G.R. Nos. 156547-51. February 4, 2008.

*
The facts are as follows:
MARIANO UN OCAMPO III, petitioner, vs. PEOPLE OF THE During the incumbency of President Corazon C. Aquino, Tarlac Province was
PHILIPPINES, respondent. chosen as one of the four provinces that would serve as a test case on
decentralization of local government administration.
G.R. Nos. 156384-85. February 4, 2008. *

ANDRES S. FLORES, petitioner, vs. PEOPLE OF THE PHILIPPINES,
respondent.
Civil Law; Loans; The relationship between the Province of Tarlac and the Lingkod
Tarlac Foundation, Inc. (LTFI) is that of a creditor and debtor; Failure to pay the indebtedness
would give rise to a collection suit.—Art. 1953 of the Civil Code provides that “[a] person who
receives a loan of money or any other fungible thing acquires the ownership thereof, and is
bound to pay to the creditor an equal amount of the same kind and quality.” Hence, petitioner
Ocampo correctly argued that the NALGU funds shed their public character when they were
lent to LTFI as it acquired ownership of the funds with an obligation to repay the Province of
Tarlac the amount borrowed. The relationship between the Province of Tarlac and the LTFI
is that of a creditor and debtor. Failure to pay the indebtedness would give rise to a collection
suit.
Criminal Law; Malversation; Ways by which malversation may be committed; Essential
elements common to all acts of malversation under Art. 217 of the Revised Penal Code.—
Malversation may be committed by appropriating public funds or property; by taking or
misappropriating the same; by consenting, or through abandonment or negligence, by
permitting any other person to take such public funds or property; or by being otherwise guilty
of the misappropriation or malversation of such funds or property. The essential elements
common to all acts of malversation under Art. 217 of the Revised Penal Code are: (a) That the
offender be a public officer; (b) That he had the custody or control of funds or property by
reason of the duties of his office; (c) That those funds or property were public funds or
property for which he was accountable; (d) That he appro-
_______________
For this purpose, the Department of Budget and Management (DBM) released
National Aid for Local Government Units (NALGU) funds in the total amount of
P100 million to the Province of Tarlac. The NALGU is a fund set aside in the
General Appropriations Act to assist local governments in their various projects
and services. The distribution of this fund is entirely vested with the Secretary of
the DBM.
_______________
1Under Rule 45 of the Rules of Court.
489
VOL. 543, FEBRUARY 4, 2008 489
Ocampo III vs. People
Petitioner Ocampo, provincial governor of Tarlac from February 22, 1988 up to
June 30, 1992, loaned out P56.6 million of the P100 million to the Lingkod Tarlac
Foundation, Inc. (LTFI) for the implementation of various livelihood projects. The
loan was made pursuant to a Memorandum of Agreement (MOA) entered into by
the Province of Tarlac, represented by petitioner Ocampo, and LTFI, represented
by petitioner Flores, on August 8, 1988.
LTFI is a private non-stock corporation with petitioner Ocampo as its first
chairperson and petitioner Andres S. Flores as its executive director. The
Sandiganbayan, in its Resolution dated January 6, 2000, admitted the
annexes submitted by petitioner Ocampo, which annexes proved that petitioner
2

Ocampo resigned as chairperson and trustee of the LTFI prior to August 8, 1988,
FIRST DIVISION.
*

488
the date when petitioner Ocampo and LTFI entered into the MOA.
How the P56.6 million released to LTFI was utilized became the subject matter
488 SUPREME COURT REPORTS ANNOTATED of 25 criminal cases. In a Resolution in G.R. Nos. 103754-78 dated October 22,
Ocampo III vs. People 1992, this Court quashed 19 of the 25 Informations filed against petitioner Ocampo.
3

priated, took, misappropriated or consented or, through abandonment or negligence, The Fifth Division of the Sandiganbayan dismissed one case on demurrer to 4

permitted another person to take them. evidence. In its Decision promulgated on March 8, 2002, the Fifth Division of the
Sandiganbayan dismissed two of five criminal cases for malversation of public
5

PETITIONS for review on certiorari of a decision of the Sandiganbayan. funds against petitioners. On motion for reconsideration, the Sandiganbayan
dismissed one more case in a Resolution promulgated on January 6, 2003. The two
6

The facts are stated in the opinion of the Court. remaining cases are the subject matters in the instant consolidated petitions.
Ongkiko, Kalaw, Manhit & Acorda Law Offices for Mariano Un Ocampo III.
Fornier, Fornier, Saño & Lagumpay for Andres S. Flores. _______________

Annexes “A,” “B,” and “C.”

AZCUNA, J.:
2

Governor Mariano UN Ocampo III v. The Honorable Sandiganbayan (Second Division) and Office of
3

the Special Prosecutor.

These are consolidated petitions for review on certiorari of the Sandiganbayan’s
1
Criminal Case No. 16786.
4

Criminal Case Nos. 16796 and 16802.

Decision promulgated on March 8, 2002 and its Resolution promulgated on January
5

Criminal Case No. 16787.

6

6, 2003. 490
The Decision and Resolution of the Sandiganbayan held petitioners Mariano 490 SUPREME COURT REPORTS ANNOTATED
Un Ocampo III and Andres S. Flores guilty of malversation of public funds in Crim.
Case Nos. 16794 and 16795. Ocampo III vs. People
The Informations of the remaining two cases filed on May 28, 1991 state:
Crim. Case No. 16794
“That on or about the periods between November 2, 1988 to February 27, 1989, or sometime
subsequent thereto, in the Province of Tarlac, Philippines and within the jurisdiction of this
Honorable Court, accused Mariano Un Ocampo III, then the Governor of the province of
Tarlac and at the same time President-Chairman of the Board of Trustees of the Lingkod
Tarlac Foundation, Inc. (LTFI), a private entity, having received by reason of his position,
public funds amounting to more than Fifty Two Million Pesos (P52,000,000) x x x from the
National Aid for Local Government Unit (NALGU) funds, which he is accountable by reason
of his official duties, did then and there with intent to defraud the government aforethought
release out of the aforesaid funds thru the said LTFI, the amount of EIGHT MILLION EIGHT
HUNDRED SIXTY THOUSAND PESOS (P8,860,000) x x x for the payment of the
importation of Juki Embroidery Machines which actually cost SEVEN MILLION SIX
HUNDRED SEVENTY NINE THOUSAND FIVE HUNDRED THIRTY PESOS AND FIFTY
TWO CENTAVOS (P7,679,530.52) x x x thereby leaving a balance of P1,180,463.48 which
ought to have been returned, but far from returning the said amount, accused Mariano Un
Ocampo III, in connivance with his co-accused, Andres S. Flores and William Uy wilfully,
unlawfully and feloniously misapply, misappropriate and convert for their own personal use
and benefit the said amount resulting to the damage and prejudice of the government in the
aforesaid sum of One Million One Hundred Eighty Thousand Four Hundred Sixty Three
Pesos and Forty Eight Centavos (P1,180,463.48).
CONTRARY TO LAW.”
Crim. Case No. 16795
“That on or about the periods between November 2, 1988 to February 27, 1989, or
sometime subsequent thereto, in the Province of Tarlac, Philippines and within the
jurisdiction of this Honorable Court, accused Mariano Un Ocampo III, then the Governor of
the province of Tarlac, and at the same time President-Chairman of the Board of Trustees of
the Lingkod Tarlac Foundation, Inc. (LTFI), a
491
VOL. 543, FEBRUARY 4, 2008 491
Ocampo III vs. People
private entity, having received by reason of his position, public funds amounting to more than
Fifty Two Million Pesos (P52,000,000.00) xxx from the National Aid for Local Government
Unit (NALGU) Funds, which he is accountable by reason of his official duties, caused the
withdrawal by co-accused Andres S. Flores on April 28, 1989, then Executive Officer, LTFI,
from the PHILIPPINE NATIONAL BANK LTFI account the sum of FIFTY EIGHT
THOUSAND PESOS (P58,000.00), portion of the said NALGU funds deposited by LTFI under
Account No. 490-555744, both accused conniving and confederating with one another, with
intent to gain and to defraud the government, did then and there, wilfully, unlawfully and
feloniously misappropriate, misapply and convert the same to their own personal use and
benefit to the damage and prejudice of the government in the aforesaid amount of P58,000.00,
Philippine Currency.
CONTRARY TO LAW.” 7
The Prosecution relied mainly on an audit conducted by the Commission on Audit
on LTFI from February 12, 1990 up to April 2, 1990. The audit covered the period
from July 1, 1988 to December 31, 1989 and was confined to the examination of the
loans granted by the Provincial Government of Tarlac for the implementation of its
Rural Industrialization Can Happen Program. The result of the audit was
embodied in Special Audit Report No. 90-91, offered as Exhibit “B” by the
prosecution.
According to the Sandiganbayan, the money trail with respect to the two cases,
as proven by the prosecution, is as follows:
1. “(1)Accused Ocampo released P11.5 Million to LTFI, P7,023,836.00 of which was
intended for the purchase of 400 embroidery machines;
2. (2)The total amount released was deposited by LTFI to the Rural Bank of Tarlac,
Inc.;
_______________
7Rollo (G.R. Nos. 156547-51), Sandiganbayan Decision, pp. 4647.
492
492 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
1. (3)Within two (2) months from the deposit, a total of P5,465,000.00 was withdrawn
and given to William Uy (LTFI’s broker for the importation of the machines);
2. (4)This amount (P5,465,000) was thereafter deposited to the personal account of
“Willam Uy and/or Andres Flores” under S/A No. 26127;
3. (5)Another account (PNB S/A No. 490-555744-6) was opened by “LTFI by Andres
Flores,” this time with PNB, intended solely for the purchase of the machines;
4. (6)A check in the amount of P3,395,000.00 dated February 27, 1989, was remitted
for the payment of the machines;
5. (7)This amount, together with the P5,465,000.00placed on the personal account of
William Uy and/or Andres Flores, made up the cost of he machines or a total
of P8,860,000.00 as recorded in the books of LTFI;
6. (8)To the PNB account was added a total of P4,332,261.00 deposited on different
dates from March 6 to April 17, 1989 which funds came from S/A No. 26127;
7. (9)Thus, the total amount on deposit with PNB was P7,727,261.00 plus interest;
8. (10)Of this amount, P7,679,530.52 was used for the opening of the LC (for the
payment of the machines) leaving a balance of P47,730,48.00 plus interest;
9. (11)Between the amount listed in the books of the corporation (P8,860,000) and the
amount of the LC (P7,679,530), a discrepancy of P1,180,496.48existed.
10. (12)Between the total amount deposited in PNB S/A No. 490555744-
6 (P7,727,261.00) and the total amount withdrawn from the account for the
payment of the machines (P7,679,530.52), a balance of P47,730.48 remained.
This balance (plus interest), in the amount of P58,000.00, was later withdrawn
upon authorization of accused Flores.” 8
Petitioner Ocampo did not testify regarding the subject cases on the ground that
he was not competent to testify on
_______________
Id., at pp. 84-85.
8
493
VOL. 543, FEBRUARY 4, 2008 493
Ocampo III vs. People
the disbursements made by LTFI but only as to the receipt of the NALGU funds
from the government.
The Sandiganbayan declared that petitioner Ocampo as governor of Tarlac,
who personally received the NALGU funds from the DBM and thereafter released
some of them to the LTFI, was duty bound to put up regular and effective measures
for the monitoring of the projects approved by him.
According to the Sandiganbayan, Sec. 203(t) of the Local Government Code
obligated provincial governors to “adopt measures to safeguard all the lands,
buildings, records, monies, credits and other property rights of the province.”
However, petitioner Ocampo, as governor of Tarlac, neglected to set up safeguards
for the proper handling of the NALGU funds in the hands of LTFI which resulted
in the disappearance of P1,132,739 and P58,000 of the said funds. The
Sandiganbayan held:
“For such gross and inexcusable negligence, accused is liable for malversation. In so ruling,
we are guided by the oft-repeated principle that malversation may be committed through a
positive act of misappropriation of public funds or passively though negligence by allowing
another to commit such misappropriation (Cabello vs. Sandiganbayan, 197 SCRA 94 [1991]).
Although accused was charged with willful malversation, he can validly be convicted of
malversation through negligence where the evidence sustains the latter mode of committing
the offense (Cabello, supra).” 9 payment of the said machines.
Further, the Sandiganbayan stated that under Sec. 203(f) of the Local Government
Code of 1983, the provincial governor, as chief executive of the provincial
10
government, has the power to “represent the province in all its business
transactions and sign on its behalf all bonds, contracts and obligations and other
official documents made in accordance with law or ordinance.”
_______________
9Id., at p. 89.
Batas Pambansa Blg. 337.
10
494
494 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
Sec. 2 (c) of Rule XI of the Rules and Regulations Implementing the Local
11
Government Code of 1983 provides that the local chief executive of a local
government unit shall “[r]epresent the respective local units in all their business
transactions and sign on its behalf all bonds, contracts and obligations and other
official documents made in accordance with law or ordinance.” Sec. 2 of Rule
VI states that “[t]he power to sue, to acquire and convey real or personal property,
12
and to enter into contracts shall be exercised by the local chief executive upon
authority of the Sanggunian concerned.” Thus, the Sandiganbayan declared that
since the required authority from the Sangguniang Panlalawigan was not shown
to have been obtained by petitioner Ocampo, the MOA is ineffective as far as the
Province of Tarlac is concerned.
Petitioner Flores, as executive director of LTFI, was charged with malversation
of public funds in connivance with a public officer. However, the Sandiganbayan
found that there was no conspiracy between the petitioners, and held petitioner
Flores guilty of malversation through his independent acts under Art. 222 of the
Revised Penal Code, since the purpose of Art. 222 is to extend the provisions of the
13
Penal Code on malversation to private individuals. According to the
Sandiganbayan, petitioner Flores bound himself, as a signatory of the MOA
representing LTFI, to receive NALGU funds from the province of Tarlac. In such
capacity, he had charge of these funds.
In Crim. Case No. 16794, petitioner Flores was found to have charge of missing
NALGU funds deposited in his per-
_______________
Powers and Duties of Local Executives.
11
Corporate Powers and Seal.
12
Art. 222. Officers included in the preceding provisions.—The provision of this chapter shall apply to
13
private individuals who, in any capacity whatever, have charge of any insular, provincial or municipal
funds, revenues, or property attached, seized, or deposited by public authority even if such property belongs
to a private individual.
495
VOL. 543, FEBRUARY 4, 2008 495
Ocampo III vs. People
sonal account in the amount of P1,132,739, which formed part of the discrepancy
of the actual cost of the embroidery machines and the NALGU funds released for
In defense, petitioner Flores claimed that the broker for the importation of the
machines made an initial payment to the supplier of the machines, which initial
payment would explain the discrepancy between the reported cost as stated in the
books of the corporation and the letter of credit. However, the Sandiganbayan
stated that the explanation was hearsay as the broker was not presented in court,
and there was no proof of the initial payment.
In Crim. Case No. 16795, the Sandiganbayan held that petitioner Flores’ failure
to explain the purpose of the withdrawal on April 28, 1989 of P58,000 upon his
authorization, considering that he was in charge of the PNB savings account, made
him liable for malversation of public funds.
Petitioners presented five documents to show that LTFI’s obligations to the
Province of Tarlac, in the amount of P56.6 million, have been extinguished. The
documents are as follows:
1. 1)The Tripartite Memorandum of Agreement (TMOA) dated May 23, 1990 executed
by the Province of Tarlac, LTFI and the Barangay Unity for Industrial and
Leadership Development (BUILD) Foundation whereby the liability of LTFI in
favor of the Province of Tarlac was transferred and assumed by BUILD in the total
amount of P40 million.
2. 2)Resolution No. 76 of the Sangguniang Panlalawigan of Tarlac dated April 5, 1990
showing that the authority of petitioner Ocampo in entering into the TMOA was
with prior approval of the Sangguniang Panlalawigan.
3. 3)A Deed of Assignment between Tarlac and LTFI whereby the latter assigned its
loan portfolios (including interests and certificates of time deposit), the Juki em
496
496 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
 1. broidery machines and other assignable documents to the Province of Tarlac in the
total amount of P16,618,403.
2. 4)Resolution No. 199 of the Sangguniang Panlalawigan of Tarlac dated October 18,
1990 authorizing petitioner Ocampo to enter into the Deed of Assignment with
LTFI.
3. 5)A certified photocopy of a document dated June 16, 1992 issued by the OIC
provincial treasurer of Tarlac whereby the treasurer affirmed the existence of the
above documents.
The Sandiganbayan declared that the documents showing the extinguishment of
LTFI’s obligations to the Province of Tarlace do not mitigate the liability of
petitioners since the crime is consummated as of asportation, akin to the taking of
another’s property in theft. It held that the return of the amount malversed is
neither an exempting circumstance nor a ground for extinguishing the criminal
liability of petitioners.
On March 8, 2002, the Fifth Division of the Sandiganbayan rendered a Decision
acquitting petitioners of the crime of malversation of public funds in Crim. Case
Nos. 16796 and 16802, but finding them guilty of the crime in Crim. Case Nos.
16787, 16794 and 16795. The dispositive portion of the Decision reads:
“WHEREFORE, premises considered, accused Mariano Un Ocampo III and Andres S. Flores
are hereby found GUILTY beyond reasonable doubt of the crime of malversation of Public
Funds under Crim. Case No. 16787 and are sentenced to suffer the indeterminate penalty of
(10) years, and one (1) day of prision mayor, as minimum, to eighteen (18) years, eight (8)
months and one (1) day of reclusion temporal as maximum and to pay a fine of sixty-six
thousand nine hundred thirty-two pesos and seventy centavos (P66,932.70). They shall also
suffer the penalty of perpetual special disqualification. Costs against the accused.
For Crim. Case No. 16794, accused Mariano Un Ocampo III and Andres S. Flores are
hereby found GUILTY beyond reasonable
497
VOL. 543, FEBRUARY 4, 2008 497
Ocampo III vs. People
doubt of the crime of Malversation of Public Funds and are sentenced to suffer the
indeterminate penalty of (10) years, and one (1) day of prision mayor, as minimum, to
eighteen (18) years, eight (8) months and one (1) day of reclusion temporal as maximum and
to pay a fine of one million one hundred thirty-two thousand seven hundred thirty-nine pesos
(P1,132,739.00). They shall also suffer the penalty of perpetual special disqualification. Costs
against the accused.
For Crim. Case No. 16795, accused Mariano Un Ocampo III and Andres S. Flores are
hereby found GUILTY beyond reasonable doubt of the crime of Malversation of Public Funds
and are sentenced to suffer the indeterminate penalty of (10) years, and one (1) day of prision
mayor, as minimum, to eighteen (18) years, eight (8) months and one (1) day of reclusion
temporalas maximum and to pay a fine of fifty-eight thousand pesos (P58,000.00). They shall
also suffer the penalty of perpetual special disqualification. Costs against the accused.
For Crim. Case No. 16796, on ground that the crime was not committed by the accused,
accused Mariano Un Ocampo III and Andres S. Flores are hereby ACQUITTED of the crime
charged. The surety bonds posted by them for their provisional liberty are cancelled.
For Crim. Case No. 16802, on ground of reasonable doubt, accused Mariano Un Ocampo
III and Andres S. Flores are hereby ACQUITTED of the crime charged. The surety bonds
posted by them for their provisional liberty are cancelled.
SO ORDERED.” 14
Petitioners separately filed a motion for reconsideration of the Decision.
In a Resolution promulgated on January 6, 2003, the Sandiganbayan
reconsidered its Decision in Crim. Case No. 16787, and acquitted petitioners of the
crime charged. In that case, the prosecution alleged that P5 million of the NALGU
funds loaned to LTFI were placed in time deposits with the Rural Bank of Tarlac
and earned a total interest of
_______________
Rollo, (G.R. Nos. 156547-51), pp. 92-93.
14
498
498 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
P116,932.77, of which amount only P50,000.00 was recorded in the books of LTFI.
The unrecorded interest of P66,932.77 was said to have been withdrawn from
December 27, 1988 to February 2, 1989 and allegedly malversed by petitioners. The
Sandiganbayan held that as this Court has already labeled the subject agreement
as one of loan, the said “interest are private funds, hence, not the proper subject for
malversation of public funds.” Thus, petitioners were acquitted in Crim. Case No.
16787.
Petitioners thereafter filed their respective petitions, which were consolidated
by the Court in a Resolution dated February 20, 2006.
The pertinent issues raised by petitioners may be summarized as follows:
1. 1)Whether or not petitioners Ocampo and Flores are guilty of the crime of
malversation of public funds under Art. 217 and Art. 220 respectively of the
Revised Penal Code;
2. 2)Whether or not the Sandiganbayan erred in holding that the MOA is void and did
not bind the Province of Tarlac on the ground that the MOA was entered into by
petitioner Ocampo without authority from the Sangguniang Panlalawigan in
violation of the Local Government Code of 1983.
First Issue: Whether or not petitioners Ocampo and Flores are guilty of the crime of
malversation of public funds under Art. 217 and Art. 220 respectively of the
Revised Penal Code?
Crucial to the resolution of the first issue is the nature of the transaction
entered into by the Province of Tarlac and LTFI.
Petitioners claim that in the instant cases, the public funds alleged to have been
malversed were loaned by the Province of Tarlac to LTFI per the MOA; hence,
LTFI acquired owner-
499
VOL. 543, FEBRUARY 4, 2008 499
Ocampo III vs. People
ship of the funds which thus shed their public character and became private funds.
Petitioner Ocampo also asserts that the Sandiganbayan impliedly ruled that
the funds were private in character and owned by LTFI when it ruled in Crim. Case
No. 16787 that since this Court has already labeled the subject agreement as one
of loan, the interests from the loan are private funds; hence, not the proper subject
for malversation of public funds. Having declared the interests earned by the funds
loaned to LTFI as private funds, the Sandiganbayan should have also declared the ARTICLE V
funds loaned as private. TERMS OF REPAYMENT
Petitioners’ arguments are meritorious.
The MOA states: 1. The Second Party shall repay the First Party only the total amount of capital without
“x x x interest in consideration of the following:
WHEREAS, the First Party [the Provincial Government of Tarlac], in order to vigorously
pursue its livelihood program for rural development, has identified the need to establish a 1. a)The Second Party shall shoulder all its operating expenses.
RICH (Rural Industrialization Can Happen) Program; 2. b)The Second Party shall not charge the Province any management fees or whatever
WHEREAS, the First Party now realizes the effectivity and efficiency of designating a fees.
professional private non-profit organization to implement the various livelihood projects
under the RICH Program;
501
WHEREAS, the Second Party [Lingkod Tarlac Foundation], has represented that it has
the technical expertise required by the First Party in the implementation of the various VOL. 543, FEBRUARY 4, 2008 501
livelihood projects under the RICH Program;
WHEREAS, the First Party desires to engage the Second Party and the latter agrees as
Ocampo III vs. People
the implementing arm of the Provincial Government for its livelihood projects;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the 1. c)The Second Party shall, whenever necessary, assure the beneficiaries of the
Parties hereby agree as follows: project interests and management fees at rates lower than the commercial
financial rates.
ARTICLE I
UNDERTAKINGS OF THE FIRST PARTY 2. The terms of repayment shall be based on the projects’ ability to pay without sacrificing on
the projects viability.
1. The First Party shall provide all the data and information as may be required by [the]
Second Party in the implementation of the RICH Program; ARTICLE VI
500
SUCCESSORS AND ASSIGNEES
500 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People Except as may be mutually agreed in writing, neither party can assign, sublet, or transfer
its interest or duties under this Agreement.

