hac vice to remand the cases to
the trial court for determination of the civil liability of petitioner as employer of the accused
driver in the civil action quasi ex delicto re-opened for the purpose.
In negligence cases, the aggrieved party has the choice between (1) an action to enforce civil
liability arising from crime under Article 100 of the Revised Penal Code; and (2) a separate
action for quasi delict under Article 2176 of the Civil Code of the Philippines. Once the choice
is made, the injured party can not avail himself of any other remedy because he may not
recover damages twice for the same negligent act or omission of the accused. [if !supportFootnotes][23]
[endif]
This is the rule against double recovery.
In other words, "the same act or omission can create two kinds of liability on the part of the
offender, that is, civil liability ex delicto, and civil liability quasi delicto" either of which "may
be enforced against the culprit, subject to the caveat under Article 2177 of the Civil Code that
the offended party can not recover damages under both types of liability."[if !supportFootnotes][24][endif]
In the instant case, the offended parties elected to file a separate civil action for damages
against petitioner as employer of the accused, based on quasi delict, under Article 2176 of the
Civil Code of the Philippines. Private respondents sued petitioner Rafael Reyes Trucking
Corporation, as the employer of the accused, to be vicariously liable for the fault or negligence
of the latter. Under the law, this vicarious liability of the employer is founded on at least two
specific provisions of law.
The first is expressed in Article 2176 in relation to Article 2180 of the Civil Code, which would
allow an action predicated on quasi-delict to be instituted by the injured party against the
employer for an act or omission of the employee and would necessitate only a preponderance
of evidence to prevail. Here, the liability of the employer for the negligent conduct of the
subordinate is direct and primary, subject to the defense of due diligence in the selection and
supervision of the employee. The enforcement of the judgment against the employer in an
action based on Article 2176 does not require the employee to be insolvent since the nature of
the liability of the employer with that of the employee, the two being statutorily considered
joint tortfeasors, is solidary.[if !supportFootnotes][25][endif] The second, predicated on Article 103 of the

Revised Penal Code, provides that an employer may be held subsidiarily civilly liable for a
felony committed by his employee in the discharge of his duty. This liability attaches when the
employee is convicted of a crime done in the performance of his work and is found to be
insolvent that renders him unable to properly respond to the civil liability adjudged. [if !
supportFootnotes][26][endif]

As regards the first issue, the answer is in the negative. Rafael Reyes Trucking Corporation, as
employer of the accused who has been adjudged guilty in the criminal case for reckless
imprudence, can not be held subsidiarily liable because of the filing of the separate civil action
based on quasi delict against it. In view of the reservation to file, and the subsequent filing of
the civil action for recovery of civil liability, the same was not instituted with the criminal
action. Such separate civil action was for recovery of damages under Article 2176 of the Civil
Code, arising from the same act or omission of the accused.[if !supportFootnotes][27][endif]
Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules of Criminal
Procedure, when private respondents, as complainants in the criminal action, reserved the
right to file the separate civil action, they waived other available civil actions predicated on
the same act or omission of the accused-driver. Such civil action includes the recovery of
indemnity under the Revised Penal Code, and damages under Articles 32, 33, and 34 of the
Civil Code of the Philippines arising from the same act or omission of the accused. [if !
supportFootnotes][28][endif]

The intention of private respondents to proceed primarily and directly against petitioner as
employer of accused truck driver became clearer when they did not ask for the dismissal of
the civil action against the latter based on quasi delict.
Consequently, the Court of Appeals and the trial court erred in holding the accused civilly
liable, and petitioner-employer of the accused subsidiarily liable for damages arising from
crime (ex delicto) in the criminal action as the offended parties in fact filed a separate civil
action against the employer based on quasi delict resulting in the waiver of the civil action ex
delicto.
It might be argued that private respondents as complainants in the criminal case withdrew
the reservation to file a civil action against the driver (accused) and manifested that they
would pursue the civil liability of the driver in the criminal action. However, the withdrawal is
ineffective to reverse the effect of the reservation earlier made because private respondents
did not withdraw the civil action against petitioner based on quasi delict. In such a case, the
provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules on Criminal Procedure is clear
that the reservation to file or the filing of a separate civil action results in a waiver of other
available civil actions arising from the same act or omission of the accused. Rule 111, Section
1, paragraph 2 enumerated what are the civil actions deemed waived upon such reservation or
filing, and one of which is the civil indemnity under the Revised Penal Code. Rule 111, Section

1, paragraph 3 of the 1985 Rules on Criminal Procedure specifically provides:

