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G.R. No.

L-51183 December 21, 1983

CARMEN L. MADEJA, petitioner,


vs.
HON. FELIX T. CARO and EVA ARELLANO-JAPZON, respondents.

ABAD SANTOS, J.:ñé+.£ªwph!1

In Criminal Case No. 75-88 of the defunct Court of First Instance of Eastern Samar, DR. EVA A. JAPZON is
accused of homicide through reckless imprudence for the death of Cleto Madeja after an appendectomy. The
complaining witness is the widow of the deceased, Carmen L. Madeja. The information states that: "The offended
party Carmen L. Madeja reserving her right to file a separate civil action for damages." (Rollo, p. 36.)

The criminal case still pending, Carmen L. Madeja sued Dr. Eva A. Japzon for damages in Civil Case No. 141 of
the same court. She alleged that her husband died because of the gross negligence of Dr. Japzon. The
respondent judge granted the defendant's motion to dismiss which motion invoked Section 3(a) of Rule 111 of the
Rules of Court which reads:têñ.£îhqwâ£

Sec. 3. Other civil actions arising from offenses. — In all cases not included in the preceding
section the following rules shall be observed:

(a) Criminal and civil actions arising from the same offense may be instituted separately, but after
the criminal action has been commenced the civil action can not be instituted until final judgment
has been rendered in the criminal action. ...

According to the respondent judge, "under the foregoing Sec. 3 (a), Rule 111, New Rules of Court, the instant civil
action may be instituted only after final judgment has been rendered in the criminal action." (Rollo, p. 33.)

The instant petition which seeks to set aside the order of the respondent judge granting the defendant's motion to
dismiss Civil Case No. 141 is highly impressed with merit.

Section 2, Rule 111 of the Rules of Court in relation to Article 33 of the Civil Code is the applicable provision. The
two enactments are quoted hereinbelow:têñ.£îhqwâ£

Sec. 2. Independent civil action. — In the cases provided for in Articles 31,32, 33, 34 and 2177 of
the Civil Code of the Philippines, an independent civil action entirely separate and distinct from
the criminal action, may be brought by the injured party during the pendency of the criminal case,
provided the right is reserved as required in the preceding section. Such civil action shall proceed
independently of the criminal prosecution, and shall require only a preponderance of evidence."
(Rule 111, Rules of Court.)

Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely
separate and distinct from the criminal action, may be brought by the injured party. Such civil
action shall proceed independently of the criminal prosecution, and shall require only a
preponderance of evidence. (Civil Code,)

There are at least two things about Art. 33 of the Civil Code which are worth noting, namely:

1. The civil action for damages which it allows to be instituted is ex-delicto. This is manifest from the provision
which uses the expressions "criminal action" and "criminal prosecution." This conclusion is supported by the
comment of the Code Commission, thus:têñ.£îhqwâ£

The underlying purpose of the principle under consideration is to allow the citizen to enforce his
rights in a private action brought by him, regardless of the action of the State attorney. It is not
conducive to civic spirit and to individual self-reliance and initiative to habituate the citizens to
depend upon the government for the vindication of their own private rights. It is true that in many
of the cases referred to in the provision cited, a criminal prosecution is proper, but it should be
remembered that while the State is the complainant in the criminal case, the injured individual is
the one most concerned because it is he who has suffered directly. He should be permitted to
demand reparation for the wrong which peculiarly affects him. (Report, p. 46.)

And Tolentino says:têñ.£îhqwâ£


The general rule is that when a criminal action is instituted, the civil action for recovery of civil
liability arising from the offense charged is impliedly instituted with the criminal action, unless the
offended party reserves his right to institute it separately; and after a criminal action has been
commenced, no civil action arising from the same offense can be prosecuted. The present articles
creates an exception to this rule when the offense is defamation, fraud, or physical injuries, In
these cases, a civil action may be filed independently of the criminal action, even if there has
been no reservation made by the injured party; the law itself in this article makes such
reservation; but the claimant is not given the right to determine whether the civil action should be
scheduled or suspended until the criminal action has been terminated. The result of the civil
action is thus independent of the result of the civil action." (I Civil Code, p. 144 [1974.])

2. The term "physical injuries" is used in a generic sense. It is not the crime of physical injuries defined in the
Revised Penal Code. It includes not only physical injuries but consummated, frustrated and attempted
homicide.têñ.£îhqwâ£

The Article in question uses the words 'defamation', 'fraud' and 'physical injuries.' Defamation and
fraud are used in their ordinary sense because there are no specific provisions in the Revised
Penal Code using these terms as means of offenses defined therein, so that these two terms
defamation and fraud must have been used not to impart to them any technical meaning in the
laws of the Philippines, but in their generic sense. With this apparent circumstance in mind, it is
evident that the terms 'physical injuries' could not have been used in its specific sense as a crime
defined in the Revised Penal Code, for it is difficult to believe that the Code Commission would
have used terms in the same article-some in their general and another in its technical sense. In
other words, the term 'physical injuries' should be understood to mean bodily injury, not the crime
of physical injuries, bacause the terms used with the latter are general terms. In any case the
Code Commission recommended that the civil action for physical injuries be similar to the civil
action for assault and battery in American Law, and this recommendation must hove been
accepted by the Legislature when it approved the article intact as recommended. If the intent has
been to establish a civil action for the bodily harm received by the complainant similar to the civil
action for assault and battery, as the Code Commission states, the civil action should lie whether
the offense committed is that of physical injuries, or frustrated homicide, or attempted homicide, or
even death," (Carandang vs. Santiago, 97 Phil. 94, 96-97 [1955].)

Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, which states that reckless imprudence or criminal
negligence is not included in Article 33 of the Civil Code is not authoritative. Of eleven justices only nine took part
in the decision and four of them merely concurred in the result.

In the light of the foregoing, it is apparent that the civil action against Dr. Japzon may proceed independently of
the criminal action against her.

WHEREFORE, the petition is hereby granted; the order dismissing Civil Case No. 141 is hereby set aside; no
special pronouncement as to costs.

SO ORDERED.1äwphï1.ñët

Makasiar (Chairman), Concepcion, Jr., Guerrero, De Castro and Escolin, JJ., concur.

Separate Opinions

AQUINO, J., concurring:

I concur. Death due to a negligent act may be a delict or quasi-delict. It may create a civil action based on article
100 of the Penal Code or an action based on culpa aquiliana under article 2176 of the Civil Code. These
alternatives are assumed in article 2177 of the Civil Code "but the plaintiff cannot recover twice for the same act or
omission of the defendant" (Barredo vs. Garcia, 73 Phil. 607 and Sudario vs. Acro Taxi and Yuson, 86 Phil. 1. See
Formento vs. CA, L-26442, August 29,1969,29 SCRA 437).

The term "physical injuries" in article 33 of the Civil Code includes death and may give rise to an independent civil
action (Dyogi vs. Yatco, 100 Phil. 1095).
The rule in Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, that reckless imprudence is not included in
article 33 of the Civil Code, is not authoritative doctrine because it was concurred in by only five Justices. Four
Justices concurred in the result.

Separate Opinions

AQUINO, J., concurring:

I concur. Death due to a negligent act may be a delict or quasi-delict. It may create a civil action based on article
100 of the Penal Code or an action based on culpa aquiliana under article 2176 of the Civil Code. These
alternatives are assumed in article 2177 of the Civil Code "but the plaintiff cannot recover twice for the same act or
omission of the defendant" (Barredo vs. Garcia, 73 Phil. 607 and Sudario vs. Acro Taxi and Yuson, 86 Phil. 1. See
Formento vs. CA, L-26442, August 29,1969,29 SCRA 437).

The term "physical injuries" in article 33 of the Civil Code includes death and may give rise to an independent civil
action (Dyogi vs. Yatco, 100 Phil. 1095).

The rule in Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, that reckless imprudence is not included in
article 33 of the Civil Code, is not authoritative doctrine because it was concurred in by only five Justices. Four
Justices concurred in the result.
G.R. No. L-18719 October 31, 1964

PILAR JOAQUIN, ET AL., plaintiffs-appellants,


vs.
FELIX ANICETO, ET AL., defendants-appellee.

REGALA, J.:

This case comes to Us for review directly from the Court of First Instance of Manila. The facts are not in dispute.
They are as follows:

While Pilar Joaquin was on the sidewalk of Aviles Street, Manila, on April 27, 1960, a taxicab driven by Felix
Aniceto and owned by Ruperto Rodelas bumped her As a result, she suffered physical injuries.

Aniceto was charged with serious physical injuries through reckless imprudence in the Municipal Court (now the
City Court) of Manila. He was subsequently found guilty and sentenced to imprisonment. However, no ruling was
made on his civil liability to the offended party in view of the latter's reservation to file a separate civil action for
damages for the injuries suffered by her.

Aniceto appealed the judgment of conviction to the Court of First Instance of Manila. While the criminal case was
thus pending appeal, Pilar Joaquin, the injured party, filed this case for damages in the Court of First Instance of
Manila, in accordance with the reservation which she had earlier made. Felix Aniceto and Ruperto Rodelas, driver
and owner, respectively, of the taxicab were made party defendants.

At the trial of this case, the plaintiff blocked all attempts of Rodelas to prove that, as employer, he had exercised
due diligence in the selection and supervision of his employee, on the ground that such a defense is not available
in a civil action brought under the Penal Code to recover the subsidiary civil liability arising from the crime. The
lower court sustained plaintiff's objection. However, it dismissed the case on the ground that in the absence of a
final judgment of conviction against the driver in the criminal case, any action to enforce the employer's subsidiary
civil liability would be premature. Such liability, the trial court added, may only be enforced on proof of the
insolvency of the employee. Hence, this appeal.

The issue in this case is: May an employee's primary civil liability for crime and his employer's subsidiary liability
therefor be proved in a separate civil action even while the criminal case against the employee is still pending?

To begin with, obligations arise from law, contract, quasi-contract, crime and quasi-delict.1According to appellant,
her action is one to enforce the civil liability arising from crimes. With respect to obligations arising from crimes,
Article 1161 of the New Civil Code provides:

Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to
the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary, Title, on Human
Relations, and of Title XVIII of this Book, regulating damages. (Emphasis supplied)

The Revised Penal Code provides in turn that "every person criminally liable for a felony is also civilly liable" 2and
that in default of the persons criminally liable, employers, teachers persons and corporations engaged in any kind
of industry shall be civilly liable for felonies committed by their servants, pupils, workmen, apprentices or
employees in the discharge of their duties.3

As this Court held in City of Manila v. Manila Electric Co., 52 Phil. 586:

... The Penal Code authorizes the determination of subsidiary liability. The Civil Code negatives its
applicability providing that civil obligations arising from crimes or misdemeanors shall be governed by the
provisions of the Penal Code. In other words, the Penal Code affirms its jurisdiction while the Civil Code
negatives its jurisdiction.