ARTICLE III
ARTICLE VII
DESCRIPTION OF THE PRIORITY PROJECTS
TERMS OF THE AGREEMENT

A. Program For Lease Purchase Agreements on equipment, machineries, buildings and

This Agreement shall exist for as long as the Program exists or any extension thereof.
structures:
IN WITNESS WHEREOF, the Parties have hereunto set their hands on this 8 day of th
xxx
August, 1988 in Tarlac, Tarlac.
B. Direct Lending Pogram:
Under this scheme, the Lingkod Tarlac Foundation shall engage in direct lending LINGKOD TARLAC FOUNDATION PROVINCE OF TARLAC
operations to proponents of livelihood activities under the Rural Industrialization Can
Second Party First Party
Happen (RICH PROGRAM) at variable interest rates and loan conditions depending on the
viability and nature of the livelihood projects availing of the loan. (Signed) (Signed)
C. Direct Borrowing by Lingkod Tarlac Foundation:
ANDRES S, FLORES MARIANO UN OCAMPO III
The Lingkod Tarlac Foundation shall be allowed to borrow funds directly from
the Provincial government to fund Lingkod Tarlac Foundation projects provided the Executive Director Governor
projects are livelihood projects under the Rural Industrialization Can Happen (RICH
CONCURRED IN BY:
Program).
D. Other project financing schemes that may be developed for the RICH Program. (Signed)
GUILLERMO N. CARAGUE
ARTICLE IV
CONDITIONS FOR RELEASE OF FUNDS Secretary of Budget
& Management
The First Party shall release in lump sum the appropriate funds for the approved The MOA shows that LTFI is “allowed to borrow funds directly from the Provincial
projects covered by individual loan documents upon signing of [the] respective loan Government to fund Lingkod Tarlac Foundation projects provided the projects are
agreement and approval of the Commission on Audit. livelihood projects under the Rural Industrialization Can Happen Program.”
Moreover, the agreement stipulates under the “Conditions for Release of Funds” Date Amount
that the Province of Tarlac “shall release in lump sum the appropriate funds for
the approved 06 14 89 12,718,403
502 Total P56,618,403
502 SUPREME COURT REPORTS ANNOTATED xxx
On October 24, 1988, the Provincial Government of Tarlac approved and released an
Ocampo III vs. People amount of P11,500,000 to Lingkod Tarlac Foundation, Inc. (LTFI) for the Rural
projects covered by individual loan documents upon signing of the respective Industrialization Can Happen (RICH) Program. Of the amount released, P7,023,836 was
loan agreement....” 15 intended for the purchase of 400 sets embroidery machines for the Embroidery Skills Training
In Crim. Case No. 16794, the fund alleged to have been malversed in the Project.” 17

amount of P1,180,496.48 represents the discrepancy of the cost of the Juki
embroidery machines as listed in the books of LTFI and the amount actually paid
to open the letter of credit for the payment of the machines. In the books of LTFI,
the cost of the Juki embroidery machines was listed as P8,860,000, while the
amount paid to open the letter of credit for the payment of the machines was
P7,679,530.52. Petitioner Flores was held liable only up to the amount of
P1,132,739.
In Crim. Case No. 16795, the fund alleged to have been malversed in the
amount of P58,000 is the money left (P47,730) in PNB S/A No. 490-555744-6 after
the withdrawal of the purchase price of the Juki embroidery machines, plus
interest. The amount of P58,000 was withdrawn upon the authorization of
petitioner Flores. The withdrawal was neither reflected as deposit in the bank
accounts of LTFI nor spent by it.
In both cases, the money trail proven by the prosecution shows that the subject
funds or the money used for the purchase of the Juki embroidery machines came
Based on the foregoing, it is clear that the funds released by the Province of Tarlac,
including the money allegedly malversed by petitioners in Crim. Case Nos. 16794
and 16795, were in the nature of a loan to LTFI.
Art. 1953 of the Civil Code provides that “[a] person who receives a loan of
money or any other fungible thing acquires the ownership thereof, and is bound to
pay to the creditor an equal amount of the same kind and quality.”
Hence, petitioner Ocampo correctly argued that the NALGU funds shed their
public character when they were lent to LTFI as it acquired ownership of the funds
with an obligation to repay the Province of Tarlac the amount borrowed. The
relationship between the Province of Tarlac and the LTFI is that of a creditor and
debtor. Failure to pay the indebtedness would give rise to a collection suit.
_______________
Exhibit “B-3.”
17

504
from the release of the Province of Tarlac through petitioner Ocampo of NALGU
funds in the amount of P11.5 million to LTFI on October 24, 1988. The release of
504 SUPREME COURT REPORTS ANNOTATED
the funds was covered by a loan document in accordance with the MOA which Ocampo III vs. People
states that the Province of Tarlac “shall release in lump sum the appropriate funds The Sandiganbayan convicted petitioner Ocampo of malversation of public funds
for the approved projects covered by individual loan documents upon signing under Art. 217 of the Revised Penal Code for his “gross and inexcusable negligence”
of the respective loan agreement....” in not setting up safeguards in accordance with Sec. 203(t) of the Local Government
The Report on the Special Audit of LTFI stated:
16
Code for the proper handling of the NALGU funds in the hands of LTFI which
18

resulted in the disappearance of P1,132,739 allegedly malversed in Crim. Case No.

_______________ 16794 and the disappearance of P58,000 in Crim. Case No. 16795.
In his petition, petitioner Ocampo states that he made sure that proper
Emphasis supplied.
15
safeguards were in place within LTFI to ensure the proper handling of NALGU
Exhibit “B.”
16