"A waiver of any of the civil actions extinguishes the others. The institution of, or the
reservation of the right to file, any of said civil actions separately waives
the others."
The rationale behind this rule is the avoidance of multiple suits between the same litigants
arising out of the same act or omission of the offender. The restrictive phraseology of the
section under consideration is meant to cover all kinds of civil actions, regardless of their
source in law, provided that the action has for its basis the same act or omission of the
offender.[if !supportFootnotes][29][endif]
However, petitioner as defendant in the separate civil action for damages filed against it,
based on quasi delict, may be held liable thereon. Thus, the trial court grievously erred in
dismissing plaintiffs civil complaint. And the Court of Appeals erred in affirming the trial
courts decision. Unfortunately private respondents did not appeal from such dismissal and
could not be granted affirmative relief.[if !supportFootnotes][30][endif]
The Court, however, in exceptional cases has relaxed the rules "in order to promote their
objectives and assist the parties in obtaining just, speedy, and inexpensive determination of
every action or proceeding"[if !supportFootnotes][31][endif] or exempted "a particular case from the
operation of the rules."[if !supportFootnotes][32][endif]
Invoking this principle, we rule that the trial court erred in awarding civil damages in the
criminal case and in dismissing the civil action. Apparently satisfied with such award, private
respondent did not appeal from the dismissal of the civil case. However, petitioner did appeal.
Hence, this case should be remanded to the trial court so that it may render decision in the
civil case awarding damages as may be warranted by the evidence.[if !supportFootnotes][33][endif]
With regard to the second issue, the award of damages in the criminal case was improper
because the civil action for the recovery of civil liability was waived in the criminal action by
the filing of a separate civil action against the employer. As enunciated in Ramos vs. Gonong,
[if !supportFootnotes][34][endif]
"civil indemnity is not part of the penalty for the crime committed." The
only issue brought before the trial court in the criminal action is whether accused Romeo
Dunca y de Tumol is guilty of reckless imprudence resulting in homicide and damage to
property. The action for recovery of civil liability is not included therein, but is covered by the
separate civil action filed against the petitioner as employer of the accused truck-driver.
In this case, accused-driver jumped bail pending his appeal from his conviction. Thus, the
judgment convicting the accused became final and executory, but only insofar as the penalty
in the criminal action is concerned. The damages awarded in the criminal action was invalid
because of its effective waiver. The pronouncement was void because the action for recovery
of the civil liability arising from the crime has been waived in said criminal action.
With respect to the issue that the award of damages in the criminal action exceeded the

amount of damages alleged in the amended information, the issue is de minimis. At any rate,
the trial court erred in awarding damages in the criminal case because by virtue of the
reservation of the right to bring a separate civil action or the filing thereof, "there would be no
possibility that the employer would be held liable because in such a case there would be no
pronouncement as to the civil liability of the accused.[if !supportFootnotes][35][endif]
As a final note, we reiterate that "the policy against double recovery requires that only one
action be maintained for the same act or omission whether the action is brought against the
employee or against his employer.[if !supportFootnotes][36][endif] The injured party must choose which of
the available causes of action for damages he will bring.[if !supportFootnotes][37][endif]
Parenthetically, the trial court found the accused "guilty beyond reasonable doubt of the
crime of Double Homicide Through Reckless Imprudence with violation of the Motor
Vehicle Law (Rep. Act No. 4136)." There is no such nomenclature of an offense under the
Revised Penal Code. Thus, the trial court was misled to sentence the accused "to suffer two (2)
indeterminate penalties of four (4) months and one (1) day of arresto mayor, as minimum, to
three (3) years, six (6) months and twenty (20) days of prision correccional, as maximum."
This is erroneous because in reckless imprudence cases, the actual penalty for criminal
negligence bears no relation to the individual willful crime or crimes committed, but is set in
relation to a whole class, or series of crimes.[if !supportFootnotes][38][endif]
Unfortunately, we can no longer correct this judgment even if erroneous, as it is, because it
has become final and executory.
Under Article 365 of the Revised Penal Code, criminal negligence "is treated as a mere quasi
offense, and dealt with separately from willful offenses. It is not a question of classification or
terminology. In intentional crimes, the act itself is punished; in negligence or imprudence,
what is principally penalized is the mental attitude or condition behind the act, the dangerous
recklessness, lack of care or foresight, the imprudencia punible. Much of the confusion has
arisen from the common use of such descriptive phrase as homicide through reckless
imprudence, and the like; when the strict technical sense is, more accurately, reckless
imprudence resulting in homicide; or simple imprudence causing damages to property." [if !

guilty beyond reasonable doubt of reckless imprudence resulting in homicide and damage to
property, defined and penalized under Article 365, paragraph 2 of the Revised Penal Code,
with violation of the automobile law (R. A. No. 4136, as amended), and sentences him to
suffer two (2) indeterminate penalties of four (4) months and one (1) day of arresto mayor, as
minimum, to three (3) years, six (6) months and twenty (20) days of prision correccional, as
maximum,[if !supportFootnotes][40][endif] without indemnity, and to pay the costs, and
(2) In Civil Case No. Br. 19-424, the Court orders the case re-opened to determine the liability
of the defendant Rafael Reyes Trucking Corporation to plaintiffs and that of plaintiffs on
defendants counterclaim.
No costs in this instance.
SO ORDERED.

[G.R. No. 129792. December 21, 1999]

JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and
ELISA PANELO, petitioners, vs. HONORABLE COURT OF APPEALS, CONRADO
C. AGUILAR and CRISELDA R. AGUILAR, respondents.
DECISION
DAVIDE, JR., C.J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court,
petitioners seek the reversal of the 17 June 1996 decision [if !supportFootnotes][1][endif] of the Court
of Appeals in C.A. G.R. No. CV 37937 and the resolution [if !supportFootnotes][2][endif]denying
their motion for reconsideration. The assailed decision set aside the 15 January 1992
judgment of the Regional Trial Court (RTC), Makati City, Branch 60 in Civil Case No.
7119 and ordered petitioners to pay damages and attorneys fees to private respondents
Conrado and Criselda (CRISELDA) Aguilar.

supportFootnotes][39][endif]

There is need, therefore, to rectify the designation of the offense without disturbing the
imposed penalty for the guidance of bench and bar in strict adherence to precedent.
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the amended decision and
resolution of the Court of Appeals in CA-G. R. CR No. 14448, promulgated on January 6,
1997, and the joint decision of the Regional Trial Court, Isabela, Branch 19, Cauayan, in
Criminal Case No. Br. 19-311 and Civil Case No. Br. 19-424, dated June 6, 1992.
IN LIEU THEREOF, the Court renders judgment as follows:
(1) In Criminal Case No. Br. 19-311, the Court declares the accused Romeo Dunca y de Tumol

Petitioner Jarco Marketing Corporation is the owner of Syvels Department Store,

Makati City. Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the stores
branch manager, operations manager, and supervisor, respectively. Private
respondents are spouses and the parents of Zhieneth Aguilar (ZHIENETH).

