Worcester v Ocampo

Facts:

Defendants were owners of two newspapers, El Renascimiento and Muling Pagsilang. These had large circulations throughout the Philippines and were published in Spanish and Tagalog.

It was alleged that the newspapers have been maliciously persecuting the plaintiff, member of the Civil Commission of the Philippines and Sec. of Interior, for a long time and on October 30, 1908, published a libelous article in the Birds of Prey
column.

It was alleged that in the performance of his duties, he ascended to the Mountains of Benguet to study the Igorots; there were gold reserves in the area and that as part of the Civil Commission, he took part in legislation covering the same; As SI,
had authority over implementing laws regarding the slaughtering of cattle; purchase of parcel of land in Manila and negotiated with a certain firm to open a hotel in the filled-in lands of Manila.

Defendants charged him with the prostitution of his office; for being a bird of prey. Aside from libel, they were also inciting the people to go against his office and make him so unpopular that he would have to resign. Defendants have been
trying to destroy the publics confidence in him.

Defense filed a demurrer saying that the complaint is vague and unintelligible; they had no cause of action; there was a pending case of the same cause; erroneous inclusion of other defendants; prayer for dismissal.

(5) That the defendants Lope K. Santos, Faustino Aguilar, Leoncio G. Liquete, Manuel Palma, Arcadio Arellano, Angel Jose, Galo Lichauco, Felipe Barretto, and Gregorio M. Cansipit have been erroneously included in the complaint, for the simple
reason that the first two were acquitted in said cause No. 4295 for libel, the third was used as a witness by the prosecution in the same cause, and the latter ones have no interest, directly or indirectly, in the newspaper "El Renacimiento," in
which the plaintiff presumes, was published the editorial which forms the basis of the complaint, and which is said to be libelous; and concluding with a prayer to the court to dismiss the case, with cost against the plaintiff.

Overruled by the RTC. RTC ruled in favor of the plaintiff.

Issue: W/N defendants, Lope K. Santos, Faustino Aguilar, Leoncio G. Liquete, Manuel Palma, Arcadio Arellano, Angel Jose, Galo Lichauco, Felipe Barretto, and Gregorio M. Cansipit are proper parties to the case and can they be held liable. YES.

Ratio:

As shareholders and co-owners of the paper, they are all liable as joint tortfeasors. It is not necessary that the cooperation of the joint tortfeasor be through a direct, corporeal act.

The appellants discussed the eight and ninth assignments of error together, and claim that the lower court committed an error in rendering a judgment jointly and severally against the defendants and in allowing an execution against the
individual property of said owners, and cite provisions of the Civil and Commercial Codes in support of their contention. The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is a tort.
They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates, but is also jointly liable with his tort feasors. The defendants might have been sued separately for the
commission of the tort. They might have been sued jointly and severally, as they were. (Nicoll vs. Glennie, 1 M. & S. (English Common Law Reports), 558.) If several persons jointly commit a tort, the plaintiff or person injured, has his election to
sue all or some of the parties jointly, or one of them separately, because the tort is in its nature a separate act of each individual. (1 Chiddey, Common Law Pleadings, 86.) It is not necessary that the cooperation should be a direct, corporeal act,
for, to give an example, in a case of assault and battery committed by various persons, under the common law all are principals. So also is the person who counsels, aids or assists in any way he commission of a wrong. Under the common law, he
who aided or assisted or counseled, in any way, the commission of a crime, was as much a principal as he who inflicted or committed the actual tort. (Page vs. Freeman, 19 Mo., 421.)

It may be stated as a general rule, that the joint tort feasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done
for their benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves. (Cooley on Torts, 133; Moir vs. Hopkins, 16 Ill., 313 (63 Am. Dec., 312 and note); Berry vs.
Fletch, 1st Dill., 67; Smithwick vs. Ward, 7 Jones L. 64; Smith vs. Felt, 50 Barb. (N. Y.), 612; Shepard vs. McQuilkin, 2 W. Va., 90; Lewis vs. Johns, 34 Cal., 269.)

Joint tort feasors are jointly and severally liable for the tort which they commit. The person injured may sue all of them, or any number less than all. Each is liable for the whole damage caused by all, and all together are jointly liable for the whole
damage. It is no defense for one sued alone, that the others who participated in the wrongful act are not joined with him as defendants; nor is it any excuse for him that his participation in the tort was insignificant as compared with that of the
others. (Forebrother vs. Ansley, 1 Campbell (English Reports), 343; Pitcher vs. Bailey, 8 East, 171; Booth vs. Hodgson, 6 Term Reports, 405; Vose vs. Grant, 15 Mass., 505; Acheson vs. Miller, 18 Ohio, 1; Wallace vs. Miller, 15 La. Ann., 449; Murphy
vs. Wilson, 44 Mo., 313; Bishop vs. Ealey, 9 Johnson (N. Y.), 294.)

Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among themselves. They can no insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable
for the full amount. (Pardrige vs. Brady, 7 Ill. App., 639; Carney vs. Read, 11 Ind., 417; Lee vs. Black, 27 Ark., 337; Bevins vs. McElroy, 52 Am. Dec., 258.)

A payment in full of the damage done, by one of the joint tort feasors, of course satisfies any claim which might exist against the others. There can be but one satisfaction. The release of one of the joint tort feasors by agreement, generally
operates to discharge all. (Wright vs. Lathrop, 2 Ohio, 33; Livingston vs. Bishop, 1 Johnson (N.Y.), 290; Brown vs. Marsh, 7 Vt., 327; Ayer vs. Ashmead, 31 Conn., 447; Eastman vs. Grant, 34 Vt., 387; Turner vs. Hitchcock, 20 Iowa, 310; Ellis vs. Esson,
50 Wis., 149.)

Of course the courts during the trial may find that some of the alleged joint tort feasors are liable and that others are not liable. The courts may release some for lack of evidence while condemning others of the alleged tort feasors. And this is
true even though they are charged jointly and severally. (Lansing vs. Montgomery, 2 Johnson (N. Y.), 382; Drake vs. Barrymore, 14 Johnson, 166; Owens vs. Derby, 3 Ill., 126.)

This same principle is recognized by Act 277 of the Philippine Commission. Section 6 provides that:
Every author, editor or proprietor . . . is chargeable with the publication of any words in any part . . . or number of each newspaper, as fully as if he were the author of the same.

In our opinion the lower court committed no error in rendering a joint and several judgment against the defendants and allowing an execution against their individual property. The provisions of the Civil and Commercial Codes cited by the
defendants and appellants have no application whatever to the question presented in the present case.