It is now settled that for an employer to be subsidiarily liable, the following requisites must be present: (1) That an
employee has committed a crime in the discharge of his duties; (2) that said employee is insolvent and has not
satisfied his civil liability; (3) that the employer is engaged in some kind of industry. (1 Padilla, Criminal Law,
Revised Penal Code 794 [1964])

Without the conviction of the employee, the employer cannot be subsidiarily liable.
Now, it is no reason to bring such action against the employer on the ground that in cases of defamation, fraud
and physical injuries, Article 33 of the Civil Code authorizes a civil action that is "entirely separate, and distinct
from the criminal action," (Carangdang v. Santiago, 51 O.G. 2878; Reyes v. De la Rosa, 52 O.G. 6548; Dyogi v.
Yatco, G. R. No. L-9623, January 22, 1957).

Can Article 33 above cited be made applicable to an employer in a civil action for subsidiary liability? The answer
to this question is undoubtedly in the negative.

What this article 33 authorizes is an action against the employee on his primary civil liability. It cannot apply to an
action against the employer to enforce his subsidiary civil liability as stated above, because such liability arises
only after conviction of the employee in the criminal case. Any action brought against him before the conviction of
his employee is premature.

In cases of negligence, the injured party or his heirs has the choice, between an action to enforce the civil liability
arising from crime under Article 100 of the Revised Penal Code and an action for quasi-delict under Articles 2176-
2194 of the Civil Code. (See Barredo v. Garcia and Almario, 73 Phil. 607; Parker v. Panlilio, et al., 91 Phil. 1)

If he chooses an action for quasi-delict, he may hold an employer liable for the negligent act of the employee
subject, however, to the employer's defense of exercise of the diligence of a good father of the family. (Art. 2180,
Civil Code)

On the other hand, should he choose to prosecute his action under Article 100 of the Penal Code, he can hold the
employer subsidiarily liable only upon prior conviction of the employee. While a separate and independent civil
action for damages may be brought against the employee under Article 33 of the Civil Code, no such action may
be filed against the employer on the latter's subsidiary civil liability because such liability is governed not by the
Civil Code but by the Penal Code, under which conviction of the employee is a condition sine qua non for the
employer's subsidiary liability. If the court trying the employee's liability adjudges the employee liable, but the court
trying the criminal action acquits the employee, the subsequent insolvency of the employee cannot make the
employer subsidiary liable to the offended party or to the latter's heirs.

WHEREFORE, the decision appealed from is affirmed, without pronouncement as to costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Makalintal, Bengzon, J.P.,
and Zaldivar, JJ., concur.
G.R. No. 108017 April 3, 1995

MARIA BENITA A. DULAY, in her own behalf and in behalf of the minor children KRIZTEEN ELIZABETH,
BEVERLY MARIE and NAPOLEON II, all surnamed DULAY, petitioners,
vs.
THE COURT OF APPEALS, Former Eighth Division, HON. TEODORO P. REGINO, in his capacity as
Presiding Judge of the Regional Trial Court National Capital Region, Quezon City, Br. 84, SAFEGUARD
INVESTIGATION AND SECURITY CO., INC., and SUPERGUARD SECURITY CORPORATION, respondents.

This petition for certiorari prays for the reversal of the decision of the Court of Appeals dated October 29, 1991 in
CA-G.R. CV No. 24646 which affirmed the order of the Regional Trial Court dismissing Civil Case No. Q-89-1751,
and its resolution dated November 17, 1991 denying herein, petitioner's motion for reconsideration.

The antecedent facts of the case are as follows:

On December 7, 1988, an altercation between Benigno Torzuela and Atty. Napoleon Dulay occurred at the "Big
Bang Sa Alabang," Alabang Village, Muntinlupa as a result of which Benigno Torzuela, the security guard on duty
at the said carnival, shot and killed Atty. Napoleon Dulay.

Herein petitioner Maria Benita A. Dulay, widow of the deceased Napoleon Dulay, in her own behalf and in behalf
of her minor children, filed on February 8, 1989 an action for damages against Benigno Torzuela and herein
private respondents Safeguard Investigation and Security Co., Inc., ("SAFEGUARD") and/or Superguard Security
Corp. ("SUPERGUARD"), alleged employers of defendant Torzuela. The complaint, docketed as Civil Case No.
Q-89-1751 among others alleges the following:

1. . . .

Defendants SAFEGUARD INVESTIGATION AND SECURITY CO., INC., (Defendant Safeguard)


and SUPERGUARD SECURITY CORPORATION (Defendant Superguard) are corporations duly
organized and existing in accordance with Philippine laws, with offices at 10th Floor,
Manufacturers Building, Inc., Plaza Santa Cruz, Manila. They are impleaded as alternative
defendants for, while the former appears to be the employer of defendant BENIGNO TORZUELA
(defendant TORZUELA), the latter impliedly acknowledged responsibility for the acts of defendant
TORZUELA by extending its sympathies to plaintiffs.

Defendant BENIGNO TORZUELA is of legal age, an employee of defendant SAFEGUARD and/or


defendant SUPERGUARD and, at the time of the incident complained of, was under their control
and supervision. . . .

3. On December 7, 1988 at around 8:00 a.m., defendant TORZUELA, while he was on duty as
security guard at the "Big Bang sa Alabang," Alabang Village, Muntinlupa, Metro Manila shot and
killed NAPOLEON V. DULAY with a .38 caliber revolver belonging to defendant SAFEGUARD,
and/or SUPERGUARD (per Police Report dated January 7, 1989, copy attached as Annex A);

4. The incident resulting in the death of NAPOLEON V. DULAY was due to the concurring
negligence of the defendants. Defendant TORZUELA'S wanton and reckless discharge of the
firearm issued to him by defendant SAFEGUARD and/or SUPERGUARD was the immediate and
proximate cause of the injury, while the negligence of defendant SAFEGUARD and/or
SUPERGUARD consists in its having failed to exercise the diligence of a good father of a family in
the supervision and control of its employee to avoid the injury.

xxx xxx xxx

(Rollo, pp. 117-118)

Petitioners prayed for actual, compensatory, moral and exemplary damages, and attorney's fees. The said Civil
Case No. Q-89-1751 was raffled to Branch 84 of the Regional Trial Court of Quezon City, presided by respondent
Judge Teodoro Regino.

On March 2, 1989, private respondent SUPERGUARD filed a Motion to Dismiss on the ground that the complaint
does not state a valid cause of action. SUPERGUARD claimed that Torzuela's act of shooting Dulay was beyond
the scope of his duties, and that since the alleged act of shooting was committed with deliberate intent (dolo), the
civil liability therefor is governed by Article 100 of the Revised Penal Code, which states:

Art. 100. Civil liability of a person guilty of a felony. — Every person criminally liable for a felony is
also civilly liable.

Respondent SUPERGUARD further alleged that a complaint for damages based on negligence under Article 2176
of the New Civil Code, such as the one filed by petitioners, cannot lie, since the civil liability under Article 2176
applies only to quasi-offenses under Article 365 of the Revised Penal Code. In addition, the private respondent
argued that petitioners' filing of the complaint is premature considering that the conviction of Torzuela in a criminal
case is a condition sine qua non for the employer's subsidiary liability (Rollo, p. 55-59).

Respondent SAFEGUARD also filed a motion praying that it be excluded as defendant on the ground that
defendant Torzuela is not one of its employees (Rollo, p. 96).

Petitioners opposed both motions, stating that their cause of action against the private respondents is based on
their liability under Article 2180 of the New Civil Code, which provides:

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or an industry.

xxx xxx xxx

(Emphasis supplied)

Petitioners contended that a suit against alternative defendants is allowed under Rule 3, Section 13 of the Rules
of Court. Therefore, the inclusion of private respondents as alternative defendants in the complaint is justified by
the following: the Initial Investigation Report prepared by Pat. Mario Tubon showing that Torzuela is an employee
of SAFEGUARD; and through overt acts, SUPERGUARD extended its sympathies to petitioners (Rollo, pp. 64
and 98).

Meanwhile, an Information dated March 21, 1989 charging Benigno Torzuela with homicide was filed before the
Regional Trial Court of Makati and was docketed as Criminal Case No. 89-1896.

On April 13, 1989, respondent Judge Regino issued an order granting SUPERGUARD'S motion to dismiss and
SAFEGUARD'S motion for exclusion as defendant. The respondent judge held that the complaint did not state
facts necessary or sufficient to constitute a quasi-delict since it does not mention any negligence on the part of
Torzuela in shooting Napoleon Dulay or that the same was done in the performance of his duties. Respondent
judge ruled that mere allegations of the concurring negligence of the defendants (private respondents herein)
without stating the facts showing such negligence are mere conclusions of law (Rollo, p. 106). Respondent judge
also declared that the complaint was one for damages founded on crimes punishable under Articles 100 and 103
of the Revised Penal Code as distinguished from those arising from, quasi-delict. The dispositive portion of the
order dated April 13, 1989 states:

WHEREFORE, this Court holds that in view of the material and ultimate facts alleged in the
verified complaint and in accordance with the applicable law on the matter as well as precedents
laid down by the Supreme Court, the complaint against the alternative defendants Superguard
Security Corporation and Safeguard Investigation and Security Co., Inc., must be and (sic) it is
hereby dismissed. (Rollo, p. 110)

The above order was affirmed by the respondent court and petitioners' motion for reconsideration thereof was
denied.

Petitioners take exception to the assailed decision and insist that quasi-delicts are not limited to acts of negligence
but also cover acts that are intentional and voluntary, citing Andamo v. IAC (191 SCRA 195 [1990]). Thus,
petitioners insist that Torzuela' s act of shooting Napoleon Dulay constitutes a quasi-delict actionable under Article
2176 of the New Civil Code.