In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd
floor of Syvels Department Store, Makati City. CRISELDA was signing her credit card

slip at the payment and verification counter when she felt a sudden gust of wind and
heard a loud thud. She looked behind her. She then beheld her daughter ZHIENETH on
the floor, her young body pinned by the bulk of the stores gift-wrapping
counter/structure. ZHIENETH was crying and screaming for help. Although shocked,
CRISELDA was quick to ask the assistance of the people around in lifting the counter
and retrieving ZHIENETH from the floor.[if !supportFootnotes][3][endif]

ZHIENETH was quickly rushed to the Makati Medical Center where she was
operated on. The next day ZHIENETH lost her speech and thereafter communicated
with CRISELDA by writing on a magic slate. The injuries she sustained took their toil
on her young body. She died fourteen (14) days after the accident or on 22 May 1983,
on the hospital bed. She was six years old.[if !supportFootnotes][4][endif]

The cause of her death was attributed to the injuries she sustained. The
provisional medical certificate[if !supportFootnotes][5][endif] issued by ZHIENETHs attending
doctor described the extent of her injuries:

Diagnoses:
1. Shock, severe, sec. to intra-abdominal injuries due to blunt injury
2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L) lobe liver
3. Rupture, stomach, anterior & posterior walls
4. Complete transection, 4th position, duodenum
5. Hematoma, extensive, retroperitoneal
6. Contusion, lungs, severe
CRITICAL
After the burial of their daughter, private respondents demanded upon
petitioners the reimbursement of the hospitalization, medical bills and wake and
funeral expenses[if !supportFootnotes][6][endif] which they had incurred. Petitioners refused to pay.
Consequently, private respondents filed a complaint for damages, docketed as Civil
Case No. 7119 wherein they sought the payment of P157,522.86 for actual damages,
P300,000 for moral damages, P20,000 for attorneys fees and an unspecified amount
for loss of income and exemplary damages.

In their answer with counterclaim, petitioners denied any liability for the injuries
and consequent death of ZHIENETH. They claimed that CRISELDA was negligent in
exercising care and diligence over her daughter by allowing her to freely roam around
in a store filled with glassware and appliances. ZHIENETH too, was guilty of
contributory negligence since she climbed the counter, triggering its eventual collapse
on her. Petitioners also emphasized that the counter was made of sturdy wood with a
strong support; it never fell nor collapsed for the past fifteen years since its
construction.

Additionally, petitioner Jarco Marketing Corporation maintained that it

observed the diligence of a good father of a family in the selection, supervision and
control of its employees. The other petitioners likewise raised due care and diligence in
the performance of their duties and countered that the complaint was malicious for
which they suffered besmirched reputation and mental anguish. They sought the
dismissal of the complaint and an award of moral and exemplary damages and
attorneys fees in their favor.

In its decision[if !supportFootnotes][7][endif] the trial court dismissed the complaint and
counterclaim after finding that the preponderance of the evidence favored petitioners.
It ruled that the proximate cause of the fall of the counter on ZHIENETH was her act of
clinging to it. It believed petitioners witnesses who testified that ZHIENETH clung to
the counter, afterwhich the structure and the girl fell with the structure falling on top of
her, pinning her stomach. In contrast, none of private respondents witnesses testified
on how the counter fell. The trial court also held that CRISELDAs negligence
contributed to ZHIENETHs accident.

In absolving petitioners from any liability, the trial court reasoned that the
counter was situated at the end or corner of the 2nd floor as a precautionary measure
hence, it could not be considered as an attractive nuisance. [if !supportFootnotes][8][endif] The
counter was higher than ZHIENETH. It has been in existence for fifteen years. Its
structure was safe and well-balanced. ZHIENETH, therefore, had no business climbing
on and clinging to it.

Private respondents appealed the decision, attributing as errors of the trial court
its findings that: (1) the proximate cause of the fall of the counter was ZHIENETHs
misbehavior; (2) CRISELDA was negligent in her care of ZHIENETH; (3) petitioners
were not negligent in the maintenance of the counter; and (4) petitioners were not
liable for the death of ZHIENETH.

On the other hand, petitioners argued that private respondents raised purely
factual issues which could no longer be disturbed. They explained that ZHIENETHs
death while unfortunate and tragic, was an accident for which neither CRISELDA nor
even ZHIENETH could entirely be held faultless and blameless. Further, petitioners
adverted to the trial courts rejection of Gonzales testimony as unworthy of credence.

Further, private respondents asserted that ZHIENETH should be entitled to the

conclusive presumption that a child below nine (9) years is incapable of contributory
negligence. And even if ZHIENETH, at six (6) years old, was already capable of
contributory negligence, still it was physically impossible for her to have propped
herself on the counter. She had a small frame (four feet high and seventy pounds) and
the counter was much higher and heavier than she was. Also, the testimony of one of
the stores former employees, Gerardo Gonzales, who accompanied ZHIENETH when
she was brought to the emergency room of the Makati Medical Center belied petitioners
theory that ZHIENETH climbed the counter. Gonzales claimed that when ZHIENETH
was asked by the doctor what she did, ZHIENETH replied, [N]othing, I did not come
near the counter and the counter just fell on me. [if !supportFootnotes][9][endif] Accordingly,
Gonzales testimony on ZHIENETHs spontaneous declaration should not only be
considered as part of res gestae but also accorded credit.