MMTC v CA

Facts: At about six o'clock in the morning of August 28, 1979, plaintiff-appellant Nenita Custodio boarded as a paying passenger a public utility jeepney with plate No. D7 305 PUJ Pilipinas 1979, then driven by defendant Agudo Calebag and owned
by his co-defendant Victorino Lamayo, bound for her work at Dynetics Incorporated located in Bicutan, Taguig, Metro Manila, where she then worked as a machine operator earning P16.25 a day. While the passenger jeepney was travelling at (a)
fast clip along DBP Avenue, Bicutan, Taguig, Metro Manila another fast moving vehicle, a Metro Manila Transit Corp. (MMTC, for short) bus bearing plate no. 3Z 307 PUB (Philippines) "79 driven by defendant Godofredo C. Leonardo was
negotiating Honeydew Road, Bicutan, Taguig, Metro Manila bound for its terminal at Bicutan. As both vehicles approached the intersection of DBP Avenue and Honeydew Road they failed to slow down and slacken their speed; neither did they
blow their horns to warn approaching vehicles. As a consequence, a collision between them occurred, the passenger jeepney ramming the left side portion of the MMTC bus. The collision impact caused plaintiff-appellant Nenita Custodio to hit
the front windshield of the passenger jeepney and (she) was thrown out therefrom, falling onto the pavement unconscious with serious physical injuries. She was brought to the Medical City Hospital where she regained consciousness only after
one (1) week. Thereat, she was confined for twenty-four (24) days, and as a consequence, she was unable to work for three and one half months (31/2).

RTC: The reorganized trial court, in its decision of August 1, 1989, 10 found both drivers of the colliding vehicles concurrently negligent for non-observance of appropriate traffic rules and regulations and for failure to take the usual precautions
when approaching an intersection. As joint tortfeasors, both drivers, as well as defendant Lamayo, were held solidarily liable for damages sustained by plaintiff Custodio. Defendant MMTC, on the bases of the evidence presented was, however,
absolved from liability for the accident on the ground that it was not only careful and diligent in choosing and screening applicants for job openings but was also strict and diligent in supervising its employees by seeing to it that its employees
were in proper uniforms, briefed in traffic rules and regulations before the start of duty, and that it checked its employees to determine whether or not they were positive for alcohol and followed other rules and regulations and guidelines of the
Bureau of Land Transportation and of the company.

CA: modified the trial court's decision by holding MMTC solidarily liable with the other defendants for the damages awarded by the trial court because of their concurrent negligence

Issue: W/N Employer may be held solidarily liable with employer. YES.

Ratio: As early as the case of Gutierrez vs. Gutierrez, 51 and thereafter, we have consistently held that where the injury is due to the concurrent negligence of the drivers of the colliding vehicles, the drivers and owners of the said vehicles shall be
primarily, directly and solidarily liable for damages and it is immaterial that one action is based on quasi-delict and the other on culpa contractual, as the solidarily of the obligation is justified by the very nature thereof.

Ruks v Adworld

Facts: The instant case arose from a complaint for damages filed by Adworld against Transworld and Comark International Corporation (Comark) before the RTC.5 In the complaint, Adworld alleged that it is the owner of a 75 ft. x 60 ft. billboard
structure located at EDSA Tulay, Guadalupe, Barangka Mandaluyong, which was misaligned and its foundation impaired when, on August 11, 2003, the adjacent billboard structure owned by Transworld and used by Comark collapsed and crashed
against it. Resultantly, on August 19, 2003, Adworld sent Transworld and Comark a letter demanding payment for the repairs of its billboard as well as loss of rental income. On August 29, 2003, Transworld sent its reply, admitting the damage
caused by its billboard structure on Adworlds billboard, but nevertheless, refused and failed to pay the amounts demanded by Adworld. As Adworlds final demand letter also went unheeded, it was constrained to file the instant complaint,
praying for damages in the aggregate amount of P474,204.00, comprised of P281,204.00 for materials, P72,000.00 for labor, and P121,000.00 for indemnity for loss of income.6chanRoblesvirtualLawlibrary

In its Answer with Counterclaim, Transworld averred that the collapse of its billboard structure was due to extraordinarily strong winds that occurred instantly and unexpectedly, and maintained that the damage caused to Adworlds billboard
structure was hardly noticeable. Transworld likewise filed a Third-Party Complaint against Ruks, the company which built the collapsed billboard structure in the formers favor. It was alleged therein that the structure constructed by Ruks had a
weak and poor foundation not suited for billboards, thus, prone to collapse, and as such, Ruks should ultimately be held liable for the damages caused to Adworlds billboard structure.

For its part, Comark denied liability for the damages caused to Adworlds billboard structure, maintaining that it does not have any interest on Transworlds collapsed billboard structure as it only contracted the use of the same. In this relation,
Comark prayed for exemplary damages from Transworld for unreasonably including it as a party-defendant in the complaint.8chanRoblesvirtualLawlibrary

Lastly, Ruks admitted that it entered into a contract with Transworld for the construction of the latters billboard structure, but denied liability for the damages caused by its collapse. It contended that when Transworld hired its services, there
was already an existing foundation for the billboard and that it merely finished the structure according to the terms and conditions of its contract with the latter.

RTC: Ruks and Transwold are solidarily liable to Adworld. The RTC explained that Transworld was made aware by Ruks that the initial construction of the lower structure of its billboard did not have the proper foundation and would require
additional columns and pedestals to support the structure. Notwithstanding, however, Ruks proceeded with the construction of the billboards upper structure and merely assumed that Transworld would reinforce its lower structure.13 The RTC
then concluded that these negligent acts were the direct and proximate cause of the damages suffered by Adworlds billboard.

CA: Affirmed in Toto

Issue: W/N Ruks and Transworld should be held solidarily liable. YES.

In this case, the CA correctly affirmed the RTCs finding that Transworlds initial construction of its billboards lower structure without the proper foundation, and that of Rukss finishing its upper structure and just merely assuming that Transworld
would reinforce the weak foundation are the two (2) successive acts which were the direct and proximate cause of the damages sustained by Adworld. Worse, both Transworld and Ruks were fully aware that the foundation for the formers
billboard was weak; yet, neither of them took any positive step to reinforce the same. They merely relied on each others word that repairs would be done to such foundation, but none was done at all. Clearly, the foregoing circumstances show
that both Transworld and Ruks are guilty of negligence in the construction of the formers billboard, and perforce, should be held liable for its collapse and the resulting damage to Adworlds billboard structure. As joint tortfeasors, therefore, they
are solidarily liable to Adworld. Verily, [j]oint tortfeasors are those who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or approve of it after it is done, if done for their benefit.
They are also referred to as those who act together in committing wrong or whose acts, if independent of each other, unite in causing a single injury. Under Article 219429 of the Civil Code, joint tortfeasors are solidarily liable for the resulting
damage. In other words, joint tortfeasors are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves.30 The Courts pronouncement in People v. Velasco31 is instructive on this
matter, to wit:32chanRoblesvirtualLawlibrary

Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against
any or all of the responsible persons although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not same. No actors negligence ceases
to be a proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.