Petitioners further contend that under Article 2180 of the New Civil Code, private respondents are primarily liable
for their negligence either in the selection or supervision of their employees. This liability is independent of the
employee's own liability for fault or negligence and is distinct from the subsidiary civil liability under Article 103 of
the Revised Penal Code. The civil action against the employer may therefore proceed independently of the
criminal action pursuant to Rule 111 Section 3 of the Rules of Court. Petitioners submit that the question of
whether Torzuela is an employee of respondent SUPERGUARD or SAFEGUARD would be better resolved after
trial.

Moreover, petitioners argue that Torzuela's act of shooting Dulay is also actionable under Article 33 of the New
Civil Code, to wit:

Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely
separate and distinct from the criminal action, may be brought by the injured party. Such civil
action shall proceed independently of the criminal prosecution, and shall require only a
preponderance of evidence. (Emphasis supplied)

In the same vein, petitioners cite Section 3, Rule 111 of the Rules of Court which provides:

Rule 111. . . . .

Sec. 3. When civil action may proceed independently — In the cases provided for in Articles 32,
33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which has been
reserved may be brought by the offended party, shall proceed independently of the criminal
action, and shall require only a preponderance of evidence. (Emphasis supplied)

The term "physical injuries" under Article 33 has been held to include consummated, frustrated and attempted
homicide. Thus, petitioners maintain that Torzuela's prior conviction is unnecessary since the civil action can
proceed independently of the criminal action. On the other hand, it is the private respondents' argument that since
the act was not committed with negligence, the petitioners have no cause of action under Articles 2116 and 2177
of the New Civil Code. The civil action contemplated in Article 2177 is not applicable to acts committed with
deliberate intent, but only applies to quasi-offenses under Article 365 of the Revised Penal Code. Torzuela's act of
shooting Atty. Dulay to death, aside from being purely personal, was done with deliberate intent and could not
have been part of his duties as security guard. And since Article 2180 of the New Civil Code covers only: acts
done within the scope of the employee's assigned tasks, the private respondents cannot be held liable for
damages.

We find for petitioners.

It is undisputed that Benigno Torzuela is being prosecuted for homicide for the fatal shooting of Napoleon Dulay.
Rule 111 of the Rules on Criminal Procedure provides:

Sec. 1. Institution of criminal and civil actions. When a criminal action is instituted, the civil action
for the recovery of civil liability is impliedly instituted with the criminal action, unless the offended
party waives the civil action , reserves his right to institute it separately or institutes the civil action
prior to the criminal action.

Such civil action includes recovery of indemnity under the Revised Penal Code, and damages
under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising from the same act
or omission of the accused. (Emphasis supplied)

It is well-settled that the filing of an independent civil action before the prosecution in the criminal action presents
evidence is even far better than a compliance with the requirement of express reservation (Yakult Philippines v.
Court of Appeals, 190 SCRA 357 [1990]). This is precisely what the petitioners opted to do in this case. However,
the private respondents opposed the civil action on the ground that the same is founded on a delict and not on a
quasi-delict as the shooting was not attended by negligence. What is in dispute therefore is the nature of the
petitioner's cause of action.

The nature of a cause of action is determined by the facts alleged in the complaint as constituting the cause of
action (Republic v. Estenzo, 158 SCRA 282 [1988]). The purpose of an action or suit and the law to govern it is to
be determined not by the claim of the party filing the action, made in his argument or brief, but rather by the
complaint itself, its allegations and prayer for relief. (De Tavera v. Philippine Tuberculosis Society, 112 SCRA 243
[1982]). An examination of the complaint in the present case would show that the plaintiffs, petitioners herein, are
invoking their right to recover damages against the private respondents for their vicarious responsibility for the
injury caused by Benigno Torzuela's act of shooting and killing Napoleon Dulay, as stated in paragraphs 1 and 2
of the complaint.

Article 2176 of the New Civil Code provides:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties is called a quasi-delict and is governed by the provisions
of this Chapter.

Contrary to the theory of private respondents, there is no justification for limiting the scope of Article 2176 of the
Civil Code to acts or omissions resulting from negligence. Well-entrenched is the doctrine that article 2176 covers
not only acts committed with negligence, but also acts which are voluntary and intentional. As far back as the
definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that:

. . . Article 2176, where it refers to "fault or negligence," covers not only acts "not punishable by
law" but also acts criminal in character; whether intentional and voluntary or negligent.
Consequently, a separate civil action against the offender in a criminal act, whether or not he is
criminally prosecuted and found guilty or acquitted, provided that the offended party is not
allowed, if he is actually charged also criminally, to recover damages on both scores, and would
be entitled in such eventuality only to the bigger award of the two, assuming the awards made in
the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3,
Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code,
whereas the civil liability for the same act considered as quasi-delict only and not as a crime is not
extinguished even by a declaration in the criminal case that the criminal act charged has not
happened or has not been committed by the accused. Briefly stated, We here hold, in reiteration
of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by
law. (Emphasis supplied)

The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court (191 SCRA 195 [1990]),
wherein the Court held:

Article 2176, whenever it refers to "fault or negligence," covers not only acts criminal in character,
whether intentional and voluntary or negligent. Consequently, a civil action lies against the
offender in a criminal act, whether or not he is prosecuted or found guilty or acquitted, provided
that the offended party is not allowed, (if the tortfeasor is actually also charged criminally), to
recover damages on both scores, and would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two cases vary. [citing Virata v. Ochoa, 81
SCRA 472] (Emphasis supplied)

Private respondents submit that the word "intentional" in the Andamo case is inaccurate obiter, and should be
read as "voluntary" since intent cannot be coupled with negligence as defined by Article 365 of the Revised Penal
Code. In the absence of more substantial reasons, this Court will not disturb the above doctrine on the coverage
of Article 2176.

Private respondents further aver that Article 33 of the New Civil Code applies only to injuries intentionally
committed pursuant to the ruling in Marcia v. CA (120 SCRA 193 [1983]), and that the actions for damages
allowed thereunder are ex-delicto. However, the term "physical injuries" in Article 33 has already been construed
to include bodily injuries causing death (Capuno v. Pepsi-Cola Bottling Co. of the Philippines, 121 Phil. 638
[1965); Carandang v. Santiago, 97 Phil. 94 [1955]). It is not the crime of physical injuries defined in the Revised
Penal Code. It includes not only physical injuries but also consummated, frustrated, and attempted homicide
(Madeja v. Caro, 126 SCRA 293 [1983]). Although in the Marcia case (supra), it was held that no independent civil
action may be filed under Article 33 where the crime is the result of criminal negligence, it must be noted however,
that Torzuela, the accused in the case at bar, is charged with homicide, not with reckless imprudence, whereas
the defendant in Marcia was charged with reckless imprudence. Therefore, in this case, a civil action based on
Article 33 lies.

Private respondents also contend that their liability is subsidiary under the Revised Penal Code; and that they are
not liable for Torzuela's act which is beyond the scope of his duties as a security guard. It having been established
that the instant action is not ex-delicto, petitioners may proceed directly against Torzuela and the private
respondents. Under Article 2180 of the New Civil Code as aforequoted, when an injury is caused by the
negligence of the employee, there instantly arises a presumption of law that there was negligence on the part of
the master or employer either in the selection of the servant or employee, or in supervision over him after
selection or both (Layugan v. Intermediate Appellate Court, 167 SCRA 363 [1988]). The liability of the employer
under Article 2180 is direct and immediate; it is not conditioned upon prior recourse against the negligent
employee and a prior showing of the insolvency of such employee (Kapalaran Bus Lines v. Coronado, 176 SCRA
792 [1989]). Therefore, it is incumbent upon the private respondents to prove that they exercised the diligence of a
good father of a family in the selection and supervision of their employee.

Since Article 2176 covers not only acts of negligence but also acts which are intentional and voluntary, it was
therefore erroneous on the part of the trial court to dismiss petitioner's complaint simply because it failed to make
allegations of attendant negligence attributable to private respondents.

With respect to the issue of whether the complaint at hand states a sufficient cause of action, the general rule is
that the allegations in a complaint are sufficient to constitute a cause of action against the defendants if, admitting
the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. A
cause of action exist if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to
respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of
the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages (Del Bros Hotel Corporation v. CA, 210 SCRA 33 [1992]);
Development Bank of the Philippines v. Pundogar, 218 SCRA 118 [1993])

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

WHEREFORE, premises considered, the petition for review is hereby GRANTED. The decision of the Court of
Appeals as well as the Order of the Regional Trial Court dated April 13, 1989 are hereby REVERSED and SET
ASIDE. Civil Case No. Q-89-1751 is remanded to the Regional Trial Court for trial on the merits. This decision is
immediately executory.

SO ORDERED.
G.R. No. L-37733 September 30, 1982

ALMARIO T. SALTA, petitioner,


vs.
HON. JUDGE JESUS DE VEYRA, in his capacity as Presiding Judge of the CFI of Manila, Branch XIV and
PHILIPPINE NATIONAL BANK, respondents.

G.R. No. L-38035 September 30, 1982

PHILIPPINE NATIONAL BANK, petitioner,


vs.
HON. AMANTE P. PURISIMA, as Judge of the Court of First Instance of Manila, Branch VII and ALMARIO
SALTA, respondents.

Dakila F. Castro & Associates for petitioner.

Nestor L. Kalaw, Edgardo M. Magtalas and Juan C. Gatmaitan for respondents,

DE CASTRO, J.:

In these two cases, the only issue to be resolved is whether a decision of acquittal in a criminal case operates to
dismiss a separate civil action filed on the basis of the same facts as alleged in the criminal case, which is for
violation of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act.

The petitioner, Almario T. Salta, in G.R. No. L-37733, takes the affirmative stand on the issue as above indicated,
as he made manifest in his motion to dismiss Civil Case No. 79583, of the CFI of Manila, Branch XIV, which was,
however, denied by Hon. Jesus de Veyra, presiding. In a similar motion, aforementioned petitioner sought to
dismiss another civil case (Civil Case No. 88343), pending before Branch VII of the same CFI of Manila, presided
over by Hon. Amante Purisima who granted the motion to dismiss.

We have, therefore, the unedifying spectacle of two cases involving the same issue disposed of by two judges in a
manner directly in opposition of each other. For a uniform ruling that would authoritatively settle this regrettable
conflict of opinion, the two cases have been consolidated for a single decision. For purposes of convenience,
however, although the petitioner in G.R. No. L-37733, Almario T. Salta, is the private respondent in the other case,
G.R. No. L-38035, in which the petitioner is the Philippine National Bank, We shall refer in this decision to Salta as
"petitioner," and the PNB, as respondent bank."