As to private respondents claim that the counter should have been nailed to the
ground, petitioners justified that it was not necessary. The counter had been in
existence for several years without any prior accident and was deliberately placed at a
corner to avoid such accidents. Truth to tell, they acted without fault or negligence for
they had exercised due diligence on the matter. In fact, the criminal case [if !supportFootnotes][10]
[endif]
for homicide through simple negligence filed by private respondents against the
individual petitioners was dismissed; a verdict of acquittal was rendered in their favor.

Moreover, negligence could not be imputed to CRISELDA for it was reasonable

for her to have let go of ZHIENETH at the precise moment that she was signing the
credit card slip.

Finally, private respondents vigorously maintained that the proximate cause of

ZHIENETHs death, was petitioners negligence in failing to institute measures to have
the counter permanently nailed.

The Court of Appeals, however, decided in favor of private respondents and

reversed the appealed judgment. It found that petitioners were negligent in
maintaining a structurally dangerous counter. The counter was shaped like an inverted
L[if !supportFootnotes][11][endif] with a top wider than the base. It was top heavy and the weight of
the upper portion was neither evenly distributed nor supported by its narrow base.
Thus, the counter was defective, unstable and dangerous; a downward pressure on the
overhanging portion or a push from the front could cause the counter to fall. Two
former employees of petitioners had already previously brought to the attention of the
management the danger the counter could cause. But the latter ignored their concern.
The Court of Appeals faulted the petitioners for this omission, and concluded that the
incident that befell ZHIENETH could have been avoided had petitioners repaired the
defective counter. It was inconsequential that the counter had been in use for some
time without a prior incident.

The Court of Appeals declared that ZHIENETH, who was below seven (7) years
old at the time of the incident, was absolutely incapable of negligence or other tort. It
reasoned that since a child under nine (9) years could not be held liable even for an
intentional wrong, then the six-year old ZHIENETH could not be made to account for a
mere mischief or reckless act. It also absolved CRISELDA of any negligence, finding

nothing wrong or out of the ordinary in momentarily allowing ZHIENETH to walk

while she signed the document at the nearby counter.

The Court of Appeals also rejected the testimonies of the witnesses of petitioners.
It found them biased and prejudiced. It instead gave credit to the testimony of
disinterested witness Gonzales. The Court of Appeals then awarded P99,420.86 as
actual damages, the amount representing the hospitalization expenses incurred by
private respondents as evidenced by the hospital's statement of account. [if !supportFootnotes][12]
[endif]
It denied an award for funeral expenses for lack of proof to substantiate the same.
Instead, a compensatory damage of P50,000 was awarded for the death of ZHIENETH.

We quote the dispositive portion of the assailed decision, [if

where said negligence was the proximate cause of the injury sustained. The injury in
the instant case was the death of ZHIENETH. The proximate cause was ZHIENETHs
act of clinging to the counter. This act in turn caused the counter to fall on her. This and
CRISELDAs contributory negligence, through her failure to provide the proper care and
attention to her child while inside the store, nullified private respondents claim for
damages. It is also for these reasons that parents are made accountable for the damage
or injury inflicted on others by their minor children. Under these circumstances,
petitioners could not be held responsible for the accident that befell ZHIENETH.

Petitioners also assail the credibility of Gonzales who was already separated from
Syvels at the time he testified; hence, his testimony might have been tarnished by illfeelings against them.

!supportFootnotes][13][endif]

thus:

WHEREFORE, premises considered, the judgment of the lower court is SET ASIDE and
another one is entered against [petitioners], ordering them to pay jointly and severally unto
[private respondents] the following:
1. P50,000.00 by way of compensatory damages for the death of Zhieneth Aguilar, with legal
interest (6% p.a.) from 27 April 1984;
2. P99,420.86 as reimbursement for hospitalization expenses incurred; with legal interest
(6% p.a.) from 27 April 1984;
3. P100,000.00 as moral and exemplary damages;
4. P20,000.00 in the concept of attorneys fees; and
5. Costs.
Private respondents sought a reconsideration of the decision but the same was
denied in the Court of Appeals resolution[if !supportFootnotes][14][endif] of 16 July 1997.

Petitioners now seek the reversal of the Court of Appeals decision and the
reinstatement of the judgment of the trial court. Petitioners primarily argue that the
Court of Appeals erred in disregarding the factual findings and conclusions of the trial
court. They stress that since the action was based on tort, any finding of negligence on
the part of the private respondents would necessarily negate their claim for damages,

For their part, private respondents principally reiterated their arguments that
neither ZHIENETH nor CRISELDA was negligent at any time while inside the store;
the findings and conclusions of the Court of Appeals are substantiated by the evidence
on record; the testimony of Gonzales, who heard ZHIENETH comment on the incident
while she was in the hospitals emergency room should receive credence; and finally,
ZHIENETHs part of the res gestae declaration that she did nothing to cause the heavy
structure to fall on her should be considered as the correct version of the gruesome
events.

We deny the petition.