There is no contribution between joint [tortfeasors] whose liability is solidary since both of them are liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although
acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the
whole injury. x x x. (Emphases and underscoring supplied)

Vestil v IAC

Facts: Theness Uy allegedly died from being bitten by a the Vestils dog as she was playing in the house of the petitioners late father. She was treated for multiple lacerated wounds on the forehead and administered anti-vaccine. She was
discharged after nine days but was readmitted one week later due to "vomiting of saliva." 2 The following day, on August 15, 1975, the child died. The cause of death was certified as broncho-pneumonia.

Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of "Andoy," the dog that bit and eventually killed their daughter. The Vestils rejected the charge, insisting that the dog belonged to the
deceased Vicente Miranda, that it was a tame animal, and that in any case no one had witnessed it bite Theness.

RTC dismissed; CA found them liable under NCC 2183.

Issue: W/N Vestils may be held liable for the dog. YES.

Defense was that they were not owners of the dog as the estate of the father was not yet partitioned, thus even the sister in Canada may be held liable as one of the heirs. This is beside the point, what matters is possession, which was admitted.
She denied having possession of the house but was found to be incredible. Bronchopneumonia was also found to be a possible complication of rabies.

According to Manresa the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the
principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause.

Chapman v Underwood (Time element for owner to direct his driver to desist from negligent act is material when holding the former liable)

At the time the accident occurred, which is the basis of this action, there was a single-track street-car line running along Calle Herran, with occasional switches to allow cars to meet and pass each other. One of these switches was located at the
scene of the accident.

The plaintiff had been visiting his friend, a man by the name of Creveling, in front of whose house the accident happened. He desired to board a certain "San Marcelino" car coming from Santa Ana and bound for Manila. Being told by Creveling
that the car was approaching, he immediately, and somewhat hurriedly, passed from the gate into the street for the purpose of signaling and boarding the car. The car was a closed one, the entrance being from the front or the rear platform.
Plaintiff attempted to board the front platform but, seeing that he could not reached it without extra exertion, stopped beside the car, facing toward the rear platform, and waited for it to come abreast of him in order to board. While in this
position he was struck from behind and run over by the defendant's automobile.

The defendant entered Calle Herran at Calle Peafrancia in his automobile driven by his chauffeur, a competent driver. A street car bound from Manila to Santa Ana being immediately in front of him, he followed along behind it. Just before
reaching the scene of the accident the street car which was following took the switch that is, went off the main line to the left upon the switch lying alongside of the main track. Thereupon the defendant no longer followed that the street car
nor went to the left, but either kept straight ahead on the main street-car track or a bit to the right. The car which the plaintiff intended to board was on the main line and bound in an opposite direction to that in which the defendant was going.
When the front of the "San Marcelino" car, the one the plaintiff attempted to board, was almost in front of the defendant's automobile, defendant's driver suddenly went to the right and struck and ran over the plaintiff, as above described.

The judgment of the trial court was for defendant.

A careful examination of the record leads us to the conclusion that the defendant's driver was guilty of negligence in running upon and over the plaintiff. He was passing an oncoming car upon the wrong side. The plaintiff, in common out to board
the car, was not obliged, for his own protection, to observe whether a car was coming upon him from his left hand. He had only to guard against those coming from the right. He knew that, according to the law of the road, no automobile or other
vehicle coming from his left should pass upon his side of the car. He needed only to watch for cars coming from his right, as they were the only ones under the law permitted to pass upon that side of the street car.

The defendant, however, is not responsible for the negligence of his driver, under the facts and circumstances of this case. As we have said in the case of Johnson vs. David (5 Phil. Rep., 663), the driver does not fall within the list of persons in
article 1903 of the Civil Code for whose acts the defendant would be responsible.

Although in the David case the owner of the vehicle was not present at the time the alleged negligent acts were committed by the driver, the same rule applies where the owner is present, unless the negligent act of the driver are continued for
such a length of time as to give the owner a reasonable opportunity to observe them and to direct his driver to desist therefrom. An owner who sits in his automobile, or other vehicle, and permits his driver to continue in a violation of the law by
the performance of negligent acts, after he has had a reasonable opportunity to observe them and to direct that the driver cease therefrom, becomes himself responsible for such acts. The owner of an automobile who permits his chauffeur to
drive up to Escolta, for example, at a speed of 60 miles an hour, without any effort to stop him, although he has had a reasonable opportunity to do so, becomes himself responsible, both criminally and civilly, for the results produced by the acts
of his chauffeur. On the other hand, if the driver, by a sudden act of negligence, and without the owner having a reasonable opportunity to prevent the acts or its continuance, injures a person or violates the criminal law, the owner of the
automobile, although present therein at the time the act was committed, is not responsible, either civilly or criminally, therefor. The act complained of must be continued in the presence of the owner for such a length a time that the owner, by
his acquiescence, makes his driver's act his own.

In the case before us it does not appear from the record that, from the time the automobile took the wrong side of the road to the commission of the injury, sufficient time intervened to give the defendant an opportunity to correct the act of his
driver. Instead, it appears with fair clearness that the interval between the turning out to meet and pass the street car and the happening of the accident was so small as not to be sufficient to charge defendant with the negligence of the driver.

Whether or not the owner of an automobile driven by a competent driver, would be responsible, whether present or not, for the negligent acts of his driver when the automobile was a part of a business enterprise, and was being driven at the
time of the accident in furtherance of the owner's business, we do not now decide.

The judgment appealed from is affirmed, with costs against the appellant.

CAEDO v YU KHE TAI (Owner is NOT solidarily liable in this case; Cadillac overtook a carretela and another vehicle was approaching from the other lane)

As a result of a vehicular accident in which plaintiff Marcial Caedo and several members of his family were injured they filed this suit for recovery of damages from the defendants. The judgment, rendered by the Court of First Instance of Rizal on
February 26, 1960 (Q-2952), contains the following disposition:

IN VIEW OF THE FOREGOING, the court renders a judgment, one in favor of the plaintiffs and against the defendants, Yu Khe Thai and Rafael Bernardo, jointly and severally, to pay to plaintiffs Marcial Caedo, et al., the sum of P1,929.70 for actual
damages; P48,000.00 for moral damages; P10,000.00 for exemplary damages; and P5,000.00 for attorney's fees, with costs against the defendants. The counterclaim of the defendants against the plaintiffs is hereby ordered dismissed, for lack of
merits.