Petitioner was an employee of the PNB assigned as Manager of the Malolos' branch. As such, his duty was,
among others, to himself grant loans, or only to recommend the granting of loans, depending on the amount of the
loan applied for. In the performance of this particular duty, he is supposed to exercise care and prudence, and
with utmost diligence, observe the policies, rules and regulations of the bank.

In disregard of the pertinent rules, regulations and policies of the respondent bank, petitioner indiscriminately
granted certain loans mentioned in the complaints filed by PNB, in a manner characterized by negligence, fraud
and manifest partiality, and upon securities not commensurate with the amount of the loans. This is how the
respondent bank found petitioner to have discharged his duties as branch manager of the bank, and so it filed a
civil action in the CFI of Manila (Civil Case No. 79583, Branch XIV) on April 22, 1970, and another case (Civil
Case No. 88343, Branch VII) on September 23, 1972, to recover losses the bank suffered. At the same time the
bank caused to be filed, based on the same acts, a criminal case with the Circuit Criminal Court of the Fifth
Judicial District at San Fernando, Pampanga, Criminal Case No. CCCV-668, for violation of the Anti-Graft and
Corrupt Practices Act.

In the criminal case, the Court, on motion to dismiss filed by the defense, after the prosecution has rested, granted
the motion in a 64-page Resolution, the dispositive portion of which reads:

CONFORMABLY WITH ALL THE FOREGOING, therefore, the Motion to Dismiss (Demurrer) to
Evidence) should be as it is hereby granted and accused ALMARIO T. SALTA ACQUITTED of the
offense charged in the Information the prosecution having failed to prove the essential
ingredience and/or elements of the crime charged,. with costs de oficio. 1
With his acquittal in the criminal case, petitioner filed Motions to Dismiss in each of the two civil cases, based on
Section 3(c), Rule I I I of the Revised Rules of Court which provides:

(c) extinction of the penal action does not carry with it extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment that the fact from which the civil might arise did
not exist. ... 2

It is in the resolution of the motions to dismiss that Judges de Veyra and Purisima of the CFI of Manila took
diametrically opposing views, the former denying the motion, the latter granting it.

We sustain the order denying the motion to dismiss as issued by Judge de Veyra, which, for its brevity, but clear
and convincing, We quote as follows:

Having been acquitted by the Circuit Court of the charges of violation of the Anti-Graft Law,
Defendant now seeks the dismissal of the civil case which arose from the same set of facts. The
motion to dismiss must be denied for the reason that acquittal in the criminal case will not be an
obstacle for the civil case to prosper unless in the criminal case the Court makes a finding that
even civilly the accused would not be liable-there is no such a finding. Apart from this, Plaintiff in
this present civil case bases its case either on fraud or negligence-evidence that only requires a
preponderance, unlike beyond reasonable doubt which is the requisite in criminal cases.

The motion to dismiss is, therefore, denied for lack of merit. 3

To begin with, the filing in this case of a civil action separate from the criminal action is fully warranted under the
provision of Article 33 of the New Civil Code. 4 The criminal case is for the prosecution of an offense the main
element of which is fraud, one of the kinds of crime mentioned in the aforecited provision. Based on the same acts
for which the criminal action was filed, the civil actions very clearly alleged fraud and negligence as having given
rise to the cause of action averred in the complaints. It needs hardly any showing to demonstrate this fact, which
petitioner disputes, particularly as to the sufficiency of the allegation of fraud in the civil complaints. Definitely, We
hold that the following allegation in the complaints unmistakably shows that the complaints do contain sufficient
averment of fraud:

13. That there was fraud committed by the defendant in granting the aforesaid loans which
rendered him liable for his acts, which fraud is positively and easily Identifiable in the manner and
scheme aforementioned. 5

That there is allegation of negligence is also unmistakably shown when the complaint states that "the defendant
as manager of Malolos Branch, in gross violation of the bank rules and regulations, and without exercising
necessary prudence, ... extended a number of credit accommodations . . ." 6 On this allegation of negligence
alone, the civil case may be maintained as an entirely independent action from the criminal case. Consequently,
Section 3(c), Rule III of the Revised Rules of Court has no application thereto.

The ruling in the case of PNB vs. Bagamaspad, 7 involving the same respondent herein, and also against its
branch manager, unherringly charts the course to be followed in the final resolution of these cases. Thus -

The trial court based in the civil liability the appellants herein on the provisions of Article 1718 and
1719 of the Civil Code, defining and enumerating the duties and obligations of an agent and his
liability for failure to comply with such duty.. . . A careful study and consideration of the record,
however, convinces us and we agree with the trial court that the defendants-appellants have not
only violated instructions of the plaintiff Bank, including things which the bank wanted done or not
done, all of which were fully understood by them but they (appellants) also violated standing
regulations regarding the granting of loans; and what is more, thru their carelessness, laxity and
negligence, they allowed bans to be granted to persons who were not entitled to secure loans. 8

If petitioner's civil liability is, as alleged in the complaint, based on negligence, apart from the averment of fraud,
then on the strength of the aforesaid ruling, the civil action can be maintained regardless of the outcome of the
criminal action.

The opinion of former Justice J.B.L. Reyes in Dionisio vs. Alvendia 9 is not only enlightening, but authoritative.
Thus —
. . . in the case of an independent civil actions under the Civil Code, the result of the criminal case,
whether acquittal or conviction, would be entirety irrelevant to the civil action. This seems to be
the spirit of the law when it decided to make these actions 'entirely separate and distinct' from the
criminal action (Articles 22, 33, 34 and 2177). Hence in these cases, I think Rule 107 Sec. l(d)
does not apply. 10

It is significant to note that under Article 31 11 of the New Civil Code, it is made clear that the civil action permitted
therein to be filed separately from the criminal action may proceed independently of the criminal proceedings
"regardless of the result of the latter." It seems perfectly reasonable to conclude that the civil actions mentioned in
Article 33, permitted in the same manner to be filed separately from the criminal case, may proceed similarly
regardless of the result of the criminal case.

Indeed, when the law has allowed a civil case related to a criminal case, to be filed separately and to proceed
independently even during the pendency of the latter case, the intention is patent to make the court's disposition of
the criminal case of no effect whatsoever on the separate civil case. This must be so because the offenses
specified in Article 33 are of such a nature, unlike other offenses not mentioned, that they may be made the
subject of a separate civil action because of the distinct separability of their respective juridical cause or basis of
action. This is clearly illustrated in the case of swindling, a specie of an offense committed by means of fraud,
where the civil case may be filed separately and proceed independently of the criminal case, regardless of the
result of the latter.

The wisdom of the provision of Article 33 of the New Civil Code is to be found in the fact that when the civil action
is reserved to be filed separately, the criminal case is prosecuted by the prosecuting officer alone without
intervention from a private counsel representing the interest of the offended party. It is but just that when, as in the
present instance, the prosecution of the criminal case is left to the government prosecutor to undertake, any
mistake or mishanding of the case committed by the latter should not work to the prejudice of the offended party
whose interest would thus be protected by the measure contemplated by Article 33 and Article 2177 12 of the New
Civil Code.

Prescinding from the foregoing, it should be stated with emphasis, for its decisive effect on how the issue raised in
this case should be disposed of, that in no manner may the resolution of the Circuit Criminal Court be read as
positively stating that the fact from which the civil action might arise did not exist, as required in the provision
relied upon by petitioner, Section 3(c), Rule III of the Revised Rules of Court. As Judge de Veyra put it, "acquittal
in the criminal case will not be an obstacle for the civil case to prosper unless in the criminal case the Court makes
a finding that even civilly, the accused would not be liable-there is no such finding." There, indeed, could not be
such finding because the criminal court, aware that the civil case is not before it, would be acting in excess of
jurisdiction if it were to make any pronouncement in effect disposing of a case pending before another court, over
which it had not acquired jurisdiction. Even if this were authorized by the Rules of Court, the validity of such rule
would be open to serious doubt as it would be affecting a matter of jurisdiction, which is substantive in character,
considering the constitutional limitation of the rule-making power of the Supreme Court, that said rules should not
increase or diminish substantive rights.

WHEREFORE, the order denying the motion to dismiss issued in Civil Case No. 79583 of the Court of First
Instance of Manila (G. R. No. L-37733) is affirmed, while the order granting a similar motion in Civil Case No.
88343 of the same court (G. R. No. L-38035) is reversed. Let the records of these two (2) cases be remanded to
their respective courts of origin for proper further proceedings. No costs.

SO ORDERED.
G.R. No. 175822 October 23, 2013

CALIFORNIA CLOTHING INC. and MICHELLE S. YBAÑEZ, Petitioners,


vs.
SHIRLEY G. QUIÑONES, Respondent.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the ; Rules of Court are the Court of Appeals
Decision1 dated August 3, 2006 and Resolution2 dated November 14, 2006 in CA-G.R. CV No. 80309. The
assailed decision reversed and set aside the June 20, 2003 Decision 3 of the Regional Trial Court of Cebu City
(RTC), Branch 58, in Civil Case No. CEB-26984; while the assailed resolution denied the motion for
reconsideration filed by petitioner Michelle Ybañez (Ybañez).