The two issues to be resolved are: (1) whether the death of ZHIENETH was
accidental or attributable to negligence; and (2) in case of a finding of negligence,
whether the same was attributable to private respondents for maintaining a defective
counter or to CRISELDA and ZHIENETH for failing to exercise due and reasonable
care while inside the store premises.

An accident pertains to an unforeseen event in which no fault or negligence

attaches to the defendant.[if !supportFootnotes][15][endif] It is a fortuitous circumstance, event or
happening; an event happening without any human agency, or if happening wholly or
partly through human agency, an event which under the circumstances is unusual or
unexpected by the person to whom it happens.[if !supportFootnotes][16][endif]

On the other hand, negligence is the omission to do something which a

reasonable man, guided by those considerations which ordinarily regulate the conduct
of human affairs, would do, or the doing of something which a prudent and reasonable
man would not do.[if !supportFootnotes][17][endif] Negligence is the failure to observe, for the
protection of the interest of another person, that degree of care, precaution and
vigilance which the circumstances justly demand, whereby such other person suffers
injury.[if !supportFootnotes][18][endif]

Accident and negligence are intrinsically contradictory; one cannot exist with the
other. Accident occurs when the person concerned is exercising ordinary care, which is
not caused by fault of any person and which could not have been prevented by any
means suggested by common prudence.[if !supportFootnotes][19][endif]

The test in determining the existence of negligence is enunciated in the landmark

case of Picart v. Smith,[if !supportFootnotes][20][endif] thus: Did the defendant in doing the alleged
negligent act use that reasonable care and caution which an ordinarily prudent
person would have used in the same situation? If not, then he is guilty of negligence. [if !
supportFootnotes][21][endif]

We rule that the tragedy which befell ZHIENETH was no accident and that
ZHIENETHs death could only be attributed to negligence.

We quote the testimony of Gerardo Gonzales who was at the scene of the
incident and accompanied CRISELDA and ZHIENETH to the hospital:

Q While at the Makati Medical Center, did you hear or notice anything while the child was
being treated?
A At the emergency room we were all surrounding the child. And when the doctor asked the
child what did you do, the child said nothing, I did not come near the counter and the counter
just fell on me.
Q (COURT TO ATTY. BELTRAN)
You want the words in Tagalog to be translated?
ATTY. BELTRAN
Yes, your Honor.
COURT
Granted. Intercalate wala po, hindi po ako lumapit doon. Basta bumagsak.[if !
supportFootnotes][22][endif]

This testimony of Gonzales pertaining to ZHIENETHs statement formed (and

should be admitted as) part of the res gestae under Section 42, Rule 130 of the Rules of
Court, thus:

Part of res gestae. Statements made by a person while a startling occurrence is taking
place or immediately prior or subsequent thereto with respect to the circumstances
thereof, may be given in evidence as part of the res gestae. So, also, statements
accompanying an equivocal act material to the issue, and giving it a legal significance,
may be received as part of the res gestae.

It is axiomatic that matters relating to declarations of pain or suffering and

statements made to a physician are generally considered declarations and admissions.
[if !supportFootnotes][23][endif]
All that is required for their admissibility as part of the res gestae is
that they be made or uttered under the influence of a startling event before the
declarant had the time to think and concoct a falsehood as witnessed by the person who
testified in court. Under the circumstances thus described, it is unthinkable for
ZHIENETH, a child of such tender age and in extreme pain, to have lied to a doctor
whom she trusted with her life. We therefore accord credence to Gonzales testimony on
the matter, i.e., ZHIENETH performed no act that facilitated her tragic death. Sadly,
petitioners did, through their negligence or omission to secure or make stable the

counters base.

Q Will you please described [sic] to the honorable Court the counter where you were assigned
in January 1983?
xxx

Gonzales earlier testimony on petitioners insistence to keep and maintain the

structurally unstable gift-wrapping counter proved their negligence, thus:

Q When you assumed the position as gift wrapper at the second floor, will you please describe
the gift wrapping counter, were you able to examine?
A Because every morning before I start working I used to clean that counter and since it is not
nailed and it was only standing on the floor, it was shaky.
xxx

Q Will you please describe the counter at 5:00 oclock [sic] in the afternoon on [sic] May 9
1983?
A At that hour on May 9, 1983, that counter was standing beside the verification counter. And
since the top of it was heavy and considering that it was not nailed, it can collapse at
anytime, since the top is heavy.
xxx

Q And what did you do?

A I informed Mr. Maat about that counter which is [sic] shaky and since Mr. Maat is
fond of putting display decorations on tables, he even told me that I would
put some decorations. But since I told him that it not [sic] nailed and it is
shaky he told me better inform also the company about it. And since the
company did not do anything about the counter, so I also did not do
anything about the counter.[if !supportFootnotes][24][endif] [Emphasis supplied]

Ramon Guevarra, another former employee, corroborated the testimony of

Gonzales, thus:

A That counter assigned to me was when my supervisor ordered me to carry that counter to
another place. I told him that the counter needs nailing and it has to be nailed because it
might cause injury or accident to another since it was shaky.
Q When that gift wrapping counter was transferred at the second floor on February 12, 1983,
will you please describe that to the honorable Court?
A I told her that the counter wrapper [sic] is really in good [sic] condition; it was shaky. I
told her that we had to nail it.
Q When you said she, to whom are you referring to [sic]?
A I am referring to Ms. Panelo, sir.
Q And what was the answer of Ms. Panelo when you told her that the counter was shaky?
A She told me Why do you have to teach me. You are only my subordinate and you are to
teach me? And she even got angry at me when I told her that.
xxx

Q From February 12, 1983 up to May 9, 1983, what if any, did Ms. Panelo or any employee of
the management do to that (sic)
xxx

Witness:
None, sir. They never nailed the counter. They only nailed the counter after the
accident happened.[if !supportFootnotes][25][endif] [Emphasis supplied]

Without doubt, petitioner Panelo and another store supervisor were personally
informed of the danger posed by the unstable counter. Yet, neither initiated any
concrete action to remedy the situation nor ensure the safety of the stores employees
and patrons as a reasonable and ordinary prudent man would have done. Thus, as
confronted by the situation petitioners miserably failed to discharge the due diligence
required of a good father of a family.