On March 12, 1960 the judgment was amended so as to include an additional award of P3,705.11 in favor of the plaintiffs for the damage sustained by their car in the accident.

Both parties appealed to the Court of Appeals, which certified the case to us in view of the total amount of the plaintiffs' claim.

There are two principal questions posed for resolution: (1) who was responsible for the accident? and (2) if it was defendant Rafael Bernardo, was his employer, defendant Yu Khe Thai, solidarily liable with him? On the first question the trial court
found Rafael Bernardo negligent; and on the second, held his employer solidarily liable with him.

The mishap occurred at about 5:30 in the morning of March 24, 1958 on Highway 54 (now E. de los Santos Avenue) in the vicinity of San Lorenzo Village. Marcial was driving his Mercury car on his way from his home in Quezon City to the airport,
where his son Ephraim was scheduled to take a plane for Mindoro. With them in the car were Mrs. Caedo and three daughters. Coming from the opposite direction was the Cadillac of Yu Khe Thai, with his driver Rafael Bernardo at the wheel,
taking the owner from his Paraaque home to Wack Wack for his regular round of golf. The two cars were traveling at fairly moderate speeds, considering the condition of the road and the absence of traffic the Mercury at 40 to 50 kilometers
per hour, and the Cadillac at approximately 30 to 35 miles (48 to 56 kilometers). Their headlights were mutually noticeable from a distance. Ahead of the Cadillac, going in the same direction, was a caretella owned by a certain Pedro Bautista. The
carretela was towing another horse by means of a short rope coiled around the rig's vertical post on the right side and held at the other end by Pedro's son, Julian Bautista.

Rafael Bernardo testified that he was almost upon the rig when he saw it in front of him, only eight meters away. This is the first clear indication of his negligence. The carretela was provided with two lights, one on each side, and they should have
given him sufficient warning to take the necessary precautions. And even if he did not notice the lights, as he claimed later on at the trial, the carretela should anyway have been visible to him from afar if he had been careful, as it must have been
in the beam of his headlights for a considerable while.

In the meantime the Mercury was coming on its own lane from the opposite direction. Bernardo, instead of slowing down or stopping altogether behind the carretela until that lane was clear, veered to the left in order to pass. As he did so the
curved end of his car's right rear bumper caught the forward rim of the rig's left wheel, wrenching it off and carrying it along as the car skidded obliquely to the other lane, where it collided with the oncoming vehicle. On his part Caedo had seen
the Cadillac on its own lane; he slackened his speed, judged the distances in relation to the carretela and concluded that the Cadillac would wait behind. Bernardo, however, decided to take a gamble beat the Mercury to the point where it
would be in line with the carretela, or else squeeze in between them in any case. It was a risky maneuver either way, and the risk should have been quite obvious. Or, since the car was moving at from 30 to 35 miles per hour (or 25 miles according
to Yu Khe Thai) it was already too late to apply the brakes when Bernardo saw the carretela only eight meters in front of him, and so he had to swerve to the left in spite of the presence of the oncoming car on the opposite lane. As it was, the
clearance Bernardo gave for his car's right side was insufficient. Its rear bumper, as already stated, caught the wheel of the carretela and wrenched it loose. Caedo, confronted with the unexpected situation, tried to avoid the collision at the last
moment by going farther to the right, but was unsuccessful. The photographs taken at the scene show that the right wheels of his car were on the unpaved shoulder of the road at the moment of impact.

There is no doubt at all that the collision was directly traceable to Rafael Bernardo's negligence and that he must be held liable for the damages suffered by the plaintiffs. The next question is whether or not Yu Khe Thai, as owner of the Cadillac, is
solidarily liable with the driver. The applicable law is Article 2184 of the Civil Code, which reads:

ART. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the use of due diligence, prevented the misfortune. It is disputably presumed that a driver was negligent, if he
had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months.

Under the foregoing provision, if the causative factor was the driver's negligence, the owner of the vehicle who was present is likewise held liable if he could have prevented the mishap by the exercise of due diligence. The rule is not new,
although formulated as law for the first time in the new Civil Code. It was expressed in Chapman vs. Underwood (1914), 27 Phil. 374, where this Court held:

... The same rule applies where the owner is present, unless the negligent acts of the driver are continued for such a length of time as to give the owner a reasonable opportunity to observe them and to direct his driver to desist therefrom. An
owner who sits in his automobile, or other vehicle, and permits his driver to continue in a violation of the law by the performance of negligent acts, after he has had a reasonable opportunity to observe them and to direct that the driver cease
therefrom, becomes himself responsible for such acts. The owner of an automobile who permits his chauffeur to drive up the Escolta, for example, at a speed of 60 miles an hour, without any effort to stop him, although he has had a reasonable
opportunity to do so, becomes himself responsible, both criminally and civilly, for the results produced by the acts of the chauffeur. On the other hand, if the driver, by a sudden act of negligence, and without the owner having a reasonable
opportunity to prevent the act or its continuance, injures a person or violates the criminal law, the owner of the automobile, although present therein at the time the act was committed, is not responsible, either civilly or criminally, therefor. The
act complained of must be continued in the presence of the owner for such a length of time that the owner, by his acquiescence, makes his driver act his own.

The basis of the master's liability in civil law is not respondent superior but rather the relationship of paterfamilias. The theory is that ultimately the negligence of the servant, if known to the master and susceptible of timely correction by him,
reflects his own negligence if he fails to correct it in order to prevent injury or damage.

In the present case the defendants' evidence is that Rafael Bernardo had been Yu Khe Thai's driver since 1937, and before that had been employed by Yutivo Sons Hardware Co. in the same capacity for over ten years. During that time he had no
record of violation of traffic laws and regulations. No negligence for having employed him at all may be imputed to his master. Negligence on the part of the latter, if any, must be sought in the immediate setting and circumstances of the accident,
that is, in his failure to detain the driver from pursuing a course which not only gave him clear notice of the danger but also sufficient time to act upon it. We do not see that such negligence may be imputed. The car, as has been stated, was not
running at an unreasonable speed. The road was wide and open, and devoid of traffic that early morning. There was no reason for the car owner to be in any special state of alert. He had reason to rely on the skill and experience of his driver. He
became aware of the presence of the carretela when his car was only twelve meters behind it, but then his failure to see it earlier did not constitute negligence, for he was not himself at the wheel. And even when he did see it at that distance, he
could not have anticipated his driver's sudden decision to pass the carretela on its left side in spite of the fact that another car was approaching from the opposite direction. The time element was such that there was no reasonable opportunity
for Yu Khe Thai to assess the risks involved and warn the driver accordingly. The thought that entered his mind, he said, was that if he sounded a sudden warning it might only make the other man nervous and make the situation worse. It was a
thought that, wise or not, connotes no absence of that due diligence required by law to prevent the misfortune.