The facts of the case, as culled from the records, are as follows:

On July 25, 2001, respondent Shirley G. Quiñones, a Reservation Ticketing Agent of Cebu Pacific Air in Lapu
Lapu City, went inside the Guess USA Boutique at the second floor of Robinson’s Department Store (Robinson’s)
in Cebu City. She fitted four items: two jeans, a blouse and a shorts, then decided to purchase the black jeans
worth ₱2,098.00.4 Respondent allegedly paid to the cashier evidenced by a receipt 5 issued by the store.6

While she was walking through the skywalk connecting Robinson’s and Mercury Drug Store (Mercury) where she
was heading next, a Guess employee approached and informed her that she failed to pay the item she got. She,
however, insisted that she paid and showed the employee the receipt issued in her favor. 7 She then suggested
that they talk about it at the Cebu Pacific Office located at the basement of the mall. She first went to Mercury then
met the Guess employees as agreed upon.8

When she arrived at the Cebu Pacific Office, the Guess employees allegedly subjected her to humiliation in front
of the clients of Cebu Pacific and repeatedly demanded payment for the black jeans. 9 They supposedly even
searched her wallet to check how much money she had, followed by another argument. Respondent, thereafter,
went home.10

On the same day, the Guess employees allegedly gave a letter to the Director of Cebu Pacific Air narrating the
incident, but the latter refused to receive it as it did not concern the office and the same took place while
respondent was off duty.11 Another letter was allegedly prepared and was supposed to be sent to the Cebu Pacific
Office in Robinson’s, but the latter again refused to receive it.12 Respondent also claimed that the Human
Resource Department (HRD) of Robinson’s was furnished said letter and the latter in fact conducted an
investigation for purposes of canceling respondent’s Robinson’s credit card. Respondent further claimed that she
was not given a copy of said damaging letter.13 With the above experience, respondent claimed to have suffered
physical anxiety, sleepless nights, mental anguish, fright, serious apprehension, besmirched reputation, moral
shock and social humiliation.14 She thus filed the Complaint for Damages15 before the RTC against petitioners
California Clothing, Inc. (California Clothing), Excelsis Villagonzalo (Villagonzalo), Imelda Hawayon (Hawayon)
and Ybañez. She demanded the payment of moral, nominal, and exemplary damages, plus attorney’s fees and
litigation expenses.16

In their Answer,17 petitioners and the other defendants admitted the issuance of the receipt of payment. They
claimed, however, that instead of the cashier (Hawayon) issuing the official receipt, it was the invoicer
(Villagonzalo) who did it manually. They explained that there was miscommunication between the employees at
that time because prior to the issuance of the receipt, Villagonzalo asked Hawayon " Ok na ?," and the latter
replied " Ok na ," which the former believed to mean that the item has already been paid. 18 Realizing the mistake,
Villagonzalo rushed outside to look for respondent and when he saw the latter, he invited her to go back to the
shop to make clarifications as to whether or not payment was indeed made. Instead, however, of going back to
the shop, respondent suggested that they meet at the Cebu Pacific Office. Villagonzalo, Hawayon and Ybañez
thus went to the agreed venue where they talked to respondent.19 They pointed out that it appeared in their
conversation that respondent could not recall whom she gave the payment.20 They emphasized that they were
gentle and polite in talking to respondent and it was the latter who was arrogant in answering their questions.21 As
counterclaim, petitioners and the other defendants sought the payment of moral and exemplary damages, plus
attorney’s fees and litigation expenses.22
On June 20, 2003, the RTC rendered a Decision dismissing both the complaint and counterclaim of the parties.
From the evidence presented, the trial court concluded that the petitioners and the other defendants believed in
good faith that respondent failed to make payment. Considering that no motive to fabricate a lie could be attributed
to the Guess employees, the court held that when they demanded payment from respondent, they merely
exercised a right under the honest belief that no payment was made. The RTC likewise did not find it damaging for
respondent when the confrontation took place in front of Cebu Pacific clients, because it was respondent herself
who put herself in that situation by choosing the venue for discussion. As to the letter sent to Cebu Pacific Air, the
trial court also did not take it against the Guess employees, because they merely asked for assistance and not to
embarrass or humiliate respondent. In other words, the RTC found no evidence to prove bad faith on the part of
the Guess employees to warrant the award of damages.23

On appeal, the CA reversed and set aside the RTC decision, the dispositive portion of which reads:

WHEREFORE, the instant appeal is GRANTED. The decision of the Regional Trial Court of Cebu City, Branch 58,
in Civil Case No. CEB-26984 (for: Damages) is hereby REVERSED and SET ASIDE. Defendants Michelle
Ybañez and California Clothing, Inc. are hereby ordered to pay plaintiff-appellant Shirley G. Quiñones jointly and
solidarily moral damages in the amount of Fifty Thousand Pesos (₱50,000.00) and attorney’s fees in the amount
of Twenty Thousand Pesos (₱20,000.00).

SO ORDERED.24

While agreeing with the trial court that the Guess employees were in good faith when they confronted respondent
inside the Cebu Pacific Office about the alleged non-payment, the CA, however, found preponderance of evidence
showing that they acted in bad faith in sending the demand letter to respondent’s employer. It found respondent’s
possession of both the official receipt and the subject black jeans as evidence of payment. 25 Contrary to the
findings of the RTC, the CA opined that the letter addressed to Cebu Pacific’s director was sent to respondent’s
employer not merely to ask for assistance for the collection of the disputed payment but to subject her to ridicule,
humiliation and similar injury such that she would be pressured to pay. 26 Considering that Guess already started
its investigation on the incident, there was a taint of bad faith and malice when it dragged respondent’s employer
who was not privy to the transaction. This is especially true in this case since the purported letter contained not
only a narrative of the incident but accusations as to the alleged acts of respondent in trying to evade
payment.27 The appellate court thus held that petitioners are guilty of abuse of right entitling respondent to collect
moral damages and attorney’s fees. Petitioner California Clothing Inc. was made liable for its failure to exercise
extraordinary diligence in the hiring and selection of its employees; while Ybañez’s liability stemmed from her act
of signing the demand letter sent to respondent’s employer. In view of Hawayon and Villagonzalo’s good faith,
however, they were exonerated from liability. 28

Ybañez moved for the reconsideration29 of the aforesaid decision, but the same was denied in the assailed
November 14, 2006 CA Resolution.

Petitioners now come before the Court in this petition for review on certiorari under Rule 45 of the Rules of Court
based on the following grounds:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE LETTER SENT TO THE CEBU
PACIFIC OFFICE WAS MADE TO SUBJECT HEREIN RESPONDENT TO RIDICULE, HUMILIATION AND
SIMILAR INJURY.

II.

THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL DAMAGES AND ATTORNEY’S
FEES.30

The petition is without merit.

Respondent’s complaint against petitioners stemmed from the principle of abuse of rights provided for in the Civil
Code on the chapter of human relations. Respondent cried foul when petitioners allegedly embarrassed her when
they insisted that she did not pay for the black jeans she purchased from their shop despite the evidence of
payment which is the official receipt issued by the shop. The issuance of the receipt notwithstanding, petitioners
had the right to verify from respondent whether she indeed made payment if they had reason to believe that she
did not. However, the exercise of such right is not without limitations. Any abuse in the exercise of such right and
in the performance of duty causing damage or injury to another is actionable under the Civil Code. The Court’s
pronouncement in Carpio v. Valmonte31 is noteworthy:

In the sphere of our law on human relations, the victim of a wrongful act or omission, whether done willfully or
negligently, is not left without any remedy or recourse to obtain relief for the damage or injury he sustained.
Incorporated into our civil law are not only principles of equity but also universal moral precepts which are
designed to indicate certain norms that spring from the fountain of good conscience and which are meant to serve
as guides for human conduct. First of these fundamental precepts is the principle commonly known as "abuse of
rights" under Article 19 of the Civil Code. It provides that " 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."x x
x32 The elements of abuse of rights are as follows: (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.33

In this case, petitioners claimed that there was a miscommunication between the cashier and the invoicer leading
to the erroneous issuance of the receipt to respondent. When they realized the mistake, they made a cash count
and discovered that the amount which is equivalent to the price of the black jeans was missing. They, thus,
concluded that it was respondent who failed to make such payment. It was, therefore, within their right to verify
from respondent whether she indeed paid or not and collect from her if she did not. However, the question now is
whether such right was exercised in good faith or they went overboard giving respondent a cause of action against
them.

Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the exercise of legal
right or duty, act in good faith. He would be liable if he instead acted in bad faith, with intent to prejudice
another.34 Good faith refers to the state of mind which is manifested by the acts of the individual concerned. It
consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of
another.35 Malice or bad faith, on the other hand, implies a conscious and intentional design to do a wrongful act
for a dishonest purpose or moral obliquity.36

Initially, there was nothing wrong with petitioners asking respondent whether she paid or not. The Guess
employees were able to talk to respondent at the Cebu Pacific Office. The confrontation started well, but it
eventually turned sour when voices were raised by both parties. As aptly held by both the RTC and the CA, such
was the natural consequence of two parties with conflicting views insisting on their respective beliefs. Considering,
however, that respondent was in possession of the item purchased from the shop, together with the official receipt
of payment issued by petitioners, the latter cannot insist that no such payment was made on the basis of a mere
speculation. Their claim should have been proven by substantial evidence in the proper forum.

It is evident from the circumstances of the case that petitioners went overboard and tried to force respondent to
pay the amount they were demanding. In the guise of asking for assistance, petitioners even sent a demand letter
to respondent’s employer not only informing it of the incident but obviously imputing bad acts on the part of
respondent.1âwphi1 Petitioners claimed that after receiving the receipt of payment and the item purchased,
respondent "was noted to hurriedly left (sic) the store." They also accused respondent that she was not completely
being honest when she was asked about the circumstances of payment, thus:

x x x After receiving the OR and the item, Ms. Gutierrez was noted to hurriedly left (sic) the store. x x x

When I asked her about to whom she gave the money, she gave out a blank expression and told me, "I can’t
remember." Then I asked her how much money she gave, she answered, "₱2,100; 2 pcs 1,000 and 1 pc 100 bill."
Then I told her that that would (sic) impossible since we have no such denomination in our cash fund at that
moment. Finally, I asked her if how much change and if she received change from the cashier, she then
answered, "I don’t remember." After asking these simple questions, I am very certain that she is not completely
being honest about this. In fact, we invited her to come to our boutique to clear these matters but she vehemently
refused saying that she’s in a hurry and very busy.37

Clearly, these statements are outrightly accusatory. Petitioners accused respondent that not only did she fail to
pay for the jeans she purchased but that she deliberately took the same without paying for it and later hurriedly left
the shop to evade payment. These accusations were made despite the issuance of the receipt of payment and the
release of the item purchased. There was, likewise, no showing that respondent had the intention to evade
payment. Contrary to petitioners’ claim, respondent was not in a rush in leaving the shop or the mall. This is
evidenced by the fact that the Guess employees did not have a hard time looking for her when they realized the
supposed non-payment.

It can be inferred from the foregoing that in sending the demand letter to respondent’s employer, petitioners
intended not only to ask for assistance in collecting the disputed amount but to tarnish respondent’s reputation in
the eyes of her employer. To malign respondent without substantial evidence and despite the latter’s possession
of enough evidence in her favor, is clearly impermissible. A person should not use his right unjustly or contrary to
honesty and good faith, otherwise, he opens himself to liability. 38

The exercise of a right must be in accordance with the purpose for which it was established and must not be
excessive or unduly harsh.39 In this case, petitioners obviously abused their rights.