503 funds by LTFI. On August 5, 1988, before the Province of Tarlac and LTFI entered
into the MOA, LTFI’s Articles of Incorporation were amended to add the following:
VOL. 543, FEBRUARY 4, 2008 503 “TENTH: That no part of the net income of the Foundation shall inure to the benefit of any
Ocampo III vs. People member of the Foundation and that at least seventy percent (70%) of the funds shall be used
. . . For the period July 1988 to December 1989, LTFI received a total of P56.6 million for the projects and not more than thirty percent (30%) of said funds shall be used for
which consisted of six releases andcovered by individual loan agreements, as follows: administrative purposes.”
Petitioner Ocampo argues that since he had resigned from LTFI both as
Date Amount
chairperson and as trustee on June 22, 1988, he ceased to become accountable for
08 30 88 P 7, 000,000 the handling of the NALGU funds after the same were loaned to LTFI pursuant to
10 24 88 11,500,000 the MOA dated August 8, 1988. Consequently, he may not be held
12 08 88 1,500,000 _______________
02 22 89 4,000,000
04 12 89 18,000,000
 Sec. 203. Provincial Governor as Chief Executive of the Province; Powers and Duties.—(1) The
18
governor shall be the chief executive of the provincial government and shall exercise such powers and
duties as provided in this Code and other laws.
(2) The governor shall:
xxx
(t) Adopt measures to safeguard all the lands, buildings, records, monies, credits and other property and rights of the
province. . . .
505
VOL. 543, FEBRUARY 4, 2008
Ocampo III vs. People
criminally liable for disbursements made by LTFI since he had nothing to do with
its operations after his resignation.
Malversation may be committed by appropriating public funds or property; by
taking or misappropriating the same; by consenting, or through abandonment or
negligence, by permitting any other person to take such public funds or property;
or by being otherwise guilty of the misappropriation or malversation of such funds
or property. 19
The essential elements common to all acts of malversation under Art. 217 of
the Revised Penal Code are: 20
1. (a)That the offender be a public officer;
2. (b)That he had the custody or control of funds or property by reason of the duties of
his office;
3. (c)That those funds or property were public funds or property for which he was
accountable;
_______________
Pondevida v. Sandiganbayan, G.R. Nos. 160929-31, August 16, 2005, 467 SCRA 219, 241-242.
19
Art. 217. Malversation of public funds or property—Presumption of malversation.—Any public
20
officer, who, by reason of the duties of his office, is accountable for public funds or property, shall
appropriate the same, or shall take or misappropriate or shall consent, or through abandonment or
negligence, shall permit any other person to take such public funds or property, wholly or partially, or shall
otherwise be guilty of the misappropriation or malversation of such funds or property, shall suffer:
1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in
the misappropriation or malversation does not exceed two hundred pesos.
xxx
The failure of a public officer to have duly forthcoming any public funds or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such
missing funds or property to personal uses.
506
506 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
1. (d)That he appropriated, took, misappropriated or consented or, through
abandonment or negligence, permitted another person to take them. 21
There can be no malversation of public funds by petitioner Ocampo in the instant
cases since the loan of P11.5 million transferred ownership and custody of the
funds, which included the sum of money allegedly malversed, to LTFI for which
Ocampo could no longer be held accountable. Thus, contrary to the allegation of the
Office of the Special Prosecutor, petitioner Ocampo cannot be held culpable for
malversation committed through negligence in adopting measures to safeguard the
money of the Province of Tarlac, since the same were neither in his custody nor was
he accountable therefor after the loan to LTFI.
Thus, petitioner Flores, as the executive director of LTFI, cannot also be held
liable for malversation of public funds in a contract of loan which transferred
ownership of the funds to LTFI making them private in character. Liwanag v.
505 Court of Appeals held:22
“. . . in a contract of loan once the money is received by the debtor, ownership over the same
is transferred. Being the owner, the borrower can dispose of it for whatever purpose he may
deem proper.
The Sandiganbayan erred when it stated that the intention of the parties was for
the funds to remain public, citing the MOA which allegedly provided, thus:
“The Province shall have the right to have access to all resources and records of either LTF[I]
or BUILD and may conduct COA examination or audit on any or all matter affecting the loans
or assets covered by this agreement and funds from the Province of Tarlac.”
_______________
21Supra, note 19, at p. 242; Luis B. Reyes, The Revised Penal Code, Book 2, Fourteenth Edition,
Revised 1998, p. 406.
22G.R. No. 114398, October 24, 1997, 281 SCRA 225, 231.
507
VOL. 543, FEBRUARY 4, 2008 507
Ocampo III vs. People
A review of the MOA did not show the presence of such provision. But the cited
provision is contained in the TMOA, which was later entered into by the Province
of Tarlac, LTFI and BUILD, whereby LTFI transferred part of its obligation to
BUILD.
What is controlling in the instant cases is that the parties entered into a
contract of loan for eachrelease of NALGU funds. The second release on
October 24, 1988 included the subject funds in controversy. By virtue of the contract
of loan, ownership of the subject funds was transferred to LTFI making them
private in character, and therefore not subject of the instant cases of malversation
of public funds.
The Court notes that the obligation of LTFI to repay the NALGU Funds of
P56,618,403 obtained by it from the Province of Tarlac pursuant to the MOA was
extinguished as follows:
1. (1)BUILD assumed LTFI’s principal loan of P40 million;
2. (2)LTFI ceded, transferred and assigned to the Province of Tarlac all the rights and
interests of LTFI in certain loans including interests, certificate of time deposit
and certain Juki embroidery machines in the total amount of P16,618,403.
Second Issue: Whether or not the Sandiganbayan erred in holding that the MOA is
void and did not bind the Province of Tarlac on the ground that the MOA was
entered into by petitioner Ocampo without authority from the Sangguniang
Panlalawigan in violation of the Local Government Code of 1983?
In its Resolution dated January 6, 2003, the Sandiganbayan concedes that the
transaction between the Province of Tarlac through petitioner Ocampo and the
 (2) The governor shall:
LTFI was one of loan. However, it stated that since Ocampo was not authorized by xxx
the Sangguniang Panlalawigan to enter into the MOA (a) Represent the province in all its business transactions and sign on its behalf all bonds, contracts and obligations
508 and other official documents made in accordance with law or ordinance.
Sec. 465. The Chief Executive: Powers, Duties, Functions and Compensation.—(a) The provincial
27

508 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
as required by the Local Government Code of 1983, the MOA did not bind the
province nor did it give any benefits to the LTFI because a void contract has no
effect whatsoever.
Petitioner Ocampo alleges that he had ample authority to enter into the MOA
for the following reasons:
1. 1)NALGU funds received by the Province of Tarlac came straight from the national
government and were intended for a specific purpose, that is, the implementation
of various livelihood projects in the Province of Tarlac, as evidenced by the
exchange of correspondence between him (petitioner Ocampo) and DBM Secretary
Guillermo N. Carague. 23
2. 2)On July 15, 1988, the DBM released a revolving fund for the implementation of
various livelihood projects in the Province of Tarlac under Advice Allotment No.
BCS-0183-88-301. In August 1988, he (petitioner Ocampo) informed the DBM
24
that the Province of Tarlac had designated LTFI as the implementing arm for its
livelihood projects, and requested authority to extend loans to LTFI, which
request was approved by the DBM Secretary.
25
governor, as the chief executive of the provincial government, shall exercise such powers and perform such
duties and functions as provided by this Code and other laws.
xxx
(1) Exercise general supervision and control over all programs, projects, services, and activities of the provincial
government, and in this connection shall:
xxx
(vi) Represent the province in all its business transactions and sign in its behalf all bonds, contracts and obligations,
and such other documents upon authority of the sangguniang panlalawigan or pursuant to law or ordinance.
28 Art. 1409. The following contracts are inexistent and void from the beginning:
1. (1)Those whose cause, object or purpose is contrary to law, morals, good customs, public order
or public policy;
2. (2)Those which are absolutely simulated or fictitious;
3. (3)Those whose cause or object did not exist at the time of the transaction;
510
510 SUPREME COURT REPORTS ANNOTATED
Ocampo III vs. People
unenforceable under Art. 1403(1) of the Civil Code. He points out that
unenforceable contracts are susceptible of ratification, and in this case, the
Provincial Board of Tarlac can be deemed to have ratified the MOA when it passed

3. 3)The DBM’s approval of petitioner Ocampo’s request constituted the authority of

petitioner Ocampo to enter into the MOA with LTFI.
the following resolutions:
4. 4)DBM also approved and concurred with the terms of the MOA as evidenced by the
DBM Secretary’s signature on the MOA. 1. (1)Resolution No. 76, which confirmed and ratified the TMOA among the Province
of Tarlac, LTFI and the BUILD, whereby the liability of LTFI in favor of the
Province of Tarlac in the total amount of P40 million was transferred to and
Petitioner Ocampo also asserts that Sec. 203(f) of the Local Government Code of
assumed by BUILD; and 29

1983, which authorized the provincial

26

2. (2)Resolution No. 199, which authorized petitioner Ocampo to sign the Deed of
Assignment between the Province of Tarlac and LTFI, whereby LTFI assigned
_______________ loans, sewing machines and other assignable documents in favor of the Province
of Tarlac to settle the balance of its obligation in the amount of P16,618,403.00. 30

See Annex “D” and Annex “E,” Rollo (G.R. Nos. 156547-51), pp. 123-124.
23

Ibid.
24

Annex “E,” Rollo (G.R. Nos. 156547-51), p. 124.

25 The Court holds that since petitioner Ocampo was not duly authorized by
Sec. 203. Provincial Governor as Chief Executive of the Province; Powers and Duties.—(1) The
26
the Sangguniang Panlalawigan to enter into the MOA, the agreement is an
governor shall be the chief
unenforceable contract under Sec. 1403 of the Civil Code:
509
“Art. 403. The following contracts are unenforceable, unless they are ratified:
VOL. 543, FEBRUARY 4, 2008 509
Ocampo III vs. People 1. (1)Those entered into in the name of another person by one who has been given no
governor to enter into business transactions on behalf of the province, did not authority or legal representation, or who has acted beyond his powers; x x x.
expressly require the concurrence of the provincial board unlike its counterpart
provision in the Local Government Code of 1991. 27 _______________
Further, petitioner Ocampo states that in any case, the lack of authority of one
who enters into a contract in the name of another does not render the contract void 1. (4)Those whose object is outside the commerce of men;
2. (5)Those which contemplate an impossible service;
under Art. 1409 of the Civil Code, as ruled by the Sandiganbayan, but only
28
3. (6)Those where the intention of the parties relative to the principal object of the contract cannot be ascertained;
4. (7)Those expressly prohibited or declared void by law.

_______________
These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.
executive of the provincial government and shall exercise such powers and duties as provided in this
29 Annexes “F” and “G,” Rollo, pp. 147, 150.
Code and other laws.
30 Annexes “H” and “I,” id., at pp. 151, 153.
 511
VOL. 543, FEBRUARY 4, 2008 511
Ocampo III vs. People
Unenforceable contracts are governed by the following provisions of the Civil Code:
“Art. 1404. Unauthorized contracts are governed by article 1317 and the principles of
agency in Title X of this Book.
Art. 1317. No one may contract in the name of another without being authorized by the
latter, or unless he has by law or right to represent him.
A contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, shall be unenforceable, unless it is
ratified, expressly or impliedly, by the person on whose behalf it has been executed, before
it is revoked by the other contracting party.” 31

The Court finds that the MOA has been impliedly ratified by the Sangguniang
Panlalawigan as it has not directly impugned the validity of the MOA despite
knowledge of this controversy. Implied ratification is also shown by the following
acts:

1. 1)The Sangguniang Panlalawigan subsequently recognized the transfer of

liabilities of LTFI in favor of the Province of Tarlac to BUILD in the amount of
P40 million contained in a TMOA. 32

2. 2)It authorized petitioner Ocampo to sign in behalf of the Province of Tarlac the
Deed of Assignment entered into by the Province of Tarlac and LTFI which 33

extinguished the remaining loan obligations of LTFI obtained under the MOA.

WHEREFORE, the consolidated petitions are GRANTED. The Decision of the

Sandiganbayan promulgated on March 8, 2002 and its Resolution promulgated on
January 6, 2003 are SET ASIDE. Petitioner Mariano Un Ocampo III and peti-

_______________

Emphasis supplied.
31

Rollo, p. 147.
32

Id., at p. 153.
33

512
512 SUPREME COURT REPORTS ANNOTATED
Montecillo vs. Pama
tioner Andres S. Flores are hereby ACQUITTED of the crime of malversation of
public funds in Crim. Case Nos. 16794 and 16795.
No costs.
SO ORDERED.
Puno (C.J., Chairperson), Sandoval-Gutierrez, Corona and Leonardo-De
Castro, JJ., concur.
Petitions granted, judgment dated March 8, 2002 and resolution dated June 6,
2003 set aside. Petitioners Mariano Un Ocampo III and Andres S. Flores acquitted.
Note.—In a loan transaction or mutuum, the borrower or debtor acquires
ownership of the amount borrowed and he is then free to dispose of or to utilize the
sum he loaned. (Development Bank of the Philippines vs. Commission on Audit, 422
SCRA 459 [2004])