On the issue of the credibility of Gonzales and Guevarra, petitioners failed to

establish that the formers testimonies were biased and tainted with partiality.
Therefore, the allegation that Gonzales and Guevarras testimonies were blemished by
ill feelings against petitioners since they (Gonzales and Guevarra) were already
separated from the company at the time their testimonies were offered in court was but
mere speculation and deserved scant consideration.

It is settled that when the issue concerns the credibility of witnesses, the
appellate courts will not as a general rule disturb the findings of the trial court, which is
in a better position to determine the same. The trial court has the distinct advantage of
actually hearing the testimony of and observing the deportment of the witnesses. [if !
supportFootnotes][26][endif]
However, the rule admits of exceptions such as when its evaluation
was reached arbitrarily or it overlooked or failed to appreciate some facts or
circumstances of weight and substance which could affect the result of the case. [if !
supportFootnotes][27][endif]
In the instant case, petitioners failed to bring their claim within the
exception.

Anent the negligence imputed to ZHIENETH, we apply the conclusive

presumption that favors children below nine (9) years old in that they are incapable of
contributory negligence. In his book,[if !supportFootnotes][28][endif] former Judge Cezar S. Sangco
stated:

In our jurisdiction, a person under nine years of age is conclusively presumed to have acted
without discernment, and is, on that account, exempt from criminal liability. The same
presumption and a like exemption from criminal liability obtains in a case of a person over
nine and under fifteen years of age, unless it is shown that he has acted with discernment.
Since negligence may be a felony and a quasi-delict and required discernment as a condition
of liability, either criminal or civil, a child under nine years of age is, by analogy, conclusively
presumed to be incapable of negligence; and that the presumption of lack of discernment or
incapacity for negligence in the case of a child over nine but under fifteen years of age is a
rebuttable one, under our law. The rule, therefore, is that a child under nine years of age
must be conclusively presumed incapable of contributory negligence as a matter of law.
[Emphasis supplied]

Even if we attribute contributory negligence to ZHIENETH and assume that she

climbed over the counter, no injury should have occurred if we accept petitioners
theory that the counter was stable and sturdy. For if that was the truth, a frail six-year
old could not have caused the counter to collapse. The physical analysis of the counter
by both the trial court and Court of Appeals and a scrutiny of the evidence [if !supportFootnotes]
[29][endif]
on record reveal otherwise, i.e., it was not durable after all. Shaped like an
inverted L, the counter was heavy, huge, and its top laden with formica. It protruded
towards the customer waiting area and its base was not secured.[if !supportFootnotes][30][endif]

CRISELDA too, should be absolved from any contributory negligence. Initially,

ZHIENETH held on to CRISELDAs waist, later to the latters hand. [if !supportFootnotes][31][endif]
CRISELDA momentarily released the childs hand from her clutch when she signed her
credit card slip. At this precise moment, it was reasonable and usual for CRISELDA to
let go of her child. Further, at the time ZHIENETH was pinned down by the counter,
she was just a foot away from her mother; and the gift-wrapping counter was just four
meters away from CRISELDA.[if !supportFootnotes][32][endif] The time and distance were both
significant. ZHIENETH was near her mother and did not loiter as petitioners would
want to impress upon us. She even admitted to the doctor who treated her at the
hospital that she did not do anything; the counter just fell on her.

WHEREFORE, in view of all the foregoing, the instant petition is DENIED and the
challenged decision of the Court of Appeals of 17 June 1996 in C.A. G.R. No. CV 37937 is
hereby AFFIRMED.
Costs against petitioners.

SO ORDERED.
[G.R. No. 141258. April 9, 2003]
TOMASA SARMIENTO, petitioner, vs. SPS. LUIS & ROSE SUN-CABRIDO and
MARIA LOURDES SUN, respondents.
DECISION
CORONA, J.:

This appeal by certiorari stems from the Decision[if !supportFootnotes][1][endif] of respondent Court of
Appeals promulgated on November 26, 1999 in CA-G.R. SP No. 47431 declaring the private
respondents not liable for damages.
Petitioner, Tomasa Sarmiento, states that sometime in April 1994, a friend, Dra. Virginia Lao,
requested her to find somebody to reset a pair of diamond earrings into two gold rings. [if !
supportFootnotes][2][endif]
Accordingly, petitioner sent a certain Tita Payag with the pair of earrings to
Dingdings Jewelry Shop, owned and managed by respondent spouses Luis and Rose Cabrido,
[if !supportFootnotes][3][endif]
which accepted the job order for P400.[if !supportFootnotes][4][endif]
Petitioner provided 12 grams of gold to be used in crafting the pair of ring settings. [if !
supportFootnotes][5][endif]
After 3 days, Tita Payag delivered to the jewelry shop one of Dra. Laos
diamond earrings which was earlier appraised as worth .33 carat and almost perfect in cut
and clarity.[if !supportFootnotes][6][endif] Respondent Ma. Lourdes (Marilou) Sun went on to dismount
the diamond from its original setting. Unsuccessful, she asked their goldsmith, Zenon Santos,
to do it. Santos removed the diamond by twisting the setting with a pair of pliers, breaking the
gem in the process.[if !supportFootnotes][7][endif]
Petitioner required the respondents to replace the diamond with the same size and quality.
When they refused, the petitioner was forced to buy a replacement in the amount of P30,000.