Complementing the principle of abuse of rights are the provisions of Articles 20 and 2 of the Civil Code which
read:40

Article 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify
the latter for the same.

Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals or good
customs, or public policy shall compensate the latter for the damage.

In view of the foregoing, respondent is entitled to an award of moral damages and attorney s fees. Moral damages
may be awarded whenever the defendant s wrongful act or omission is the proximate cause of the plaintiffs
physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation and similar injury in the cases specified or analogous to those provided in Article 2219 of the
Civil Code.41 Moral damages are not a bonanza. They are given to ease the defendant s grief and suffering. They
should, thus, reasonably approximate the extent of hurt caused and the gravity of the wrong done. 42 They are
awarded not to enrich the complainant but to enable the latter to obtain means, diversions, or amusements that
will serve to alleviate the moral suffering he has undergone.43 We find that the amount of ₱50,000.00 as moral
damages awarded by the CA is reasonable under the circumstances. Considering that respondent was compelled
to litigate to protect her interest, attorney s fees in the amount of of₱20,000.00 is likewise just and proper.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Decision
dated August 3, 2006 and Resolution dated November 14, 2006 in CA-G.R. CV No. 80309, are AFFIRMED.

SO ORDERED.
G.R. No. 132344 February 17, 2000

UNIVERSITY OF THE EAST, petitioner,


vs.
ROMEO A. JADER, respondent.

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student into believing that the latter had
satisfied all the requirements for graduation when such is not the case? This is the issue in the instant petition for
review premised on the following undisputed facts as summarized by the trial court and adopted by the Court of
Appeals (CA),1 to wit:

Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first semester of his
last year (School year 1987-1988), he failed to take the regular final examination in Practice Court I for
which he was given an incomplete grade (Exhibits "2", also Exhibit "H"). He enrolled for the second
semester as fourth year law student (Exhibit "A") and on February 1, 1988 he filed an application for the
removal of the incomplete grade given him by Professor Carlos Ortega (Exhibits "H-2", also Exhibit "2")
which was approved by Dean Celedonio Tiongson after payment of the required fee. He took the
examination on March 28, 1988. On May 30, 1988, Professor Carlos Ortega submitted his grade. It was a
grade of five (5). (Exhibits "H-4", also Exhibits "2-L", "2-N").1âwphi1.nêt

In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who
among the fourth year students should be allowed to graduate. The plaintiff's name appeared in the
Tentative List of Candidates for graduation for the Degree of Bachelor of Laws (LL.B) as of Second
Semester (1987-1988) with the following annotation:

JADER ROMEO A.

Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript with S.O.
(Exhibits "3", "3-C-1", "3-C-2").

The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws was
scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and in the invitation for that occasion
the name of the plaintiff appeared as one of the candidates. (Exhibits "B", "B-6", "B-6-A"). At the foot of
the list of the names of the candidates there appeared however the following annotation:

This is a tentative list Degrees will be conferred upon these candidates who satisfactorily
complete requirements as stated in the University Bulletin and as approved of the Department of
Education, Culture and Sports (Exhibit "B-7-A").

The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto Campus, during
the program of which he went up the stage when his name was called, escorted by her (sic) mother and
his eldest brother who assisted in placing the Hood, and his Tassel was turned from left to right, and he
was thereafter handed by Dean Celedonio a rolled white sheet of paper symbolical of the Law Diploma.
His relatives took pictures of the occasion (Exhibits "C" to "C-6", "D-3" to "D-11").

He tendered a blow-out that evening which was attended by neighbors, friends and relatives who wished
him good luck in the forthcoming bar examination. There were pictures taken too during the blow-out
(Exhibits "D" to "D-1").

He thereafter prepared himself for the bar examination. He took a leave of absence without pay from his
job from April 20, 1988 to September 30, 1988 (Exhibit "G") and enrolled at the pre-bar review class in Far
Eastern University. (Exhibits "F" to "F-2"). Having learned of the deficiency he dropped his review class
and was not able to take the bar examination.2

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental anguish,
serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not able to take the
1988 bar examinations arising from the latter's negligence. He prayed for an award of moral and exemplary
damages, unrealized income, attorney's fees, and costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent to believe that
he completed the requirements for a Bachelor of Laws degree when his name was included in the tentative list of
graduating students. After trial, the lower court rendered judgment as follows:

WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and against
the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND FOUR HUNDRED
SEVENTY PESOS (P35,470.00) with legal rate of interest from the filing of the complaint until fully paid,
the amount of FIVE THOUSAND PESOS (P5,000.00) as attorney's fees and the cost of suit.

Defendant's counterclaim is, for lack of merit, hereby dismissed.

SO ORDERED.3

which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification. The dispositive
portion of the CA decision reads:

WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby AFFIRMED with the
MODIFICATION that defendant-appellee, in addition to the sum adjudged by the lower court in favor of
plaintiff-appellant, is also ORDERED to pay plaintiff-appellant the amount of FIFTY THOUSAND
(P50,000.00) PESOS for moral damages. Costs against defendant-appellee.

SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court on a petition for
review under Rule 45 of the Rules of Court, arguing that it has no liability to respondent Romeo A. Jader,
considering that the proximate and immediate cause of the alleged damages incurred by the latter arose out of his
own negligence in not verifying from the professor concerned the result of his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education is entered into
between said institution and the student. The professors, teachers or instructors hired by the school are
considered merely as agents and administrators tasked to perform the school's commitment under the contract.
Since the contracting parties are the school and the student, the latter is not duty-bound to deal with the former's
agents, such as the professors with respect to the status or result of his grades, although nothing prevents either
professors or students from sharing with each other such information. The Court takes judicial notice of the
traditional practice in educational institutions wherein the professor directly furnishes his/her students their grades.
It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to each
and every student as to whether he or she had already complied with all the requirements for the conferment of a
degree or whether they would be included among those who will graduate. Although commencement exercises
are but a formal ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational
institution's way of announcing to the whole world that the students included in the list of those who will be
conferred a degree during the baccalaureate ceremony have satisfied all the requirements for such degree. Prior
or subsequent to the ceremony, the school has the obligation to promptly inform the student of any problem
involving the latter's grades and performance and also most importantly, of the procedures for remedying the
same.

Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a time when
he had already commenced preparing for the bar exams, cannot be said to have acted in good faith. Absence of
good faith must be sufficiently established for a successful prosecution by the aggrieved party in a suit for abuse
of right under Article 19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undue
advantage of another, even though the forms and technicalities of the law, together with the absence of all
information or belief of facts, would render the transaction unconscientious. 5 It is the school that has access to
those information and it is only the school that can compel its professors to act and comply with its rules,
regulations and policies with respect to the computation and the prompt submission of grades. Students do not
exercise control, much less influence, over the way an educational institution should run its affairs, particularly in
disciplining its professors and teachers and ensuring their compliance with the school's rules and orders. Being
the party that hired them, it is the school that exercises general supervision and exclusive control over the
professors with respect to the submission of reports involving the students' standing. Exclusive control means that
no other person or entity had any control over the instrumentality which caused the damage or injury.6
The college dean is the senior officer responsible for the operation of an academic program, enforcement of rules
and regulations, and the supervision of faculty and student services. 7 He must see to it that his own professors
and teachers, regardless of their status or position outside of the university, must comply with the rules set by the
latter. The negligent act of a professor who fails to observe the rules of the school, for instance by not promptly
submitting a student's grade, is not only imputable to the professor but is an act of the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is engaged in legal
education, it should have practiced what it inculcates in its students, more specifically the principle of good
dealings enshrined in Articles 19 and 20 of the Civil Code which 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.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of
moral wrongs which is impossible for human foresight to provide specifically in statutory law. 8 In civilized society,
men must be able to assume that others will do them no intended injury — that others will commit no internal
aggressions upon them; that their fellowmen, when they act affirmatively will do so with due care which the
ordinary understanding and moral sense of the community exacts and that those with whom they deal in the
general course of society will act in good faith. The ultimate thing in the theory of liability is justifiable reliance
under conditions of civilized society.9 Schools and professors cannot just take students for granted and be
indifferent to them, for without the latter, the former are useless.

Educational institutions are duty-bound to inform the students of their academic status and not wait for the latter to
inquire from the former. The conscious indifference of a person to the rights or welfare of the person/persons who
may be affected by his act or omission can support a claim for damages.10 Want of care to the conscious
disregard of civil obligations coupled with a conscious knowledge of the cause naturally calculated to produce
them would make the erring party liable.11 Petitioner ought to have known that time was of the essence in the
performance of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will not
prepare himself for the bar exams since that is precisely the immediate concern after graduation of an LL.B.
graduate. It failed to act seasonably. Petitioner cannot just give out its student's grades at any time because a
student has to comply with certain deadlines set by the Supreme Court on the submission of requirements for
taking the bar. Petitioner's liability arose from its failure to promptly inform respondent of the result of an
examination and in misleading the latter into believing that he had satisfied all requirements for the course. Worth
quoting is the following disquisition of the respondent court:

It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been informed
during the deliberation that the professor in Practice Court I gave plaintiff-appellant a failing grade. Yet,
defendant-appellee still did not inform plaintiff-appellant of his failure to complete the requirements for the
degree nor did they remove his name from the tentative list of candidates for graduation. Worse,
defendant-appellee university, despite the knowledge that plaintiff-appellant failed in Practice Court
I, again included plaintiff-appellant's name in the "tentative list of candidates for graduation which was
prepared after the deliberation and which became the basis for the commencement rites program. Dean
Tiongson reasons out that plaintiff-appellant's name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to remedy the situation in the
remaining few days before graduation day. Dean Tiongson, however, did not explain how plaintiff
appellant Jader could have done something to complete his deficiency if defendant-appellee university did
not exert any effort to inform plaintiff-appellant of his failing grade in Practice Court I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed relay of
information to respondent. When one of two innocent parties must suffer, he through whose agency the loss
occurred must bear it.13 The modern tendency is to grant indemnity for damages in cases where there is abuse of
right, even when the act is not illicit.14 If mere fault or negligence in one's acts can make him liable for damages for
injury caused thereby, with more reason should abuse or bad faith make him liable. A person should be protected
only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, but
not when he acts with negligence or abuse.15

However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual damages,
we hold that respondent should not have been awarded moral damages. We do not agree with the Court of
Appeals' findings that respondent suffered shock, trauma and pain when he was informed that he could not
graduate and will not be allowed to take the bar examinations. At the very least, it behooved on respondent to
verify for himself whether he has completed all necessary requirements to be eligible for the bar examinations. As
a senior law student, respondent should have been responsible enough to ensure that all his affairs, specifically
those pertaining to his academic achievement, are in order. Given these considerations, we fail to see how
respondent could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar review
classes and not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the
bar, he brought this upon himself by not verifying if he has satisfied all the requirements including his school
records, before preparing himself for the bar examination. Certainly, taking the bar examinations does not only
entail a mental preparation on the subjects thereof; there are also prerequisites of documentation and submission
of requirements which the prospective examinee must meet.

WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner is
ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy Pesos (P35,470.00), with
legal interest of 6% per annum computed from the date of filing of the complaint until fully paid; the amount of Five
Thousand Pesos (P5,000.00) as attorney's fees; and the costs of the suit. The award of moral damages is
DELEIED.1âwphi1.nêt

SO ORDERED.
G.R. No. 81262 August 25, 1989

GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.

Atencia & Arias Law Offices for petitioners.

Romulo C. Felizmena for private respondent.

CORTES, J.:

Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and Radio Corporation
(GLOBE MACKAY) in a dual capacity as a purchasing agent and administrative assistant to the engineering
operations manager. In 1972, GLOBE MACKAY discovered fictitious purchases and other fraudulent transactions
for which it lost several thousands of pesos.

According to private respondent it was he who actually discovered the anomalies and reported them on November
10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner Herbert C. Hendry who was then the
Executive Vice-President and General Manager of GLOBE MACKAY.

On November 11, 1972, one day after private respondent Tobias made the report, petitioner Hendry confronted
him by stating that he was the number one suspect, and ordered him to take a one week forced leave, not to
communicate with the office, to leave his table drawers open, and to leave the office keys.

On November 20, 1972, when private respondent Tobias returned to work after the forced leave, petitioner Hendry
went up to him and called him a "crook" and a "swindler." Tobias was then ordered to take a lie detector test. He
was also instructed to submit specimen of his handwriting, signature, and initials for examination by the police
investigators to determine his complicity in the anomalies.

On December 6,1972, the Manila police investigators submitted a laboratory crime report (Exh. "A") clearing
private respondent of participation in the anomalies.

Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G. Fernandez, who on
December 10, 1972, submitted a report (Exh. "2") finding Tobias guilty. This report however expressly stated that
further investigation was still to be conducted.

Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending Tobias from work
preparatory to the filing of criminal charges against him.

On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document Examiner, after investigating
other documents pertaining to the alleged anomalous transactions, submitted a second laboratory crime report
(Exh. "B") reiterating his previous finding that the handwritings, signatures, and initials appearing in the checks
and other documents involved in the fraudulent transactions were not those of Tobias. The lie detector tests
conducted on Tobias also yielded negative results.

Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the report of the
private investigator, was, by its own terms, not yet complete, petitioners filed with the City Fiscal of Manila a
complaint for estafa through falsification of commercial documents, later amended to just estafa. Subsequently
five other criminal complaints were filed against Tobias, four of which were for estafa through Falsification of
commercial document while the fifth was for of Article 290 of' the Revised Penal Code (Discovering Secrets
Through Seizure of Correspondence).lâwphî1.ñèt Two of these complaints were refiled with the Judge Advocate
General's Office, which however, remanded them to the fiscal's office. All of the six criminal complaints were
dismissed by the fiscal. Petitioners appealed four of the fiscal's resolutions dismissing the criminal complaints with
the Secretary of Justice, who, however, affirmed their dismissal.

In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from petitioners that his employment
has been terminated effective December 13, 1972. Whereupon, Tobias filed a complaint for illegal dismissal. The
labor arbiter dismissed the complaint. On appeal, the National Labor Relations Commission (NLRC) reversed the
labor arbiter's decision. However, the Secretary of Labor, acting on petitioners' appeal from the NLRC ruling,
reinstated the labor arbiter's decision. Tobias appealed the Secretary of Labor's order with the Office of the
President. During the pendency of the appeal with said office, petitioners and private respondent Tobias entered
into a compromise agreement regarding the latter's complaint for illegal dismissal.

Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO). However, petitioner
Hendry, without being asked by RETELCO, wrote a letter to the latter stating that Tobias was dismissed by
GLOBE MACKAY due to dishonesty.

Private respondent Tobias filed a civil case for damages anchored on alleged unlawful, malicious, oppressive, and
abusive acts of petitioners. Petitioner Hendry, claiming illness, did not testify during the hearings. The Regional
Trial Court (RTC) of Manila, Branch IX, through Judge Manuel T. Reyes rendered judgment in favor of private
respondent by ordering petitioners to pay him eighty thousand pesos (P80,000.00) as actual damages, two
hundred thousand pesos (P200,000.00) as moral damages, twenty thousand pesos (P20,000.00) as exemplary
damages, thirty thousand pesos (P30,000.00) as attorney's fees, and costs. Petitioners appealed the RTC
decision to the Court of Appeals. On the other hand, Tobias appealed as to the amount of damages. However, the
Court of Appeals, an a decision dated August 31, 1987 affirmed the RTC decision in toto. Petitioners' motion for
reconsideration having been denied, the instant petition for review on certiorari was filed.

The main issue in this case is whether or not petitioners are liable for damages to private respondent.

Petitioners contend that they could not be made liable for damages in the lawful exercise of their right to dismiss
private respondent.

On the other hand, private respondent contends that because of petitioners' abusive manner in dismissing him as
well as for the inhuman treatment he got from them, the Petitioners must indemnify him for the damage that he
had suffered.

One of the more notable innovations of the New Civil Code is the codification of "some basic principles that are to
be observed for the rightful relationship between human beings and for the stability of the social order." [REPORT
ON THE CODE COMMISSION ON THE PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39]. The framers of
the Code, seeking to remedy the defect of the old Code which merely stated the effects of the law, but failed to
draw out its spirit, incorporated certain fundamental precepts which were "designed to indicate certain norms that
spring from the fountain of good conscience" and which were also meant to serve as "guides for human conduct
[that] should run as golden threads through society, to the end that law may approach its supreme ideal, which is
the sway and dominance of justice" (Id.) Foremost among these principles is that pronounced in Article 19 which
provides:

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.

This article, known to contain what is commonly referred to as the principle of abuse of rights, sets 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: to act with justice; to give everyone his due; and to observe honesty
and good faith. The law, therefore, recognizes a primordial limitation on all rights; that in their exercise, the norms
of human conduct set forth in Article 19 must be observed. A right, though by itself legal because recognized or
granted by law as such, may nevertheless become the source of some illegality. 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 held responsible. But while Article 19 lays down a
rule of conduct for the government of human relations and for the maintenance of social order, it does not provide
a remedy for its violation. Generally, an action for damages under either Article 20 or Article 21 would be proper.

Article 20, which pertains to damage arising from a violation of law, provides that:

Art. 20. Every person who contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

However, in the case at bar, petitioners claim that they did not violate any provision of law since they were merely
exercising their legal right to dismiss private respondent. This does not, however, leave private respondent with no
relief because Article 21 of the Civil Code provides that:

Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
This article, adopted to remedy the "countless gaps in the statutes, which leave so many victims of moral wrongs
helpless, even though they have actually suffered material and moral injury" [Id.] should "vouchsafe adequate
legal remedy for that untold number of moral wrongs which it is impossible for human foresight to provide for
specifically in the statutes" [Id. it p. 40; See also PNB v. CA, G.R. No. L-27155, May 18,1978, 83 SCRA 237, 247].

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid test which can be
applied. While the Court has not hesitated to apply Article 19 whether the legal and factual circumstances called
for its application [See for e.g., Velayo v. Shell Co. of the Phil., Ltd., 100 Phil. 186 (1956); PNB v.
CA, supra; Grand Union Supermarket, Inc. v. Espino, Jr., G.R. No. L-48250, December 28, 1979, 94 SCRA 953;
PAL v. CA, G.R. No. L-46558, July 31,1981,106 SCRA 391; United General Industries, Inc, v. Paler G.R. No. L-
30205, March 15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21, 1987, 153 SCRA 183] the
question of whether or not the principle of abuse of rights has been violated resulting in damages under Article 20
or Article 21 or other applicable provision of law, depends on the circumstances of each case. And in the instant
case, the Court, after examining the record and considering certain significant circumstances, finds that all
petitioners have indeed abused the right that they invoke, causing damage to private respondent and for which the
latter must now be indemnified.

The trial court made a finding that notwithstanding the fact that it was private respondent Tobias who reported the
possible existence of anomalous transactions, petitioner Hendry "showed belligerence and told plaintiff (private
respondent herein) that he was the number one suspect and to take a one week vacation leave, not to
communicate with the office, to leave his table drawers open, and to leave his keys to said defendant (petitioner
Hendry)" [RTC Decision, p. 2; Rollo, p. 232]. This, petitioners do not dispute. But regardless of whether or not it
was private respondent Tobias who reported the anomalies to petitioners, the latter's reaction towards the former
upon uncovering the anomalies was less than civil. An employer who harbors suspicions that an employee has
committed dishonesty might be justified in taking the appropriate action such as ordering an investigation and
directing the employee to go on a leave. Firmness and the resolve to uncover the truth would also be expected
from such employer. But the high-handed treatment accorded Tobias by petitioners was certainly uncalled for.
And this reprehensible attitude of petitioners was to continue when private respondent returned to work on
November 20, 1972 after his one week forced leave. Upon reporting for work, Tobias was confronted by Hendry
who said. "Tobby, you are the crook and swindler in this company." Considering that the first report made by the
police investigators was submitted only on December 10, 1972 [See Exh. A] the statement made by petitioner
Hendry was baseless. The imputation of guilt without basis and the pattern of harassment during the
investigations of Tobias transgress the standards of human conduct set forth in Article 19 of the Civil Code. The
Court has already ruled that the right of the employer to dismiss an employee should not be confused with the
manner in which the right is exercised and the effects flowing therefrom. If the dismissal is done abusively, then
the employer is liable for damages to the employee [Quisaba v. Sta. Ines-Melale Veneer and Plywood Inc., G.R.
No. L-38088, August 30, 1974, 58 SCRA 771; See also Philippine Refining Co., Inc. v. Garcia, G.R. No. L-21871,
September 27,1966, 18 SCRA 107] Under the circumstances of the instant case, the petitioners clearly failed to
exercise in a legitimate manner their right to dismiss Tobias, giving the latter the right to recover damages under
Article 19 in relation to Article 21 of the Civil Code.