——o0o——
 [No. 13602. April 6, 1918.]
LEUNG BEN, plaintiff, vs. P. J. O'BRIEN ; JAMES A. OSTRAND and GEO.
R. HARVEY, judges of First Instance of the city of Manila, defendants.
1. 1.CERTIORARI; ISSUANCE OF ATTACHMENT WITHOUT STATUTORY
AUTHORITY.—Where a Court of First Instance issues an attachment for which
there is no statutory authority, it is acting irregularly and in .excess of its
jurisdiction in the sense necessary to justify the Supreme Court in entertaining
an application for a writ of certiorari and quashing the attachment.
1. 2.ID.; ID.; INADEQUATE REMEDY.—In such case the remedy on the attachment
bond or by appeal would not be sufficiently speedy to meet the exigencies of the
case. Attachment is an exceedingly violent measure and its unauthorized issuance
may result in the infliction of damage which could never be repaired by any
pecuniary award at the final hearing.
1. 3.ID.; ID.; DISTINCTION BETWEEN JURISDICTION OVER PRINCIPAL
CAUSE AND OVER ANCILLARY REMEDY.—There is a clear distinction to be
noted between the jurisdiction of a Court of First Instance with respect to the
principal cause of action and its jurisdiction to grant an auxiliary remedy, like
attachment. A court, although it may have unquestioned jurisdiction over the
principal cause of action, may nevertheless act irregularly or in excess of its
jurisdiction in granting the auxiliary remedy. In such case the party aggrieved
may prosecute a proceeding by writ of certiorari in the Supreme Court.
(Herrera vs. Barretto and Joaquin, 25 Phil. Rep., 245, distinguished.)
1. 4.CONTRACT; IMPLIED CONTRACT.—The obligation imposed by Act No. 1757
upon the winner in a prohibited game to return to the loser the money or other
thing of value won at play is an "implied contract," as this term is used in
subsection (1) of section 412 of the Code of Civil Procedure.
1. 5.ATTACHMENT; CAUSE OF ACTION ARISING UPON CONTRACT, EXPRESS
OR IMPLIED.—In an action brought pursuant to the provisions
183
VOL. 38, APRIL 6, 1918 183
Leung Ben vs. O'flrien.
1. of Act No. 1757 to recover a sum of money lost at play, an attachment was obtained
in the Court of First Instance under section 424 in connection with subsection 1 of
section 412 of the Code of Civil Procedure. These provisions authorize the issuance
of an attachment in an action for the recovery of money on a cause of action arising
upon contract, express or implied, when the defendant is about to depart from the
Philippine Islands. Held: That the cause of action arose upon an implied contract
and that the action of the court in issuing the attachment would not be annulled
by the Supreme Court in a proceeding by writ of certiorari.
ORIGINAL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the .Court.
Thos. D. Aitken and W. A. Aymstrong, for plaintiff.
Kincaid & Perkins, for defendants.
STREET, J.:
This is an application for a writ of certiorari, the purpose of which is to quash an
attachment issued from the Court of First Instance of the City of Manila under
circumstances hereinbelow stated.
Upon December 12, 1917, an action was instituted in the Court of First Instance
of the city of Manila by P. J. O'Brien to recover of Leung Ben the sum of P15,000,
alleged to have been lost by the plaintiff to the defendant in a series of gambling,
banking, and percentage games conducted during the two or three months prior to
the institution of the suit. In his verified complaint the plaintiff asked for an
attachment, under sections 424 and 412 (1) of the Code of Civil Procedure, against
the property of the defendant, on the ground that the latter was about to depart
from the Philippine Islands with intent to defraud his creditors. This attachment
was issued; and acting under the authority thereof, the sheriff attached the sum of
P15,000 which had been deposited by the defendant with the International
Banking Corporation.
The defendant thereupon appeared by his attorney and moved the court to
quash the attachment. Said motion having been dismissed in the Court of First
Instance, the petitioner, Leung Ben, the defendant in that action, pre-
184
184 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Brien.
sented to this court, upon January 8, 1918, his petition for the writ of certiorari
directed against P. J. O'Brien and the judges of the Court of First Instance of the
city of Manila whose names are. mentioned in the caption hereof. The prayer is
that the Honorable James A. Ostrand, as the judge having cognizance of the action
in said court (P. J. O'Brien vs. Leung Ben) be required to certify the record to this
court for review and that the order of attachment which had been issued should be
revoked and discharged, with costs. Upon the filing of said petition in this court the
usual order was entered requiring the defendants to show cause why the writ
should not issue. The response of the defendants, in the nature of a demurrer, was
filed upon January 21, 1918; and the matter is now heard upon the pleadings thus
presented.
The provision of law under which this attachment was issued requires that
there should be a "cause of action arising upon contract, express or implied." The
contention of the petitioner is that the statutory action to recover money lost at
gaming is not such an action as is contemplated in this provision, and he therefore
insists that the original complaint shows on its face that the remedy of attachment
is not available in aid thereof; that the Court of First Instance acted in excess of its
jurisdiction in granting the writ of attachment; that the petitioner has no plain,
speedy, and adequate remedy by appeal or otherwise; and that consequently the
writ of certiorari supplies the appropriate remedy for his relief.
The case presents the two following questions of law, either of which, if decided
unfavorably to the petitioner, will be fatal to his application:
 1. (1)Supposing that the Court of First lnstance has granted an attachment
for which there is no statutory authority, can this court entertain the
present petition and grant the desired relief ?
2. (2)Is the statutory obligation to restore money won at gaming an obligation
arising from "contract, express or implied?"
185
VOL. 38, APRIL 6, 1918 185
Leung Ben vs. O'Brien.
We are of the opinion that the answer to the first question should be in the
affirmative. Under section 514 of the Code of Civil Procedure the Supreme Court
has original jurisdiction by the writ of certiorari over the proceedings of Courts of
First Instance, "wherever said courts have exceeded their jurisdiction and there is
no plain, speedy, and adequate remedy." In the same section, it is further declared
that the proceedings in the Supreme Court in such cases shall be as prescribed for
Courts of First Instance in sections 217-221, inclusive, of said Code. This has the
effect of incorporating into the practice of the Supreme Court, so far as applicable,
the provisions contained in those sections to the same extent as if they had been
reproduced verbatim immediately after section 514. Turning to section 217, we find
that, in defining the conditions under which certiorari can be maintained in a Court
of First Instance, substantially the same language is used as is found in section 514
relative to the conditions under which the same remedy can be maintained in the
Supreme Court, namely, when the inferior tribunal has exceeded its jurisdiction
and there is no appeal, nor any plain, speedy, and adequate remedy. In using these
expressions the author of the Code of Civil Procedure merely adopted the language
which, in American jurisdictions at least, had long ago reached the stage of a
stereotyped formula.
In section 220 of the same Code, we have a provision relative to the final
proceedings in certiorari, and herein it is stated that the court shall determine
whether the inf erior tribunal has regularly pursued its authority and that if it
finds that such inferior tribunal has not regularly pursued its authority, it shall
give judgment, either affirming, annulling, or modifying the proceedings below, as
the law requires. The expression, "has not regularly pursued its authority," as here.
used, is suggestive, and we think it should be construed in connection with the
other expressions "have exceeded their jurisdiction," as used in section 514, and
"has exceeded the jurisdiction," as used in section 217. Taking the three together,
it results in our opinion
186
186 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Brien.
that any irregular exercise of judicial power by a Court of First Instance, in excess
of its lawful jurisdiction, is remediable by the writ of certiorari, provided there is
no other plain, speedy, ,and adequate remedy; and in order to make out a case for
the granting of the writ it is not necessary that the court should have acted in the
matter without any jurisdiction whatever. Indeed the repeated use of the
expression "excess of jurisdiction" shows that the lawmaker contemplated the
situation where a court, having jurisdiction, should irregularly transcend its
authority as well as the situation where the court is totally devoid of lawful power.
It may be observed in this connection that the word "jurisdiction," as used in
attachment cases, has reference not only to the authority of the court to entertain
the principal action but also to its authority to issue the attachment, as dependent
upon the existence of the statutory ground. (6 C. J., 89.) This distinction between
jurisdiction over the main cause and jurisdiction to issue the attachment as an
ancillary remedy incident to the principal litigation is of importance; as a court's
jurisdiction over the main action may be complete, and yet it may lack authority to
grant an attachment as ancillary to such action. This distinction between
jurisdiction over the principal proceeding and jurisdiction over the ancillary has
been recognized by this court in connection with actions involving the appointment
of a receiver. Thus, in Rocha & Co. vs. Crossfield and Figueras (6 Phil. Rep., 355),
a receiver had been appointed without legal justification. It was held that the order
making the appointment was beyond the jurisdiction of the court; and though the
court admittedly had jurisdiction of the main cause, the order was vacated by this
court upon application for a writ of certiorari. (See Blanco vs. Ambler, 3 Phil. Rep.,
358, Blanco vs. Ambler and McMicking 3 Phil. Rep., 735; Yangco vs.Rohde, 1 Phil.
Rep., 404.)
By parity of reasoning it must follow that when a court issues a writ of
attachment for which there is no statutory authority, it is acting irregularly and in
excess of its
187
VOL. 38, APRIL 6, 1918 187
Leung Ben vs. O'Brien.
jurisdiction, in the sense necessary to justify the Supreme Court in granting relief
by the writ of certiorari. In applying this proposition it is of course necessary to
take account of the difference between a ground of attachment based on the nature
of the action and a ground of attachment based on the acts or the condition of the
defendant. Every complaint must show a cause of action of some sort; and when
the statute declares that the attachment may issue in an action arising upon
contract, express or implied, it announces a criterion which may be determined
from an inspection of the language of the complaint. The determination of this
question is purely a matter of law. On the other hand, when the statute declares
that an attachment may be issued when the defendant is about to depart from the
Islands, a criterion is announced which is wholly foreign to the cause of action; and
the determination of it may involve a disputed question of fact which must be
decided by the court. In making this determination, the court obviously acts within
its powers; and it would be idle to suppose that the writ of certiorari would be
available to reverse the action of a Court of First Instance in determining the
sufficiency of the proof on such a disputed point, and in granting or refusing the
attachment accordingly.
We should not be understood, in anything that has been said, as intending to
infringe the doctrine enunciated by this court in Herrera vs. Barretto and
Joaquin (25 Phil. Rep., 245), when properly applied. It was there held that we
would not, upon an application for a writ of certiorari, dissolve an interlocutory
mandatory injunction that had been issued in a. Court of First Instance as an
incident in an action of mandamus. The issuance of an interlocutory injunction
depends upon conditions essentially different from those involved in the issuance
of an attachment. The injunction is designed primarily for the prevention of
irreparable injury and the use of the remedy is in a great measure dependent upon
the exercise of discretion. Generally speaking, it may be said that the exercise of
the
188
188 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Bfien.
injunctive power is inherent in judicial authority; and ordinarily it would be
impossible to distinguish between the jurisdiction of the court in the main litigation
and its' jurisdiction to grant an interlocutory injunction, for the latter is involved
in the former. That the writ of certiorari can not be used to reverse an order denying
a motion for a preliminary injunction is of course not open to cavil.
(Somes vs. Crossfield and Molina, 8 Phil. Rep., 284.)
But it will be said that the writ of certiorari is not available in this case, because
the petitioner is protected by the attachment bond, and that he has a plain, speedy,
and adequate remedy by appeal. This suggestion seems to be sufficiently answered
in the case of Rocha & Co. vs.Crossfield and Figueras (6 Phil. Rep., 355), already
referred to, and the earlier case there cited. The remedy by appeal is not sufficiently
speedy to meet the exigencies of the case. An attachment is extremely violent, and
its abuse may often result in the infliction of damage which could" never be repaired
by any pecuniary award at the final hearing. To postpone the granting of the writ
in such a case until the final hearing and to compel the petitioner to bring the case
here upon appeal merely in order to correct the action of the trial court in the
matter of allowing the attachment would seem both unjust and unnecessary.
Passing to the problem propounded in the second question it may be observed
that, • upon general principles, recognized both in the civil and common law, money
lost in gaming and voluntarily paid by the loser to the winner can not, in the
absence of statute, be recovered in a civil action. But Act No. 1757 of the Philippine
Commission, which defines and penalizes several forms of gambling, contains
numerous provisions recognizing the right to recover money lost in gambling or in
the playing of certain games (secs. 6, 7, 8, 9, 11). The original complaint in the
action in the Court of First Instance is not clear as to the particular section of Act
No. 1757 under which the action is brought, but it is alleged that the money was
lost at gambling, banking, and percentage game in which the defendant was
189
VOL. 38, APRIL 6, 1918 189
Leung Ben vs. O'Brien.
banker. It must therefore be assumed that the action is based upon the right of
recovery given in section 7 of said Act, which declares that an action may be brought
against the banker by any person losing money at a banking or percentage game.
Is this a cause of action arising upon contract, "express or implied," as this term
is used in section 412 of the Code of Civil Procedure? To begin the discussion, the
English version of the Code of Civil Procedure is controlling (sec, 15, Admin. Code,
ed. of 1917). Furthermore, it is universally admitted to be proper in the
interpretation of any statute, to consider its historical antecedents and its
jurisprudential sources. The Code of Civil Procedure, as is well known, is an
American contribution to Philippine legislation. It therefore speaks the language
of the common-law and for the most part reflects its ideas. When the draftsman of
this Code used the expression "contract, express or implied," he used a phrase that
has been long current among writers on American and English law; and it is
therefore appropriate to resort to that system of law to discover the meaning which
the legislator intended to convey by those terms. We remark in passing that the
expression "contrato tácito," used in the official translation of the Code of Civil
Procedure as the Spanish equivalent of "implied contract," does not appear to
render the full sense of the English expression.
The English contract law, so far as relates to simple contracts (i. e. contracts
not evidenced by a sealed instrument or a judicial record), is planted upon two
foundations, which are supplied by two very different conceptions of legal liability.
These two conceptions are revealed in the ideas respectively underlying (1) the
common-law debt and (2) the assumptual promise. In the early and formative
stages of the common-law the only simple contract of which the courts took account
was the real contract or contract re, in which the contractual duty imposed by law
arises upon the delivery of a chattel, as in the mutuum, commodatum,
depositum, and the like; and the purely consensual agree-
190
190 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Brien.
ments of the Roman Law found no congenial place in the early common law system.
In course of time the idea underlying the contract re was extended so as to
include all cases where there was something of value passing from one person to
another under such circumstance as to constitute a justa, causa debendi. The
obligation thereby created was a debt. The constitutive element in this obligation
is found in the fact that the debtor has received something from the creditor, which
he is bound by the obligation of law to return or pay for. From an early day this
element was denominated the quid pro quo, an ungainly phrase coined by
Mediaeval Latinity. The quid pro quo was primarily a material or physical object,
and it constituted the recompense or equivalent acquired by the debtor. Upon the
passage of the quid pro quo from one party to the other, the law imposed
that real contractual duty peculiar to the debt. No one conversant with the early
history of the English law would ever conceive of the debt as an obligation created
by promise. It is the legal duty to pay or deliver a sum certain of money or an
ascertainable quantity of ponderable or measurable chattels.
The ordinary debt, as already stated, originates in a contract in which a quid
pro quo passes to the debtor at the time of the creation of the debt, but the term is
equally applicable to duties imposed by custom, or statute, or by judgment of a
court.
The existence of a debt supposes one person to have possession of a
thing (res) which he owes and hence ought to turn over the owner. This obligation
is the oldest conception of contract with which the common law is familiar; and
notwithstanding the centuries that have rolled over Westminster Hall that
conception remains as one of the fundamental bases of the common-law contract.
Near the end of the fifteenth century there was evolved in England a new
conception of contractual liability, which embodied the idea of obligation resulting
from promise and
191
VOL. 38, APRIL 6, 1918 191
Leung Ben vs. O'Brien.
which found expression in the common law assumpsit, or parol promise supported
by a consideration. The application of this novel conception had the effect of greatly
extending the field of contractual liability and by this means rights of action came
to be recognized which had been unknown before. The action of assumpsit which
was the instrument for giving effect to this obligation was found to be a useful
remedy; and presently this action came to be used for the enforcement of common-
law debts. The result was to give to our contract law the superficial appearance of
being based more or less exclusively upon the notion of the obligation of promise.
An idea is widely entertained to the effect that all simple contracts recognized
in the common-law system are referable to a single category. They all have their
roots, so many of us imagine, in one general notion of obligation; and of course the
obligation of promise is supposed to supply this general notion, being considered a
sort of menstruum in which all other forms of contractual obligation have been
dissolved. This is a mistake. The idea of contractual duty embodied in the debt,
which was the first conception of contract liability revealed in the common law, has
remained, although it was destined to be in a measure obscured by the more
modern conception of obligation resulting from promise.
What has been said is intended to exhibit the, fact that the duty to pay or
deliver a sum certain of money or an ascertainable quantity of ponderable or
measurable chattels—which is indicated by the term debt—has ever been
recognized, in the common-law system, as a true contract, regardless of the source
of the duty or the manner in which it is created—whether derived from custom,
statute or some consensual transaction depending upon the voluntary acts of the
parties. The form of contract known as the "debt" is of most ancient lineage; and
when reference is had to historical antecedents, the right of the debt to be classed
as a contract cannot be questioned. Indeed when the new form of engagement
consisting of the parol promise sup-
192
192 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Brien.
ported by a consideration first appeared, it was looked upon as an upstart and its
right to be considered a true contract was questioned. It was long customary to
refer to it exclusively as an assumpsit, agreement, undertaking, or parol promise,
in fact anything but a contract. Only in time did the new form of engagement attain
the dignity of being classed among true contracts.
The term "implied contract" takes us into the shadowy domain of those
obligations the theoretical classification of which has engaged the attention of
scholars from the time of Gaius until our own day and has been a source of as much
difficulty to the civilian as to the common-law jurist. Here we are concerned with
those acts which make one person debtor to another without there having
intervened between them any true agreement tending to produce a legal
bond (vinculum juris). Of late years some American and English legal writers have
adopted the term quasicontract as descriptive of these obligations or some of them;
but the expression more commonly used is "implied contract."
Upon examination of these obligations, from the view point of the common-law
jurisprudence, it will be found that they fall readily into two divisions, according as
they bear an analogy to the common-law debt or to the commonlaw assumpsit: To
exhibit the scope of these different classes of obligations is here impracticable. It is
only necessary in this connection to observe that the most conspicuous division is
that which comprises duties in the nature of debt. The characteristic feature of
these obligations is that upon certain states of fact the law imposes an obligation
to pay a sum certain of money; and it is characteristic of this obligation that the
money in respect to which the duty is raised is conceived as being the equivalent of
something taken or detained under circumstances giving rise to the duty to return
or compensate therefor. The proposition that no one shall be allowed to enrich
himself unduly at the expense of another embodies the general principle here lying
at the basis of obligation. The right
193
VOL. 38, APRIL 6, 1918 193
Leung Ben vs. O'Brien.
to recover money improperly paid (repetición de lo indebido) is also recognized as
belonging to this class of duties.
It will be observed that according to the Civil Code (article 1089) obligations
are supposed to be derived either from (1) the law, (2) contracts and quasi-contracts,
(3) illicit acts and omissions, or (4) acts in which some sort of blame or negligence
is present. This enumeration of the sources of obligations supposes that the quasi-
contractual obligation and the obligation imposed by law are of different types. The
learned Italian jurist, Jorge Giorgi, criticises this assumption and says that the
classification embodied in the code is theoretically erroneous. His conclusion is that
one or the other of these categories should have been suppressed and merged in the
other. (Giorgi, Teoria de las Obligaciones, Spanish ed., vol. 5 arts. 5, 7, 9.) The
validity of this criticism is, we think, self-evident; and it is of interest to note that
the common law makes no distinction between the two sources of liability. The
obligations which in the Code are indicated as quasi-contracts, as well as those
arising ex lege, are in the common law system merged into the category of
obligations imposed by law, and all are denominated implied contracts.
Many refinements, more or less illusory, have been attempted by various
writers in distinguishing different sorts of implied contracts, as, for example, the
contract implied as of fact and the contract implied as of law (or constructive
contract). No explanation of these distinctions will be here attempted. Suffice it to
say that the term "contract, express or implied" is used by common-law jurists to
include all purely personal obligations other than those which have their source in
delict, or tort. As to these it may be said that, generally speaking, the law does not
impose a contractual duty upon a wrongdoer to compensate for injury done. It is
true that in certain situations where a wrongdoer unjustly acquires something at
the expense of another, the law imposes on him a duty to surrender his unjust
acquisitions, and the injured party may here elect to sue upon this contractual duty
instead of suing upon
194
194 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Brien.
the tort; but even here the distinction between the two liabilities, in contract and
in tort, is never lost to sight; and it is always recognized that the liability arising
out of the tort is delictual and not of a contractual or quasi-contractual nature.
In the case now under consideration the duty of the defendant to refund the
money which he won from the plaintiff at gaming is a duty imposed by statute. It
therefore arises ex lege. Furthermore, it is a duty to return a certain sum which had
passed from the plaintiff to the defendant. By all the criteria which the common
law supplies, this is a duty in the nature of debt and is properly classified as an
implied contract. It is well-settled by the English authorities that money lost in
gambling or by lottery, if recoverable at all, can be recovered by the loser in an
action of indebitatus assumpsit for money had and received. (Clarke vs. Johnson,
Lofft, 759; Mason vs. Waite, 17 Mass., 560; Burnham vs. Fisher, 25 Vt., 5l4.) This
means that in the common law the duty to return money won in this way is an
implied contract, or quasi-contract.
It is no argument to say in reply to this that the obligation here recognized is
called an implied contract merely because the remedy commonly used in suing upon
ordinary contracts can be here used, or that the law adopted the fiction of a promise
in order to bring the obligation within the scope of the action of assumpsit. Such
statements fail to express the true import of the phenomenon. Before the remedy
was the idea; and the use of the remedy could not have been approved if it had not
been for historical antecedents which made the recognition of this remedy at once
logical and proper. Furthermore, it should not be forgotten that the question is not
how this duty came to be recognized in the common law as a contractual duty but
what sort of obligation did the author of the Code of Civil Procedure intend to
describe when he used the term implied contract in section 412.
In what has been said we have assumed that the obligation which is at the
foundation of the original action in the
195
VOL. 38, APRIL 6, 1918 195
Leung Ben vs. O'Brien.
court below is not a quasi-contract, when judged by the principles of the civil law.
A few observations will show that this assumption is not by any means free from
doubt. The obligation in question certainly does not fall under the definition of
either of the two quasi-contracts which are made the subject of special treatment
in the Civil Code, for it does not arise from a licit act as contemplated in article
1887 and the money was not paid under error as contemplated in article 1895. The
obligation is clearly a creation of the positive law—a circumstance which brings it
within the purview of article 1090, in relation with article 1089; and it is also
derived from an illicit act, namely, the playing of a prohibited game. It is thus seen
that the provisions of the Civil Code which might be consulted with a view to the
correct theoretical classification of this obligation are unsatisfactory and confusing.
The two obligations treated in the chapter devoted to quasi-contracts in the
Civil Code are: (1) The obligation incident to the officious management of the affairs
of other persons (gestión de negocios ajenos) and (2) the recovery of what has been
improperly paid (cobro de lo indebido). That the authors of the Civil Code selected
these two obligations for special treatment does not signify an intention to deny the
possibility of the existence of other quasi-contractual obligations. As is well said by
the commentator Manresa.
"The number of the quasi-contracts may be indefinite as may be the number of lawful facts,
the generations of the said obligations; but the Code, just as we shall see further on, in the
impracticableness of enumerating or including them all in a methodical and orderly
classification, has concerned itself with two only—namely, the management of the affairs of
other persons and the recovery of things improperly paid—without attempting by this to
exclude the others." (Manresa, 2d ed., vol. 12, p. 549.)
It would indeed have been surprising if the authors of the Code, in the light of the
jurisprudence of more than a thousand years, should have arbitrarily assumed to
limit
196
196 PHILIPPINE REPORTS ANNOTATED
Leung Ben vs. O'Brien.
the quasi-contracts to two obligations. The author from whom we have just quoted
further observes that the two obligations in question were selected for special
treatment in the Code not only because they were the most conspicuous of the
quasi-contracts, but because they had not been the subject of consideration in other
parts of the Code. (Opus citat., p. 550.)
It is well recognized among civilian jurists that the quasi-contractual
obligations cover a wide range. The Italian jurist, Jorge Giorgi, to whom we have
already referred, considers under this head, among other obligations, the following:
payments made upon a future consideration which is not realized, or upon an
existing consideration which fails; payments wrongfully made upon a consideration
which is contrary to law, or opposed to public policy; and payments made upon a
vicious consideration or obtained by illicit means (Giorgi, Teoria de las
Obligaciones, vol. 5, art. 130.)
In permitting the recovery of money lost at play, Act No. 1757 has introduced
modifications in the application of articles 1798, 1801, and 1305 of the Civil Code.
The first two of these articles relate to gambling contracts, while article 1305 treats
of the nullity of contracts proceeding from a vicious or illicit consideration. Taking
all these provisions together, it must be apparent that the obligation to return
money lost at play has a decided affinity to contractual obligations; and we believe
that it could, without violence to the doctrines of the civil law, be held that such
obligations is an innominate quasi-contract. It is, however, unnecessary to place
the decision on this ground.
From what has been said it follows that in our opinion the cause of action stated
in the complaint in the court below is based on a contract, express or implied, and
is therefore of such nature that the court had" authority to issue the writ of
attachment. The application for the writ of certiorari must therefore be denied and
the proceedings dismissed. So ordered.
Arellano, C. J., Torres, Joknson, and Carson, JJ.,concur.
197
 [No. 4089. January 12, 1909.]
ARTURO PELAYO, plaintiff and appellant, vs. MARCELO LAURON ET
AL., defendants and appellees.
1. 1.RECIPROCAL OBLIGATIONS OF HUSBAND AND WIFE; SUPPORT.—Among
the reciprocal obligations existing between a husband and wife is that of support,
which obligation is established by law
1. 2.ID. ; SUPPORT OF STRANGERS.—The law does not compel any person to
support a stranger unless such person bound himself to do so by an express
contract.
1. 3.ID., SUPPORT OF WIFE.—Where a husband whom the law compels to support
his wife is living, the father and mother-in-law of the latter are under no liability
to provide for her.
APPEAL from a judgment of the Court of First Instance of Cebu. Wislizenus, J.
The facts are stated in the opinion of the court.
J. H. Junquera, for appellant.
Filemon Sotto, for appellees.
TORRES, J.:
On the 23d of November, 1906, Arturo Pelayo, a physician-residing in Cebu, filed a
complaint against Marcelo Lauron and Juana Abella setting forth that on or about
the 13th of October of said year, at night, the plaintiff was
454
454 PHILIPPINE REPORTS ANNOTATED
Pelayo vs. Lauron.
called to the house of the defendants, situated in San Nicolas, and that upon arrival
he was requested by them to render medical assistance to their daughter-in-law
who was about to give birth to a child; that therefore, and after consultation with
the attending physician, Dr. Escaño, it was found necessary, on account of the
difficult birth, to remove the fætus by means of forceps which operation was
performed by the plaintiff, who also had to remove the afterbirth, in which service
he was occupied until the following morning, and that afterwards, on the same day,
he visited the patient several times; that the just and equitable value of the services
rendered by him was P500, which the defendants refuse to pay without alleging
any good reason therefor; that for said reason he prayed that judgment be entered
in his favor as against the defendants, or any of them, for the sum of P500 and
costs, together with any other relief that might be deemed proper.
In answer to the complaint counsel for the defendants denied all of the
allegations therein contained and alleged as a special defense, that their daughter-
in-law had died in consequence of the said childbirth, and that when she was alive
she lived with her husband independently and in a separate house without any
relation whatever with them, and that, if on the day when she gave birth she was
in the house of the defendants, her stay there was accidental' and due to fortuitous-
circumstances; therefore, he prayed that the defendants be absolved of the
complaint with costs against the plaintiff.
The plaintiff demurred to the above answer, and the court below sustained the
demurrer, directing the defendants, on the 23d of January, 1907, to amend their
answer. In compliance with this order the defendants presented, on the same date,
their amended answer, denying.each and every one of the allegations contained in
the complaint, and requesting that the same be dismissed with costs.
As a result of the evidence adduced by both parties, judgment was entered by
the court below on the 5th of April,
455
VOL. 12, JANUARY 12, 1909. 455
Pelayo vs. Lauron.
1907, whereby the -defendants were absolved from the former complaint, on
account of the lack of sufficient evidence to establish a right of action against the
defendants, with costs against the plaintiff, who excepted to the said judgment and
in addition moved for a new trial on the ground that the judgment was contrary to
law; the motion was overruled and the plaintiff excepted and in due course
presented the corresponding bill of exceptions. The motion of the defendants
requesting that the declaration contained in the judgment that the defendants had
demanded the professional services of the plaintiff be eliminated therefrom, for the
reason that, according to the evidence, no such request had been made, was also
denied, and to the decision the defendants excepted.
Assuming that it is a real fact acknowledged by the defendants, that the
plaintiff, by virtue of having been sent for by the former, attended as physician and
rendered professional services to a daughter-in-law of the said defendants during
a difficult and laborious childbirth, in order to decide the claim of the said physician
regarding the recovery of his fees, it becomes necessary to decide who is bound to
pay the bill, whether the father and mother-in-law of the patient, or the husband
of the latter.
According to article 1089 of the Civil Code, obligations are created by law, by
contracts, by quasi-contracts, and by illicit acts and omissions or by those in which
any kind of fault or negligence occurs.
Obligations arising from law are not presumed. Those expressly determined in
the code or in special laws, etc., are the only demandable ones. Obligations arising
from contracts have legal force between the contracting parties and must be
fulfilled in accordance with their stipulations. (Arts. 1090 and 1091.)
The rendering of medical assistance in case of illness is comprised among the
mutual obligations to which spouses are bound by way of mutual support. (Arts.
142 and 143.).
456
456 PHILIPPINE REPORTS ANNOTATED
Pelayo vs. Lauron.
If every obligation consists in giving, doing, or not doing something (art. 1088), and
spouses are mutually bound to support each other, there can be no question but
that, when either of them by reason of illness should be in need of medical
assistance, the other is under the unavoidable obligation to furnish the necessary
services of a physician in order that health may be restored, and he or she may be
freed from the sickness by which life is jeopardized; the party bound to furnish such
support is therefore liable for all expenses, including the fees of the medical expert Mapa and Tracey, JJ., concur.
for his professional services. This liability originates from the above-cited mutual Arellano, C. J., and Carson, J., concur in the result.
obligation which the law has expressly established between the married couple. Willard, J., dissents.
In the face of the above legal precepts it is unquestionable that the person Judgment affirmed.
bound to pay the fees due to the plaintiff for the professional services that he
rendered to the daughter-in-law of the defendants during her childbirth is the
husband of the patient and not her father and motherin-law, the defendants herein.
The fact that it was not the husband who called the plaintiff and requested his
assistance for his wife is no bar to the fulfillment of the said obligation, as the
defendants, in view of the imminent danger to which the life of the patient was at
that moment exposed, considered that medical assistance was urgently needed, and
the obligation of the husband to furnish his wife with the indispensable services of
a physician at such critical moments is specially established by the law, as has been
seen, and compliance therewith is unavoidable; therefore, the plaintiff, who
believes that he is entitled to recover his fees, must direct his action against the
husband who is under obligation to furnish medical assistance to his lawful wife in
such an emergency.
From the foregoing it may readily be understood that it was improper to have
brought an action against the defendants simply because they were the parties who
called the plaintiff and requested him to assist the patient during her difficult
confinement, and also, possibly, because they were her father and mother-in-law
and the sickness occurred in
457
VOL. 12, JANUARY 12, 1909. 457
Pelayo vs. Lauron.
their house. The defendants were not, nor are they now, under any obligation by
virtue of any legal provision, to pay the fees claimed, nor in consequence of any
contract entered into between them and the plaintiff from which such obligation
might have arisen.
In applying the provisions of the Civil Code in an action for support, the
supreme court of Spain, while recognizing the validity and efficiency of a contract
to furnish support wherein a person bound himself to support another who was not
his relative, established the rule that the law does impose the obligation to pay for
the support of a stranger, but as the liability arose out of a contract, the stipulations
of the agreement must be upheld. (Decision of May 1.1, 1897.)
Within the meaning of the law, the father and mother-inlaw are strangers with
respect to the obligation that devolves upon the husband to provide support, among
which is the furnishing of medical assistance to his wife at the time of her
confinement; and, on the other hand, it does not appear that a contract existed
between the defendants and the plaintiff physician, for which reason it is obvious
that the former can not be compelled to pay fees which they are under no liability
to pay because it does not appear that they consented to bind themselves.
The foregoing suffices to demonstrate that the first and second errors assigned
to the judgment below are unfounded, because, if the plaintiff has no right of action
against the defendants, it is needless to declare whether or not the use of forceps is
a surgical operation.
Therefore, in view of the considerations hereinbefore set forth, it is our opinion
that the judgment appealed from should be affirmed with the costs against the
appellant. So ordered.