The test of imputed negligence under Article 2184 of the Civil Code is, to a great degree, necessarily subjective. Car owners are not held to a uniform and inflexible standard of diligence as are professional drivers. In many cases they refrain from
driving their own cars and instead hire other persons to drive for them precisely because they are not trained or endowed with sufficient discernment to know the rules of traffic or to appreciate the relative dangers posed by the different
situations that are continually encountered on the road. What would be a negligent omission under aforesaid Article on the part of a car owner who is in the prime of age and knows how to handle a motor vehicle is not necessarily so on the part,
say, of an old and infirm person who is not similarly equipped.

The law does not require that a person must possess a certain measure of skill or proficiency either in the mechanics of driving or in the observance of traffic rules before he may own a motor vehicle. The test of his intelligence, within the
meaning of Article 2184, is his omission to do that which the evidence of his own senses tells him he should do in order to avoid the accident. And as far as perception is concerned, absent a minimum level imposed by law, a maneuver that
appears to be fraught with danger to one passenger may appear to be entirely safe and commonplace to another. Were the law to require a uniform standard of perceptiveness, employment of professional drivers by car owners who, by their
very inadequacies, have real need of drivers' services, would be effectively proscribed.

We hold that the imputation of liability to Yu Khe Thai, solidarily with Rafael Bernardo, is an error. The next question refers to the sums adjudged by the trial court as damages. The award of P48,000 by way of moral damages is itemized as
follows:

1. Marcial Caedo P 20,000.00 3. Ephraim Caedo 3,000.00 5. Rose Elaine Caedo 3,000.00
2. Juana S. Caedo 15,000.00 4. Eileen Caedo 4,000.00 6. Merilyn Caedo 3,000.00

Plaintiffs appealed from the award, claiming that the Court should have granted them also actual or compensatory damages, aggregating P225,000, for the injuries they sustained. Defendants, on the other hand maintain that the amounts
awarded as moral damages are excessive and should be reduced. We find no justification for either side. The amount of actual damages suffered by the individual plaintiffs by reason of their injuries, other than expenses for medical treatment,
has not been shown by the evidence. Actual damages, to be compensable, must be proven. Pain and suffering are not capable of pecuniary estimation, and constitute a proper ground for granting moral, not actual, damages, as provided in Article
2217 of the Civil Code.

.. x x x

It is our opinion that, considering the nature and extent of the above-mentioned injuries, the amounts of moral damages granted by the trial court are not excessive.

WHEREFORE, the judgment appealed from is modified in the sense of declaring defendant-appellant Yu Khe Thai free from liability, and is otherwise affirmed with respect to defendant Rafael Bernardo, with costs against the latter.
PCI v UCPB

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking a reversal of the Decision1 of the Court of Appeals (CA) dated December 12, 2003 affirming with modification the Decision of the Regional Trial
Court (RTC) of Makati City which ordered petitioner and Renato Gonzaga (Gonzaga) to pay, jointly and severally, respondent the amount of P244,500.00 plus interest; and the CA Resolution2 dated February 18, 2004 denying petitioner's Motion
for Reconsideration.

The facts, as found by the CA, are undisputed:

On October 19, 1990 at about 10:30 p.m., a Mitsubishi Lancer car with Plate Number PHD-206 owned by United Coconut Planters Bank was traversing the Laurel Highway, Barangay Balintawak, Lipa City. The car was insured with plantiff-appellee
[UCPB General Insurance Inc.], then driven by Flaviano Isaac with Conrado Geronimo, the Asst. Manager of said bank, was hit and bumped by an 18-wheeler Fuso Tanker Truck with Plate No. PJE-737 and Trailer Plate No. NVM-133, owned by
defendants-appellants PCI Leasing & Finance, Inc. allegedly leased to and operated by defendant-appellant Superior Gas & Equitable Co., Inc. (SUGECO) and driven by its employee, defendant appellant Renato Gonzaga.

The impact caused heavy damage to the Mitsubishi Lancer car resulting in an explosion of the rear part of the car. The driver and passenger suffered physical injuries. However, the driver defendant-appellant Gonzaga continued on its [sic] way to
its [sic] destination and did not bother to bring his victims to the hospital.

Plaintiff-appellee paid the assured UCPB the amount of P244,500.00 representing the insurance coverage of the damaged car.

As the 18-wheeler truck is registered under the name of PCI Leasing, repeated demands were made by plaintiff-appellee for the payment of the aforesaid amounts. However, no payment was made. Thus, plaintiff-appellee filed the instant case on
March 13, 1991.3

PCI Leasing and Finance, Inc., (petitioner) interposed the defense that it could not be held liable for the collision, since the driver of the truck, Gonzaga, was not its employee, but that of its co-defendant Superior Gas & Equitable Co., Inc.
(SUGECO).4 In fact, it was SUGECO, and not petitioner, that was the actual operator of the truck, pursuant to a Contract of Lease signed by petitioner and SUGECO.5 Petitioner, however, admitted that it was the owner of the truck in question.6

After trial, the RTC rendered its Decision dated April 15, 1999,7 the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff UCPB General Insurance [respondent], ordering the defendants PCI Leasing and Finance, Inc., [petitioner] and Renato Gonzaga, to pay jointly and severally the
former the following amounts: the principal amount of P244,500.00 with 12% interest as of the filing of this complaint until the same is paid; P50,000.00 as attorney's fees; and P20,000.00 as costs of suit.

SO ORDERED.8

Aggrieved by the decision of the trial court, petitioner appealed to the CA.

In its Decision dated December 12, 2003, the CA affirmed the RTC's decision, with certain modifications, as follows:

WHEREFORE, the appealed decision dated April 15, 1999 is hereby AFFIRMED with modification that the award of attorney's fees is hereby deleted and the rate of interest shall be six percent (6%) per annum computed from the time of the filing
of the complaint in the trial court until the finality of the judgment. If the adjudged principal and the interest remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum computed from the time the judgment becomes
final and executory until it is fully satisfied.

SO ORDERED.9

Petitioner filed a Motion for Reconsideration which the CA denied in its Resolution dated February 18, 2004.

Hence, herein Petition for Review.

The issues raised by petitioner are purely legal:

Whether petitioner, as registered owner of a motor vehicle that figured in a quasi-delict may be held liable, jointly and severally, with the driver thereof, for the damages caused to third parties.

Whether petitioner, as a financing company, is absolved from liability by the enactment of Republic Act (R.A.) No. 8556, or the Financing Company Act of 1998.