But petitioners were not content with just dismissing Tobias. Several other tortious acts were committed by
petitioners against Tobias after the latter's termination from work. Towards the latter part of January, 1973, after
the filing of the first of six criminal complaints against Tobias, the latter talked to Hendry to protest the actions
taken against him. In response, Hendry cut short Tobias' protestations by telling him to just confess or else the
company would file a hundred more cases against him until he landed in jail. Hendry added that, "You Filipinos
cannot be trusted." The threat unmasked petitioner's bad faith in the various actions taken against Tobias. On the
other hand, the scornful remark about Filipinos as well as Hendry's earlier statements about Tobias being a
"crook" and "swindler" are clear violations of 'Tobias' personal dignity [See Article 26, Civil Code].

The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime in October 1974,
stating that Tobias had been dismissed by GLOBE MACKAY due to dishonesty. Because of the letter, Tobias
failed to gain employment with RETELCO and as a result of which, Tobias remained unemployed for a longer
period of time. For this further damage suffered by Tobias, petitioners must likewise be held liable for damages
consistent with Article 2176 of the Civil Code. Petitioners, however, contend that they have a "moral, if not legal,
duty to forewarn other employers of the kind of employee the plaintiff (private respondent herein) was." [Petition,
p. 14; Rollo, p. 15]. Petitioners further claim that "it is the accepted moral and societal obligation of every man to
advise or warn his fellowmen of any threat or danger to the latter's life, honor or property. And this includes
warning one's brethren of the possible dangers involved in dealing with, or accepting into confidence, a man
whose honesty and integrity is suspect" [Id.]. These arguments, rather than justify petitioners' act, reveal a
seeming obsession to prevent Tobias from getting a job, even after almost two years from the time Tobias was
dismissed.
Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias. Petitioners contend
that there is no case against them for malicious prosecution and that they cannot be "penalized for exercising their
right and prerogative of seeking justice by filing criminal complaints against an employee who was their principal
suspect in the commission of forgeries and in the perpetration of anomalous transactions which defrauded them of
substantial sums of money" [Petition, p. 10, Rollo, p. 11].

While sound principles of justice and public policy dictate that persons shall have free resort to the courts for
redress of wrongs and vindication of their rights [Buenaventura v. Sto. Domingo, 103 Phil. 239 (1958)], the right to
institute criminal prosecutions can not be exercised maliciously and in bad faith [Ventura v. Bernabe, G.R. No. L-
26760, April 30, 1971, 38 SCRA 5871.] Hence, in Yutuk V. Manila Electric Co., G.R. No. L-13016, May 31, 1961,
2 SCRA 337, the Court held that the right to file criminal complaints should not be used as a weapon to force an
alleged debtor to pay an indebtedness. To do so would be a clear perversion of the function of the criminal
processes and of the courts of justice. And in Hawpia CA, G.R. No. L-20047, June 30, 1967. 20 SCRA 536 the
Court upheld the judgment against the petitioner for actual and moral damages and attorney's fees after making a
finding that petitioner, with persistence, filed at least six criminal complaints against respondent, all of which were
dismissed.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a design to vex
and humiliate a person and that it was initiated deliberately by the defendant knowing that the charges were false
and groundless [Manila Gas Corporation v. CA, G.R. No. L-44190, October 30,1980, 100 SCRA 602].
Concededly, the filing of a suit by itself, does not render a person liable for malicious prosecution [Inhelder
Corporation v. CA, G.R. No. 52358, May 301983122 SCRA 576]. The mere dismissal by the fiscal of the criminal
complaint is not a ground for an award of damages for malicious prosecution if there is no competent evidence to
show that the complainant had acted in bad faith [Sison v. David, G.R. No. L-11268, January 28,1961, 1 SCRA
60].

In the instant case, however, the trial court made a finding that petitioners acted in bad faith in filing the criminal
complaints against Tobias, observing that:

xxx

Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of six (6) criminal
cases, five (5) of which were for estafa thru falsification of commercial document and one for
violation of Art. 290 of the Revised Penal Code "discovering secrets thru seizure of
correspondence," and all were dismissed for insufficiency or lack of evidence." The dismissal of
four (4) of the cases was appealed to the Ministry of Justice, but said Ministry invariably sustained
the dismissal of the cases. As above adverted to, two of these cases were refiled with the Judge
Advocate General's Office of the Armed Forces of the Philippines to railroad plaintiffs arrest and
detention in the military stockade, but this was frustrated by a presidential decree transferring
criminal cases involving civilians to the civil courts.

xxx

To be sure, when despite the two (2) police reports embodying the findings of Lt. Dioscoro Tagle,
Chief Document Examiner of the Manila Police Department, clearing plaintiff of participation or
involvement in the fraudulent transactions complained of, despite the negative results of the lie
detector tests which defendants compelled plaintiff to undergo, and although the police
investigation was "still under follow-up and a supplementary report will be submitted after all the
evidence has been gathered," defendants hastily filed six (6) criminal cases with the city Fiscal's
Office of Manila, five (5) for estafa thru falsification of commercial document and one (1) for
violation of Art. 290 of the Revised Penal Code, so much so that as was to be expected, all six (6)
cases were dismissed, with one of the investigating fiscals, Asst. Fiscal de Guia, commenting in
one case that, "Indeed, the haphazard way this case was investigated is evident. Evident likewise
is the flurry and haste in the filing of this case against respondent Tobias," there can be no
mistaking that defendants would not but be motivated by malicious and unlawful intent to harass,
oppress, and cause damage to plaintiff.

xxx

[RTC Decision, pp. 5-6; Rollo, pp. 235-236].

In addition to the observations made by the trial court, the Court finds it significant that the criminal complaints
were filed during the pendency of the illegal dismissal case filed by Tobias against petitioners. This explains the
haste in which the complaints were filed, which the trial court earlier noted. But petitioners, to prove their good
faith, point to the fact that only six complaints were filed against Tobias when they could have allegedly filed one
hundred cases, considering the number of anomalous transactions committed against GLOBE MACKAY.
However, petitioners' good faith is belied by the threat made by Hendry after the filing of the first complaint that
one hundred more cases would be filed against Tobias. In effect, the possible filing of one hundred more cases
was made to hang like the sword of Damocles over the head of Tobias. In fine, considering the haste in which the
criminal complaints were filed, the fact that they were filed during the pendency of the illegal dismissal case
against petitioners, the threat made by Hendry, the fact that the cases were filed notwithstanding the two police
reports exculpating Tobias from involvement in the anomalies committed against GLOBE MACKAY, coupled by
the eventual dismissal of all the cases, the Court is led into no other conclusion than that petitioners were
motivated by malicious intent in filing the six criminal complaints against Tobias.

Petitioners next contend that the award of damages was excessive. In the complaint filed against petitioners,
Tobias prayed for the following: one hundred thousand pesos (P100,000.00) as actual damages; fifty thousand
pesos (P50,000.00) as exemplary damages; eight hundred thousand pesos (P800,000.00) as moral damages;
fifty thousand pesos (P50,000.00) as attorney's fees; and costs. The trial court, after making a computation of the
damages incurred by Tobias [See RTC Decision, pp. 7-8; Rollo, pp. 154-1551, awarded him the following: eighty
thousand pesos (P80,000.00) as actual damages; two hundred thousand pesos (P200,000.00) as moral
damages; twenty thousand pesos (P20,000.00) as exemplary damages; thirty thousand pesos (P30,000.00) as
attorney's fees; and, costs. It must be underscored that petitioners have been guilty of committing several
actionable tortious acts, i.e., the abusive manner in which they dismissed Tobias from work including the baseless
imputation of guilt and the harassment during the investigations; the defamatory language heaped on Tobias as
well as the scornful remark on Filipinos; the poison letter sent to RETELCO which resulted in Tobias' loss of
possible employment; and, the malicious filing of the criminal complaints. Considering the extent of the damage
wrought on Tobias, the Court finds that, contrary to petitioners' contention, the amount of damages awarded to
Tobias was reasonable under the circumstances.

Yet, petitioners still insist that the award of damages was improper, invoking the principle of damnum
absque injuria. It is argued that "[t]he only probable actual damage that plaintiff (private respondent herein) could
have suffered was a direct result of his having been dismissed from his employment, which was a valid and legal
act of the defendants-appellants (petitioners herein).lâwphî1.ñèt " [Petition, p. 17; Rollo, p. 18].

According to the principle of damnum absque injuria, damage or loss which does not constitute a violation of a
legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No. L-47207, September 25, 1980,
100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915); The Board of Liquidators v. Kalaw, G.R. No. L-
18805, August 14, 1967, 20 SCRA 987]. This principle finds no application in this case. It bears repeating that
even granting that petitioners might have had the right to dismiss Tobias from work, the abusive manner in which
that right was exercised amounted to a legal wrong for which petitioners must now be held liable. Moreover, the
damage incurred by Tobias was not only in connection with the abusive manner in which he was dismissed but
was also the result of several other quasi-delictual acts committed by petitioners.

Petitioners next question the award of moral damages. However, the Court has already ruled in Wassmer v.
Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that [p]er express provision of Article 2219 (10)
of the New Civil Code, moral damages are recoverable in the cases mentioned in Article 21 of said Code." Hence,
the Court of Appeals committed no error in awarding moral damages to Tobias.

Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of the Civil Code
provides that "[i]n quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence," the Court, in Zulueta v. Pan American World Airways, Inc., G.R. No. L- 28589, January 8, 1973, 49
SCRA 1, ruled that if gross negligence warrants the award of exemplary damages, with more reason is its
imposition justified when the act performed is deliberate, malicious and tainted with bad faith. As in
the Zulueta case, the nature of the wrongful acts shown to have been committed by petitioners against Tobias is
sufficient basis for the award of exemplary damages to the latter.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-G.R. CV No. 09055
is AFFIRMED.

SO ORDERED.