G.R. No. 154259. February 28, 2005. *
NIKKO HOTEL MANILA GARDEN and RUBY LIM,
petitioners, vs. ROBERTO REYES, a.k.a. “AMAY BISAYA,” respondent.
Actions; Human Relations; Torts and Damages; Doctrine of Volenti Non Fit
Injuria; The doctrine of volenti non fit injuria (“to which a person assents is not esteemed in
law as injury”) refers to a self-inflicted injury or to the consent to injury which precludes the
recovery of damages by one who has knowingly and voluntarily exposed himself to danger,
even if he is not negligent in doing so.—Petitioners Lim and Hotel Nikko contend that
pursuant to the doctrine of volenti non fit injuria, they cannot be made liable for damages as
respondent Reyes assumed the risk of being asked to leave (and being embarrassed and
humiliated in the process) as he was a “gate-crasher.” The doctrine of volenti non fit
injuria (“to which a
_______________
*SECOND DIVISION.
533
VOL. 452, FEBRUARY 28, 2005 533
Nikko Hotel Manila Garden vs. Reyes
person assents is not esteemed in law as injury”) refers to self-inflicted injury or to the
consent to injury which precludes the recovery of damages by one who has knowingly and
voluntarily exposed himself to danger, even if he is not negligent in doing so. As formulated
by petitioners, however, this doctrine does not find application to the case at bar because even
if respondent Reyes assumed the risk of being asked to leave the party, petitioners, under
Articles 19 and 21 of the New Civil Code, were still under obligation to treat him fairly in
order not to expose him to unnecessary ridicule and shame.
Same; Same; Same; Appeals; Where the trial court and the appellate court reached
divergent and irreconcilable conclusions concerning the same facts and evidence of the case,
the Supreme Court is left without choice but to use its latent power to review such findings of
facts.—The general rule is that we are not a trier of facts as our jurisdiction is limited to
reviewing and revising errors of law. One of the exceptions to this general rule, however,
obtains herein as the findings of the Court of Appeals are contrary to those of the trial court.
The lower court ruled that Ms. Lim did not abuse her right to ask Mr. Reyes to leave the party
as she talked to him politely and discreetly. The appellate court, on the other hand, held that
Ms. Lim is liable for damages as she needlessly embarrassed Mr. Reyes by telling him not to
finish his food and to leave the place within hearing distance of the other guests. Both courts,
however, were in agreement that it was Dr. Filart’s invitation that brought Mr. Reyes to the
party.
Same; Same; Same; Evidence; It is a basic rule in civil cases that he who alleges
proves.—Another problem with Mr. Reyes’s version of the story is that it is unsupported. It is
a basic rule in civil cases that he who alleges proves. Mr. Reyes, however, had not presented
any witness to back his story up. All his witnesses—Danny Rodinas, Pepito Guerrero and
Alexander Silva—proved only that it was Dr. Filart who invited him to the party.
Same; Same; Same; Party Gatecrashers; A person who did not abuse her right in asking
a person to leave a party to which he was not invited cannot be made to pay for damages under
Articles 19 and 21 of the Civil Code.—Ms. Lim, not having abused her right to ask Mr. Reyes
to leave the party to which he was not invited, cannot be made liable to pay for damages under
Articles 19 and 21 of the Civil
534
534 SUPREME COURT REPORTS ANNOTATED
Nikko Hotel Manila Garden vs. Reyes
Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability
springs from that of its employee.
Same; Same; Same; Principle of Abuse of Rights; Article 19 of the Civil Code, known to
contain what is commonly referred to as the principle of abuse of rights, is not a panacea for
all human hurts and social grievances, the object of the article being to set certain standards
which must be observed not only in the exercise of one’s rights but also in the performance of
one’s duties.—Article 19, known to contain what is commonly referred to as the principle of
abuse of rights, is not a panacea for all human hurts and social grievances. Article 19 states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith. Elsewhere, we
explained that when “a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed
for which the wrongdoer must be responsible.” The object of this article, therefore, is to set
certain standards which must be observed not only in the exercise of one’s rights but also in
the performance of one’s duties. These standards are the following: act with justice, give
everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act
evincing bad faith or intent to injure. Its elements are the following: (1) There is a legal right
or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21
of the Civil Code.
Same; Same; Same; Same; A common theme runs through Articles 19 and 21, and that
is, the act complained of must be intentional.—Article 20 pertains to damages arising from a
violation of law which does not obtain herein as Ms. Lim was perfectly within her right to ask
Mr. Reyes to leave. Article 21, on the other hand, states: 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. Article 21 refers to acts contra bonus
mores and has the following elements: (1) There is an act which is legal; (2) but which is
contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to
injure. A common theme runs through Articles 19 and 21, and that is, the act complained of
must be intentional.
535
VOL. 452, FEBRUARY 28, 2005 535
Nikko Hotel Manila Garden vs. Reyes
Same; Same; Same; Same; A complaint based on Articles 19 and 21 of the Civil Code
must necessarily fail if it has nothing to recommend it but innuendos and conjectures.—As
applied to herein case and as earlier discussed, Mr. Reyes has not shown that Ms. Lim was
driven by animosity against him. These two people did not know each other personally before
the evening of 13 October 1994, thus, Mr. Reyes had nothing to offer for an explanation for
Ms. Lim’s alleged abusive conduct except the statement that Ms. Lim, being “single at 44
years old,” had a “very strong bias and prejudice against (Mr. Reyes) possibly influenced by
her associates in her work at the hotel with foreign businessmen.” The lameness of this
argument need not be belabored. Suffice it to say that a complaint based on Articles 19 and
21 of the Civil Code must necessarily fail if it has nothing to recommend it but innuendos and
conjectures.
Same; Same; Same; Same; Bad judgment which, if done with good intentions, cannot
amount to bad faith.—The manner by which Ms. Lim asked Mr. Reyes to leave was likewise
acceptable and humane under the circumstances. In this regard, we cannot put
our imprimatur on the appellate court’s declaration that Ms. Lim’s act of personally
approaching Mr. Reyes (without first verifying from Mrs. Filart if indeed she invited Mr.
Reyes) gave rise to a cause of action “predicated upon mere rudeness or lack of consideration
of one person, which calls not only protection of human dignity but respect of such dignity.”
Without proof of any ill-motive on her part, Ms. Lim’s act of by-passing Mrs. Filart cannot
amount to abusive conduct especially because she did inquire from Mrs. Filart’s companion
who told her that Mrs. Filart did not invite Mr. Reyes. If at all, Ms. Lim is guilty only of bad
judgment which, if done with good intentions, cannot amount to bad faith.
PETITION for review on certiorari of the decision and resolution of the Court of queue at the buffet table, Ruby Lim told him to leave the party (“huwag ka nang
Appeals. kumain, hindi ka imbitado, bumaba ka na lang”). Mr. Reyes tried to explain that
12