Anent the first issue, the CA found petitioner liable for the damage caused by the collision since under the Public Service Act, if the property covered by a franchise is transferred or leased to another without obtaining the requisite approval, the
transfer is not binding on the Public Service Commission and, in contemplation of law, the grantee continues to be responsible under the franchise in relation to the operation of the vehicle, such as damage or injury to third parties due to
collisions.10

Petitioner claims that the CA's reliance on the Public Service Act is misplaced, since the said law applies only to cases involving common carriers, or those which have franchises to operate as public utilities. In contrast, the case before this Court
involves a private commercial vehicle for business use, which is not offered for service to the general public.11
Petitioner's contention has partial merit, as indeed, the vehicles involved in the case at bar are not common carriers, which makes the Public Service Act inapplicable.

However, the registered owner of the vehicle driven by a negligent driver may still be held liable under applicable jurisprudence involving laws on compulsory motor vehicle registration and the liabilities of employers for quasi-delicts under the
Civil Code.

The principle of holding the registered owner of a vehicle liable for quasi-delicts resulting from its use is well-established in jurisprudence. Erezo v. Jepte,12 with Justice Labrador as ponente, wisely explained the reason behind this principle, thus:

Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the
contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as amended.) The main aim of motor vehicle
registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Instances are
numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways.

"'One of the principal purposes of motor vehicles legislation is identification of the vehicle and of the operator, in case of accident; and another is that the knowledge that means of detection are always available may act as a deterrent from lax
observance of the law and of the rules of conservative and safe operation. Whatever purpose there may be in these statutes, it is subordinate at the last to the primary purpose of rendering it certain that the violator of the law or of the rules of
safety shall not escape because of lack of means to discover him.' The purpose of the statute is thwarted, and the displayed number becomes a 'snare and delusion,' if courts would entertain such defenses as that put forward by appellee in this
case. No responsible person or corporation could be held liable for the most outrageous acts of negligence, if they should be allowed to place a 'middleman' between them and the public, and escape liability by the manner in which they
recompense their servants." (King vs. Brenham Automobile Co., 145 S.W. 278, 279.)

With the above policy in mind, the question that defendant-appellant poses is: should not the registered owner be allowed at the trial to prove who the actual and real owner is, and in accordance with such proof escape or evade responsibility
and lay the same on the person actually owning the vehicle? We hold with the trial court that the law does not allow him to do so; the law, with its aim and policy in mind, does not relieve him directly of the responsibility that the law fixes and
places upon him as an incident or consequence of registration. Were a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him, by collusion with others or otherwise, to
escape said responsibility and transfer the same to an indefinite person, or to one who possesses no property with which to respond financially for the damage or injury done. A victim of recklessness on the public highways is usually without
means to discover or identify the person actually causing the injury or damage. He has no means other than by a recourse to the registration in the Motor Vehicles Office to determine who is the owner. The protection that the law aims to extend
to him would become illusory were the registered owner given the opportunity to escape liability by disproving his ownership. If the policy of the law is to be enforced and carried out, the registered owner should not be allowed to prove the
contrary to the prejudice of the person injured, that is, to prove that a third person or another has become the owner, so that he may thereby be relieved of the responsibility to the injured person.

The above policy and application of the law may appear quite harsh and would seem to conflict with truth and justice. We do not think it is so. A registered owner who has already sold or transferred a vehicle has the recourse to a third-party
complaint, in the same action brought against him to recover for the damage or injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of liability; said inconvenience is the
price he pays for failure to comply with the registration that the law demands and requires.

In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily responsible for the damage caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be indemnified by the real or
actual owner of the amount that he may be required to pay as damage for the injury caused to the plaintiff-appellant.13

The case is still good law and has been consistently cited in subsequent cases.14 Thus, there is no good reason to depart from its tenets.

For damage or injuries arising out of negligence in the operation of a motor vehicle, the registered owner may be held civilly liable with the negligent driver either 1) subsidiarily, if the aggrieved party seeks relief based on a delict or crime under
Articles 100 and 103 of the Revised Penal Code; or 2) solidarily, if the complainant seeks relief based on a quasi-delict under Articles 2176 and 2180 of the Civil Code. It is the option of the plaintiff whether to waive completely the filing of the civil
action, or institute it with the criminal action, or file it separately or independently of a criminal action;15 his only limitation is that he cannot recover damages twice for the same act or omission of the defendant.16

In case a separate civil action is filed, the long-standing principle is that the registered owner of a motor vehicle is primarily and directly responsible for the consequences of its operation, including the negligence of the driver, with respect to the
public and all third persons.17 In contemplation of law, the registered owner of a motor vehicle is the employer of its driver, with the actual operator and employer, such as a lessee, being considered as merely the owner's agent.18 This being the
case, even if a sale has been executed before a tortious incident, the sale, if unregistered, has no effect as to the right of the public and third persons to recover from the registered owner.19 The public has the right to conclusively presume that
the registered owner is the real owner, and may sue accordingly.20

In the case now before the Court, there is not even a sale of the vehicle involved, but a mere lease, which remained unregistered up to the time of the occurrence of the quasi-delict that gave rise to the case. Since a lease, unlike a sale, does not
even involve a transfer of title or ownership, but the mere use or enjoyment of property, there is more reason, therefore, in this instance to uphold the policy behind the law, which is to protect the unwitting public and provide it with a definite
person to make accountable for losses or injuries suffered in vehicular accidents.21 This is and has always been the rationale behind compulsory motor vehicle registration under the Land Transportation and Traffic Code and similar laws, which,
as early as Erezo, has been guiding the courts in their disposition of cases involving motor vehicular incidents. It is also important to emphasize that such principles apply to all vehicles in general, not just those offered for public service or
utility.22

The Court recognizes that the business of financing companies has a legitimate and commendable purpose.23 In earlier cases, it considered a financial lease or financing lease a legal contract,24 though subject to the restrictions of the so-called
Recto Law or Articles 1484 and 1485 of the Civil Code.25 In previous cases, the Court adopted the statutory definition of a financial lease or financing lease, as:

[A] mode of extending credit through a non-cancelable lease contract under which the lessor purchases or acquires, at the instance of the lessee, machinery, equipment, motor vehicles, appliances, business and office machines, and other
movable or immovable property in consideration of the periodic payment by the lessee of a fixed amount of money sufficient to amortize at least seventy (70%) of the purchase price or acquisition cost, including any incidental expenses and a
margin of profit over an obligatory period of not less than two (2) years during which the lessee has the right to hold and use the leased property, x x x but with no obligation or option on his part to purchase the leased property from the owner-
lessor at the end of the lease contract. 26

Petitioner presented a lengthy discussion of the purported trend in other jurisdictions, which apparently tends to favor absolving financing companies from liability for the consequences of quasi-delictual acts or omissions involving financially
leased property.27 The petition adds that these developments have been legislated in our jurisdiction in Republic Act (R.A.) No. 8556,28 which provides:

Section 12. Liability of lessors. - Financing companies shall not be liable for loss, damage or injury caused by a motor vehicle, aircraft, vessel, equipment, machinery or other property leased to a third person or entity except when the motor
vehicle, aircraft, vessel, equipment or other property is operated by the financing company, its employees or agents at the time of the loss, damage or injury.1avvphi1

Petitioner's argument that the enactment of R.A. No. 8556, especially its addition of the new Sec. 12 to the old law, is deemed to have absolved petitioner from liability, fails to convince the Court.