which rendered a decision[if !supportFootnotes][14][endif] in favor of the petitioner, the dispositive portion
of which reads:
WHEREFORE, Decision is hereby rendered in favor of plaintiff Tomasa Sarmiento and
against defendants Spouses Luis and Rose Sun-Cabrido, ordering defendants to pay jointly
and severally the amount of Thirty Thousand Pesos (P30,000.00) as actual or compensatory
damages; Three Thousand Pesos (P3,000.00) as moral damages; Five Thousand Pesos
(P5,000.00) as attorneys fees; Two Thousand Pesos (P2,000.00) as litigation expenses, with
legal interest of 6% per annum from the date of this decision and 12% per annum from the
date when this decision becomes final until the amounts shall have been fully paid and to pay
the costs.
This case as against defendant Maria Lourdes Sun as well as defendants counterclaim are
dismissed for lack of merit.
SO ORDERED.
On appeal, the Regional Trial Court (RTC) of Tagbilaran City, Branch 3, reversed the decision
of the MTCC, thus absolving the respondents of any responsibility arising from breach of
contract.[if !supportFootnotes][15][endif] Finding no reversible error, the Court of Appeals (CA) affirmed
the judgment of the RTC in its Decision promulgated on November 26, 1999. [if !supportFootnotes][16]

[if !supportFootnotes][8][endif]

[endif]

Respondent Rose Cabrido, manager of Dingdings Jewelry Shop, denied having entered into
any transaction with Tita Payag whom she met only after the latter came to the jewelry shop
to seek compensation from Santos for the broken piece of jewelry.[if !supportFootnotes][9][endif]
However, it was possible that Payag may have availed of their services as she could not have
known every customer who came to their shop. Rose disclosed that she usually arrived at
11:00 a.m. When she was not around, her mother and sister tended the shop.[if !supportFootnotes][10]

Unable to accept the decision, the petitioner filed the instant petition for review with the
following assigned errors:
I
THE COURT OF APPEALS ERRED IN MAINTAINING AND SO HOLDING THAT ZENON
SANTOS IS NOT AN EMPLOYEE OF DEFENDANT (herein respondent) ROSE SUNCABRIDO, AND IS THEREFORE ANSWERABLE FOR HIS OWN ACTS OR OMISSIONS
II
THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE REGIONAL TRIAL
COURTS PRONOUNCEMENTS THAT THERE EXISTS NO AGREEMENT BETWEEN THE
PETITIONER AND RESPONDENTS THAT THE LATTER WOULD ANSWER FOR ANY
LIABILITY SHOULD THE DIAMOND BE DAMAGED IN THE PROCESS OF
DISMOUNTING THEM FROM THE EARRINGS.
Essentially, petitioner claims that the dismounting of the diamond from its original setting
was part of the obligation assumed by the private respondents under the contract of service.
Thus, they should be held liable for damages arising from its breakage. On the other hand, the
version of the private respondents, upheld by the RTC and the CA, is that their agreement
with the petitioner was for crafting two gold rings mounted with diamonds only and did not
include the dismounting of the said diamonds from their original setting.[if !supportFootnotes][17][endif]
Consequently, the crux of the instant controversy is the scope of the obligation assumed by

[endif]

Marilou admitted knowing Payag who came to Dingdings Jewelry Shop to avail of their
services regarding a certain piece of jewelry. After a short conversation, Payag went inside the
shop to see Santos. When the precious stone was broken by Santos, Payag demanded P15,000
from him. As the latter had no money, she turned to Marilou for reimbursement apparently
thinking that Marilou was the owner of the shop.[if !supportFootnotes][11][endif]
For his part, Santos recalled that Payag requested him to dismount what appeared to him was
a sapphire. While clipping the setting with the use of a small pair of pliers, the stone
accidentally broke. Santos denied being an employee of Dingdings Jewelry Shop. [if !supportFootnotes]
[12][endif]

Attempts to settle the controversy before the barangay lupon proved futile.[if !supportFootnotes][13]
[endif]
Consequently, petitioner filed a complaint for damages on June 28, 1994 with the
Municipal Trial Court in Cities (MTCC) of Tagbilaran City docketed as Civil Case No. 2339