he was invited by Dr. Filart. Dr. Filart, who was within hearing distance, however,
13

The facts are stated in the opinion of the Court. completely ignored him thus adding to his shame and humiliation. Not long after,
14

Angara, Abello, Concepcion, Regala & Cruz for petitioners. while he was still recovering from the traumatic experience, a Makati policeman
Vicente D. Millora for respondent Amay Bisaya. approached and asked him to step out of the hotel. Like a common criminal, he
15

536 was escorted out of the party by the policeman. Claiming damages, Mr. Reyes
16

536 SUPREME COURT REPORTS ANNOTATED asked for One Million Pesos actual damages, One Million Pesos moral and/or
exemplary damages and Two Hundred Thousand Pesos attorney’s fees. 17

Nikko Hotel Manila Garden vs. Reyes Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but
not under the ignominious circumstance painted by the latter. Ms. Lim narrated
CHICO-NAZARIO, J.: that she was the Hotel’s Executive Secretary for the past twenty (20) years. One 18

of her functions included organizing the birthday party of the hotel’s former
In this petition for review on certiorari, petitioners Nikko Hotel Manila Garden General Manager, Mr. Tsuruoka. The year 1994 was no different. For Mr.
19

(Hotel Nikko) and Ruby Lim assail the Decision of the Court of Appeals dated 26
1 2
Tsuruoka’s party,
November 2001 reversing the Decision of the Regional Trial Court (RTC) of Quezon
3

City, Branch 104, as well as the Resolution of the Court of Appeals dated 09 July
4 _______________
2002 which denied petitioners’ motion for reconsideration.
The cause of action before the trial court was one for damages brought under Id., at pp. 13 & 16.
10

COMPLAINT, RTC Record, p. 2.

the human relations provisions of the New Civil Code. Plaintiff thereat (respondent 11

Supra, note 5 at p. 17.

12

herein) Roberto Reyes, more popularly known by the screen name “Amay Bisaya,” Supra, note 11.
13

alleged that at around 6:00 o’clock in the evening of 13 October 1994, while he was Ibid.
14

having coffee at the lobby of Hotel Nikko, he was spotted by his friend of several
5
Id., at pp. 2-3.
15

Id., at p. 3.
years, Dr. Violeta Filart, who then approached him. Mrs. Filart invited him to join
16

Ibid.
6
17

her in a party at the hotel’s penthouse in celebration of the natal day of the hotel’s TSN, 27 July 1996, p. 9.
18

manager, Mr. Masakazu Tsuruoka. Mr. Reyes asked if she could vouch for him for
7 Id., at p. 10.
19

which she replied: “of course.” Mr. Reyes then went up with the party of Dr. Filart
8
538

carrying the basket of fruits which was the latter’s present for the celebrant. At the 9 538 SUPREME COURT REPORTS ANNOTATED
penthouse, they first had their picture taken with the celebrant after Nikko Hotel Manila Garden vs. Reyes
Ms. Lim generated an exclusive guest list and extended invitations
_______________
accordingly. The guest list was limited to approximately sixty (60) of Mr.
20

Now Dusit Hotel Nikko.

1
Tsuruoka’s closest friends and some hotel employees and that Mr. Reyes was not
Penned by Associate Justice Eugenio S. Labitoria with Justices Teodoro P. Regino and Rebecca de
2 one of those invited. At the party, Ms. Lim first noticed Mr. Reyes at the bar
21

Guia-Salvador concurring (Rollo, pp. 48-57). counter ordering a drink. Mindful of Mr. Tsuruoka’s wishes to keep the party
22

Penned by Judge Thelma A. Ponferrada.

3
intimate, Ms. Lim approached Mr. Boy Miller, the “captain waiter,” to inquire as
Penned by Associate Justice Eugenio S. Labitoria with Justices Teodoro P. Regino and Rebecca de
4

Guia-Salvador concurring (Rollo, pp. 59-60). to the presence of Mr. Reyes who was not invited. Mr. Miller replied that he saw
23

TSN, 08 March 1995, p. 8.

5 Mr. Reyes with the group of Dr. Filart. As Dr. Filart was engaged in conversation
24

Id., at p. 10.
6
with another guest and as Ms. Lim did not want to interrupt, she inquired instead
Ibid.
from the sister of Dr. Filart, Ms. Zenaida Fruto, who told her that Dr. Filart did not
7

Id., at p. 11.
8

Id., at p. 13.
9 invite Mr. Reyes. Ms. Lim then requested Ms. Fruto to tell Mr. Reyes to leave the
25

537 party as he was not invited. Mr. Reyes, however, lingered prompting Ms. Lim to
26

VOL. 452, FEBRUARY 28, 2005 537 inquire from Ms. Fruto who said that Mr. Reyes did not want to leave. When Ms. 27

Lim turned around, she saw Mr. Reyes conversing with a Captain Batung whom
Nikko Hotel Manila Garden vs. Reyes she later approached. Believing that Captain Batung and Mr. Reyes knew each
28

which Mr. Reyes sat with the party of Dr. Filart. After a couple of hours, when the
10

other, Ms. Lim requested from him the same favor from Ms. Fruto, i.e., for Captain
buffet dinner was ready, Mr. Reyes lined-up at the buffet table but, to his great Batung to tell Mr. Reyes to leave the party as he was not invited. Still, Mr. Reyes
29

shock, shame and embarrassment, he was stopped by petitioner herein, Ruby Lim, lingered. When Ms. Lim spotted Mr. Reyes by the buffet table, she decided to speak
who claimed to speak for Hotel Nikko as Executive Secretary thereof. In a loud 11

to him herself as there were no other guests in the immediate vicinity. However, as
30

voice and within the presence and hearing of the other guests who were making a Mr. Reyes was
_______________ Plaintiff had no business being at the party because he was not a guest of Mr. Tsuruoka, the
birthday celebrant. He assumed the risk of being asked to leave for attending a party to which
Id., at pp. 12-13, 15.
20 he was not invited by the host. Damages are pecuniary consequences which the law imposes
Id., at pp. 15-17, 25.
21
for the breach of some duty or the violation of some right. Thus, no recovery can be had against
Id., at p. 25.
22
defendants Nikko Hotel and Ruby Lim because he himself was at fault (Garciano v. Court of
Id., at p. 27.
Appeals, 212 SCRA 436). He knew that it was not the party of defendant Violeta Filart even
23

Ibid.
24

Id., at pp. 31-32.

25
if she allowed him to join her and took responsibility for his attendance at the party. His
Id., at p. 33.
26
action against defendants Nikko Hotel and Ruby Lim must therefore fail. 42

Id., at p. 37.
27 On appeal, the Court of Appeals reversed the ruling of the trial court as it found
Id., at pp. 38-39.
28
more commanding of belief the testimony of Mr. Reyes that Ms. Lim ordered him
Ibid.
to leave in a loud voice within hearing distance of several guests:
29

Petition, Rollo, p. 18.

30

539 In putting appellant in a very embarrassing situation, telling him that he should not finish
his food and to leave the place within the hearing distance of other guests is an act which is
VOL. 452, FEBRUARY 28, 2005 539 contrary to morals, good customs . . ., for which appellees should compensate the appellant
Nikko Hotel Manila Garden vs. Reyes for the damage suffered by the latter as a consequence therefore (Art. 21, New Civil Code).
The liability arises from the acts which are in themselves legal or not prohibited, but contrary
already helping himself to the food, she decided to wait. When Mr. Reyes went to a
to morals or good customs. Conversely, even in the exercise of a formal right, [one] cannot
31

corner and started to eat, Ms. Lim approached him and said: “alam ninyo, hindi ho with impunity intentionally cause damage to another in a manner contrary to morals or good
kayo dapat nandito. Pero total nakakuha na ho kayo ng pagkain, ubusin na lang customs. 43

ninyo at pagkatapos kung pwede lang po umalis na kayo.” She then turned around 32

trusting that Mr. Reyes would show enough decency to leave, but to her surprise, _______________
he began screaming and making a big scene, and even threatened to dump food on
her. 33 Dismissed as well were the counterclaims filed by then defendants Nikko Hotel Manila Garden,
41

Dr. Violeta Filart, the third defendant in the complaint before the lower court, Ruby Lim and Violeta Filart, RTC Records, p. 347.
RTC Records, p. 342.
also gave her version of the story to the effect that she never invited Mr. Reyes to
42

CA Rollo, p. 205.
43

the party. According to her, it was Mr. Reyes who volunteered to carry the basket
34
541
of fruits intended for the celebrant as he was likewise going to take the elevator, VOL. 452, FEBRUARY 28, 2005 541
not to the penthouse but to Altitude 49. When they reached the penthouse, she
35

reminded Mr. Reyes to go down as he was not properly dressed and was not Nikko Hotel Manila Garden vs. Reyes
invited. All the while, she thought that Mr. Reyes already left the place, but she
36 The Court of Appeals likewise ruled that the actuation of Ms. Lim in approaching
later saw him at the bar talking to Col. Batung. Then there was a commotion and
37 several people to inquire into the presence of Mr. Reyes exposed the latter to
she saw Mr. Reyes shouting. She ignored Mr. Reyes. She was embarrassed and did
38 39 ridicule and was uncalled for as she should have approached Dr. Filart first and
not want the celebrant to think that she invited him. 40 both of them should have talked to Mr. Reyes in private:
Said acts of appellee Lim are uncalled for. What should have been done by appellee Lim was
_______________ to approach appellee Mrs. Filart and together they should have told appellant Reyes in
private that the latter should leave the party as the celebrant only wanted close friends
Supra, note 29 at pp. 41-42.
31
around. It is necessary that Mrs. Filart be the one to approach appellant because it was she
Id., at pp. 42-43.
32
who invited appellant in that occasion. Were it not for Mrs. Filart’s invitation, appellant could
Answer, pp. 32-33, RTC Records; RTC Decision, Rollo, p. 62; TSN, 27 July 1995, pp. 43-46.
33 not have suffered such humiliation. For that, appellee Filart is equally liable.
TSN, 05 November 1997, p. 15.
34 ...
Violeta Filart’s “ANSWER WITH COMPULSORY COUNTERCLAIM,” RTC Records, p. 21.
35
The acts of [appellee] Lim are causes of action which are predicated upon mere rudeness
Supra, note 34 at p. 17.
36
or lack of consideration of one person, which calls not only protection of human dignity but
Or “Captain Batung” from the testimony of Ruby Lim; Id., at p. 18.
respect of such dignity. Under Article 20 of the Civil Code, every person who violates this duty
37

Id., at p. 19.
38

Ibid.
39
becomes liable for damages, especially if said acts were attended by malice or bad faith. Bad
Ibid.
40
faith does not simply connote bad judgment or simple negligence. It imports a dishonest
540 purpose or some moral obliquity and conscious doing of a wrong, a breach of a known duty to
some motive or interest or ill-will that partakes of the nature of fraud (Cojuangco, Jr. v. CA,
540 SUPREME COURT REPORTS ANNOTATED et al., 309 SCRA 603).44

Nikko Hotel Manila Garden vs. Reyes
After trial on the merits, the court a quo dismissed the complaint, giving more
credence to the testimony of Ms. Lim that she was discreet in asking Mr. Reyes to
leave the party. The trial court likewise ratiocinated that Mr. Reyes assumed the
risk of being thrown out of the party as he was uninvited:
Consequently, the Court of Appeals imposed upon Hotel Nikko, Ruby Lim and Dr.
41 Violeta Filart the solidary obligation to pay Mr. Reyes (1) exemplary damages in
the amount of Two Hundred Thousand Pesos (P200,000); (2) moral damages in the
amount of Two Hundred Thousand Pesos (P200,000); and (3) attorney’s fees in the
amount of Ten Thousand Pesos (P10,000). On motion for reconsideration, the
45
Nikko Hotel Manila Garden vs. Reyes
Court of Appeals affirmed its earlier decision as the argument raised in Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti
non fit injuria, they cannot be made liable for damages as respondent Reyes
_______________
assumed the risk of being asked to leave (and being embarrassed and humiliated
Id., at pp. 208-209.
44
in the process) as he was a “gate-crasher.”
Id., at p. 238.
45 The doctrine of volenti non fit injuria (“to which a person assents is not
542 esteemed in law as injury” ) refers to self-inflicted injury or to the consent to
47 48

542 SUPREME COURT REPORTS ANNOTATED injury which precludes the recovery of damages by one who has knowingly and
49

voluntarily exposed himself to danger, even if he is not negligent in doing so. As 50

Nikko Hotel Manila Garden vs. Reyes
the motion had “been amply discussed and passed upon in the decision sought to
be reconsidered.” 46
Thus, the instant petition for review. Hotel Nikko and Ruby Lim contend that
the Court of Appeals seriously erred in—
I.
. . . NOT APPLYING THE DOCTRINE OF VOLENTI NON FIT INJURIA CONSIDERING
THAT BY ITS OWN FINDINGS, AMAY BISAYA WAS A GATE-CRASHER
II.
. . . HOLDING HOTEL NIKKO AND RUBY LIM JOINTLY AND SEVERALLY LIABLE
WITH DR. FILART FOR DAMAGES SINCE BY ITS OWN RULING, AMAY BISAYA
“COULD NOT HAVE SUFFERED SUCH HUMILIATION,” “WERE IT NOT FOR DR.
FILART’S INVITATION”
formulated by petitioners, however, this doctrine does not find application to the
case at bar because even if respondent Reyes assumed the risk of being asked to
leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were
still under obligation to treat him fairly in order not to expose him to unnecessary
ridicule and shame.
Thus, the threshold issue is whether or not Ruby Lim acted abusively in asking
Roberto Reyes, a.k.a. “Amay Bisaya,” to leave the party where he was not invited
by the celebrant thereof thereby becoming liable under Articles 19 and 21 of the
Civil Code. Parenthetically, and if Ruby Lim were so liable, whether or not Hotel
Nikko, as her employer, is solidarily liable with her.
As the trial court and the appellate court reached divergent and irreconcilable
conclusions concerning the same facts and evidence of the case, this Court is left
without choice but to use its latent power to review such findings of facts. Indeed,
the general rule is that we are not a trier of facts as our juris-
_______________

E.L. Pineda, Torts and Damages Annotated, p. 52 (2004 ed.).