These developments, indeed, point to a seeming emancipation of financing companies from the obligation to compensate claimants for losses suffered from the operation of vehicles covered by their lease. Such, however, are not applicable to
petitioner and do not exonerate it from liability in the present case.

The new law, R.A. No. 8556, notwithstanding developments in foreign jurisdictions, do not supersede or repeal the law on compulsory motor vehicle registration. No part of the law expressly repeals Section 5(a) and (e) of R.A. No. 4136, as
amended, otherwise known as the Land Transportation and Traffic Code, to wit:

Sec. 5. Compulsory registration of motor vehicles. - (a) All motor vehicles and trailer of any type used or operated on or upon any highway of the Philippines must be registered with the Bureau of Land Transportation (now the Land Transportation
Office, per Executive Order No. 125, January 30, 1987, and Executive Order No. 125-A, April 13, 1987) for the current year in accordance with the provisions of this Act.

xxxx

(e) Encumbrances of motor vehicles. - Mortgages, attachments, and other encumbrances of motor vehicles, in order to be valid against third parties must be recorded in the Bureau (now the Land Transportation Office). Voluntary transactions or
voluntary encumbrances shall likewise be properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle concerned.

Cancellation or foreclosure of such mortgages, attachments, and other encumbrances shall likewise be recorded, and in the absence of such cancellation, no certificate of registration shall be issued without the corresponding notation of
mortgage, attachment and/or other encumbrances.

x x x x (Emphasis supplied)

Neither is there an implied repeal of R.A. No. 4136. As a rule, repeal by implication is frowned upon, unless there is clear showing that the later statute is so irreconcilably inconsistent and repugnant to the existing law that they cannot be
reconciled and made to stand together.29 There is nothing in R.A. No. 4136 that is inconsistent and incapable of reconciliation.

Thus, the rule remains the same: a sale, lease, or financial lease, for that matter, that is not registered with the Land Transportation Office, still does not bind third persons who are aggrieved in tortious incidents, for the latter need only to rely on
the public registration of a motor vehicle as conclusive evidence of ownership.30 A lease such as the one involved in the instant case is an encumbrance in contemplation of law, which needs to be registered in order for it to bind third parties.31
Under this policy, the evil sought to be avoided is the exacerbation of the suffering of victims of tragic vehicular accidents in not being able to identify a guilty party. A contrary ruling will not serve the ends of justice. The failure to register a lease,
sale, transfer or encumbrance, should not benefit the parties responsible, to the prejudice of innocent victims.

The non-registration of the lease contract between petitioner and its lessee precludes the former from enjoying the benefits under Section 12 of R.A. No. 8556.

This ruling may appear too severe and unpalatable to leasing and financing companies, but the Court believes that petitioner and other companies so situated are not entirely left without recourse. They may resort to third-party complaints
against their lessees or whoever are the actual operators of their vehicles. In the case at bar, there is, in fact, a provision in the lease contract between petitioner and SUGECO to the effect that the latter shall indemnify and hold the former free
and harmless from any "liabilities, damages, suits, claims or judgments" arising from the latter's use of the motor vehicle.32 Whether petitioner would act against SUGECO based on this provision is its own option.

The burden of registration of the lease contract is minuscule compared to the chaos that may result if registered owners or operators of vehicles are freed from such responsibility. Petitioner pays the price for its failure to obey the law on
compulsory registration of motor vehicles for registration is a pre-requisite for any person to even enjoy the privilege of putting a vehicle on public roads.

WHEREFORE, the petition is DENIED. The Decision dated December 12, 2003 and Resolution dated February 18, 2004 of the Court of Appeals are AFFIRMED.

Costs against petitioner.

SO ORDERED.

COCA-COLA v CA

This case concerns the proprietress of a school canteen which had to close down as a consequence of the big drop in its sales of soft drinks triggered by the discovery of foreign substances in certain beverages sold by it. The interesting issue
posed is whether the subsequent action for damages by the proprietress against the soft drinks manufacturer should be treated as one for breach of implied warranty against hidden defects or merchantability, as claimed by the manufacturer,
the petitioner herein which must therefore be filed within six months from the delivery of the thing sold pursuant to Article 1571 of the Civil Code, or one for quasi-delict, as held by the public respondent, which can be filed within four years
pursuant to Article 1146 of the same Code.

On 7 May 1990, Lydia L. Geronimo, the herein private respondent, filed a complaint for damages against petitioner with the Regional Trial Court (RTC) of Dagupan City. 1 The case was docketed as Civil Case No. D-9629. She alleges in her
complaint that she was the proprietress of Kindergarten Wonderland Canteen docketed as located in Dagupan City, an enterprise engaged in the sale of soft drinks (including Coke and Sprite) and other goods to the students of Kindergarten
Wonderland and to the public; on or about 12 August 1989, some parents of the students complained to her that the Coke and Sprite soft drinks sold by her contained fiber-like matter and other foreign substances or particles; he then went over
her stock of softdrinks and discovered the presence of some fiber-like substances in the contents of some unopened Coke bottles and a plastic matter in the contents of an unopened Sprite bottle; she brought the said bottles to the Regional
Health Office of the Department of Health at San Fernando, La Union, for examination; subsequently, she received a letter from the Department of Health informing her that the samples she submitted "are adulterated;" as a consequence of the
discovery of the foreign substances in the beverages, her sales of soft drinks severely plummeted from the usual 10 cases per day to as low as 2 to 3 cases per day resulting in losses of from P200.00 to P300.00 per day, and not long after that she
had to lose shop on 12 December 1989; she became jobless and destitute; she demanded from the petitioner the payment of damages but was rebuffed by it. She prayed for judgment ordering the petitioner to pay her P5,000.00 as actual
damages, P72,000.00 as compensatory damages, P500,000.00 as moral damages, P10,000.00 as exemplary damages, the amount equal to 30% of the damages awarded as attorney's fees, and the costs. 2