the private respondents under the verbal contract of service with the petitioner.
The Court notes that, during the trial, private respondents vigorously denied any transaction
between Dingdings Jewelry Shop and the petitioner, through Tita Payag. Rose Cabrido, for
instance, denied having ever met Payag before the latter came to seek reimbursement for the
value of the broken diamond. Likewise, while Marilou acknowledged acquaintance with
Payag, she nevertheless denied accepting any job order from her. Debunking their
protestations, however, the MTCC of Tagbilaran City rendered its decision on November 26,
1999 in favor of herein petitioner.
Apparently realizing the weakness and futility of their position, private respondents
conceded, on appeal, the existence of an agreement with the petitioner for crafting a pair of
gold rings mounted with diamonds. This apparent concession by the private respondents,
however, was really nothing but an ingenious maneuver, designed to preclude, just the same,
any recovery for damages by the petitioner. Thus, while ostensibly admitting the existence of
the said agreement, private respondents, nonetheless denied assuming any obligation to
dismount the diamonds from their original settings.[if !supportFootnotes][18][endif]
The inconsistent position of the private respondents impugns their credibility. They cannot be
permitted to adopt a certain stance, only to vacillate later to suit their interest. We are
therefore inclined to agree with the MTCC in giving credence to the version of the petitioner.
The MTCC had the unique opportunity to actually observe the behavior and demeanor of the
witnesses as they testified during the trial.[if !supportFootnotes][19][endif]
At any rate, the contemporaneous and subsequent acts of the parties[if !supportFootnotes][20][endif]
support the version of the petitioner. Thus, when Tita Payag asked Marilou of Dingdings
Jewelry Shop to reset a pair of diamond earrings, she brought with her the said pieces of
jewelry so that the diamonds which were still mounted could be measured and the new ring
settings crafted accordingly. On the said occasion, Marilou expressed no reservation
regarding the dismounting of the diamonds which, after all, was an integral part of petitioners
job order. She should have instructed Payag to have them dismounted first if Marilou had
actually intended to spare the jewelry shop of the task but she did not. Instead, petitioner was
charged P400 for the job order which was readily accepted. Thus, a perfected contract to reset
the pair of diamond earrings arose between the petitioner, through Payag, and Dingdings
Jewelry Shop, through Marilou.
Marilous subsequent actuations were even more revealing as regards the scope of obligation
assumed by the jewelry shop. After the new settings were completed in 3 days, she called up
the petitioner to bring the diamond earrings to be reset.[if !supportFootnotes][21][endif] Having initially
examined one of them, Marilou went on to dismount the diamond from its original setting.
Unsuccessful, she then delegated the task to their goldsmith, Zenon Santos. Having acted the
way she did, Marilou cannot now deny the shops obligation to reset the pair of earrings.

Obligations arising from contracts have the force of law between the contracting parties. [if !
supportFootnotes][22][endif]
Corollarily, those who in the performance of their obligations are guilty of
fraud, negligence or delay and those who in any manner contravene the tenor thereof, are
liable for damages.[if !supportFootnotes][23][endif] The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the obligation and corresponds
with the circumstances of the persons, of the time and of the place.[if !supportFootnotes][24][endif]
In the case at bar, it is beyond doubt that Santos acted negligently in dismounting the
diamond from its original setting. It appears to be the practice of the trade to use a miniature
wire saw in dismounting precious gems, such as diamonds, from their original settings. [if !
supportFootnotes][25][endif]
However, Santos employed a pair of pliers in clipping the original setting,
thus resulting in breakage of the diamond. The jewelry shop failed to perform its obligation
with the ordinary diligence required by the circumstances. It should be pointed out that
Marilou examined the diamond before dismounting it from the original setting and found the
same to be in order. Its subsequent breakage in the hands of Santos could only have been
caused by his negligence in using the wrong equipment. Res ipsa loquitur.
Private respondents seek to avoid liability by passing the buck to Santos who claimed to be an
independent worker. They also claim, rather lamely, that Marilou simply happened to drop by
at Dingdings Jewelry Shop when Payag arrived to place her job order. [if !supportFootnotes][26][endif]
We do not think so.
The facts show that Santos had been working at Dingdings Jewelry Shop as goldsmith for
about 6 months accepting job orders through referrals from private respondents. [if !supportFootnotes]
[27][endif]
On the other hand, Payag stated that she had transacted with Dingdings Jewelry Shop
on at least 10 previews occasions, always through Marilou.[if !supportFootnotes][28][endif] The
preponderance of evidence supports the view that Marilou and Zenon Santos were employed
at Dingdings Jewelry Shop in order to perform activities which were usually necessary or
desirable in its business.[if !supportFootnotes][29][endif]
We therefore hold that an obligation to pay actual damages arose in favor of the petitioner
against the respondents spouses who admittedly owned and managed Dingdings Jewelry
Shop. It was proven that petitioner replaced the damaged jewelry in the amount of P30,000.
[if !supportFootnotes][30][endif]

The facts of the case also justify the award of moral damages. As a general rule, moral
damages are not recoverable in actions for damages predicated on a breach of contract for it is
not one of the items enumerated under Article 2219 of the Civil Code.[if !supportFootnotes][31][endif]
Moral damages may be awarded in a breach of contract only when there is proof that
defendant acted in bad faith, or was guilty of gross negligence amounting to bad faith, or in
wanton disregard of his contractual obligation.[if !supportFootnotes][32][endif] Santos was a goldsmith for
more than 40 years.[if !supportFootnotes][33][endif] Given his long experience in the trade, he should have

known that using a pair of pliers instead of a miniature wire saw in dismounting a precious
stone like a diamond would have entailed an unnecessary risk of breakage. He went on with it
anyway. Hence, respondent spouses are liable for P10,000 as moral damages due to the gross
negligence of their employee.
However, private respondents refusal to pay the value of the damaged jewelry emanated from
an honest belief that they were not responsible therefor, hence, negating any basis for the
award of attorneys fees.[if !supportFootnotes][34][endif]

WHEREFORE, the instant petition is GRANTED and the assailed decision of the
Court of Appeals dated November 26, 1999 is hereby reversed and set aside. Private
respondents Luis Cabrido and Rose Sun-Cabrido are hereby ordered to pay, jointly and
severally, the amount of P30,000 as actual damages and P10,000 as moral damages in favor
of the petitioner.
No costs.
SO ORDERED.