47

III. Garciano v. Court of Appeals, G.R. No. 96126, 10 August 1992, 212 SCRA 436, 440.
48

Cf. Servicewide Specialists, Inc. v. Intermediate Appellate Court, G.R. No. 74553, 08 June 1989, 174
49

. . . DEPARTING FROM THE FINDINGS OF FACT OF THE TRIAL COURT AS SCRA 80, 88.
REGARDS THE CIRCUMSTANCES THAT ALLEGEDLY CAUSED THE HUMILIATION Sangco, Torts and Damages, Vol. 1, pp. 83-84.
50

544
OF AMAY BISAYA
544 SUPREME COURT REPORTS ANNOTATED
IV. Nikko Hotel Manila Garden vs. Reyes
diction is limited to reviewing and revising errors of law. One of the exceptions to
51

. . . IN CONCLUDING THAT AMAY BISAYA WAS TREATED UNJUSTLY BECAUSE

this general rule, however, obtains herein as the findings of the Court of Appeals
OF HIS POVERTY, CONSIDERING THAT THIS WAS NEVER AN ISSUE AND NO
EVIDENCE WAS PRESENTED IN THIS REGARD
are contrary to those of the trial court. The lower court ruled that Ms. Lim did not
52

abuse her right to ask Mr. Reyes to leave the party as she talked to him politely
V.
and discreetly. The appellate court, on the other hand, held that Ms. Lim is liable
for damages as she needlessly embarrassed Mr. Reyes by telling him not to finish
. . . IN FAILING TO PASS UPON THE ISSUE ON THE DEFECTS OF THE
his food and to leave the place within hearing distance of the other guests. Both
APPELLANT’S BRIEF, THEREBY DEPARTING FROM THE ACCEPTED AND USUAL courts, however, were in agreement that it was Dr. Filart’s invitation that brought
COURSE OF JUDICIAL PROCEEDINGS Mr. Reyes to the party.
The consequential question then is: Which version is credible?
_______________ From an in depth review of the evidence, we find more credible the lower court’s
findings of fact.
CA Rollo, pp. 239-240.
46
First, let us put things in the proper perspective.
543 We are dealing with a formal party in a posh, five-star hotel, for-invitation- 53

VOL. 452, FEBRUARY 28, 2005 543 only, thrown for the hotel’s former Manager, a Japanese national. Then came a
person who was clearly uninvited (by the celebrant) and who could not just
54
 TSN, 15 March 1995, p. 20.
disappear into the crowd as his face is known by many, being an actor. While he 55

546
was already spotted by the organizer of the party, Ms. Lim, the very person who
generated the guest list, it did not yet appear that the celebrant was aware of his 546 SUPREME COURT REPORTS ANNOTATED
presence. Ms. Lim, mindful of the celebrant’s instruction to keep the party Nikko Hotel Manila Garden vs. Reyes
intimate, would naturally want to get rid of the “gate-crasher” in the most hush- only and there could have been no intention on her part to cause embarrassment to him. It
hush manner in order not to call attention to a glitch in an otherwise seamless was plaintiff’s reaction to the request that must have made the other guests aware of what
affair and, in the process, risk the displeasure of the celebrant, her for- transpired between them. . .
Had plaintiff simply left the party as requested, there was no need for the police to take
_______________ him out. 56

Moreover, another problem with Mr. Reyes’s version of the story is that it is
Floro v. Llenado, G.R. No. 75723, 02 June 1995, 244 SCRA 713, 720.
51 unsupported. It is a basic rule in civil cases that he who alleges proves. Mr. Reyes,
Ibid.
52
however, had not presented any witness to back his story up. All his witnesses—
TSN, 22 May 1999, p. 11.
Danny Rodinas, Pepito Guerrero and Alexander Silva—proved only that it was Dr.
53

Admitted by Mr. Reyes, see TSN, 15 March 1995, p. 10.

54

545 Filart who invited him to the party. 57

VOL. 452, FEBRUARY 28, 2005
Nikko Hotel Manila Garden vs. Reyes
mer boss. To unnecessarily call attention to the presence of Mr. Reyes would
Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to
545
which he was not invited, cannot be made liable to pay for damages under Articles
19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be
held liable as its liability springs from that of its employee. 58

certainly reflect badly on Ms. Lim’s ability to follow the instructions of the celebrant Article 19, known to contain what is commonly referred to as the principle of
to invite only his close friends and some of the hotel’s personnel. Mr. Reyes, upon abuse of rights, is not a panacea for all human hurts and social grievances. Article
59

whom the burden rests to prove that indeed Ms. Lim loudly and rudely ordered him
to leave, could not offer any satisfactory explanation why Ms. Lim would do that
and risk ruining a formal and intimate affair. On the contrary, Mr. Reyes, on cross-
examination, had unwittingly sealed his fate by admitting that when Ms. Lim
talked to him, she was very close. Close enough for him to kiss:
Q: And, Mr. Reyes, you testified that Miss Lim approached you while you were
at the buffet table? How close was she when she approached you?
A: Very close because we nearly kissed each other.
19 states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
Elsewhere, we explained that when “a right is exercised in a manner which does
not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be
respon-
_______________

Q: And yet, she shouted for you to go down? She was that close and she RTC Records, pp. 340-341.
56

shouted? Danny Rodinas and Pepito Guerrero (TSN, 18 May 1995), Alexander Silva (TSN, 21 June 1995).
57

Article 2180, Civil Code.

58

A: Yes. She said, “wag kang kumain, hindi ka imbitado dito, bumaba ka na Globe-Mackay Cable and Radio Corp. v. Court of Appeals, G.R. No. 81262, 25 August 1989, 176
59

SCRA 779, 783.

lang.” 547
Q: So, you are testifying that she did this in a loud voice? VOL. 452, FEBRUARY 28, 2005 547
... Nikko Hotel Manila Garden vs. Reyes
A: Yes. If it is not loud, it will not be heard by many. 55 sible.” The object of this article, therefore, is to set certain standards which must
60

In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes be observed not only in the exercise of one’s rights but also in the performance of
and expose him to ridicule and shame, it is highly unlikely that she would shout at one’s duties. These standards are the following: act with justice, give everyone his
61

him from a very close distance. Ms. Lim having been in the hotel business for due and observe honesty and good faith. Its antithesis, necessarily, is any act
62

twenty years wherein being polite and discreet are virtues to be emulated, the evincing bad faith or intent to injure. Its elements are the following: (1) There is a
testimony of Mr. Reyes that she acted to the contrary does not inspire belief and is legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of
indeed incredible. Thus, the lower court was correct in observing that— prejudicing or injuring another. When Article 19 is violated, an action for damages
63

Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages
the party was made such that they nearly kissed each other, the request was meant to be arising from a violation of law which does not obtain herein as Ms. Lim was
64

heard by him perfectly within her right to ask Mr. Reyes to leave. Article 21, on the other hand,
states:
_______________
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.
Article 21 refers to acts contra bonus mores and has the following elements: (1)
65 Not being liable for both actual and moral damages, neither can petitioners Lim
There is an act which is legal; (2) but which is contrary to morals, good custom, and Hotel Nikko be made answerable for exemplary damages especially for the 72

public order, or public policy; and (3) it is done with intent to injure. 66 reason stated by the Court of Appeals. The Court of Appeals held—
A common theme runs through Articles 19 and 21, and that is, the act 67 Not a few of the rich people treat the poor with contempt because of the latter’s lowly station
complained of must be intentional. 68
in life. This has to be limited somewhere. In a democracy, such a limit must be established.
Social equality is not sought by the legal provisions under consideration, but due regard for
_______________
decency and propriety (Code Commission, pp. 33-34). And by way of example or correction for
public good and to avert further commission of such acts, exemplary damages should be
imposed upon appellees. 73

Albenson Enterprises Corp. v. Court of Appeals, G.R. No. 88694, 11 January 1993, 217 SCRA 16, 25.
60

Supra, note 59 at pp. 783-784.

61
The fundamental fallacy in the above-quoted findings is that it runs counter with
Ibid.
62 the very facts of the case and the evidence on hand. It is not disputed that at the
Supra, note 62.
63
time of the incident in question, Mr. Reyes was “an actor of long standing; a co-host
Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall
of a radio program over DZRH; a Board Member of the Music Singer Composer
64

indemnify the latter for the same. See Globe Mackay, supra, note 61 at p. 784.
Civil Code.
65 (MUSICO) chaired by popular singer Imelda Papin; a showbiz Coordinator of
Supra, note 60 at p. 25.
66
Citizen Crime Watch; and 1992 official candidate of the KBL Party for Governor of
Civil Code.
67
Bohol; and an awardee of a number of humanitarian organizations of the
Ibid.
68

548 Philippines.” During his direct examination on rebuttal, Mr. Reyes stressed that
74

he had income and nowhere did he say otherwise. On the other hand, the records
75

548 SUPREME COURT REPORTS ANNOTATED

are bereft of any information as to the social and economic standing of petitioner
Nikko Hotel Manila Garden vs. Reyes Ruby Lim. Consequently, the conclusion reached by the appellate court cannot
As applied to herein case and as earlier discussed, Mr. Reyes has not shown that withstand scrutiny as it is without basis.
Ms. Lim was driven by animosity against him. These two people did not know each All told, and as far as Ms. Lim and Hotel Nikko are concerned, any damage
other personally before the evening of 13 October 1994, thus, Mr. Reyes had which Mr. Reyes might have suffered
nothing to offer for an explanation for Ms. Lim’s alleged abusive conduct except the
statement that Ms. Lim, being “single at 44 years old,” had a “very strong bias and _______________
prejudice against (Mr. Reyes) possibly influenced by her associates in her work at
the hotel with foreign businessmen.” The lameness of this argument need not be
69
Art. 2234, Civil Code.
72

CA Rollo, pp. 209-210.

belabored. Suffice it to say that a complaint based on Articles 19 and 21 of the Civil
73

Appellant’s Brief, CA Rollo, p. 27; see also TSN, 08 March 1995, pp. 7-8.
74

Code must necessarily fail if it has nothing to recommend it but innuendos and TSN, 29 October 1998, p. 11.
75

conjectures.
Parenthetically, the manner by which Ms. Lim asked Mr. Reyes to leave was
likewise acceptable and humane under the circumstances. In this regard, we
cannot put our imprimatur on the appellate court’s declaration that Ms. Lim’s act
of personally approaching Mr. Reyes (without first verifying from Mrs. Filart if
indeed she invited Mr. Reyes) gave rise to a cause of action “predicated upon mere
rudeness or lack of consideration of one person, which calls not only protection of
human dignity but respect of such dignity.” Without proof of any ill-motive on her
70
part, Ms. Lim’s act of by-passing Mrs. Filart cannot amount to abusive conduct
especially because she did inquire from Mrs. Filart’s companion who told her that
Mrs. Filart did not invite Mr. Reyes. If at all, Ms. Lim is guilty only of bad
71
judgment which, if done with good intentions, cannot amount to bad faith.
_______________
“COMMENT,” Rollo, p. 302; “MEMORANDUM,” Rollo, p. 417.
69
CA Rollo, p. 209.
70
In fact, Mrs. Filart herself, in her testimony and in her pleadings, consistently disclaimed having
71
550
through Ms. Lim’s exercise of a legitimate right done within the bounds of propriety
and good faith, must be his to bear alone.
WHEREFORE, premises considered, the petition filed by Ruby Lim and Nikko
Hotel Manila Garden is GRANTED. The Decision of the Court of Appeals dated 26
November 2001 and its Resolution dated 09 July 2002 are hereby REVERSED and
SET ASIDE. The Decision of the Regional Trial Court of Quezon City, Branch 104,
dated 26 April 1999 is hereby AFFIRMED. No costs.
SO ORDERED.
Puno (Chairman), Austria-Martinez, Callejo, Sr.and Tinga, JJ., concur.
Petition granted, judgment and resolution reversed and set aside.
Notes.—It must be remembered that the exercise of a right ends when the right
disappears, and it disappears when it is abused especially to the prejudice of others.
(Metropolitan Bank and Trust Company vs. Wong, 359 SCRA 608 [2001])
Entrenched is the rule that bad faith does not simply connote bad judgment or
negligence—it imputes a dishonest purpose or some moral obliquity and conscious
doing of a wrong, a breach of sworn duty through some motive or intent or ill will,
and partakes of the nature of fraud. (Andrade vs. Court of Appeals, 371 SCRA