The petitioner moved to dismiss 3 the complaint on the grounds of failure to exhaust administrative remedies and prescription. Anent the latter ground, the petitioner argued that since the complaint is for breach of warranty under Article 1561
of the said Code. In her Comment 4 thereto, private respondent alleged that the complaint is one for damages which does not involve an administrative action and that her cause of action is based on an injury to plaintiff's right which can be
brought within four years pursuant to Article 1146 of the Civil Code; hence, the complaint was seasonably filed. Subsequent related pleadings were thereafter filed by the parties. 5

In its Order of 23 January 1991, 6 the trial court granted the motion to dismiss. It ruled that the doctrine of exhaustion of administrative remedies does not apply as the existing administrative remedy is not adequate. It also stated that the
complaint is based on a contract, and not on quasi-delict, as there exists pre-existing contractual relation between the parties; thus, on the basis of Article 1571, in relation to Article 1562, the complaint should have been filed within six months
from the delivery of the thing sold.

Her motion for the reconsideration of the order having been denied by the trial court in its Order of 17 April 1991, 7 the private respondent came to this Court via a petition for review on certiorari which we referred to the public respondent "for
proper determination and disposition. 8 The public respondent docketed the case as CA-G.R. SP No. 25391.

In a decision promulgated on 28 January 1992, 9 the public respondent annulled the questioned orders of the RTC and directed it to conduct further proceedings in Civil Case No. D-9629. In holding for the private respondent, it ruled that:

Petitioner's complaint being one for quasi-delict, and not for breach of warranty as respondent contends, the applicable prescriptive period is four years.

It should be stressed that the allegations in the complaint plainly show that it is an action or damages arising from respondent's act of "recklessly and negligently manufacturing adulterated food items intended to be sold or public consumption"
(p. 25, rollo). It is truism in legal procedure that what determines the nature of an action are the facts alleged in the complaint and those averred as a defense in the defendant's answer (I Moran 126; Calo v. Roldan, 76 Phil. 445; Alger Electric, Inc.
v. CA, 135 SCRA 340).

Secondly, despite the literal wording of Article 2176 of the Civil code, the existence of contractual relations between the parties does not absolutely preclude an action by one against the other for quasi-delict arising from negligence in the
performance of a contract.

In Singson v. Court of Appeals (23 SCRA 1117), the Supreme Court ruled:

It has been repeatedly held: that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor
. . . . Thus in Air France vs. Carrascoso, . . . (it was held that) although the relation between a passenger and a carrier is "contractual both in origin and in nature the act that breaks the contract may also be a tort.

Significantly, in American jurisprudence, from which Our law on Sales was taken, the authorities are one in saying that he availability of an action or breach of warranty does not bar an action for torts in a sale of defective goods. 10

Its motion for the reconsideration of the decision having been denied by the public respondent in its Resolution of 14 May 1993, 11 the petitioner took his recourse under Rule 45 of the Revised Rules of Court. It alleges in its petition that:

I.

THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN RULING THAT ARTICLE 2176, THE GENERAL PROVISION ON QUASI-DELICTS, IS APPLICABLE IN THIS CASE WHEN THE ALLEGATIONS OF THE COMPLAINT
CLEARLY SHOW THAT PRIVATE RESPONDENT'S CAUSE OF ACTION IS BASEDON BREACH OF A SELLER'S IMPLIED WARRANTIES UNDER OUR LAW ON SALES.

II.

CORROLARILY, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN OVERRULING PETITIONER'S ARGUMENT THAT PRIVATE RESPONDENT'S CAUSE OF ACTION HAD PRESCRIBED UNDER ARTICLE 1571 OF THE
CIVIL CODE. 12

The petitioner insists that a cursory reading of the complaint will reveal that the primary legal basis for private respondent's cause of action is not Article 2176 of the Civil Code on quasi-delict for the complaint does not ascribe any tortious or
wrongful conduct on its part but Articles 1561 and 1562 thereof on breach of a seller's implied warranties under the law on sales. It contends the existence of a contractual relation between the parties (arising from the contract of sale) bars
the application of the law on quasi-delicts and that since private respondent's cause of action arose from the breach of implied warranties, the complaint should have been filed within six months room delivery of the soft drinks pursuant to
Article 171 of the Civil Code.
In her Comment the private respondent argues that in case of breach of the seller's implied warranties, the vendee may, under Article 1567 of the Civil Code, elect between withdrawing from the contract or demanding a proportionate reduction
of the price, with damages in either case. She asserts that Civil Case No. D-9629 is neither an action for rescission nor for proportionate reduction of the price, but for damages arising from a quasi-delict and that the public respondent was correct
in ruling that the existence of a contract did not preclude the action for quasi-delict. As to the issue of prescription, the private respondent insists that since her cause of action is based on quasi-delict, the prescriptive period therefore is four (4)
years in accordance with Article 1144 of the Civil Code and thus the filing of the complaint was well within the said period.

We find no merit in the petition. The public respondent's conclusion that the cause of action in Civil Case No. D-9629 is found on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in four (4) years is supported
by the allegations in the complaint, more particularly paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption."

The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the Civil Code which provides:

Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages either
case. 13

The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. 14 Under the law on obligations, responsibility arising from fraud is demandable in all
obligations and any waiver of an action for future fraud is void. Responsibility arising from negligence is also demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. 15 Those guilty of fraud,
negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. 16

The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and an action based thereon may be brought by the vendee. While it may be true that the pre-existing contract between the parties may, as a general rule,
bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the acts which breaks the contract may also be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, 17 this Court stated:

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 other and the consequent recovery of damages therefor. 18 Indeed, this view has been, in
effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, 19 involving an airplane passenger who, despite hi 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 the passenger and a carrier is "contractual both in origin and nature . . . the act
that breaks the contract may also be a tort.

Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. 20

Under American law, the liabilities of a manufacturer or seller of injury-causing products may be based on negligence, 21 breach of warranty, 22 tort, 23 or other grounds such as fraud, deceit, or misrepresentation. 24 Quasi-delict, as defined in
Article 2176 of the Civil Code, (which is known in Spanish legal treaties as culpa aquiliana, culpa extra-contractual or cuasi-delitos) 25 is homologous but not identical to tort under the common law, 26 which includes not only negligence, but also
intentional criminal acts, such as assault and battery, false imprisonment and deceit. 27

It must be made clear that our affirmance of the decision of the public respondent should by no means be understood as suggesting that the private respondent's claims for moral damages have sufficient factual and legal basis.

IN VIEW OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit, with costs against the petitioner.

SO ORDERED.