invited Mr. Reyes to the party such that when Mr. Reyes was being escorted out of the penthouse, she lifted
nary a finger to his rescue. 555 [2001])
549
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G.R. No. 143363. February 6, 2002. *
ST. MARY’S ACADEMY, petitioner, vs. WILLIAM CARPITANOS and
LUCIA S. CARPITANOS, GUADA DANIEL, JAMES DANIEL II, JAMES
DANIEL, SR., and VIVENCIO VILLANUEVA, respondents.
Schools and Universities; Persons and Institutions With Special Parental Authority
Over Minor Children; The special parental authority and responsibility applies to all
authorized activities, whether inside or outside the premises of the school, entity or
institution.—Under Article 218 of the Family Code, the following shall have special parental
authority over a minor child while under their supervision, instruction or custody: (1) the
school, its administrators and teachers; or (2) the individual, entity or institution engaged in
child care. This special parental authority and responsibility applies to all authorized
activities, whether inside or outside the premises of the school, entity or institution. Thus,
such authority and responsibility applies to field trips, excursions and other affairs of the
pupils and students outside the school premises whenever authorized by the school or its
teachers. Under Article 219 of the Family Code, if the person under custody is a minor, those
exercising special parental authority are principally and solidarily liable for damages caused
by the acts or omissions of the unemancipated minor under their supervision, instruction, or
custody.
Same; Same; For a school to be liable, there must be a finding that the act or omission
considered as negligent was the proximate cause of the injury caused because the negligence
must have a causal connection to the accident.—For petitioner to be liable, there must be a
finding that the act or omission considered as negligent was the proximate cause of the injury
caused because the negligence must have a causal connection to the accident. “In order that
there may be a recovery for an injury, however, it must be shown that the ‘injury for which
recovery is sought must be the legitimate consequence of the wrong done; the connection
between the negligence and the injury must be a direct and natural sequence of events,
unbroken by intervening efficient causes.’ In other words, the negligence must be the
proximate cause of the injury. For, ‘negligence, no matter in what it consists, cannot create a
right of action unless it is the proximate cause of the injury complained of.’ And ‘the proximate
cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any
_______________
*FIRST DIVISION.
474
474 SUPREME COURT REPORTS ANNOTATED
St. Mary’s Academy vs. Carpitanos
efficient intervening cause, produces the injury, and without which the result would
not have occurred.’ ”
Same; Same; Words and Phrases; The proximate cause of an injury is that cause, which,
in natural and continuous sequence, unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred.—Liability for the accident,
whether caused by the negligence of the minor driver or mechanical detachment of the
steering wheel guide of the jeep, must be pinned on the minor’s parents primarily. The
negligence of petitioner St. Mary’s Academy was only a remote cause of the accident. Between
the remote cause and the injury, there intervened the negligence of the minor’s parents or the
detachment of the steering wheel guide of the jeep. “The proximate cause of an injury is that
cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have occurred.”
Quasi-Delicts; Torts; Motor Vehicles; The registered owner of any vehicle, even if not
used for public service, would primarily be responsible to the public or to third persons for
injuries caused the latter while the vehicle was being driven on the highways or streets.—
Incidentally, there was no question that the registered owner of the vehicle was respondent
Villanueva. He never denied and in fact admitted this fact. We have held that the registered
owner of any vehicle, even if not used for public service, would primarily be responsible to the
public or to third persons for injuries caused the latter while the vehicle was being driven on
the highways or streets.” Hence, with the overwhelming evidence presented by petitioner and
the respondent Daniel spouses that the accident occurred because of the detachment of the
steering wheel guide of the jeep, it is not the school, but the registered owner of the vehicle
who shall be held responsible for damages for the death of Sherwin Carpitanos.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Padilla Law Office for petitioner.
Peter Y. Co for respondents Daniel and Villanueva.
Feliciano M. Maraon for respondents Carpitanos.
475
VOL. 376, FEBRUARY 6, 2002 475
St. Mary’s Academy vs. Carpitanos
PARDO, J.:
The case is an appeal via certiorari from the decision of the Court of Appeals as
1
well as the resolution denying reconsideration, holding petitioner liable for
damages arising from an accident that resulted in the death of a student who had
joined a campaign to visit the public schools in Dipolog City to solicit enrollment.
The Facts
The facts, as found by the Court of Appeals, are as follows:
“Claiming damages for the death of their only son, Sherwin Carpitanos, spouses William
Carpitanos and Lucia Carpitanos filed on June 9, 1995 a case against James Daniel II and
his parents, James Daniel Sr. and Guada Daniel, the vehicle owner, Vivencio Villanueva and
St. Mary’s Academy before the Regional Trial Court of Dipolog City.
“On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its
decision the dispositive portion of which reads as follows:
“ ‘WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the
following manner:
1. 1.Defendant St. Mary’s Academy of Dipolog City, is hereby ordered to pay plaintiffs
William Carpitanos and Luisa Carpitanos, the following sums of money:
1. a.FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of Sherwin
S. Carpitanos;
2. b.FORTY THOUSAND PESOS
(P40,000.00) actual damages incurred by plaintiffs for burial and related
expenses;
3. c.TEN THOUSAND PESOS (P10,000.00) for attorney’s fees;
4. d.FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages; and to
pay costs.
_______________
In CA-G.R. CV No. 56728, promulgated on February 29, 2000, Reyes, Jr., J., ponente, Martin, Jr. and
1
Brawner, JJ., concurring.
 476
The Issues
476 SUPREME COURT REPORTS ANNOTATED
St. Mary’s Academy vs. Carpitanos 1. 1)Whether the Court of Appeals erred in holding the petitioner liable for damages
for the death of Sherwin Carpitanos.
2. 2)Whether the Court of Appeals erred in affirming the award of moral damages
1. 2.Their liability being only subsidiary, defendants James Daniel, Sr. and Guada
against the petitioner.
Daniel are hereby ordered to pay herein plaintiffs the amount of damages above-
stated in the event of insolvency of principal obligor St. Mary’s Academy of Dipolog
City;
The Court’s Ruling
2. 3.Defendant James Daniel II, being a minor at the time of the commission of the
tort and who was under special parental authority of defendant St. Mary’s We reverse the decision of the Court of Appeals.
Academy, is ABSOLVED from paying the above-stated damages, same being The Court of Appeals held petitioner St. Mary’s Academy liable for the death of
adjudged against de-fendants St. Mary’s Academy, and subsidiarily, against his Sherwin Carpitanos under Articles 218 and 219 of the Family Code, pointing out
7 8

parents;
3. 4.Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His
counterclaim not being in order as earlier discussed in this decision, is hereby
DISMISSED.
IT IS SO ORDERED.’ ”
(Decision, pp. 32-33; Records, pp. 205-206).”
“From the records it appears that from 13 to 20 February 1995, defendant-appellant St.
that petitioner was negligent in allowing a minor to drive and in not having a
teacher accompany the minor students in the jeep.
Under Article 218 of the Family Code, the following shall have special parental
authority over a minor child while under their
_______________
Petition, Annex “B”, Rollo, pp. 72-73.
5

Mary’s Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. Petition filed on July 17, 2000, Rollo, pp. 9-48. On July 16, 2001, we gave due course to the petition,
6

A facet of the enrollment campaign was the visitation of schools from where prospective Rollo, pp. 202-203.
enrollees were studying. As a student of St. Mary’s Academy, Sherwin Carpitanos was part Article 218. The School, its administrators and teachers, or the individual, entity or institution
7

of the campaigning group. Accordingly, on the fateful day, Sherwin, along with other high
school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on
their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was driven by
engaged in child care shall have special parental authority and responsibility over the minor child while
under their supervision, instruction or custody. Authority and responsibility shall apply to all authorized
activities whether inside or outside the premises of the school, entity or institution.
Article 219. Those given the authority and responsibility under the preceding Article shall be
8

James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove
the jeep in a reckless manner and as a result the jeep turned turtle.
“Sherwin Carpitanos died as a result of the injuries he sustained from the accident.”
In due time, petitioner St. Mary’s Academy appealed the decision to the Court of
Appeals. 3
principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor.
The parents, judicial guardians or the persons exercising substitute parental authority over said minor
2 shall be subsidiarily liable. The respective liabilities of those referred to in the preceding paragraph shall
not apply if it is proved that they exercised the proper diligence required under the particular
circumstances.

478
On February 29, 2000, the Court of Appeals promulgated a decision reducing
the actual damages to P25,000.00 but otherwise affirming the decision a quo in
478 SUPREME COURT REPORTS ANNOTATED
toto. 4 St. Mary’s Academy vs. Carpitanos
supervision, instruction or custody: (1) the school, its administrators and teachers;
_______________ or (2) the individual, entity or institution engaged in child care. This special
parental authority and responsibility applies to all authorized activities, whether
2Rollo, pp. 53-55. inside or outside the premises of the school, entity or institution. Thus, such
Docketed as CA-G.R. CV No. 56728.
authority and responsibility applies to field trips, excursions and other affairs of
3

4Petition, Annex “A”, Rollo, pp. 52-70.

477 the pupils and students outside the school premises whenever authorized by the
VOL. 376, FEBRUARY 6, 2002 477 school or its teachers. 9

Under Article 219 of the Family Code, if the person under custody is a minor,
St. Mary’s Academy vs. Carpitanos those exercising special parental authority are principally and solidarily liable for
On February 29, 2000, petitioner St. Mary’s Academy filed a motion for damages caused by the acts or omissions of the unemancipated minor under their
reconsideration of the decision. However, on May 22, 2000, the Court of Appeals supervision, instruction, or custody. 10

denied the motion. 5

However, for petitioner to be liable, there must be a finding that the act or
Hence, this appeal. 6
omission considered as negligent was the proximate cause of the injury caused
because the negligence, must have a causal connection to the accident. 11

“In order that there may be a recovery for an injury, however, it must be shown that the
‘injury for which recovery is sought must be the legitimate consequence of the wrong done;
the connection between the negligence and the injury must be a direct and natural sequence
of events, unbroken by intervening efficient causes.’ In other words, the negligence must be
the proximate cause of the injury. For, ‘negligence, no matter in what it consists, cannot create
a right of action unless it is the proximate cause of the injury complained of.’ And ‘the
proximate cause of an injury is that cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without which the
result would not have occurred.’ ” 12
_______________
9Handbook On The Family Code Of The Philippines, Alicia V. Sempio-Diy (1997), p. 344.
The Family Code of the Philippines Annotated, Rufus B. Rodriguez (1990), p. 505.
10
Sanitary Steam Laundry, Inc. v. Court of Appeals, 360 Phil. 199, 208; 300 SCRA 20 [1998].
11
Cruz v. Court of Appeals, 346 Phil. 872, 886; 282 SCRA 188 [1997].
12
479
VOL. 376, FEBRUARY 6, 2002
St. Mary’s Academy vs. Carpitanos
In this case, the respondents failed to show that the negligence of petitioner was
the proximate cause of the death of the victim.
Respondents Daniel spouses and Villanueva admitted that the immediate
cause of the accident was not the negligence of petitioner or the reckless driving of
James Daniel II, but the detachment of the steering wheel guide of the jeep.
In their comment to the petition, respondents Daniel spouses and Villanueva
admitted the documentary exhibits establishing that the cause of the accident was
the detachment of the steering wheel guide of the jeep. Hence, the cause of the
accident was not the recklessness of James Daniel II but the mechanical defect in
the jeep of Vivencio Villanueva. Respondents, including the spouses Carpitanos,
parents of the deceased Sherwin Carpitanos, did not dispute the report and
testimony of the traffic investigator who stated that the cause of the accident was
the detachment of the steering wheel guide that caused the jeep to turn turtle.
Significantly, respondents did not present any evidence to show that the
proximate cause of the accident was the negligence of the school authorities, or the
reckless driving of James Daniel II. Hence, the respondents’ reliance on Article 219
of the Family Code that “those given the authority and responsibility under the
preceding Article shall be principally and solidarily liable for damages caused by
acts or omissions of the unemancipated minor” was unfounded.
Further, there was no evidence that petitioner school allowed the minor James
Daniel II to drive the jeep of respondent Vivencio Villanueva. It was Ched
Villanueva, grandson of respondent Vivencio Villanueva, who had possession and
control of the jeep. He was driving the vehicle and he allowed James Daniel II, a
minor, to drive the jeep at the time of the accident.
Hence, liability for the accident, whether caused by the negligence of the minor
driver or mechanical detachment of the steering wheel guide of the jeep, must be
pinned on the minor’s parents primarily. The negligence of petitioner St. Mary’s
Academy was only a remote cause of the accident. Between the remote cause and
the injury, there intervened the negligence of the minor’s parents or the
detachment of the steering wheel guide of the jeep.
480
480 SUPREME COURT REPORTS ANNOTATED
St. Mary’s Academy vs. Carpitanos
“The proximate cause of an injury is that cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without which the
result would not have occurred.” 13
Considering that the negligence of the minor driver or the detachment of the
steering wheel guide of the jeep owned by respondent Villanueva was an event over
which petitioner St. Mary’s Academy had no control, and which was the proximate
cause of the accident, petitioner may not be held liable for the death resulting from
such accident.
Consequently, we find that petitioner likewise cannot be held liable for moral
damages in the amount of P500,000.00 awarded by the trial court and affirmed by
the Court of Appeals.
Though incapable of pecuniary computation, moral damages may be recovered
if they are the proximate result of defendant’s wrongful act or omission. In this 14
479 case, the proximate cause of the accident was not attributable to petitioner.
For the reason that petitioner was not directly liable for the accident, the
decision of the Court of Appeals ordering petitioner to pay death indemnity to
respondent Carpitanos must be deleted. Moreover, the grant of attorney’s fees as
part of damages is the exception rather than the rule. The power of the court to
15
award attorney’s fees under Article 2208 of the Civil Code demands factual, legal
and equitable justification. Thus, the grant of attorney’s fees against the petitioner
16
is likewise deleted.
Incidentally, there was no question that the registered owner of the vehicle was
respondent Villanueva. He never denied and in fact admitted this fact. We have
held that the registered owner of any
_______________
13Ford Philippines v. Citibank, G.R. No. 128604, January 29, 2001; 350 SCRA 446; Bank of the
Philippine Islands v. Court of Appeals, 326 SCRA 641, 659 [2000]; Bataclan v. Medina, 102 Phil. 181, 186
[1957].
14Article 2217 of the Civil Code.
Philtranco Service Enterprises, Inc. v. Court of Appeals, 340 Phil. 98, 111; 273 SCRA 562 [1997].
15
16Morales v. Court of Appeals, 340 Phil. 397, 422; 274 SCRA 282[1997].
481
VOL. 376, FEBRUARY 6, 2002 481
St. Mary’s Academy vs. Carpitanos
vehicle, even if not used for public service, would primarily be responsible to the
public or to third persons for injuries caused the latter while the vehicle was being
driven on the highways or streets.” Hence, with the overwhelming evidence
17
presented by petitioner and the respondent Daniel spouses that the accident
occurred because of the detachment of the steering wheel guide of the jeep, it is not
the school, but the registered owner of the vehicle who shall be held responsible for
damages for the death of Sherwin Carpitanos.
The Fallo
WHEREFORE, the Court REVERSES and SETS ASIDE the de cision of the Court
of Appeals and that of the trial court. The Court remands the case to the trial court
18 19
for determination of the liability of defendants, excluding petitioner St. Mary’s
Academy, Dipolog City.
No costs.
SO ORDERED.
 Davide, Jr. (C.J., Chairman), Kapunan and Ynares-Santiago, JJ., concur.
Puno, J., In the result.
Judgment reversed and set aside. Case remanded to trial court for
determination of liability of defendants.
Notes.—A rent-a-car company is not liable for damages based on quasi-delict
for fault or negligence of the car lessee in driving the motor vehicle. (FGU Insurance
Corporation vs. Court of Appeals, 287 SCRA 718 [1998])
A party who asserts that another person, by violation of the Land
Transportation and Traffic Code, contributed to the collision

_______________

Aguilar Sr. v. Commercial Savings Bank, G.R. No. 128705, June 29, 2001, 360 SCRA 395; Erezo v.
17

Jepte, 102 Phil. 103, 107 [1957].

CA-G.R. No. CV No. 56728.
18

In Civil Case No. 4924.

19

482
482 SUPREME COURT REPORTS ANNOTATED
Mendezona vs. Ozamiz
of vehicles, has the burden of showing a causal connection between the injury
received and the alleged violation, i.e., that the violation of the statute was the
proximate or legal cause of the injury or that it substantially contributed thereto—
negligence, consisting in whole or in part, of violation of law, like any other
negligence, is without legal consequence unless it is a contributing cause of the
injury. (Sanitary Steam Laundry, Inc. vs. Court of Appeals, 300 SCRA 20 [1998])
Accident and negligence are intrinsically contradictory—one cannot exist with
the other. (Jarco Marketing Corporation vs. Court of Appeals, 321 SCRA
375 [1999])
The mere fact that an employee was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge his employer with liability for
the negligent operation of said vehicle unless it appears that he was operating the
vehicle within the course or scope of his employment. (Castilex Industrial
Corporation vs. Vasquez, Jr., 321 SCRA 393 [1999])

——o0o——